Third District Court of Appeal
State of Florida
Opinion filed July 27, 2016.
Not final until disposition of timely filed motion for rehearing.
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No. 3D15-2350
Lower Tribunal No. 08-58648
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Vilma Martinez,
Appellant,
vs.
The Bank of New York Mellon, etc.,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, John W.
Thornton, Jr., Judge, and Jon I. Gordon, Senior Judge.
Bruce Botsford (Fort Lauderdale); Pomeranz & Associates (Hallandale), for
appellant.
Kelley Kronenberg and Jacqueline Costoya (Fort Lauderdale), for appellee.
Before SUAREZ, C.J., and EMAS and SCALES, JJ.
EMAS, J.
Vilma Martinez appeals from a final judgment of foreclosure entered in
favor of The Bank of New York Mellon (“BONY”). Martinez asserts that the trial
court abused its discretion in striking her pleadings in the middle of the nonjury
trial and entering, as a sanction against Martinez, a default final judgment of
foreclosure. We agree that, under the circumstances of this case, the trial court
abused its discretion, and therefore, reverse the final judgment of foreclosure and
remand for a new trial.
BACKGROUND
The foreclosure action was filed against Martinez in 2008. She answered
the complaint and asserted several affirmative defenses, including a lack of
standing by BONY to bring the action and a failure by BONY to comply with
conditions precedent as required by the mortgage, including the notice-of-default
provision.
The case proceeded to a nonjury trial. BONY called Martinez as a witness
during its presentation. While on the witness stand, Martinez stated that she had
never moved out of the subject property, had never requested her mail be
forwarded to a post office box,1 and had always received her mail at the subject
property. Upon further examination, counsel for BONY asked Martinez if she had
ever informed any lenders that she no longer lived at the property address. When
1The notice of default admitted into evidence by the court was addressed to
Martinez at a post office box.
2
Martinez denied that she had, counsel for BONY presented a handwritten letter,
purportedly prepared and signed by Martinez and received by BONY, wherein she
expressed that she had moved out of the subject property and was seeking a loan
modification. Initially, Martinez denied that the letter was in her handwriting, and
denied writing or signing the letter. Then, when she was shown the note and
mortgage (to compare the signatures on those documents with that on the
handwritten letter), Martinez testified that the signatures on those documents were
not hers, either. Martinez did eventually admit that the signature on the letter
appeared to be hers, but she never testified that she wrote the letter or instructed
someone to write it on her behalf, and she continued to deny that she had ever
moved out of the property. At this point, the trial court told Martinez:
Ma’am I don’t believe a word you’re saying. I think
you’re lying straight out to me. I’m just wondering
whether or not I ought to just stick you in jail for it.
That’s how irritated I am right now with this business.
You know what, I’m going to take a brief recess and
come back and dispose of this case and I may dispose of
you as well.
Upon returning from recess, BONY called a litigation foreclosure specialist
to the witness stand to authenticate the loan file and documents, including the
payment history for the loan.2 During cross-examination of this witness by
2 At one point during this direct examination, the trial court interrupted BONY’s
counsel and asked the witness a series of thirteen questions, including the requisite
foundational questions for admission of the documents as business records under
section 90.803(6)(a), Florida Statutes (2015).
3
Martinez’s counsel, the court interrupted and asked Martinez (who was not on the
witness stand): “When was the last time you made a payment on this mortgage
ma’am?” When Martinez indicated she did not know the date of the last payment
and could not remember whether she had made any payments on the mortgage, the
court said:
You know what? I think you’re lying to the Court. I’m
striking your pleadings. I’m entering a default and I’m
entering judgment. You ought to consider yourself lucky
that you’re leaving here today and not going to jail. Give
me the judgment. You’re excused. Shame on you all.
Shame on you. Leave.
Counsel for Martinez then objected and requested an opportunity to proffer
for the record his objections and position in the case. The court cut him off and
would not allow counsel to finish his proffer. Thereafter, the court entered an
order striking Martinez’s pleadings and entering default final judgment in favor of
BONY3, finding Martinez “lied and committed perjury and is therefore
sanctioned.” Martinez filed a motion for a new trial, contending that the trial
court: erred in striking her pleadings; inserted itself into the proceedings by
questioning witnesses; failed to permit Martinez’s counsel to question his own
client after she was questioned by BONY; failed to allow Martinez to complete its
cross-examination of BONY’s litigation foreclosure specialist, failed to require
3 The trial court never admitted into evidence BONY’s business records, and it is
unclear whether BONY had completed presenting its evidence at trial prior to the
trial court’s ruling.
