LILIA BELKOVA, Individually, and as successor Trustee of the Land Trust Agreement, No:072003 Dated 2/9/04 v. DEER RUN PROPERTY OWNERS' ASSOCIATION, INC. ( 2023 )

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
LILIA BELKOVA, individually and as successor trustee of the
LAND TRUST AGREEMENT, NO:072003 DATED 2/9/04,
Appellant,
v.
DEER RUN PROPERTY OWNERS’ ASSOCIATION, INC., et al.,
Appellees.
No. 4D21-2924
[August 23, 2023]
Appeal from the County Court for the Fifteenth Judicial Circuit, Palm
Beach County; Sarah L. Shullman, Judge; L.T. Case No.
502017CC001472XXXXMB.
Thomas L. Hunker and Sarah Hafeez of Hunker Appeals, Fort
Lauderdale, for appellant.
Steven R. Braten and Dina L. Rosenbaum of Rosenbaum, PLLC, West
Palm Beach, for Appellee Deer Run Property Owners’ Association, Inc.
Anthony A. Arsali of Arsali LLC, Delray Beach, for Third Party
Purchaser Nicholas Arsali.
GROSS, J.
Lilia Belkova, individually and as successor trustee of a 2004 Land
Trust, appeals a final judgment foreclosing a homeowners’ association lien
and an order awarding attorney’s fees and costs.
We affirm all points raised on appeal and write to address several
issues.
Overview
In February 2017, appellee Deer Run Property Owners’ Association (the
“Association”) filed a foreclosure complaint in county court against
appellant, as successor trustee of a 2004 Land Trust, and two unknown
tenants. The Association asserted two counts: (1) a count to foreclose a
claim of lien for assessments in accordance with section 720.3085, Florida
Statutes (2016); and (2) a count for damages seeking to recover delinquent
assessments since November 2013 in the amount of $3,857.07, plus
interest, late charges, costs and attorney’s fees.
Because this case involves the county court’s award of the Association’s
attorney’s fees incurred in appellant’s bankruptcy cases, we pause to
mention those cases.
From 2013 through the final judgment, appellant filed three
bankruptcy petitions, including two during the pendency of the
Association’s foreclosure action. The bankruptcy court dismissed the two
petitions that appellant filed during this case.
The bankruptcy court dismissed appellant’s third bankruptcy petition
with prejudice, finding that appellant’s filing was “part of a scheme to delay
hinder or defraud secured creditor Deer Run Association.” The
bankruptcy court also granted the Association prospective stay relief
relative to the property subject to the Association’s county court
foreclosure action.
Meanwhile, in the Association’s county court foreclosure action, after
appellant had evaded the Association’s attempted service for two years,
and after the Association had moved for a default against appellant,
appellant filed a pro se answer and affirmative defenses in May 2019.
The county court denied the Association’s motion for default and
allowed appellant’s filing to stand. The county court also granted the
Association’s motion to strike eight of appellant’s affirmative defenses,
with leave to amend. Appellant filed no amendment.
In March 2021, the Association filed a motion for summary judgment,
setting the motion for a hearing on April 23, 2021. Appellant sought to
continue the hearing until June 2021, citing a horseback riding injury.
The county court granted a six-day continuance until April 29, 2021.
On April 29, 2021, appellant’s counsel filed an answer and affirmative
defenses, without leave of court. The county court denied appellant’s
second motion for continuance of the summary judgment hearing,
determined that the attorney’s last-minute filing was untimely, and
granted summary judgment for the Association.
2
In September 2021, the county court entered a final judgment of
foreclosure which directed the clerk of court to sell the property on October
13, 2021.
One day before the foreclosure sale, appellant appealed from the final
judgment of foreclosure and the order awarding fees and costs. The
following day, on October 13, 2021, the clerk of court sold the foreclosed
property to a third party purchaser for $180,100.
The County Court had Jurisdiction to
Foreclose the Lien on the Property
As an initial matter, appellant argues that the county court lacked
subject matter jurisdiction to foreclose the Association’s lien.
“Judges of county courts may hear all matters in equity involved in any
case within the jurisdictional amount of the county court, except as
otherwise restricted by the State Constitution or the laws of
Florida.” § 34.01(4), Fla. Stat. (2016). Lien foreclosure actions “that fall
within the county court’s statutorily set limit may be filed in either county
or circuit court.” Alexdex Corp. v. Nachon Enters., Inc., 641 So. 2d 858,
862 (Fla. 1994). “To accept the proposition that the exclusive jurisdiction
given to circuit courts in section 26.012 constitutes the ‘otherwise
restricted by the laws of Florida’ contained in section 34.01(4) would
render the latter section totally meaningless.” Id. at 861. Thus, giving
each statute its full effect, the Florida Supreme Court concluded that “the
legislature intended to provide concurrent equity jurisdiction in circuit and
county courts, except that equity cases filed in county courts must fall
within the county court’s monetary jurisdiction, as set by statute.” Id. at
862.
