Cukierman v. Bankatlantic

• Decision Date: 01 March 2012
• Docket Number: No. 3D11–647.,3D11–647.
• Citation: 89 So.3d 250
• Parties: Elizabeth CUKIERMAN, Appellant, v. BANKATLANTIC, Appellee.
• Court: Florida District Court of Appeals

89 So.3d 250

Elizabeth CUKIERMAN, Appellant,

v.BANKATLANTIC, Appellee.

No. 3D11–647.

District Court of Appeal of Florida,

Third District.

Feb. 1, 2012.

Rehearing Denied March 1, 2012.

John H. Faro, Bonita Springs, for appellant.

William C. Davell and Christopher D. Barber, Fort Lauderdale, for appellee.

Before RAMIREZ, CORTIÑAS, and LAGOA, JJ.

RAMIREZ, J.

Elizabeth Cukierman appeals from an order denying her motion to set aside a judicial sale and vacate a final summary judgment of foreclosure. Because we find that appellant had no standing to challenge the judicial sale and foreclosure judgment, we affirm.

E.L.D. Enterprises, LLC, executed and delivered a promissory note to BankAtlantic in the principal sum of $196,000. The note was secured by a simultaneously executed mortgage encumbering a commercial warehouse owned by E.L.D. Eleazar and Elizabeth Cukierman, E.L.D.'s principals, were guarantors for E.L.D.'s note to BankAtlantic. E.L.D. defaulted on the note, and BankAtlantic sued to foreclose the mortgage. The foreclosure action included both Mr. and Mrs. Cukierman as defendants because of their guaranties. Mr. and Mrs. Cukierman allegedly were served with process at E.L.D.'s corporate address, and an attorney filed an answer to the complaint on behalf of all defendants. The trial court later entered a final summary judgment of foreclosure in favor of BankAtlantic in the amount of $158,769.24. Subsequently, the property was sold at a judicial sale to a third party for $172,000.

Two days after the judicial sale, Mrs. Cukierman moved the court to set aside the sale and vacate the foreclosure judgment. Mrs. Cukierman contended that she was never served with process and was unaware of the foreclosure action and judicial sale, and thus, the judicial sale without notice to her improperly extinguished her right of redemption. In support of her motion, Mrs. Cukierman filed affidavits from her husband and the attorney who answered the complaint, both of which averred that they did not communicate with Mrs. Cukierman regarding the foreclosure action. In response, counsel for BankAtlantic argued that Mrs. Cukierman had no standing to challenge the foreclosure action and judicial sale because, as a guarantor, she had no right of redemption. BankAtlantic contends that, because the indebtedness was satisfied from the sale of the mortgage collateral and no judgment was entered against Mrs. Cukierman personally, any lack of notice to Mrs. Cukierman is irrelevant. We agree with BankAtlantic.

A person who guarantees a promissory note does not acquire any interest in the mortgaged property. In Florida, a mortgage creates a special lien against the collateral property, see§ 697.02, Fla. Stat. (2001); Hemphill v. Nelson, 95 Fla. 498, 116 So. 498 (1928), which, upon the mortgagor's default, the mortgagee has the right to foreclose, having the collateral property sold to pay the mortgagor's debt. See Georgia Cas. Co. v. O'Donnell, 109 Fla. 290, 147 So. 267, 268 (1933) (“The method of foreclosure in this state is to have the mortgaged property sold under an order of the court and the proceeds applied in payment of the debt. The primary purpose of the suit is to subject the mortgaged property to the payment of the debt.”); Gonzalez v. Chase Home Fin. LLC, 37 So.3d 955, 957 (Fla. 3d DCA 2010) (quoting Brown v. Atlanta Nat'l Bldg. & Loan Ass'n, 46 Fla. 492, 35 So. 403, 404 (1903)) (“[T]he proper scope of a foreclosure suit is merely to enforce the mortgage lien against the title or interest of the mortgagor....”); Morris v. Osteen, 948 So.2d 821, 825 ((Fla. 5th DCA 2007) (quoting Bankers Trust Co. v. Edwards, 849 So.2d 1160, 1162 (Fla. 1st DCA 2003)) (“Upon obtaining a judgment of foreclosure, the mortgagee is ‘entitled to have the property sold and the proceeds applied against the foreclosure judgment.’ ”). Only the mortgaged property owner or the holder of subordinate interests in the property have the right to redeem the property prior to sale. § 45.0315, Fla. Stat. (2009); Marina Funding Grp., Inc. v. Peninsula Prop. Holdings, Inc., 950 So.2d 428, 430 (Fla. 4th DCA 2007).

Conversely, a guaranty of a mortgage note is simply a promise to answer for the debt should the mortgagor fail to pay. See West Flagler Assocs., Ltd. v. Dep't of Revenue, 633 So.2d 555 (Fla. 3d DCA 1994) (holding that note guaranty was not subject to intangible personal property tax in light of secondary nature of liability which arises only upon default by note maker); New Holland, Inc. v. Trunk, 579 So.2d 215, 216–17 (Fla. 5th DCA 1991) (“A guaranty is a promise to pay some debt (or to...