JULIO LAGO v. MERCANTIL COMMERCEBANK, N.A., etc. ( 2021 )


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  •       Third District Court of Appeal
    State of Florida
    Opinion filed June 16, 2021.
    Not final until disposition of timely filed motion for rehearing.
    ________________
    No. 3D20-1496
    Lower Tribunal No. 11-35962
    ________________
    Julio Lago,
    Appellant,
    vs.
    Mercantil Commercebank, N.A., etc.,
    Appellee.
    An Appeal from the Circuit Court for Miami-Dade County, Reemberto
    Diaz, Judge.
    Moris & Associates, and Alberto N. Moris and Tereza Horáková, for
    appellant.
    Dorothy G. Negrin, P.A., and Dorothy G. Negrin, for appellee.
    Before SCALES, HENDON, and BOKOR, JJ.
    HENDON, J.
    Julio Lago (“Lago”) appeals from a final summary judgment in favor of
    Mercantil Commercebank (“Amerant” or “Bank”). 1 We affirm.
    In 2011, the Bank sued Gangamania Holdings (“Gangamania”), Lago,
    and others (collectively, the “Defendants”) to foreclose a $2.3 million
    commercial mortgage, note, and guaranty. On October 21, 2012, the parties
    entered into a Stipulation in Settlement of Litigation (“Stipulation”) in lieu of
    a foreclosure. In the Stipulation, the Bank agreed to allow a short sale of the
    property in any amount over $1 million. The Stipulation also fixed the
    deficiency amount, provided repayment terms, and provided that if
    Gangamania and Lago failed to timely pay any sums due, the Bank would
    be entitled to automatic entry of a final judgment of foreclosure. Further, the
    Defendants agreed in the Stipulation to execute a deficiency promissory note
    in the amount of $500,000 (“Deficiency Note”). 2
    1
    The original plaintiff, Mercantil Commercebank, changed its name to
    Amerant Bank after the Stipulation was signed.
    2
    The Deficiency Note was to provide:
    Obligors: Gangamania Holdings, LLC and Julio Lago
    Amount: $500,000.00
    Maturity: 60 Months
    Terms: monthly payments in the amount of $500.00 for 60
    months. In the event Defendants make a principal reduction of
    50% of the Deficiency Note ($250,000.00) within months 1
    through 24, then Plaintiff shall forgive the remaining balance and
    release all defendants from the Deficiency Note. If the
    Defendants do not make a 50% principal reduction of the
    2
    In November 2012, Gangamania executed the requested Deficiency
    Note to cover any deficiency resulting from a short sale in exchange for the
    Bank’s promise to cancel the mortgage, release the property lien, and
    significantly reduce the total amount the Defendants owed under the original
    loan documents. About the same time, at the Bank’s request and as an
    inducement to and in consideration for the extension of credit by the Bank to
    Gangamania, Lago executed a Continuing Guaranty for Gangamania’s
    payment to the Bank under the Deficiency Note (“Guaranty”).
    In December 2013, the lower court entered an agreed order approving
    the stipulation and dismissing the case, in which the lower court directed the
    parties to comply with the Stipulation, and the court retained jurisdiction to
    enforce the provisions and to enter any further orders as necessary. The
    property was sold and the deficiency repayment terms became enforceable.
    In March 2019, the Bank moved for a final judgment against
    Gangamania and Lago pursuant to the Stipulation. Lago opposed the
    Deficiency Note ($250,000.00) within months 1 through 24, then
    Defendants shall pay in addition to the $500.00 monthly payment
    the additional amounts:
    At month 36, 1/3 of the Deficiency Note's then outstanding
    principal balance is due. At month 48, 1/3 of the Deficiency Note's
    then outstanding principal balance is due.
    3
    motion, arguing that the court lacked subject matter jurisdiction to enter a
    money judgment for the deficiency or to adjudicate the new claims seeking
    to enforce the Deficiency Note and Guaranty. The trial court denied the
    Bank’s motion for summary judgment and allowed the Bank to amend its
    complaint to add counts to enforce the Stipulation and to re-establish and
    enforce the Deficiency Note and Guaranty. 3
    The Bank once again moved for summary judgment on the Amended
    Complaint, and Lago filed an affidavit in opposition. The trial court held a
    hearing on the motion and entered final summary judgment for the Bank on
    the deficiency balance plus interest, attorney’s fees and costs for a total final
    judgment amount of $657,054.04. 4 The court heard both parties’ arguments
    on rehearing, denied rehearing and affirmed its subject matter jurisdiction.
    On appeal, Lago argues two issues, neither of which have merit. First,
    he argues that the trial court did not have continuing subject matter
    jurisdiction over the Bank’s claims via the Stipulation, Note and Guaranty.
    Second, Lago asserts that even if the court had jurisdiction, there are
    3
    Subsequent to the filing of the Amended Complaint, the Bank located the
    original Guaranty and dropped Count IV of the Amended Complaint.
    4
    There is no transcript in the record on appeal of the hearing on the Bank’s
    second motion for summary judgment.
    4
    genuine issues of material fact that preclude summary judgment, i.e.,
    whether the Guaranty was part of the Stipulation.
    Our standard of review of the trial court’s order enforcing or interpreting
    a settlement agreement is de novo. Pinnacle Three Corp. v. EVS Invs., Inc.,
    
