Category: Litigation

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.

Short selling your home? Here’s a tip: start the process well in advance of a scheduled foreclosure sale

Short selling your home? Here’s a tip: start the process well in advance of a scheduled foreclosure sale

A September, 2018 opinion[note]Ocean Bank v. Gato, 2018 WL 4761845, ___ So.3d ___ (Fla. 3d DCA 2018).[/note] from Florida’s Third District Court of Appeals provides guidance on what is not a “lawful, cognizable basis” for cancelling, rescheduling, or continuing a judicial foreclosure sale date, in the absence of an agreement from the plaintiff (lender). In the case below, thirteen days before a foreclosure sale[note]This was the second foreclosure sale to be scheduled, with the first having been canceled due to the homeowner filing bankruptcy. The bankruptcy case was dismissed not long after it was filed, resulting in the foreclosure sale being reset.[/note] was set to occur, the plaintiff/homeowner filed an “emergency” motion to cancel the foreclosure sale, citing as the basis a contemplated short sale, and attaching a short sale contract dated twelve dates prior to the “emergency” motion.

At the hearing on the homeowner’s motion to cancel, the plaintiff/bank explicitly objected, stating, “The bank has declined the short sale which would leave us tens of thousands of dollars short. We have filed our objection in writing and the law says that under those circumstances the motion to cancel the sale should not be granted.” The court’s response? “So what I’m going to do is give it a 90-day resale date with no further continuances.”

The bank appealed this decision to the Third DCA. The appeals court, in citing to Florida Statutes § 45.031(1)(a)[note]Florida Statutes § 45.031(1)(a) states that “the court shall direct the clerk to sell the property at public sale on a specified day that shall be not less than 20 days or more than 35 days after the date thereof.” The statute continues, “[a] sale may be held more than 35 days after the date of final judgment or order if the plaintiff or plaintiff’s attorney consents to such time.” (Emphasis added).[/note], said that the court’s rescheduling of the sale was improper as the homeowner’s basis for wanting the sale canceled was not a “lawful, cognizable basis,” in light of the bank’s objection. However, in an odd twist that only an attorney could find interesting, the appeals court, in its enlightened wisdom, affirmed the lower court’s ruling, despite the ruling being wrong, because reversing the decision may have resulted in further delay to the bank’s foreclosure sale.

No contract, no fees, no, really

We’re all familiar with the notion that one can’t have something both ways, a notion that has been idiomized in a number of ways over the years:

  1. “What’s good for the goose is good for the gander.”
  2. “You can’t have your cake and eat it, too.”
  3. “What goes around, comes around.”
  4. “Because the homeowner prevailed on an argument that the bank failed to prove entitlement to enforce the note and mortgage, the homeowner cannot now seek to take advantage of the fee provisions of the note and mortgage.”

Wait, say what? You’re not familiar with that fourth one? Well, you’re forgiven because it’s fairly recent, originating from a 2018 case[note]Torres v. Bank of New York for Certificate Holders CWABS, Inc. Asset Backed Certificates Series 2006-26, No. 4D17-1625, 2018 WL 4026038 (Fla. 4th DCA 2018).[/note] decided by Florida’s Fourth District Court of Appeals. In the referenced case, the 4th DCA had to decide whether a homeowner who successfully defended a foreclosure action was entitled to recover from the foreclosing bank his defense attorney’s fees and costs. At trial, the homeowner was successful in opposing the foreclosing lender’s attempt to introduce the promissory note into evidence. No note, no foreclosure, right? Well, sure, said the trial court, and the homeowner won the case. To the victor go the spoils, apparently, so the homeowner then sought to recover from the bank his attorney’s fees and costs, as well. When his request was denied, he appealed.

The American Rule

In America, our court systems follow the “American Rule,” requiring that all litigants in court pay for their own attorney’s fees and costs. The exception to this rule is that parties may recover fees and costs from the other side if a statute, rule, or contractual provision provide for such. The homeowner claimed entitlement to his fees and costs based upon the provision in the note and mortgage providing for same.

Goose, meet Gander

The 4th DCA said that this doesn’t fly; the homeowner could not recover his attorney’s fees and costs under the contract, when the contract never made it into evidence, because (recall) that the homeowner opposed its admittance.

Not a goose egg, however

Despite this, the 4th DCA did, however, hold that the homeowner was entitled to recover his costs; not because of the contractual provision, but because of a rule and a statute, specifically, Fla. R. Civ. P. 1.420(d)[note]Costs in any action dismissed under this rule shall be assessed and judgment for costs entered in that action, once the action is concluded as to the party seeking taxation of costs.”[/note] and Florida Statutes, § 57.041(1)[note]”The party recovering judgment shall recover all his or her legal costs and charges which shall be included in the judgment ….”[/note].