U.S. Bank v. Raheb , 259 So. 3d 912 ( 2018 )

Third District Court of Appeal
State of Florida
Opinion filed November 14, 2018.
Not final until disposition of timely filed motion for rehearing.
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No. 3D17-2734
Lower Tribunal No. 16-31554
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U.S. Bank, N.A., etc.,
Appellant,
vs.
Babak Raheb,
Appellee.
An Appeal from the Circuit Court for Miami-Dade County, Rodney Smith,
Judge.
Lapin & Leichtling, LLP, Jeffrey S. Lapin, Adam B. Leichtling and
Alejandra Arroyave Lopez, for appellant.
Lazaro Vazquez; Anthony Accetta and Brian A. Concepcion, for appellee.
Before ROTHENBERG, C.J., and FERNANDEZ, and SCALES, JJ.
FERNANDEZ, J.
Plaintiff U.S. Bank N.A., successor Trustee to Bank of America, N.A.,
successor in interest to LaSalle Bank N.A., as trustee, on behalf of the holders of
the WAMU mortgage pass-through certificates, series 2007-OA3 (the "Trust"),
appeals to this Court the trial court’s Order Granting Defendant’s Motion to
Dismiss Plaintiff’s Complaint and dismissing the action with prejudice, as well as
the subsequent order denying Plaintiff’s Motion for Rehearing. We reverse
because the trial court erred in dismissing the Trust's foreclosure action with
prejudice.
On December 9, 2016, the Trust filed the mortgage foreclosure action
below, after the defendant Babak Raheb defaulted on a $1,125,000.00 mortgage
loan secured by real property Raheb owned in Miami-Dade County. The trial
court's order on appeal granted Raheb’s motion to dismiss the Trust's complaint
with prejudice. The complaint alleged that Raheb failed to make the payment that
was due on March 1, 2012, and all subsequent payments due thereafter. Raheb
moved to transfer the case to the circuit court division to which the prior
foreclosure actions filed by the Trust had been assigned. The trial court granted
Raheb’s motion, and the Trust agreed to this transfer.
Raheb then moved to dismiss the foreclosure action, contending that the
foreclosure action was barred by the dismissal of three prior foreclosure actions by
the Trust against Raheb. The motion to dismiss stated that the first foreclosure
action was filed in 2009 and was based on Raheb’s August 1, 20081 default and all
1The record reflects that the first foreclosure action alleged a September 1, 2008
default date and all subsequent payments due.
2
subsequent payments, and was voluntarily dismissed by the Trust. The motion
stated that the second action, filed in 2010, alleged the same August 1, 2008
default and was involuntarily dismissed by the Trust on a motion to quash service
of process. Raheb’s motion argued that the third foreclosure action, alleging the
same August 1, 2008 default, was dismissed with prejudice because “the Court
found after an evidentiary hearing that the [Trust] committed fraud upon the Court
by submitting false affidavits.”
Raheb’s motion to dismiss further contended that the Trust appealed the
dismissal order in the third foreclosure action and requested this Court to
relinquish jurisdiction of the case so that trial court could consider a motion for
rehearing by the Trust. Raheb’s motion stated that the trial court denied the Trust’s
motion for rehearing due to the alleged fraud upon the court. The trial court’s order
denying the Trust’s motion for rehearing does not contain this finding.
During the appeal of the Trust’s third action, this Court issued Deutsche
Bank Trust Company Americas v. Beauvais, 188 So. 3d 938 (Fla. 3d DCA 2016),
an en banc decision where this Court held that a mortgagee had a right to file a
subsequent foreclosure action after a dismissal, even if the dismissal was with
prejudice. After the Beauvais decision, the Trust dismissed its appeal in the third
action. The Trust then filed its fourth foreclosure action, based on different
defaults by Raheb.
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Raheb’s motion to dismiss the Trust’s complaint further argued that Florida
Rule of Civil Procedure 1.420(b)’s two-dismissal rule applied and that all the
dismissals operated as an adjudication on the merits. Raheb thus argued that if the
Trust wanted to purse its claim against Raheb, the Trust was required to refile a
lawsuit against Raheb alleging a new and separate breach that was not addressed in
the previous foreclosure actions.2
At the conclusion of the hearing on Raheb’s motion to dismiss, the trial
court stated:
THE COURT: All right. Thank you for both Counsels’ arguments.
And the Court did consider the case law presented before this Court,
and considering the arguments, the Court is going to dismiss this
matter with prejudice and for the final time, as well. Should this case
be re-filed I’m going to declare vexatious litigation.
You should have [a mandate] by the Third DCA directing this Court,
specifically, to hear this matter. Number one, it was appealed by final
judgment and you filed a voluntary dismissal, and you brought the
case back before this Court. And even though the order may not have
stated, initially, that it was, you know, stated as fraudulent testimony
when it was brought before this Court, it is -- the record speaks clearly
for itself. If you need to attach the transcript, you may, to supplement
and reargue before the Third DCA.
