Adhin v. Loans, JULY TERM 2010

CourtCourt of Appeal of Florida (US)
Docket NumberJULY TERM 2010,Case No. 5D09-2607
Decision Date01 October 2010


Case No. 5D09-2607


Opinion filed October 1, 2010

Appeal from the Circuit Court for Lake County, Mark A. Nacke, Judge.

Ceci Culpepper Berman, of Fowler White Boggs P.A., Tampa, for Appellants.

Samuel M. Nelson, of Burr & Forman LLP, Winter Park, for Appellee.


Khilena Adhin, Tenita Issacs, Eileen Barcene, Khilesh Adhin, Praimkumarie Bipat, Shazida Singh, Mohamed O. Sadick, Cyril S. Joseph, Davitri Persaud, Claude Walcott, UMS, LLC d/b/a Unique Mortgage Solutions, Countrywide Home Loans, Inc., Countrywide Bank, FSB, Popular Mortgage Corporation, Popular Mortgage, Inc., and J.P. Morgan Chase Bank, N.A. (collectively "Appellants") appeal the trial court's order denying their motion to intervene in the mortgage foreclosure proceedings initiated by First Horizon Home Loans, as successor-in-interest to First Horizon Home Loan

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Corporation ("First Horizon"). The trial court denied intervention, concluding Appellants' motion was untimely under section 48.23(1)(b), Florida Statutes (2008).1 Appellants contend that section 48.23(1)(b), a lis pendens statute allowing the holders of unrecorded property interests only twenty days from the recording date of the lis pendens to intervene in an action affecting property, unconstitutionally conflicts with Florida Rule of Civil Procedure 1.230, which gives interested parties the right to intervene "at any time" during the litigation.2 We disagree and affirm.

In October 2005, J&J Building and Development, LC ("J&J") executed and delivered a $10 million promissory note for a construction loan to First Horizon.3 To secure the debt, J&J executed and delivered two mortgages to First Horizon, encumbering properties known generally as the Highland Oaks and Blue Lakes properties. First Horizon promptly recorded the mortgages. J&J used a portion of the construction loan funds to build thirteen homes on separate lots within the encumbered properties.

Some months later, J&J encountered financial difficulties and was nearing default on the construction loan. In an effort to work out the loan, First Horizon and J&J entered into an agreement with Ravi Roopnarine to market and sell the properties and the homes that J&J built. Roopnarine, on J&J's behalf, sold the thirteen homes built by

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J&J with the mortgage proceeds. Appellants, the purchasers of those homes and their lenders, are the putative intervenors. Appellants claim that as their transactions closed, the closing agent was to use a portion of the purchase proceeds to obtain partial releases of their lots from the lien of First Horizon's mortgage. Instead, the closing agent gave the sale proceeds to Roopnarine and failed to record Appellants' deeds or the associated purchase money mortgages. Roopnarine paid $1.5 million to First Horizon, which it claims it applied to a forbearance agreement, reducing the aggregate amount of First Horizon's outstanding debt, but not releasing the individual parcels of property purchased or financed by Appellants.

Ultimately, J&J defaulted on the loan and First Horizon filed a complaint seeking to foreclose its mortgages encumbering the properties, including the thirteen lots that Appellants claim to have purchased or financed. First Horizon also filed a Notice of Lis Pendens covering the subject properties, which it recorded the same day. None of the Appellants were named in First Horizon's complaint. Fifty-nine days after First Horizon's foreclosure suit was filed and the lis pendens was recorded, Appellants recorded their deeds and mortgages. A few days later, Appellants sought to intervene in the foreclosure action, asserting their respective ownership and mortgagee interests in the thirteen lots, and claiming that their interests would be adversely affected by a foreclosure judgment in First Horizon's favor. Appellants also sought to conduct discovery to determine whether First Horizon knew or should have known of their interests in the properties.

First Horizon opposed Appellants' motion, arguing Appellants were beyond the twenty-day window allowed for intervention established by section 48.23(1)(b). The trial

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court agreed and denied the motion to intervene. Appellants sought rehearing, arguing that section 48.23(1)(b) unconstitutionally conflicts with Florida Rule of Civil Procedure 1.230, which authorizes intervention "at any time." More specifically, Appellants argued that section 48.23(1)(b) usurps the Florida Supreme Court's rulemaking authority. First Horizon disagreed, arguing, inter alia, that the statute was substantive, not procedural, and was properly enacted by the Legislature. The trial court agreed with First Horizon's position and denied rehearing. This appeal followed.