4
BONY to complete the presentation of its case; and refused to permit Martinez to
present her case. The trial court denied the motion for new trial and this appeal
followed.
ANALYSIS
This court reviews the trial court’s sanction order “under a ‘somewhat
narrowed’ abuse of discretion standard.” Faddis v. City of Homestead, 121 So. 3d
1134, 1135 (Fla. 3d DCA 2013). It is well-settled in Florida “that a party who has
been guilty of fraud or misconduct in the prosecution or defense of a civil
proceeding is not permitted to continue to employ the very institution she has
subverted to achieve her ends.” Austin v. Liquid Distributors, Inc., 928 So. 2d 521,
521 (Fla. 3d DCA 2006) (quoting Hanano v. Murphy, 723 So. 2d 892, 895 (Fla. 3d
DCA 1998)). Accordingly, a trial court has the authority to impose sanctions on a
party that perpetrates a fraud on the court, which includes striking that party’s
pleadings and entering a default judgment against that party. See Faddis, 121 So.
3d at 1135. However, and importantly for our purposes, the power of the court to
impose sanctions under these circumstances “should be exercised with great
restraint” and should be used “‘only upon the most blatant showing of fraud,
pretense, collusion, or other similar wrongdoing.’” E.I. DuPont De Nemours &
Co. v. Sidran, 140 So. 3d 620, 623 (Fla. 3d DCA 2014).4 See also Celebrity
4 Internal citations and quotations omitted.
5
Cruises, Inc. v. Fernandes, 149 So. 3d 744, 751 (Fla. 3d DCA 2014) (noting that
“striking a party’s pleadings and entry of a default . . . is the most severe of all
sanctions which should be employed only in extreme circumstances” (quoting
Ham v. Dunmire, 891 So. 2d 492, 495 (Fla. 2004)); Empire World Towers, LLC v.
CDR Creances, S.A.S., 89 So. 3d 1034, 1038 (Fla. 3d DCA 2012). “The court
should consider the proper mix of factors and carefully balance a policy favoring
adjudication on the merits with competing policies to maintain the integrity of the
judicial system.” Id. Of significance, the court’s finding of fraud “must be
supported by clear and convincing evidence that goes to ‘the very core issue at
trial.’” Id. at 624.
Upon our review of the record in this case, there is an absence of competent
substantial evidence to support the trial court’s determination, by clear and
convincing evidence, that Martinez “lied and committed perjury” on a central and
material issue, nor competent substantial evidence that any such misconduct was
“undertaken with intent to deceive, constituted a deliberate scheme to subvert the
judicial process, [or] amounted to a fraud upon the court.” Faddis, 121 So. 3d at
1135. Accordingly, we determine that under these circumstances, the trial court
abused its discretion in striking Martinez’s pleadings and entering default final
judgment against her as a sanction.5 In addition, the trial court’s refusal to allow
5To be clear, we do not hold that the trial court’s implicit conclusion—that
Martinez signed the letter, the mortgage and the note—was erroneous. As
6
Martinez’s counsel to call Martinez or any other witnesses to the stand regarding
the “lies and perjury” his client allegedly committed, or even to allow counsel to
make a complete proffer to the court, was a denial of due process. See Fernandes,
149 So. 3d at 750 (holding reversal required where party lacked an opportunity to
present evidence on the issue before sanctions imposed); Kilnapp v. Kilnapp, 140
So. 3d 1051 (Fla. 4th DCA 2014) (holding court denied party a fundamental right
to due process by failing to allow him to present witnesses or testify on his own
behalf); Miller v. Nelms, 966 So. 2d 437 (Fla. 2d DCA 2007) (holding court must
have evidence to support dismissal before dismissing a case for fraud on the court).
We reverse and remand to the trial court for proceedings consistent herewith and,
in consideration of the record on appeal, those further proceedings shall be before a
different judge. See, e.g., Edgel v. State, 962 So. 2d 356 (Fla. 1st DCA 2007).6
Reversed and remanded.
factfinder, the trial court is charged with the responsibility of making the necessary
findings of fact, including determinations of witness credibility inherent in its fact-
finding duties. It may well be that the trial court’s conclusion in this regard would
have been appropriate, had the trial court permitted the parties to conclude the
presentation of their respective cases, made the necessary findings supported by
the evidence, and entered final judgment accordingly. Our holding focuses on the
procedurally improper striking of pleadings and entry of a default final judgment
as a sanction in the absence of proper evidentiary support, and doing so without
first affording Martinez and her counsel an opportunity to present evidence and
testimony to challenge such a sanction.
6 The other issue raised by Martinez on appeal is moot based on this court’s order
for a new trial.
7