Tuesday, March 27, 2012

Another Homeowner/Victim Of Foreclosure Rocket Docket Scores Relief On Appeal; Rules On Good vs. Crappy Service Of Process Eludes Snoozing Trial Judge

The following facts are taken from a recent Florida appeals court ruling vacating a default judgment and setting aside a judgment of foreclosure (once again, we have a case that illustrates the need for a homeowner challenging a foreclosure in court to (1) understand that trial court judges are quite capable of dropping the ball on a pretty simple, basic issue of law, and (2) be ready, willing, and able to challenge a trial judge's ruling in an appeals court when the situation calls for it, as the homeowner did in this case):
  1. Bank begins foreclosure proceedings on homeowner, one Mr. Baker.

  2. Homeowner Baker happens to be in Europe on a business trip and, while he was away, he allowed the out-of-town parents of a friend, Mr. and Mrs. Vadim Saitgareev, stay at his home, while the the Saitgareevs met with medical providers in Sarasota.

  3. Homeowner Baker's friend arranged the entire stay. Baker was not present at the home at any time during the Saitgareevs' visit.

  4. The Saitgareevs did not talk to homeowner Baker to arrange the visit, nor did they talk to him during their stay at his home.

  5. While Homeowner Baker was in Europe on business, a process server dropped by to serve the lawsuit papers on him and, instead, met houseguest Mr. Saitgareev.

  6. Houseguest Mr. Saitgareev refused to accept service on behalf of homeowner Baker. Houseguest Saitgareev did not open the door for the process server, but said that homeowner Baker was not at home. Saitgareev told the process server that he would not see homeowner Baker and that Mr. Baker was a friend of their daughter.

  7. According to houseguest Saitgareev, the process server kept yelling at him and his wife through the door. Saitgareev told the man that he would not accept any paper for homeowner Baker because he did not expect to see him before he returned home.

  8. The process server proceeded to leave the lawsuit papers at the front door.

  9. Homeowner Baker had departed for Europe three days before the process server's visit and returned four days afterwards.

  10. The foreclosing lender subsequently obtained a default judgment and a judgment of foreclosure.

  11. Subsequently, homeowner Baker filed a motion to quash service of process, vacate default, and set aside the final judgment of foreclosure.

  12. At the hearing, the foreclosing lender's submissions into evidence was limited to the process server's return of service.

  13. Homeowner Baker submitted what the appellate court later found to be clear and convincing evidence in the form of affidavits from himself and Mr. Saitgareev,(1) as well as giving testimony in court attesting to the foregoing facts. Baker's testimony was substantially the same as his affidavit.

  14. Attached to homeowner Baker's affidavit were copies of pages from his passport displaying immigration stamps marking his entry and exit from Europe on the dates he claimed. He also stated in his affidavit that at no time between these dates did he leave Europe.

  15. The Bank failed to provide any further evidence or call any witness to refute the clear and convincing evidence provided by homeowner Baker.

  16. The trial court proceeded to deny homeowner Baker's motion to quash, vacate, set aside, etc.

In reversing the trial court screw-up, the Florida appeals court essentially said that, because:

  1. homeowner Baker provided clear and convincing evidence that he was not at the home on the day of the process server's visit, and that the Saitgareevs were merely "short term houseguests" who were not actually residing on the premises, and

  2. the foreclosing lender failed to meet its burden to refute the clear and convincing evidence provided by Baker,

the foreclosing lender had failed to establish that the service of process in this case was anything other than crappy. Accordingly, the appeals court reversed the ruling of Sarasota County Circuit Court Judge Charles E. Roberts, and booted the case back to him with instructions to grant the motion to quash service of process, vacate the default, and set aside the final judgment of foreclosure.(2)

For the ruling, see Baker v. Stearns Bank, N.A., Case # 2D11-2986 (Fla. 2d DCA, March 23, 2012).

(1) According to the appeals court ruling, Mr. Saitgareev stated in his affidavit that:

  • He was born in Russia and that English is not his first language.
  • His permanent residence is in Massachusetts and he resides at no other place (Mr. Saitgareev also attached a photocopy of his current driver's license to substantiate his Massachusetts address).
  • On the date of service in this matter, he was temporarily away from home as a houseguest of Mr. Baker.
  • Mr. Baker had permitted him and his wife to use his home while he was away in Europe because they needed a place to stay for a few days while attending medical treatment in Sarasota.
  • Mr. Baker was not present at the home at any time during their visit.
  • Their daughter is a friend of Mr. Baker and she arranged the visit. He and his wife did not talk to him to arrange the visit, nor did they talk to him during their stay at his home.

