Uv Cite III, LLC v. Deutsche Bank

Third District Court of Appeal
State of Florida
Opinion filed April 12, 2017.
Not final until disposition of timely filed motion for rehearing.
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No. 3D16-2341
Lower Tribunal No. 16-344
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UV Cite III, LLC,
Appellant,
vs.
Deutsche Bank National Trust Co., as Trustee, in trust for the
Registered Holders of Morgan Stanley ABS Capital I Inc. Trust
2006-NC5, Mortgage Pass-Through Certificates, Series 2006 NC5,
Appellee.
An Appeal from a non-final order from the Circuit Court for Miami-Dade
County, Jorge Cueto, Judge.
Wallen Hernandez Lee Martinez, LLP, and Todd L. Wallen, for appellant.
Weitz & Schwartz, P.A., and Sarah T. Weitz (Fort Lauderdale), for appellee.
Before EMAS, LOGUE, and LUCK, JJ.
LUCK, J.
This is a residential foreclosure case. In 2016, Deutsche Bank National
Trust Company sought to foreclose on the mortgage it held on a condominium in
Sailboat Cay owned by UV Cite III, LLC. While the case was pending, Deutsche
Bank moved to “sequester” the rents that UV Cite was collecting from tenants
living in the condominium, and have the rents placed in the court registry. The
trial court held a hearing on the motion, and granted it, ordering UV Cite to “pay
all rents due each month . . . under the subject lease into the Court Registry.” “At
the conclusion of this action,” the trial court continued, “all sums deposited into
the Court Registry shall be released to Plaintiff or other prevailing party.”
UV Cite appeals the order requiring that it deposit in the court registry the
rent it receives from leasing out the condominium. We reverse because, absent an
agreement between the parties to assign rents1 or some form of injunctive relief, a
trial court has no authority to order a deposit of money into the registry of the court
if the money was not the subject of the litigation. See Ksaibati v. Ksaibati, 824 So.
2d 219, 222 (Fla. 2d DCA 2002) (“A trial court has no authority to order a deposit
1 “A mortgage or separate instrument may provide for an assignment of rents of
real property or any interest therein as security for repayment of an indebtedness. .
. . Upon application by the mortgagee or mortgagor, in a foreclosure action . . . a
court of competent jurisdiction, pending final adjudication of any action, may
require the mortgagor to deposit the collected rents into the registry of the court . . .
.” § 697.07(1), (4), Fla. Stat. (2016). Section 697.07 “was enacted as a public
policy matter by the legislature to facilitate commercial lending by banks by
enabling them to obtain an assignment of rents as further security in the event of
default.” Williams v. First Union Nat. Bank of Fla., 591 So. 2d 1137, 1140 (Fla.
4th DCA 1992).
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of money into the registry of the court if the money is not the subject of the
litigation.”); Morroni v. Fisher, 647 So. 2d 127, 129 (Fla 2d DCA 1994) (“[T]he
appellees’ counterclaim does not seek a money judgment for the fair rental value
of the properties; the causes of action asserted against the Morronis are ejectment,
possession and trespass. A trial court has no authority to order a deposit of money
in the registry of the court if the money is not the subject of the litigation.”);
Wincast Assocs., Inc. v. Hickey, 320 So. 2d 17, 18 (Fla. 4th DCA 1975) (“The
authority conferred on a court to order a deposit of money or property does not
apply if the money in the possession of the party is not the subject of the litigation,
but rather its payment is an incident thereto, dependent on the judgment to be
rendered in the action, as in the case of an action for redemption, specific
performance, accounting, rescission, or the like.” (quotation omitted)).2
The Morroni case, for example, involved a dispute over real property
secured as part of a loan. Morroni, 647 So. 2d at 128. The Morronis deeded
property to the Fishers as “security for loans [that Mr. Fisher] had made to them.”
Id. The arrangement ended in a lawsuit with the Morronis suing to cancel or
reform the deed, and the Fishers counterclaiming for ejectment, possession, and
trespass. Id. As the case was winding its way through the circuit court, the Fishers
2While UV Cite objected that the trial court did not have authority to order what it
ordered, neither party cited these cases to the trial court in the motion or at the
hearing.
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moved “to require the Morronis to deposit funds in the registry of the court . . .
representing the fair rental value of the properties.” Id. The trial court ordered the
Morronis to deposit money into the court registry equal to the fair rental value of
the properties they had deeded to the Fishers. Id. at 128-29. The appellate court
reversed because the Fishers’ counterclaim did “not seek a money judgment for the
fair rental value of the properties.” Id. at 129. “A trial court,” the Second District
explained, “has no authority to order a deposit of money in the registry of the court
if the money is not the subject of the litigation.” Id.
Here, Deutsche Bank’s complaint alleged three causes of action: to
foreclose on the mortgage (count one); and to reform the mortgage (count two) and
deed (count three). The complaint did not seek a judgment for the rent UV Cite
collected, and the rent was not part of any of the three alleged causes of action.
The record, moreover, contains no evidence of an assignment of rents provision,
and Deutsche Bank did not seek injunctive relief. Because the rent was not the
subject of Deutsche Bank’s lawsuit, and there was no other basis for sequestering
the money, the trial court had no authority to order that the rent UV Cite collected
from its tenant be deposited in the registry of the court.
Reversed and remanded.
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