Florida Appeals Court: Defect In Stipulation Agreement Left Judge Without Jurisdiction To Summarily Enter Foreclosure Judgment Upon Subsequent Default

A Florida appeals court recently ruled that a trial judge improperly overstepped his bounds and exceeded his jurisdiction(1) by summarily entering a foreclosure judgment on a property owner who, after entering a stipulation agreement with the lender in an effort to cure an earlier default, subsequently found himself unable to make the payments on the stipulation agreement.

According to the appeals court, the basis for their reversal was simply the fact that the stipulation did not include a provision authorizing the trial court to summarily enter a final judgment of foreclosure upon a default.(2)

For the ruling, see Sarhan v. H & H Investors, Inc., No. 3D10-3394 (Fla. App. 3d DCA, October 19, 2011).

(1) See generally:

• The Florida Bar Journal: Enforcement of Settlements: A Jurisdictional Perspective, for a discussion on the jurisdictional issues that arise when reopening a case for the purpose of enforcing a settlement which "have troubled the courts of Florida and vexed litigants and their attorneys for decades."



• The Florida Bar Journal: Florida’s Third Species of Jurisdiction, for a discussion on the confusion that has arisen in the Florida courts over the years over what exactly is meant by the term “jurisdiction.”

(2) From the court ruling:

• When a trial court approves a settlement agreement by order and retains jurisdiction to enforce its terms, the trial court’s continuing jurisdiction to enforce the terms of the settlement agreement is circumscribed by the terms of the agreement. See Paulucci v. Gen. Dynamics Corp., 842 So. 2d 797, 803 (Fla. 2003).
  
  In this case, the parties agreed in their stipulation to modify the terms of the note and mortgage. The stipulation did not include a provision authorizing the trial court to summarily enter a final judgment of foreclosure upon a default. In so doing, the trial court exceeded the jurisdiction it reserved for itself in the order of dismissal. Compare Zimmerman v. Olympus Fid. Trust, LLC, 847 So. 2d 1101, 1102 n.2 (Fla. 4th DCA 2003) (“Although the settlement agreement provided that the Zimmermans . . . ‘agree[d]’ to waive any defenses to the foreclosure of the mortgage, . . . [t]he agreement fell short of providing that if the payments were not made when due, a final judgment of foreclosure could be entered against the Zimmermans.”), with BAC Int’l Credit Corp. v. Macia, 626 So. 2d 1037, 1038 (Fla. 3d DCA 1993) (finding the settlement should have been enforced in accordance with its terms, which “provided that if the payments were not made when due, an agreed final judgment of foreclosure would be entered against the borrowers”).
  
  Reversed and remanded for further proceedings.