CitiBank, N.A. v. Jorge Villanueva, Lucia Gonzalez, unknown spouse of Jorge Villanueva, unknown spouse of Lucia Gonzalez, John Doe and Jane Doe, as unknown tenants in possession of the subject property

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT

CITIBANK, N.A., as Trustee for the Certificateholders of STRUCTURED
ASSET MORTGAGE INVESTMENTS II, INC., Bear Stearns Alt-A Trust
Mortgage Pass-through Certificates Series 2006-4,
Appellant,

v.

JORGE VILLANUEVA, LUCIA GONZALEZ, unknown spouse of JORGE
VILLANUEVA, unknown spouse of LUCIA GONZALEZ, JOHN DOE, and
JANE DOE, as unknown tenants in possession of the subject property,
Appellees.

No. 4D15-239

[September 9, 2015]

Appeal of a non-final order from the Circuit Court for the Seventeenth
Judicial Circuit, Broward County; Cynthia G. Imperato, Judge; L.T. Case
No. CACE 08011842 (11).

Steven W. Schabacker of Wargo & French, LLP, Miami, for appellant.

No appearance for appellees.

PER CURIAM.

Citibank, N.A., the plaintiff in a mortgage foreclosure action, appeals a
non-final order denying its motion to vacate final judgment of
foreclosure. This court has jurisdiction pursuant to Florida Rule of
Appellate Procedure 9.130(a)(5). We reverse.

After the borrower defaulted on a note secured by a mortgage on real
property, Citibank filed a foreclosure complaint. Citibank obtained a
final judgment of foreclosure in March 2013, and a foreclosure sale was
set for a date in July 2013.

In June 2013, a non-party, Diana Diaz, moved to cancel the sale. Her
motion alerted Citibank that the owners of the property at the time the
note and mortgage were executed had quit-claimed the property to Diaz
and another person, Luis Garcia. Diaz and Garcia actually were the
record title owners at the time the foreclosure complaint was filed. They
were not named in the foreclosure action or on the final judgment;
therefore, their interests were not foreclosed. Diaz did not move to
intervene in the foreclosure action or to vacate the final judgment of
foreclosure. Instead, she filed a separate action to quiet title to the
property.

Citibank moved to vacate the final judgment of foreclosure in October
2014, a year and seven months after the judgment was filed and a year
and four months after Diaz alerted it to the existence of the record title
owners. Without intervening, Diaz filed a response, arguing that the
motion was untimely. The trial court denied the motion without
explanation. This appeal followed.

A trial court’s ruling on a motion to vacate generally is reviewed for
abuse of discretion. Suntrust Mortg. v. Torrenga, 153 So. 3d 952, 953
(Fla. 4th DCA 2014). But “when the underlying judgment is ‘void,’ the
trial court has no discretion, but is obligated to vacate the judgment.”
Phenion Dev. Grp., Inc. v. Love, 940 So. 2d 1179, 1181 (Fla. 5th DCA
2006) (citing State, Dep't of Transp. v. Bailey, 603 So. 2d 1384, 1386-87
(Fla. 1st DCA 1992)).

The fee simple title holder is an indispensable party in an action to
foreclose a mortgage on property. Oakland Props. Corp. v. Hogan, 117
So. 846, 848 (Fla. 1928) (“One who holds the legal title to mortgaged
property is not only necessary, but is an indispensable, party defendant
in a suit to foreclose a mortgage.”); Cmty. Fed. Sav. & Loan Ass’n of Palm
Beaches v. Wright, 452 So. 2d 638, 640 (Fla. 4th DCA 1984).
“Indispensable parties are necessary parties so essential to a suit that no
final decision can be rendered without their joinder.” Hertz Corp. v.
Piccolo, 453 So. 2d 12, 14 n.3 (Fla. 1984).

In English v. Bankers Trust Co. of California, N.A., 895 So. 2d 1120
(Fla. 4th DCA 2005), the lender filed a foreclosure action against the
original borrower, obtained a final judgment, and purchased the property
at the foreclosure sale. Then it learned that the borrower had conveyed
the property to another before the foreclosure action, and it brought a
second foreclosure action, naming both the borrower and the new owner
as defendants. Summary judgment was entered for the lender. Id. at
1121.

On appeal, the borrower argued she could not be joined in the new
action because of the prior action. This court affirmed the summary
judgment, explaining as follows:

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 The trial court correctly concluded that the first action
was void. Significantly, this is not a re-foreclosure to
extinguish a junior lienor. Rather, this second action is an
initial foreclosure as to the fee simple owner. Because Lesa
Investments, the undisputed owner, was not a party to the
first suit, the initial foreclosure judgment could not result in
a valid sale, as the owner of the fee simple title was an
indispensable party. Community Fed. Svgs. and Loan Ass’n
v. Wright, 452 So. 2d 638, 640 (Fla. 4th DCA 1984).

....

We note that, more than a century ago, the Florida
Supreme Court recognized that “a foreclosure proceeding
resulting in a final decree and a sale of the mortgaged
property, without the holder of the legal title being before the
court will have no effect to transfer his title to the purchaser
at said sale.” Jordan v. Sayre, 24 Fla. 1, 3 So. 329, 330
(1888). If the foreclosure proceeding has no effect to transfer
title because the legal title holder has not been joined, it is
simply another way of saying that the foreclosure
proceeding is void.

Id. (emphasis added). This court explained that the borrower’s res
judicata argument would have merit if the first foreclosure sale were not
void. Id. Similarly, Citibank’s foreclosure judgment was void for failing
to join indispensable parties. See also Lambert v. Dracos, 403 So. 2d
481, 484 (Fla. 1st DCA 1981) (holding trial court erred in denying
defendants’ motion to dismiss foreclosure complaint for failure to join an
indispensable party, a legal co-owner of the interest foreclosed).

If the trial court denied the motion to vacate because of Citibank’s
delay in filing it, that was not a proper reason for denial. Florida Rule of
Civil Procedure 1.540(b) allows relief from a final judgment for various
reasons, including that the judgment is void, which falls under
subdivision 1.540(b)(4). “The motion shall be filed within a reasonable
time, and for reasons (1), (2), and (3) not more than 1 year after the
judgment, decree, order, or proceeding was entered or taken.” Fla. R.
Civ. P. 1.540(b). Thus, the time limit for void judgments is “within a
reasonable time.” Id. However, that language has been construed to
mean almost no time limit. Kirchoff v. Jenne, 819 So. 2d 959, 963 (Fla.
4th DCA 2002); M.L. Builders, Inc. v. Reserve Developers, LLP, 769 So. 2d
1079, 1082 (Fla. 4th DCA 2000) (“[W]e do not agree that the length of the
delay in filing a motion to vacate after learning of the entry of a void

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judgment is legally significant since it is well established that the
passage of time cannot make valid that which has been void from the
beginning.”).

Accordingly, we reverse the order denying Citibank’s motion to vacate
final judgment of foreclosure and direct the trial court on remand to
grant the motion.

Reversed and Remanded.

STEVENSON, LEVINE and KLINGENSMITH, JJ., concur.

* * *

Not final until disposition of timely filed motion for rehearing.

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