Vera De Sousa, as Trustee for Vag Land Trust 1 v. JP Morgan Chase

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
VERA DE SOUSA, as Trustee for VAG LAND TRUST 1,
Appellant,
v.
JP MORGAN CHASE, N.A.,
Appellee.
No. 4D13-4638
[July 29, 2015]
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Howard H. Harrison, Senior Judge, Judge; L.T. Case No.
502013CA002062.
Venol C. Adams, West Palm Beach, for appellant.
Elliot B. Kula of Kula & Associates, P.A., North Miami, for appellee.
FORST, J.
Appellant Vera De Sousa, as Trustee for Vag Land Trust 1, appeals the
trial court’s order denying Appellant’s motion to intervene in foreclosure
proceedings following the entry of final judgment of foreclosure for the
Appellee JP Morgan Chase, N.A. (“Chase”). For the reasons stated below,
we disagree and affirm the denial of the motion to intervene.
Background
In September of 2011, Los Mangos Property Owners’ Association (“Los
Mangos”), in an effort to be reimbursed for unpaid assessments, initiated
a foreclosure action with respect to property located in Palm Beach County
owned by Paul and Frances Morobitto. While that action was pending,
Chase filed a complaint seeking to foreclose on a superior mortgage
granted on the same Morobitto property. The defendants named in the
complaint included the Morobittos (both now deceased); the unknown
heirs of the Morobittos; Los Mangos, as the holder of an inferior lien; and
any unknown parties in possession of the property. Chase filed a lis
pendens on the property contemporaneously with its complaint in January
of 2013 and the lis pendens was recorded on February 6, 2013.
Los Mangos’ claim was resolved in its favor in February of 2013, one
month after Chase’s foreclosure proceedings began and twenty-one days
after Chase’s lis pendens was recorded. In April of 2013, with Chase’s lis
pendens still on the property and its foreclosure complaint filed, Appellant
purchased Los Mangos’ property interest, subject to Chase’s superior
interest, at the Los Mangos foreclosure sale.
Subsequently, the trial court entered final judgment of foreclosure in
favor of Chase and found that Chase’s lien was superior to all rights,
claims, liens, encumbrances, and equities of all defendants. Twenty-nine
days after the final judgment was entered on behalf of Chase, Appellant
filed a motion to intervene. After considering Appellant’s motion, the trial
court denied the motion to intervene and Appellant now appeals the denial.
Standard of Review
We review an order denying a motion to intervene for abuse of
discretion. “[I]ntervention pursuant to rule 1.230 is a matter of
discretion.” Union Cent. Life Ins. Co. v. Carlisle, 593 So. 2d 505, 507 (Fla.
1992).
Analysis
Appellant’s motion to intervene is based on an interest in property
acquired through the foreclosure sale resulting from Los Mangos’ action to
foreclose on assessment liens. As noted above, at the time Appellant
purchased its inferior interest in the property, there was an outstanding
lis pendens on record and the property was subject to Chase’s foreclosure
action.
Florida Rule of Civil Procedure 1.230 states “anyone claiming an
interest in pending litigation may at any time be permitted to assert a right
by intervention, but the intervention shall be in subordination to, and in
recognition of, the propriety of the main proceeding, unless otherwise
ordered by the court in its discretion.” The ability to intervene is a
permissive right granted in the trial court’s discretion. See Hausmann ex
rel. Doe v. L.M., 806 So. 2d 511, 513 (Fla. 4th DCA 2001). It has been
established that inferior interests, such as Appellant’s in the instant case,
do not support intervention. See Greenwald v. Graham, 130 So. 608, 611
(Fla. 1930) (“[A] purchaser pendente lite is bound by the judgment or
decree rendered against the party from whom he makes the purchases as
much so as though he had been a party to the judgment or decree
himself.”); Andresix Corp. v. Peoples Downtown Nat’l Bank, 419 So. 2d
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1107, 1107 (Fla. 3d DCA 1982) (“We affirm the trial court’s order denying
the motion to intervene filed by Andresix Corporation upon a holding that
Andresix, as a purchaser of property which was then the subject of a
mortgage foreclosure action and accompanying lis pendens by Peoples
Downtown National Bank, was not entitled to intervene in such action.”).