Appellant further contends that the county court lacked jurisdiction to
foreclose the Association’s lien because the property subject to the lien was
her homestead. But under Article X, section 4 of the Florida Constitution,
one of the exceptions to the exemption from the forced sale of a homestead
is “for the payment of taxes and assessments thereon[.]” Indeed, section
222.01, Florida Statutes (2016), which allows an owner to make a
designation of homestead before levy, does not apply to “[l]iens and
judgments for the payment of taxes and assessments on real property.” §
222.01(5)(a), Fla. Stat. (2016).
Further, the creation of a lien “by acceptance of the deed relates back
to the time of the filing of the declaration of restrictions.” Bessemer v.
Gersten, 381 So. 2d 1344, 1348 (Fla. 1980). Thus, “[s]ince the acquisition
3
of homestead status does not defeat prior liens, the lienor’s right prevails
over the respondents’ homestead right.” Id. (citations omitted).
We distinguish Sepulveda v. Westport Recovery Corp., 145 So. 3d 162(Fla. 3d DCA 2014), which held that section 222.10, Florida Statutes,
grants circuit courts exclusive jurisdiction to determine a claimed
homestead exemption. However, Sepulveda did not involve an action to
foreclose a lien for assessments. Sepulveda concerned an attempt to levy
on claimed homestead property to enforce an unsatisfied judgment. Id. at
164. The trial court there was required to determine the validity of the
debtor’s homestead claim under section 222.10, Florida Statutes. Id. at
165–66. “Accordingly, the county court exceeded its subject matter
jurisdiction by determining that Sepulveda’s Claim of Homestead did not
exempt the property from levy.” Id. at 169.
By contrast, the Association’s lien foreclosure action here did not
involve a determination of homestead exemption under section 222.10.
That is because the Association’s action to foreclose its assessment lien
was not a “bill filed by a creditor or other person interested in enforcing
any unsatisfied judgment or decree.” § 222.10, Fla. Stat. (2016).
Under Alexdex, the Association’s lien foreclosure action here was within
the county court’s concurrent equity jurisdiction. Circuit and county
courts have concurrent equity jurisdiction, except that equity cases filed
in county courts must fall within the county court’s monetary jurisdiction.
The property’s alleged homestead status, which appellant did not argue
below, did not preclude the county court from entering a judgment
foreclosing the Association’s lien for assessments. 1
In the end, appellant has cited no statute that would have barred the
county court from exercising subject matter jurisdiction over the
Association’s lien foreclosure action. The validity of any homestead claim
was immaterial. Homestead or not, the Association was entitled to
foreclose on its assessment lien.
The County Court’s Monetary Judgment Did Not
Exceed its Jurisdictional Limits
Appellant contends that the county court lacked jurisdiction over the
lien foreclosure action because “the total final lien foreclosure judgment
1 Instead, the reference to the property’s alleged homestead status was contained
in judicially noticed documents from one of appellant’s bankruptcy cases.
4
awarded $87,922.55, far exceeding the county court’s $15,000
jurisdictional limit.” This argument is without merit.
For actions filed on or before December 31, 2019, county courts have
original jurisdiction over “all actions at law in which the matter in
controversy does not exceed the sum of $15,000, exclusive of interest,
costs, and attorney’s fees, except those within the exclusive jurisdiction
of the circuit courts.” § 34.01(1)(c), Fla. Stat. (2016) (emphasis added); Ch.
2019-58, § 9, Laws of Fla. (increasing monetary jurisdiction of county
courts for actions filed on or after January 1, 2020).
“[T]he monetary restrictions in section 34.01(1)(c) 1.–4. shall apply to
the amount of the lien without consideration to the value of the securing
property.” Alexdex, 641 So. 2d at 862. Because interest, costs, and
attorney’s fees are excluded from the amount in controversy, see §
34.01(1)(c), Fla. Stat. (2016), the Alexdex court’s reference to the “amount
of the lien” necessarily refers to the amount of the lien exclusive of interest,
costs, and attorney’s fees. Although a claim of lien for assessments may
include reasonable attorney’s fees as part of the lien, the claim for
attorney’s fees is not a part of “the matter in controversy” under section
34.01(1)(c). For the purpose of determining the county court’s jurisdiction,
attorney’s fees are ancillary to the damages sought in the underlying
causes of action.
