Taylor Bean & Whitaker Mortgage Company v. Joseph M. Wright and Megan L. Wright

FIRST DISTRICT COURT OF APPEAL
STATE OF FLORIDA
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No. 1D17-1432
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TAYLOR, BEAN &
WHITAKER MORTGAGE
COMPANY and GOSHEN
MORTGAGE, LLC, as
successor in interest to
Taylor, Bean & Whitaker
Mortgage Company,
Appellants,
v.
JOSEPH M. WRIGHT and
MEGAN L. WRIGHT,
Appellees.
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On appeal from the Circuit Court for Nassau County.
Steven Fahlgren, Judge.
August 3, 2018
WINOKUR, J.
Appellant, Taylor, Bean & Whitaker Mortgage Company
(Taylor), appeals the trial court’s entry of Final Judgment, which
awarded attorney’s fees and costs against Taylor’s successor-in-
interest, Goshen Mortgage, LLC (Goshen). Florida Rule of Civil
Procedure 1.260(c) requires that the substitution of parties occur
upon motion to the trial court, which never occurred here. As a
result, the lower court erred by sua sponte substituting Goshen as
the Plaintiff. *
I.
Joseph and Megan Wright entered into a mortgage with
Taylor for a property located in Yulee. The Wrights defaulted and
Taylor filed a complaint against them. Later in the litigation,
Taylor went into bankruptcy and their interest in the Wrights’
mortgage was assigned to Goshen. Goshen’s counsel filed a Notice
of Appearance as Taylor’s co-counsel. Goshen, as “successor-in-
interest” to Taylor, moved to dismiss the case and to cancel notice
of lis pendens, and requested the original mortgage documents
back from the court file, which the trial court granted. In turn,
the Wrights then moved for a Judgment Awarding Costs and
Attorney’s Fees.
One of the primary issues at the hearing on the Wrights’
motion was whether Goshen was the proper plaintiff in this
action, subject to attorney’s fees. Goshen and Taylor both argued
that Taylor was the proper plaintiff, because Goshen was never
substituted as plaintiff, in spite of the fact that it filed a motion
to dismiss. The trial court found that Goshen’s dismissal of the
foreclosure suit as successor-in-interest made Goshen the “de
facto” plaintiff. Accordingly, the trial court on its own motion
substituted Goshen as the Plaintiff.
After the hearing, the trial court entered the Final Judgment
Awarding Attorney’s Fees and Costs Against Goshen.
II.
When a trial court’s decision is based, in part, on factual
findings, it presents a mixed question of law and fact. Gainesville
Health Care Ctr., Inc. v. Weston, 857 So. 2d 278, 283 (Fla. 1st
DCA 2003). The trial court’s factual findings are reviewed under
a competent, substantial evidence standard. Id. However, the
trial court’s application of the law to the facts is reviewed de
novo. Id.
* We reject other issues raised in this appeal.
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Florida Rule of Civil Procedure 1.260(c) governs substitution
of parties to an action:
In case of any transfer of interest, the action may be
continued by or against the original party, unless the
court upon motion directs the person to whom the
interest is transferred to be substituted in the action or
joined with the original party.
We find that the trial court did not comply with the requirements
of Rule 1.260(c). As such, Goshen was never properly substituted
as Plaintiff in this case.
III.
Goshen became Taylor’s successor-in-interest when it
acquired the Wrights’ mortgage. Under this authority, Goshen
voluntarily dismissed Taylor’s foreclosure action against the
Wrights. Rule 1.260(c) permits Goshen to seek dismissal on
behalf of Taylor. Moreover, the rule makes clear that a successor-
in-interest may continue an action of the original plaintiff “unless
the court upon motion” substitutes the successor-in-interest as
the plaintiff. Fla. R. Civ. P. 1.260(c) (emphasis added). This
never occurred here.