I appreciate Counsel’s argument. She wasn’t here present when I
conducted the hearing and made that finding, which is clearly on the
record. But, again, you need an order mandating this Court to hear this
again, because otherwise it’s going to be a fifth time or sixth, or
seventh, etcetera, where the ruling clearly stood, and you took an
appeal, then you took another voluntary dismissal. This is my final
2In the current action, the Trust alleged new and separate breaches that occurred
on March 1, 2012, and “all subsequent payments due thereafter.”
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judgment, otherwise we’re going to be spinning our wheels here. And
I don’t want vexatious litigation, as I said before, until there’s a final
closure to this matter.
The transcript then indicates that Raheb’s counsel stated that he would circulate a
proposed order to the Trust’s counsel before submitting it to the trial court.
However, he did not, and instead submitted his proposed order to the trial court at
the same time he submitted it to the Trust’s counsel. As such, he did not give the
Trust’s counsel a chance to review it. The trial court then adopted Raheb’s
proposed Order verbatim.
Raheb’s proposed order contained findings the trial court did not pronounce
at the hearing. For example, it stated that the current action dealt with the same
claims as the previous action, even though the Trust alleged different default dates.
The proposed order also erroneously stated that the parties agreed to transfer the
case to the trial court’s division because the trial court’s prior ruling involved the
same claims. In addition, Raheb’s proposed order cited to case law that was not
discussed at the hearing, nor were the cases included in Raheb’s motion to dismiss.
Importantly, Raheb’s proposed order stated the trial court had dismissed the
Trust’s prior action with prejudice after finding that the Trust committed fraud
upon the court, which was factually inaccurate because the trial court had never
made this finding. Raheb’s proposed order also stated that “[p]laintiff committed
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serious misconduct by providing false or misleading testimony.” The record
reflects the trial court did not state this.
Raheb’s proposed order also awarded Raheb entitlement to attorney’s fees
and costs pursuant to the mortgage. However, there was no argument at the
hearing about attorney’s fees and costs. There was no finding by the trial court
that Raheb and the Trust were parties to the note and mortgage. Raheb had argued
in his motion to dismiss and at the hearing that the Trust lacked standing to enforce
the note and mortgage.
At the hearing, the Trust’s counsel complained that Raheb’s counsel did not
submit his proposed order without first providing it to the Trust’s counsel for
review. The following exchange then took place at the hearing:
Trust’s counsel: Why didn’t you send me the draft proposed order
before submitting it to the Judge? You said at the hearing that you
would do so before submitting it.
***
Trust’s counsel: I just read the proposed order. It contains rulings that
the Judge did not make at the hearing. It also includes entitlement to
attorney’s fees that was not discussed at the hearing. Plaintiff was not
given the opportunity to oppose entitlement to attorney’s fees. Please
retrieve your submission from the Judge and send me the draft
proposed order so we may accurately reflect the Court’s ruling based
on the transcript. I would appreciate your cooperation in this matter
and hope you will extend the professional courtesy to do the requested
above.
***
Raheb’s counsel: The request for fees is in my motion that was
granted and the judge ruled your client committed fraud upon the
court based on his prior order. Maybe you were to [sic] frustrated to
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pay attention. Remember he said don’t ever come back to his court
room with this case unless you have a writ from the 3rd dca [sic].
Do you think he wasn’t granting my request for fees? Are you joking?
If he doesn’t believe it’s accurate he can change it or enter his own
order.
Finally, you and your client have continued to file false and fraudulent
documents with the court. That is the only amendment I’m willing to
make if you would like. I suggest you relax your tone and don’t ever
dare tell me what to do. Your actions should be sanctioned and I
believe I was beyond nice not to include them in the order.
Have a great day!
Although the Trust’s counsel told the trial court that the Trust never had the
opportunity to review Raheb's proposed order, the trial court adopted, verbatim,
Raheb’s proposed order. The Trust then moved for rehearing, which the trial court
denied. The Trust now appeals the trial court’s order dismissing the Trust's
complaint with prejudice.
The standard of review of an order granting a motion to dismiss is de novo.
Susan Fixel, Inc. v. Rosenthal & Rosenthal, Inc., 842 So. 2d 204, 206 (Fla. 3d
DCA 2003). We find that the trial court erred in dismissing the Trust’s mortgage
foreclosure action with prejudice.
First, the trial court improperly dismissed this action because it based its
dismissal on a previous dismissal with prejudice of a prior foreclosure action. The
plaintiff alleged a default date in this action of March 1, 2012, which was different
than the default date in the prior foreclosure action, in addition to “all subsequent
payments due thereafter.” Thus, the dismissal with prejudice of the present
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foreclosure action is not supported by law. The Florida Supreme Court in Bartram
v. U.S. Bank National Association, 211 So. 3d 1009 (Fla. 2016), permitted a
subsequent foreclosure action based on subsequent default dates within five years
of the filing of the subsequent foreclosure action. See also Singleton v. Greymar
Assoc., 882 So. 2d 1004, 1005-07 (Fla 2004). Thus, the plaintiff’s allegations of a
different default period stated a new foreclosure cause of action, and the trial court
erred in dismissing it with prejudice.