Appellant purchased its interest in the property at the foreclosure sale
on April 4, 2013. Chase’s lis pendens on the property was recorded on
February 6, 2013 and gave notice that Chase’s foreclosure action was
pending. Accordingly, Appellant was a purchaser pending the outcome of
Chase’s foreclosure action and is precluded from intervening in the action.
Andresix, 419 So. 2d at 1107. On these grounds, Appellant has failed to
demonstrate an abuse of discretion on the part of the trial court in denying
the motion to intervene.
Further supporting the trial court’s denial of Appellant’s motion to
intervene is the fact that the motion was filed after the final judgment of
foreclosure was entered. “[T]he general rule — universally — is that
intervention may not be allowed after final judgment, save in the interests
of justice . . . .” Sedra Family Ltd. P’ship v. 4750, LLC, 124 So. 3d 935,
936 (Fla. 4th DCA 2012) (internal quotations and citations omitted).
The narrow exception to the rule prohibiting post-judgment
intervention arises when the interests of justice so require. Wags Transp.
Sys., Inc. v. City of Miami Beach, 88 So. 2d 751, 752 (Fla. 1956). In Wags,
the petitioners sought to intervene post-judgment in a case where the city
was attempting to build commercial hotels within the same zoning district
as the petitioner’s residential property. Id. The Florida Supreme Court
permitted the homeowners to intervene post-judgment in order to show
how the addition of the commercial buildings would affect the value of
their residential property. Id.
Courts have been reluctant to extend this exception to cases outside
the facts of Wags and the limitation on applying the exception has been
recognized by this Court as well as the Florida Supreme Court. See
Dickinson v. Segal, 219 So. 2d 435, 438 (Fla. 1969) (“[W]e, by virtue of the
authority of that case, recognize this exception but decline to extend it
beyond the facts involved there.”); Md. Cas. Co. v. Hanson Dredging, Inc.,
393 So. 2d 595, 596 (Fla. 4th DCA 1981) (“We are strongly inclined to the
view that adherence to the rule rather than the exception will produce the
best result in the great majority of cases.”).
The instant case does not align with the circumstances in Wags to meet
the narrow exception to the general rule prohibiting post-judgment
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intervention. Wags involved the subject matter of zoning, not foreclosure.
Wags, 88 So. 2d at 751. Appellant in the instant case purchased the
property during the pendency of Chase’s foreclosure action with notice of
the lis pendens and foreclosure action,1 unlike the situation in Wags where
the intervenors purchased their house on the strength of the zoning
ordinance and in reliance on the fact that property within that zoning
district would remain residential. Id. at 752.
Lastly, the intervenors in Wags were granted the opportunity to
intervene because of a lack of alternative procedures to protect their
residential property interest. Id. Appellant in the instant case had the
ability to exercise its statutory right of redemption. See § 45.0315, Fla.
Stat. (2013); Sedra, 124 So. 3d at 935-36. The statutory right of
redemption allows the mortgagor or the holder of a subordinate interest to
cure the indebtedness and prevent a foreclosure sale up until the time of
the filing of a certificate of sale by the clerk of the court. Id.
Conclusion
Appellant’s attempt to intervene was made after final judgment and
does not meet the narrow exception allowing for post-judgment
intervention. We conclude that the trial court properly denied Appellant’s
motion to intervene.
Affirmed.
CIKLIN, C.J., and KLINGENSMITH, J., concur.
* * *
Not final until disposition of timely filed motion for rehearing.
1Appellant’s claim that its due process rights were violated due to Chase’s failure
to notify Appellant of the foreclosure proceedings is without merit. Chase’s senior
interest was not foreclosed in the prior, junior proceeding and Appellant was on
notice of the foreclosure proceedings due to the recorded lis pendens. See U.S.
Bank Nat’l Ass’n v. Bevans, 138 So. 3d 1185, 1188-89 (Fla. 3d DCA 2014) (“A
person that acquires property for value can protect itself by checking the public
records for duly recorded instruments that reflect superior liens” and “[a] lis
pendens serves as constructive notice of the claims asserted against the property
in the pending litigation with respect to one acquiring an interest in the property
after the lis pendens is filed.” (internal quotations and citation omitted)).
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