Here, the outstanding amount of assessments and late charges—
exclusive of interest, costs, and attorney’s fees—was under $15,000
throughout the entire foreclosure action. Because the amount in
controversy within the meaning of section 34.01(1)(c) was always under
$15,000, exclusive of interest, costs, and attorney’s fees, the county court
had subject matter jurisdiction over the lien foreclosure action.
The County Court was Permitted to Award the Association’s
Attorney’s Fees for Work Performed in the Bankruptcy Court to
Return the Association’s Foreclosure Action to the County Court
Appellant contends that the county court lacked jurisdiction to award
the Association’s attorney’s fees for work performed in bankruptcy court.
We reject that contention, because after the bankruptcy stay was lifted,
the property subject to the lien remained the appellant’s property and
returned to the county court’s jurisdiction. No disposition of the property
subject to the Association’s lien was made under the bankruptcy court’s
supervision.
5
In a case involving foreclosure on corporate stock securing a loan, we
approved a circuit court’s award of fees incurred in bankruptcy court
relating to the state court claim. Webber v. D’Agostino, 251 So. 3d 188,
192 (Fla. 4th DCA 2018). That case, however, did not address the
argument presented here.
More instructive is Dvorak v. First Family Bank, 639 So. 2d 1076 (Fla.
5th DCA 1994), which drew a distinction between the situation where
federal law preempts state law on the award of attorney’s fees, and the
circumstance here where no preemption exists. Dvorak involved a state
foreclosure action on real property which was stayed by the filing of a
Chapter 11 bankruptcy petition. Id. at 1077. “Almost two years later, the
bankruptcy trustee conveyed the mortgaged property to the Bank for
$6,000, the amount of equity [the borrowers] had in the property.” Id.Back in state court, the trial judge awarded the bank its attorney’s fees,
including fees for work performed in the bankruptcy court. Id. The Fifth
District reversed that ruling, holding that federal law preempted state law
in determining the reasonableness of such fees. Id. at 1078–79. The court
pointed to 11 U.S.C. § 506(b) as giving the bankruptcy court exclusive
jurisdiction. Id. That statute provides “a vehicle for bankruptcy courts to
award postpetition attorney’s fees and costs to oversecured creditors if the
security agreement so provides.” Id. at 1078 (italics in original).
The Fifth District was careful to distinguish the situation before it from
situations like this case, where:
the bankruptcy stay had been lifted and the property (which
remained the property of the debtor in bankruptcy and the
mortgagor in the foreclosure action) was returned to the
jurisdiction of the state foreclosure court.
Id. at 1077. In this scenario, without any disposition of property in the
bankruptcy court, no “recovery” has occurred within the meaning of
section 506(b) which would trigger section 506(b)’s operation. 2
2 11 U.S.C. § 506(b) provides: “To the extent that an allowed secured claim is
secured by property the value of which, after any recovery under subsection (c)
of this section, is greater than the amount of such claim, there shall be allowed
to the holder of such claim, interest on such claim, and any reasonable fees,
costs, or charges provided for under the agreement or State statute under which
such claim arose.” (Emphasis added).
6
In this case, the bankruptcy court supervised no disposition of the
property. The bankruptcy court never determined that the Association
was an oversecured creditor, i.e., that the Association’s “allowed secured
claim is secured by property the value of which . . . is greater than the
amount of such claim.” Rather, the bankruptcy court dismissed
appellant’s petition with prejudice and sent the Association’s foreclosure
case back to state court for further proceedings, even providing prospective
stay relief in the event appellant filed yet another bankruptcy petition to
“delay, hinder, or defraud” the Association. We therefore affirm the county
court’s award of the Association’s attorney’s fees incurred in the federal
forum to return the case to a Florida court for resolution.
The Third District has taken a different view of this issue. In Florida
Federal Savings & Loan Ass’n v. Sanchez, 553 So. 2d 1254, 1255 (Fla. 3d
DCA 1989), a case factually similar to this one, the Third District held that
a creditor must seek its attorney’s fees from the bankruptcy court, not the
state court which entered final judgment in a foreclosure action after
dismissal of the bankruptcy petition. As authority, Sanchez relied upon
In re Boffey, 14 B.R. 2, 3 (S.D. Fla. 1981), a bankruptcy court decision
where the mortgaged property was “liquidated by the [bankruptcy]
trustee,” not sold in a state foreclosure sale. Thus, Boffey’s precise holding
does not stretch as far as the Third District extended it. 3
We certify conflict with Sanchez, Martinez, and Pastore-Borroto
Development.
The County Court Did Not Abuse its Discretion in Refusing to
Continue the Summary Judgment Hearing
Appellant asserts that the county court abused its discretion in
refusing to continue the summary judgment hearing due to appellant
suffering injuries in a horseback riding accident.
