Snoozing Florida Trial Judge's Refusal To Vacate Judgment Despite Lender's Failure To Name Record Owners As Defendants In Foreclosure Action Requires Review & Reversal By Appeals Court

The following facts have been adapted from a recent ruling by Florida's Fourth District Court of Appeal:

1. After the borrower defaulted on a note secured by a mortgage on real property, Citibank filed a foreclosure complaint.
   .
2. Citibank obtained a final judgment of foreclosure in March 2013, and a foreclosure sale was set for a date in July 2013.
   .
3. In June 2013, a non-party, Diana Diaz, moved to cancel the sale. Her motion alerted Citibank that the owners of the property at the time the note and mortgage were executed had quit-claimed the property to Diaz and another person, Luis Garcia. Diaz and Garcia actually were the record title owners at the time the foreclosure complaint was filed.
   .
4. They were not named in the foreclosure action or on the final judgment; therefore, their interests were not foreclosed.
   .
5. Diaz did not move to intervene in the foreclosure action or to vacate the final judgment of foreclosure. Instead, she filed a separate action to quiet title to the property.
   .
6. Citibank moved to vacate the final judgment of foreclosure in October 2014, a year and seven months after the judgment was filed and a year and four months after Diaz alerted it to the existence of the record title owners.
   .
7. Without intervening, Diaz filed a response, arguing that the motion was untimely. The trial court denied the motion without explanation. This appeal followed.

In a nutshell, the appeals court reminded the trial judge that:

• the owners of record at the time a foreclosure action is filed are indispensible parties to the action - "necessary parties so essential to a suit that no final decision can be rendered without their joinder.”
  .
• without their joinder, the foreclosure proceeding, and any underlying judgment devolving therefrom, is void, and
  .
• “when the underlying judgment is ‘void,’ the trial court has no discretion, but is obligated to vacate the judgment.”

Accordingly, the Florida appeals court reversed another trial judge's ruling (once again highlighting the importance of being represented by legal counsel competent enough to absorb the hit of a trial judge's crappy ruling and challenge it in the appropriate appeals court).

For the ruling, see Citibank, N.A. v. Villanueva, No. 4D15-239 (4th DCA, September 9, 2015).

Thanks to Deontos for the heads-up on this court ruling.