Carrington Mortg. Servs., LLC v. Nicolas

• Decision Date: 24 November 2021
• Docket Number: s. 3D21-1300,3D21-1304,3D21-1311,& 3D21-1320
• Citation: 343 So.3d 605
• Parties: CARRINGTON MORTGAGE SERVICES, LLC, et al., Petitioners, v. Julie NICOLAS, et al., Respondents.
• Court: Florida District Court of Appeals

343 So.3d 605

CARRINGTON MORTGAGE SERVICES, LLC, et al., Petitioners,
v.
Julie NICOLAS, et al., Respondents.

Nos. 3D21-1300
3D21-1304
3D21-1311
& 3D21-1320

District Court of Appeal of Florida, Third District.

Opinion filed November 24, 2021.

Akerman LLP, and Nancy M. Wallace (Tallahassee); Akerman LLP, and William P. Heller (Fort Lauderdale); Akerman LLP, and Eric M. Levine (West Palm Beach), for petitioner Nathaniel Callahan ; Bradley Arant Boult Cummings LLP, and Lauren G. Raines and Sara D. Accardi (Tampa); Bradley Arant Boult Cummings LLP, and Marc James Ayers and Stephen C. Parsley (Birmingham, AL), for petitioner Carrington Mortgage Services, LLC; Polsinelli PC, and Brendan I. Herbert and Henry H. Bolz IV, for petitioner The Bank of New York Mellon; Liebler, Gonzalez & Portuondo, and Adam J. Wick, for petitioner Bank of America, N.A.

Jacobs Legal, PLLC, and Bruce Jacobs ; Wasson & Associates, Chartered, and Roy D. Wasson, for respondent Julie Nicolas.

Before EMAS, LOGUE and LOBREE, JJ.

LOGUE, J.

INTRODUCTION

This proceeding, which began as a straightforward mortgage foreclosure—the borrower had stopped making payments on a negotiable note indorsed in blank—has somehow transformed into an ever-escalating battle that no longer resembles its original form.

After a contested final summary judgment was entered and no appeal taken, the Respondent borrower, Julie Nicolas, moved to set aside the judgment for fraud under Rule 1.540 of the Florida Rules of Civil Procedure. During the evidentiary hearing on that motion, the parties presented conflicting testimony regarding the identity of the current loan servicer. Without concluding the hearing, or even resolving that narrow factual dispute, the trial court signed the borrower's proposed order to show cause, charging each of the Petitioners with perjury. The order set an arraignment date and advised Petitioners that the penalties under consideration included "jail, adjudication, [and] probation."

Petitioners, which include the Trustee for the foreclosing trust (The Bank of New York Mellon), a non-party loan servicer (Carrington Mortgage Services, LLC), a second non-party loan servicer (Bank of America), and the non-party attorney for the Trustee (Nathaniel Callahan), each seek a writ from this Court prohibiting the trial court from proceeding on an order to show cause why each Petitioner should not be held in indirect criminal contempt.

In addition to significant due process infirmities, Petitioners contend that an unresolved factual dispute of the nature involved here cannot form the basis of criminal contempt. For the reasons that follow, we grant their petitions and issue the writ.

BACKGROUND

On October 11, 2006, Julie Nicolas borrowed $202,500 from Popular Mortgage Corporation and signed a note and mortgage. By January 1, 2016, Nicolas had stopped making payments. In the meantime,

343 So.3d 608

the loan had been transferred several times and ultimately made part of a package of loans securitized for sale to investors. On November 1, 2018, the Bank of New York Mellon, as Trustee for the Trust that became the owner of the loan during the securitization process, filed the instant foreclosure action.

The operative complaint alleged the Trust was "entitled to enforce the Promissory Note as the owner and holder, pursuant to Section 673.3011, Florida Statutes." The note contained an indorsement in blank. In her answer, Nicolas denied this allegation and raised the affirmative defense that the Trust lacked standing. On October 29, 2020, the trial court entered a final summary judgment of foreclosure. Nicolas did not appeal that final judgment. The trial court took custody of, and canceled, the original note.

More than six months after entry of the final judgment of foreclosure, and one day before the foreclosure sale was scheduled to take place, Nicolas filed a motion under Rule 1.540 of the Florida Rules of Civil Procedure to set aside the judgment.¹ In the post-judgment motion, Nicolas sought to revive her pre-judgment claim that the Trustee lacked standing by framing the Trustee's claim of standing as fraudulent.

At a May 10, 2021 hearing, Nicolas offered the testimony of Bernard Jay Patterson as an expert "Certified Fraud Examiner." Patterson testified that the current loan servicer was Petitioner Bank of...