(2) The Florida appeals court provided the following analysis in explaining the obligations of the parties when establishing whether service of process is good or crappy (bold text is my highlight, not in the original text):

  • There is no issue whether Mr. Baker was personally served. The question then narrows to whether Mr. Saitgareev was "residing" at Mr. Baker's home when the process server left the papers at the door.

    This is so because the parties do not dispute any of the remaining elements of this statute, i.e., the place at which the process server left the summons and complaint was Mr. Baker's "usual place of abode," Mr. Saitgareev was fifteen years of age or older, and the process server did inform the person there of the contents of the papers he left at the front door.

    At the evidentiary hearing on Mr. Baker's emergency motion to quash service of process, vacate default, and set aside the final judgment of foreclosure, the Bank had the initial burden to sustain the validity of service because it was the party invoking the jurisdiction of the court. See Bank of Am., N.A. v. Bornstein, 39 So.3d 500 (Fla. 4th DCA 2010).

    The Bank carried its initial burden in this case because it presented as evidence at the hearing the return of service, which Mr. Baker admits is regular on its face. "A process server's return which is regular on its face is presumed valid absent clear and convincing evidence to the contrary." Bennett v. Christiana Bank & Trust Co.,
    50 So.3d 43, 45 (Fla. 3d DCA 2010).

    The burden then shifted to Mr. Baker to make a prima facie showing by clear and convincing evidence that the substituted service was defective. This he did by submitting not only the two affidavits, which are competent evidence on such issue, see Viking Superior Corp. v. W.T. Grant Co., 212 So.2d 331 (Fla. 1st DCA 1968), but also by testifying in person.

    He testified that Mr. Saitgareev was staying at his home while he himself was away on business, that Mr. Saitgareev was but a temporary houseguest who did not stay more than seven days—evidenced by the fact that the Saitgareevs were not there when he left nor when he returned—and that his home was the "usual place of abode" to no one but himself.

    Mr. Saitgareev's affidavit established that his own "usual place of abode" was in Massachusetts, and he attached a photocopy of his current driver's license to substantiate his Massachusetts address. Thus, his temporary stay in Mr. Baker's home for a few days to receive medical treatment in Sarasota merely made him a short-term houseguest.

    A short-term houseguest is not a person residing in the usual place of abode of the person to be served. Couts v. Md. Cas. Co., 306 So.2d 594 (Fla. 2d DCA 1975) (holding that a stay of a few days is insufficient to qualify that visitor to receive substituted service); Gamboa v. Jones, 455 So.2d 613 (Fla. 3d DCA 1984) (holding the same for a ten-day visitor).

    Having had its prima facie showing of regular substituted service rebutted, it was incumbent upon the Bank to provide competing evidence to overcome Mr. Baker's showing of substituted service upon a mere short-term houseguest. This burden-shifting is illustrated, in the analogous context of personal jurisdiction via the long-arm statute, in Hilltopper Holding Corp. v. Estate of Cutchin ex rel. Engle, 955 So.2d 598 (Fla. 2d DCA 2007).

    In Hilltopper, the plaintiff met its initial burden to establish personal jurisdiction over the defendants, but the defendants fully disputed, via sworn affidavits only, the jurisdictional basis alleged by the plaintiff. This shifted the burden back to the plaintiff to prove by affidavit or other sworn proof that a basis for personal jurisdiction existed. The plaintiff failed in this by offering no other sworn facts to establish personal jurisdiction over the defendants and refute their evidence that they were not subject to personal jurisdiction via the long-arm statute. Id. at 603. Accordingly, the trial court's order finding that personal jurisdiction over the defendants had been established was reversed.

    Like the plaintiff in Hilltopper, the Bank, as plaintiff, failed to refute Mr. Baker's factual evidence that Mr. Saitgareev was not residing in his home at the time service was attempted. The Bank presented no further evidence, such as an affidavit or testimony that Mr. Saitgareev's stay was of a longer duration so as to qualify him as a person residing at Mr. Baker's usual place of abode. Cf. Magazine v. Bedoya, 475 So.2d 1035 (Fla. 3d DCA 1985) (holding that mother-in-law's six-week visit qualified her as a person residing in the defendant's usual place of abode); Sangmeister v. McElnea, 278 So.2d 675 (Fla. 3d DCA 1973) (holding that a visit of four months establishes that person as a resident who may properly accept substituted service).

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