You Didn’t Get Served – Mattress One v. Sunshop Properties

You Didn’t Get Served – Mattress One v. Sunshop Properties

I’m sure you all remember the 2004 smash hit and box office success, You Got Served. The film’s depth of plot is rivaled only by its extravagant choreography and magnificent soundtrack. Aside from its Oscar-worthy qualities, this film will stand, for eternity, as a cautionary tale of why one should never work for a drug lord that goes by the name of Emerald. Essentially, if you study the film closely, you will learn valuable life lessons on how not to get served.

Now let’s fast forward to November of 2019 when we find ourselves fortunate enough for another lesson on not getting served. This time our lesson is served delivered within the context of not being served with a non-residential eviction lawsuit. The underlying facts were that Mattress One, Inc. was a tenant under a commercial lease agreement with Sunshop Properties, LLC. Sunshop filed for eviction against Mattress One and served the summons and complaint at Mattress One’s designated principal place of business, which was also the same address designated for its registered agent for service of process.

Florida Statutes Section 48.091(2) requires registered agents for corporations to be present for service of process between 10 a.m. and 12 noon each day, except for Saturdays, Sundays, and legal holidays. In this case, although the service of process was made at 10:59 a.m., which was within the statutorily-required window, Mattress One’s registered agent was not present. The return of service reflects that the process server gave the summons and complaint to an unknown employee of Mattress One, identified only as “Drew Doe (refused to provide full name).” Mr. Doe apparently did not notify any of his bedfellows up Matress One’s chain of command, and default judgments were eventually entered against Mattress One for the breach of lease and eviction counts. Mattress One finally became aware of the proceedings when its funds were seized pursuant to a writ of garnishment.

Not one to take it lying down, Mattress One, Inc. filed an emergency motion to set aside the default judgments and to quash (not squash) the writ of garnishment. The trial court denied Mattress One’s motion and Mattress One appealed. In its analysis, the Third DCA observed that Florida law requires strict compliance with all the statutory requirements for service of process. To perfect service on a corporation, Florida Statutes Section 48.081(1) requires process be served on specified officers of the corporation, or, in their absence, on any officer or business agent. Specifically, the DCA observed,

[t]o bind a corporation for jurisdictional purposes, a return of service must show the absence of all officers of a superior class designated in the statute before service can be obtained by serving an officer or agent of an inferior class. If this requirement is not met, a court’s jurisdiction is not perfected, and any judgment entered is void. As an alternative to any of these, service may be perfected on the registered agent designated by the corporation to accept service of process.

In this case, service was not made on Mattress One’s officers, and the return of service did not reflect the absence of all officers prior to resorting to service on an officer or agent of an inferior class. The return of service also failed to reflect service upon Mattress One’s registered agent. Finally, the Third DCA observed that “although the registered agent was not present on the corporate premises when he or she was required to be under section 48.091, the return of service does not indicate that service of process was proper based on the absence of the registered agent. Instead, the attempted service was made on an unidentified, random employee.”

Florida’s Third District Court of Appeals reversed the trial court’s order, remanding the matter with instructions to quash the service of process as void, to set aside the default judgments, and to quash the writ of garnishment.

The appellate decision referenced in this blog post is Mattress One, Inc. v. Sunshop Properties, LLC, Case No. 3D19-0307 (Fla. 3d DCA 2019).

And for those of you wondering, yes, the long-awaited sequel to You Got Served is finally on the way.

A corporation by any other name…

“A rose lender by any other a slightly different name would smell as sweet still be able to foreclose.”

Shakespeare 4th DCA (more or less)

Florida’s 4th District Court of Appeals has held that the omission of the word “corporation” from a corporation’s name as it appears on various mortgage loan documents, did not render the loan invalid as a matter of law.

The September 20, 2018 appellate decision[note]Avant Capital, LLC v. Gomez, 2018 WL 4519981, ___ So.3d ___ (Fla. 4th DCA 2018) (not final until the time for rehearing has expired).[/note] was rendered upon a foreclosure plaintiff’s appeal from a trial court’s order granting summary judgment in favor of the homeowner. The foreclosure plaintiff alleged that it was the holder of the note and mortgage that were in default, entitling it to foreclose. The plaintiff was not the original lender, having received an assignment of the loan from another party, as is common in the industry. The issue here was that the the promissory note, the mortgage, and also the allonge that assigned the loan out from the initial lender, all omitted the word “corporation” from the initial lender’s name. The homeowner defended the foreclosure, claiming that this omission meant that the lender as shown on the documentation was a nonexistent entity and, thus, the promissory note and mortgage were void, and the endorsement from the (alleged to be) nonexistent entity was a nullity. The trial court agreed, granting summary judgment in favor of the homeowner.

The 4th DCA reversed the trial court’s ruling, and the DCA did not have to go far to find support for its reasoning. Florida Statutes § 694.12 states that all mortgages “made and received bona fide and upon good consideration […] in which the name of said corporation shall be incorrectly set out in such [mortgage] by omitting a word from the corporate name, or by adding a word thereto, or by misspelling any part of the name of said corporation, and the identify of said corporation shall plainly appear from the contents of said instrument, or otherwise, such [mortgage], shall be taken and deemed valid and effectual as though the name of said corporation were correctly set out in said [mortgage], and the same shall, notwithstanding such irregularity or defect, be deemed and taken as properly executed.” Despite the unambiguous plain language of the statute, the 4th DCA also cited to a 1998 concurring opinion[note]Presley v. Ponce Plaza Assocs., 723 So. 2d 328, 330 (Fla. 3d DCA 1998) (Cope, J., specially concurring).[/note] out of the 3rd DCA, which stated, “slight departures from the name used by the corporation, such as the omission of a part of its name or the inclusion of additional words, generally will not affect the validity of contracts or other business transactions as long as the identity of the corporation can be reasonably established from the evidence.”

Note that the practical result of this is not an automatic win for the plaintiff, meaning that the foreclosure will now proceed and the plaintiff will still have the burden of proof on its claims. Perhaps the homeowner has other defenses to the claims, perhaps not. However, the issue of whether or not the initial lender was a nonexistent entity has been determined.