An order denying a motion to intervene is final as to, and appealable by, the movant. See, e.g., City of Sunrise v. Town of Davie, 472 So. 2d 458, 459 (Fla. 1985); Y.H. v. F.L.H., 784 So. 2d 565, 567-68 (Fla. 1st DCA 2001). Ordinarily, a trial court's denial of a motion to intervene is reviewed for an abuse of discretion. See Superior Fence & Rail of N. Fla. v. Lucas, 35 So. 3d 104, 104 (Fla. 5th DCA 2010). However, because this appeal concerns pure questions of law, we review the matter de novo. See Ellis v. Hunter, 3 So. 3d 373, 379 (Fla. 5th DCA 2009).

There is a strong presumption in favor of the validity of all legislative enactments. Ellis, 3 So. 3d at 378. Statutes "should be held constitutional if there is any reasonable theory to that end." Bonvento v. Bd. of Pub. Instruction of Palm Beach County, 194 So. 2d 605, 606 (Fla. 1967); see Sunset Harbour Condo. Ass'n v. Robbins, 914 So. 2d 925 (Fla. 2005); Ellis, 3 So. 3d at 378. Indeed, this Court is bound to resolve all doubts as to the validity of a statute in favor of its constitutionality, provided that the statute is given a fair construction that is consistent with the federal and state constitutions as well as with the legislative intent. Caple v. Tuttle's Design-Build, Inc., 753 So. 2d 49, 51 (Fla. 2000). The "unconstitutionality must appear beyond all reasonable doubt before [a statute] is

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condemned." Bonvento, 194 So. 2d at 606. As a result, a party "'who challenges the constitutional validity of a statute bears a heavy burden of establishing its invalidity.'" Dickerson v. State, 783 So. 2d 1144, 1146 (Fla. 5th DCA 2001) (quoting Wright v. State, 739 So. 2d 1230, 1231 (Fla. 1st DCA 1999)).

Appellants argue that section 48.23(1)(b), violates the principle of separation of powers by infringing on the rulemaking authority of the Florida Supreme Court. Article V, section 2(a) of the Florida Constitution gives the Florida Supreme Court the exclusive authority to "adopt rules for the practice and procedure in all courts." Art. V, § 2(a), Fla. Const. Article II, section 3 of the Florida Constitution prohibits one branch of government from exercising "any powers appertaining to either of the other branches unless expressly provided herein." These two constitutional provisions make it clear that the Legislature is empowered to enact substantive law, while the supreme court has the authority to enact procedural rules. See Allen v. Butterworth, 756 So. 2d 52, 59 (Fla. 2000). The issue that we must resolve is whether the 2008 version of section 48.23(1)(b) is a procedural statute that impermissibly encroaches on the Florida Supreme Court's rulemaking authority, or a substantive statute properly within the purview of the Legislature.

Courts have long been befuddled by the task of differentiating substantive statutes from procedural statutes, because the boundary between the two is imprecise. It is often difficult to distinguish whether a particular matter involves substance or procedure, especially because a substantive right must be implemented procedurally. James R. Wolf, Inherent Rulemaking of an Independent Judiciary, 56 U. Miami L. Review 507, 527 (Apr. 2002). In its most basic form, "substantive law prescribes the

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duties and rights under our system of government.... Procedural law concerns the means and methods to apply and enforce those duties and rights." Benyard v. Wainwright, 322 So. 2d 473, 475 (Fla. 1975). However, the distinction between substantive and procedural law is neither simple nor certain. Caple, 753 So. 2d at 53.4

To further complicate matters, at times, a statute may not fall neatly into either a procedural or substantive classification. Massey v. David, 979 So. 2d 931, 937 (Fla. 2008). In those cases, the supreme court has held that when a statute contains some procedural aspects, but those provisions are intimately intertwined with the substantive rights created by the statute, the statute will not be viewed as impermissibly intruding on

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the practice and procedure of the courts in a constitutional sense, causing a constitutional challenge to fail. See Caple, 753 So. 2d at 54; see also State v. Raymond, 906 So. 2d 1045, 1049 (Fla. 2005).

"Lis pendens" literally means a pending lawsuit, and is defined as the jurisdiction, power, or control that courts acquire over property involved in a pending suit. See De Pass v. Chitty, 105 So. 148, 149 (Fla. 1925)....

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