As a result, this case is similar to Tinsley v. Mangonia
Residence I, Ltd., 937 So. 2d 178 (Fla. 4th DCA 2006). In Tinsley,
the original plaintiff, Vikar Associates, instituted foreclosure
proceedings against Mangonia Residence. Id. During the
litigation, Vikar assigned its interest in the mortgage to Tinsley.
Id. Vikar later moved to substitute Tinsley as the plaintiff, but
the trial court never heard the motion. Id. Eventually, the
foreclosure proceedings were dismissed. Id. Mangonia then
sought attorney’s fees from both Vikar and Tinsley, and the trial
court awarded them fees from Tinsley. Id. The district court
reversed the fee order based on Rule 1.260(c), holding that
“[b]ecause no party obtained a court order substituting Tinsley
for Vikar, Vikar, as the rule permits, remained as the party
pursuing the action, and the court was without jurisdiction to
award fees or costs against Tinsley, a non-party.” Id. at 180. The
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same analysis applies here. Taylor remained the proper plaintiff
and the court could not order Goshen to pay attorney’s fees.
The Wrights attempt to distinguish this case by asserting
that, unlike Tinsley, Goshen acted to voluntarily dismiss the
action, which had the effect of substituting itself for Taylor and
made it the “de facto” plaintiff here. Indeed, the trial court also
used this reasoning in its ruling. We disagree. Rule 1.260(c)
provides that a party to whom the plaintiff’s interest has been
transferred can continue an action on behalf of the original
plaintiff, including filing a voluntary dismissal. If a successor-in-
interest becomes the plaintiff merely by filing a motion in the
action, then the specific requirements to substitute parties
contained in Rule 1.260(c) becomes meaningless.
A successor-in-interest can become a party to an action by
making a motion to the trial court pursuant to Rule 1.260(c).
Indeed, Florida courts have recognized that once a plaintiff has
assigned its interests in an action a trial court has two options:
“(1) to allow the action to be continued in the name of the
plaintiff; or (2) to allow [the successor] to be either substituted for
or joined with the original party-plaintiff.” Levine v. Gonzalez,
901 So. 2d 969, 972 (Fla. 4th DCA 2005) (quoting Schmidt v.
Mueller, 335 So. 2d 630, 631 (Fla. 2d DCA 1976)). The trial
court’s unilateral substitution of Goshen as the plaintiff violated
the requirements of Rule 1.260(c).
We note that after the voluntary dismissal of Taylor’s action
by Goshen, the trial court did not have jurisdiction to substitute
Goshen as the plaintiff. See Randle-Eastern Ambulance Serv.,
Inc. v. VASTA, 360 So. 2d 68, 68-69 (Fla. 1978) (holding that “a
plaintiff’s volitional dismissal divests a trial court of jurisdiction
to entertain a later request to be relieved from the dismissal” and
that a “trial court loses jurisdiction to proceed in any way beyond
the announcement of dismissal”). Because the trial court’s
unilateral substitution of Goshen as the plaintiff occurred several
months after the voluntary dismissal, it acted without
jurisdiction. While the trial court had jurisdiction to hear the
motion for attorney’s fees, it did not have jurisdiction to
substitute the plaintiff.
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IV.
In conclusion, Goshen could dismiss the foreclosure suit as
Taylor’s successor-in-interest without substituting itself as the
Plaintiff. Pursuant to Florida Rule of Civil Procedure 1.260(c), a
trial court must rule on a motion for substitution before it can
substitute a party to an action. The trial court’s sua sponte
substitution of Goshen as the Plaintiff was error. We reverse the
entry of Final Judgment and remand to the trial court for
proceedings consistent with this opinion.
REVERSED and REMANDED.
WOLF and JAY, JJ., concur.
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Not final until disposition of any timely and
authorized motion under Fla. R. App. P. 9.330 or
9.331.
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Cameron H.P. White and Jason R. Hawkins of South Milhausen,
P.A., Orlando, for Appellants.
Lynn Drysdale, Jacksonville Area Legal Aid, Inc., Jacksonville,
for Appellees.
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