Florida Supremes: Foot-Dragging Bankster Waited Too Long In Attempt To Vacate Unfavorable Defective Judgment Against It In Quiet Title Action Initiated By Condo Association, Saying Defect Rendered Judgment Merely Voidable, Not Void; Ruling Leaves Lender With Worthless Mortgage, HOA With Free & Clear Apartment

In Tallahassee, Florida, the Daily Business Review reports:

• In a setback for mortgage lenders, the Florida Supreme Court on Thursday ruled the Bank of New York Mellon Corp. waited too long to try to vacate an adverse judgment in a title dispute following foreclosure.
  
  The case pitted BNY Mellon against Condominium Association of La Mer Estates Inc. and raised the question of whether a judgment becomes void—treated as if it never existed—or is voidable if based on a complaint with no cause of action.
  
  "The failure to state a cause of action is a procedural irregularity and does not render a judgment void—just voidable," La Mer attorney Michael David Heidt of the Law Office of Gable & Heidt in Hollywood, said after the ruling.
  
  The case dates back to February 2011 when the Hallandale Beach condo association won a second default judgment on a complaint to quiet the bank's title on a La Mer unit.
  
  The association gained control of the unit after the former owner defaulted on the mortgage. It obtained a final foreclosure judgment in July 2009, but the mortgage securing the condominium unit was assigned to BNY Mellon before the foreclosure sale. The association was the only bidder at the sale and received a certificate of title to the condo.
  
  "Concerned about the continuing unpaid monthly assessments, the association wrote to the bank offering to convey to it the title to the condominium, but the bank did not respond," Justice James Perry wrote in the 6-1 ruling.
  
  Chief Judge Jorge Labarga and Justices Barbara Pariente, Peggy Quince, Charles Canady and Ricky Polston concurred. Justice Fred Lewis dissented.
  
  The association filed a complaint to quiet title to the property and won two default judgments.
  
  The bank took no action for more than 18 months until it was well past the deadline for challenging the judgment. It August 2012, BNY Mellon moved to vacate the quiet title judgment, arguing the order was void because the association's complaint failed to state a cause of action. BNY Mellon argued the deadline that applied to other grounds for relief did not apply because the order was void.
  
  The bank maintained it possessed a superior title interest and the Hallandale Beach association had not proven otherwise.
  
  The circuit court found the order was void and vacated it, but the Fourth District Court of Appeal sided with the condo association, denying BNY Mellon's motion to vacate.
  
  The high court found the lack of a cause of action rendered the judgment voidable rather than wiping it out. It also found the bank had proper notice and enough opportunity to raise a challenge.
  
  "Because we agree that the default judgment was voidable … the default judgment could not be collaterally attacked one and one-half years later when BNY Mellon finally decided to respond," Perry wrote.
  
  Lewis insisted the case involved a non-existent cause of action and maintained the majority was setting a "dangerous precedent."
  
  Randolph Liebler, Tricia Julie Duthiers and Joshua Robert Levine of Liebler Gonzalez & Portuondo in Miami represented BNY Mellon. They did not respond to requests for comment by deadline.

Source: This Florida Supreme Court Ruling is a Setback for Mortgage Lenders in Foreclosure Cases.

For the court ruling, see Bank of New York Mellon, etc. v. Condominium Association of La Mer Estates, Inc., No. SC14-1049 (Fla. September 17, 2015).