An appellate court reviews a trial court’s ruling on a request for
continuance for an abuse of discretion. Taylor v. Inst. for Med. Weight
Loss, 863 So. 2d 398, 400 (Fla. 4th DCA 2003).
To determine if the denial of a continuance amounts to an abuse of
discretion, an appellate court focuses on three factors: (1) whether the
3 Without much discussion, the Third District applied Sanchez in Pastore-Borroto
Development, Inc. v. Marevista Apartments, M.B., Inc., 596 So. 2d 526 (Fla. 3d
DCA 1992), Martinez v. Giacobbe, 951 So. 2d 902 (Fla. 3d DCA 2007), and
Makarewicz v. Jacoby, 663 So. 2d 6 (Fla. 3d DCA 1995).
7
denial of the continuance created an injustice for the movant; (2) whether
the cause of the request for continuance was unforeseeable by the movant
and not the result of dilatory practices; and (3) whether the opposing party
would suffer any prejudice or inconvenience as a result of a continuance.
Fleming v. Fleming, 710 So. 2d 601, 603 (Fla. 4th DCA 1998).
“[W]hen undisputed facts reveal that the physical condition of either
counsel or client prevents fair and adequate presentation of a case, failure
to grant a continuance is reversible error.” Ziegler v. Klein, 590 So. 2d
1066, 1067 (Fla. 4th DCA 1991). However, “cases involving illness of
counsel or a party do not mandate reversal in all circumstances.” Krock
v. Rozinsky, 78 So. 3d 38, 41 (Fla. 4th DCA 2012). Instead, additional
specific factors should be considered, including: “(1) the length of the
requested continuance; (2) whether the counsel who becomes unavailable
for trial has associates adequately prepared to try the case; (3) whether
other continuances have been requested and granted; (4) the
inconvenience to all involved in the trial; and (5) any other unique
circumstances.” Myers v. Siegel, 920 So. 2d 1241, 1243 (Fla. 5th DCA
2006).
Here, the county court did not abuse its discretion in denying appellant
a second continuance of the summary judgment hearing where the court
determined that her request was made for dilatory purposes.
The county court detailed the various, numerous physical problems
which appellant had claimed during the course of litigation to delay the
proceedings, including exhaustion caused by exposure to “microwave
radiation from Internet routers and cell phones,” two separate automobile
accidents causing a herniated disc and “significant neck injuries”
respectively, muscle cramps from hunching over a desk in front of a
computer, unspecified “serious illnesses,” an unspecified “catastrophic
injury,” and “chronic mercury and lead poisoning.”
The county court also performed a thorough review of the record and
made specific findings that appellant’s request for continuance was part
of a deliberate pattern of “dilatory practices and an intent to delay the
proceedings”:
Based on the foregoing findings, a thorough review of this
Court’s docket and the bankruptcy proceedings, the multiple
notices of unavailability spanning 1-2 months each, prior
claims of injury and medical incapacity, and [appellant’s]
bankruptcy filings on the eve of hearings, the Court finds
there has been a deliberate pattern by [appellant] to delay [the
8
Association’s] efforts to have its motion for summary
judgment heard by the Court. [Appellant] has had over a year
to oppose [the Association’s] motion for summary judgment,
file an affidavit in opposition, and obtain an attorney to
represent her in these proceedings, but she did not do so.
***
In the case at bar, the Court, after weighing the factors
enumerated in Krock, finds there have been multiple delays
by [appellant] and continuances of the hearing on [the
Association’s] summary judgment motion. These delays were
due to [appellant’s] lengthy notices of unavailability and serial
bankruptcy filings, which the bankruptcy court found was
part of a scheme to delay this particular proceeding that has
been pending since 2017.
The Court finds that the denial of the motion to continue
would not create an injustice for [appellant], who has been on
notice of [the Association’s] summary judgment motions for a
year, and was granted even more time to respond but did not.
The Court finds that the request for continuance, even if the
allegation of recent medical injuries [is] truthful, is the result
of dilatory practices and an intent to delay the proceedings
and a ruling on [the Association’s] motion. Finally, the Court
finds that not only would [the Association] suffer prejudice as
a result of another continuance, but that [the Association]
already has.
Given these findings, which find support in record, the county court
did not abuse its discretion in denying the continuance.
Conclusion
Without further discussion, we conclude that appellant’s remaining
arguments and appeals of other orders are either unpreserved or otherwise
without merit. Therefore, we affirm the final judgment of foreclosure.
Affirmed.
DAMOORGIAN and GERBER, JJ., concur.
* * *
9
Not final until disposition of timely filed motion for rehearing.
10