Second, we agree with the Trust that the trial court erred in entering the
dismissal order because on a motion to dismiss, it was required to only consider
matters within the four corners of plaintiff’s complaint. Susan Fixel, Inc., 842 So.
2d at 206 (Fla. 3d DCA 2003). Here, the Trust’s “Verified Complaint to Foreclose
Mortgage” filed on December 9, 2016, does not contain any allegation regarding
the prior foreclosure action between the parties that was dismissed with prejudice
for the trial court to base its ruling in dismissing the December 9, 2016 action with
prejudice. Thus, in ruling on Raheb’s motion to dismiss, the trial court erroneously
considered information outside of the four corners of the Trust’s Complaint.
Furthermore, the trial court stated that the prior dismissal “was premised
upon a finding that the Plaintiff committed serious misconduct by providing false
and misleading testimony.” However, the trial court never made this finding in the
prior action. The basis of the dismissal in the prior action was improper service by
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publication. The trial court did make a finding that the process server lied but did
not tie this in in any way to the Trust being involved or any fraud committed by the
Trust. In order to make a finding of fraud on the court, the trial court would have
had to make express written findings “demonstrating that the trial court has
carefully balanced the equities and supporting the conclusion that the moving party
has proven, clearly and convincingly, that the non-moving party implemented a
deliberate scheme calculated to subvert the judicial process.” Chacha v. Transp.
USA, Inc., 78 So. 3d 727, 731 (Fla. 4th DCA 2012). No such findings were made
by the trial court.
Finally, the trial court erred in dismissing the plaintiff’s action with
prejudice because the record reflects the trial court's dismissal order included
findings not made by the trial court at the hearing on Raheb's motion to dismiss.
The oral pronouncement and the trial court’s findings in the order on appeal do not
match, and it appears that Raheb’s counsel took certain liberties in making findings
from the court that are not supported by the transcripts. For example, the trial
court's order cites to two cases that were not cited in Raheb’s motion to dismiss,
nor were they discussed at the hearing on that motion. The Order also incorrectly
states that the prior action dealt with the same claims as the instant action.
However, the current claim before the trial court dealt with different defaults that
were not addressed in the previous action. In addition, the Order incorrectly states
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that the parties agreed to transfer this action to the trial court’s division “upon this
Court’s prior ruling involving the same claims and parties to this action.”
However, this was incorrect, because as previously stated, the current action was
based on a different default date than the default claim in the prior action.
Furthermore, the trial court’s Order incorrectly states that the trial court
“dismissed the third action after making a finding at the close of an evidentiary
hearing that the Plaintiff committed fraud upon the Court by submitting false
affidavits and testimony to this Court.” The trial court did not make this statement.
In addition, paragraph 7 of the trial court’s order states, “Plaintiff committed
serious misconduct by providing false or misleading testimony.” The trial court
also did not make this statement or make this finding. What the trial court said was
that “the record [from the prior action’s evidentiary hearing] speaks clearly for
itself.” The trial judge never made specific findings that the Trust was in any way
involved in perpetrating a fraud on the court in the prior action.
And finally, the Order erroneously granted Raheb entitlement to attorney’s
fees and costs “pursuant to the mortgage and applicable Florida law.” The
transcript of the hearing reflects that not only did the trial court not orally grant
entitlement at the hearing, there was no argument at the hearing on attorneys’ fees
and costs. The Trust contends that for Raheb to recover attorney’s fees and costs,
this would require a finding by the trial court that the Trust had standing to enforce
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the note and mortgage. See Bank of N.Y. Mellon Tr. Co. v. Fitzgerald, 215 So. 3d
116 (Fla. 3d DCA 2017). In his motion to dismiss and at the hearing on the
motion, Raheb argued that the Trust lacked standing to foreclose under the note
and mortgage. Raheb did not prove at the hearing and there was no finding by the
trial court that both Raheb and the Trust were parties to the note and mortgage.
Thus, Raheb is not entitled to fees here.
The trial court adopted the defendant’s counsel's proposed order verbatim,
and it was never provided to the plaintiff’s counsel first for review, although at the
hearing defendant’s counsel indicated on the record he would provide it to
plaintiff’s counsel before submitting it to the trial court. This was improper.
Perlow v. Berg-Perlow, 875 So. 2d 383, 390 (Fla. 2004).
For the foregoing reasons, we reverse the trial court's Order Granting
Defendant's Motion to Dismiss Plaintiff's Complaint with prejudice and remand the
case to the trial court for reinstatement of the Trust’s foreclosure action against
Raheb.
Reversed and remanded.
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