    193 So. 3d 973
    , 975-76 (Fla. 3d DCA 2016). The standard of review of an
    order granting summary judgment is also de novo. Volusia Cnty v. Aberdeen
    at Ormond Beach, L.P., 
    760 So. 2d 126
     (Fla. 2000).
    We first address Lago’s argument that the court exceeded its retained
    subject matter jurisdiction when it enforced the Stipulation by awarding a
    monetary deficiency judgment rather than an “Agreed Final Judgment of
    Mortgage Foreclosure” in the event of any default under the Stipulation. Lago
    asserts that a foreclosure judgment was the sole remedy pursuant to the
    Stipulation. The record indicates that the property was apparently sold and
    pursuant to the Stipulation, a deficiency remained to be paid – hence the
    Note and Guaranty. 5 Because the property had been sold prior to entry of
    5
    The Stipulation provides that the total debt was approximately $2.4 million.
    The property was to be offered for sale for a price between $1 million and
    $1.2 million, leaving a deficiency between the debt and gross sales proceeds
    of $1.4 million to $1.2 million. The Stipulation fixed the deficiency at
    $500,000, providing Lago a $700,000 - $900,000 benefit by way of reduction
    of the total deficiency owed.
    5
    the foreclosure final judgment, the trial court properly entered a money
    judgment enforcing the Stipulation.
    “The general reservation of jurisdiction in a foreclosure judgment is
    deemed in case law to be appropriate for deficiency judgment.” Garcia v.
    Christiana Tr., 
    230 So. 3d 66
    , 69 (Fla. 3d DCA 2017). Further, “[f]oreclosure
    (a.k.a. equity) courts are explicitly granted the authority to enter the legal
    remedy of a deficiency judgment by virtue of [Florida Statutes] section
    702.06 which provides, in pertinent part, that [i]n all suits for the foreclosure
    of mortgages heretofore or hereafter executed the entry of a deficiency
    decree for any portion of a deficiency should one exist, shall be within the
    sound judicial discretion of the court.” Kinney v. Countrywide Home Loans
    Servicing, L.P., 
    165 So. 3d 691
    , 693-94 (Fla. 4th DCA 2015) (quoting Florida
    Statutes §702.06). Further, “[t]he law of mortgage foreclosure in Florida
    contemplates that a deficiency judgment may be appropriate in a foreclosure
    suit, and as such, a deficiency proceeding is a continuation of the original
    foreclosure suit.” Estepa v. Jordan, 
    678 So. 2d 876
    , 878 (Fla. 5th DCA 1996)
    (footnote omitted); see also, Grace v. Hendricks, 
    140 So. 790
    , 795 (Fla.
    1932) (stating that where the property to be foreclosed is sold before the
    foreclosure, a court has sufficient equity jurisdiction to grant a money
    judgment against the mortgagor for the amount of the mortgaged debt by
    6
    substituting relief for a decree of foreclosure that cannot otherwise be made
    effective). Thus, the trial court properly exercised its broad reservation of
    jurisdiction to enforce the Stipulation by entering final summary judgment in
    favor of the Bank. 6
    We next address Lago’s related argument that there is a factual
    dispute precluding summary judgment regarding whether Lago’s personal
    Guaranty can be considered part of the Stipulation, and if so, whether Lago
    is thus personally obligated under the Stipulation to make the deficiency
    payments where the Stipulation provides for a judgment of foreclosure in
    case of default.
    There is no genuine issue of disputed fact regarding the enforceability
    of any of the documents, the terms of which are factually and legally
    overlapping.   Although the Guaranty is not “part” of the Stipulation, it is a
    document that by its terms is directly related to the outstanding deficiency
    debt. The counts set forth in the Amended Complaint arise from a set of
    common facts and a single debt. The Bank properly chose to seek
    6
    It is true that the Guaranty is a separate document from the Stipulation or
    Note, but the Bank is owed the same debt as reflected in all three executed
    instruments: the Guaranty references Gangamania’s debt to the Bank and is
    an unconditional promise to pay; the Note provides for money damages in
    case of default of the same deficiency debt; and the Stipulation provides for
    foreclosure or a subsequent deficiency repayment upon sale of the property
    for less than a given amount.
    7
    enforcement of the Guaranty via a separate count against the Defendants in
    its Amended Complaint, instead of filing a second, separate lawsuit. The
    Note obligates both Gangamania and Lago to repay the deficiency debt as
    required by the Stipulation. The Guaranty executed by Lago obligates him
    to repay the deficiency debt on Gangamania’s behalf or by Lago personally
    should Gangamania default. It is all the same debt to the Bank parsed
    between the Defendants via different instruments. The trial court recognized
    this and granted one summary judgment for the outstanding deficiency
    against Lago and Gangamania, fulfilling the terms of the Stipulation.
    For the reasons stated above, we affirm.
    Affirmed.
    8
    

Document Info

Docket Number: 20-1496

Filed Date: 6/16/2021

Precedential Status: Precedential

Modified Date: 6/16/2021