Hobbs v. Florida First Nat. Bank of Jacksonville, BI-159

Citation480 So.2d 153,10 Fla. L. Weekly 2763
Decision Date16 December 1985
Docket NumberNo. BI-159,BI-159
Parties10 Fla. L. Weekly 2763 C.A. HOBBS, Jr., Lauryce G. Hobbs, and C.A. Hobbs, Jr., Inc., a Florida corporation, Appellants, v. FLORIDA FIRST NATIONAL BANK OF JACKSONVILLE, Appellee.
CourtCourt of Appeal of Florida (US)

Hugh A. Carithers, Jr., and Jack G. Hand, Jr. of Cooke, Hand, Carithers & Showalter, P.A., Jacksonville, for appellants.

Wesley L. Wallace of Kent, Watts & Durden, Jacksonville, for appellee.

SMITH, Judge.

In their petition for writ of certiorari, petitioners seek review of an order setting this action for a non-jury trial. We hold that the trial court departed from the essential requirements of law in ruling that petitioners, endorsers of a mortgage note who were joined as parties to the action to foreclose the mortgage securing payment of the note, were not entitled to a jury trial on the legal issues raised in the subsequent deficiency proceeding.

Land Tract Development, Inc. (Land Tract), as maker, and petitioners, as endorsers, executed a mortgage note to the respondent (bank). At the same time, Land Tract executed and delivered to the bank a mortgage encumbering three parcels of real estate in Duval County as security for the mortgage note. Petitioners were not parties to the mortgage and according to the allegations of their petition they have no interest in the mortgaged property.

After Land Tract defaulted on the note, the bank filed a complaint against it seeking foreclosure of the mortgage. Petitioners, as endorsers of the mortgage note, were joined as defendants. 1 In the complaint, the bank asked for a deficiency decree should the property be foreclosed and sold for less than the sum owing on the mortgage note. Land Tract, and petitioners C.A. Hobbs, Jr., and C.A. Hobbs, Jr., Inc., filed an answer but did not ask for a jury trial. Petitioner Lauryce G. Hobbs did not respond to the complaint and a default was entered against her. Thereafter, petitioners C.A. Hobbs, Jr., and C.A. Hobbs, Jr., Inc., moved for leave to file a counterclaim and additional defenses and petitioner Lauryce G. Hobbs moved to set aside the default entered against her.

A summary final judgment of foreclosure was entered. 2 On the same day, the court entered an order which deferred ruling on the motion for leave to file a counterclaim and additional defenses and the motion to set aside default until such time as the question of any deficiency might become an issue. At the subsequent foreclosure sale, the property sold for a price considerably lower than the amount awarded in the summary final judgment of foreclosure. Before the bank moved for a deficiency decree against the petitioners, all three petitioners filed a demand for jury trial. After the bank moved for a deficiency decree, the petitioners raised their previously deferred motions.

The court entered an order denying petitioner Lauryce G. Hobbs' motion to set aside default and granting petitioners C.A. Hobbs, Jr., and C.A. Hobbs, Jr., Inc., leave to file affirmative defenses. In their affirmative defenses, C.A. Hobbs, Jr., and C.A. Hobbs, Jr., Inc., essentially allege that they and the bank had an understanding that the development loan was to be disbursed on a work-completed basis in accordance with the customary procedures in the construction industry, but that the bank disbursed the loan in a negligent manner not in accordance with the parties' understanding, thereby prejudicing the position of the petitioners-endorsers. In this pleading, C.A. Hobbs, Jr., and C.A. Hobbs, Jr., Inc., demanded a jury trial. After a considerable period of discovery and the disposal of a third party action, the lower court entered an order denying petitioners' demand for a jury trial and setting the case for a non-jury trial.

The denial of a right to jury trial of issues traditionally triable by a jury as a matter of right, which is protected by the clear mandate of the Florida Constitution, 3 is a departure from the essential requirements of law warranting the issuance of a writ of common law certiorari. Freedman v. Rosin, 394 So.2d 241 (Fla. 1st DCA 1981); Miller v. Rolfe, 97 So.2d 132, 135 (Fla. 1st DCA 1957).

Petitioners argue that their liability is predicated on their endorsement of the note, and is not related to the foreclosure of real property in which they had no interest. It follows, they urge, that the action against them is one at law, which entitles them to a jury trial. Cheek v. McGowan Electric Supply Co., 404 So.2d 834 (Fla. 1st DCA 1981). On the other hand, the bank contends the trial court did not depart from the essential requirements of law in denying the demand for jury trial because petitioners' request was untimely; and even if timely, petitioners are not entitled to a jury trial on the determination of the amount of deficiency when tried as a continuation of the foreclosure suit. Cerrito v. Kovitch, 457 So.2d 1021 (Fla.1984); and Bradberry v. Atlantic Bank of St. Augustine, 336 So.2d 1248 (Fla. 1st DCA 1976).

We find agreement with petitioners. It is clear that an action on a promissory note is an action at law and that a defendant in an action on a promissory note is entitled to a jury trial. Cheek v. McGowan Electric Supply Co., 404 So.2d at 836. We recognize that the action on the promissory note here was brought in a foreclosure proceeding, an equitable proceeding for which trial by jury is not constitutionally guaranteed. Nevertheless, this court has held that the mixture of legal and equitable claims in the same case cannot deprive either of the parties of a right to a jury trial of issues traditionally triable by a jury as a matter of right. Padgett v. First Federal Savings & Loan Association, 378 So.2d 58 (Fla. 1st DCA 1979). Accordingly, even though some of the issues in the mortgage foreclosure proceeding were equitable, the issues to be tried in the deficiency proceeding against petitioners are legal ones and petitioners are entitled to a jury trial on these. See Sundale Associates, Ltd. v. Southeast Bank, 471 So.2d 100 (Fla. 3d DCA, 1985) (failure to disburse funds in accordance with a construction loan is a legal defense).

Although in Bradberry v. Atlantic Bank of St. Augustine, 336 So.2d 1248 (Fla. 1st DCA 1976), this court held that a mortgagor does not have the right to demand a jury trial on the determination of the amount of a deficiency, Bradberry is immediately distinguishable from the present case because there the bank was seeking a deficiency against the mortgagor in the mortgage foreclosure proceeding. Here, the petitioners are endorsers on the note, not the mortgagors. Further, it is doubtful whether Bradberry has continuing vitality in light of Padgett and subsequent cas...

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9 cases
  • Federal Deposit Ins. Corp. v. Morley
    • United States
    • United States Courts of Appeals. United States Court of Appeals (11th Circuit)
    • October 30, 1990
    ...as opposed to mortgagor, entitles him to a trial on the deficiency issues. In support of this position, he cites Hobbs v. First Nat'l Bank, 480 So.2d 153 (Fla.Dist.Ct.App.1985). 5 In Hobbs, endorsers of a mortgage note who were not parties to the mortgage appealed from an order denying thei......
  • Ronbeck Const. Co., Inc. v. Savanna Club Corp.
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    ...v. Sherman, 402 So.2d 1349 (Fla. 4th DCA 1981). It is true that our Lindsey decision is in conflict with Hobbs v. Florida First National Bank, 480 So.2d 153 (Fla. 1st DCA 1985); Valiante v. Allstate Insurance Company, 462 So.2d 590 (Fla. 2d DCA 1985); and Spring v. Ronel Refining Inc., 421 ......
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    • October 14, 1987
    ...Sarasota-Manatee Airport Authority v. Alderman, 238 So.2d 678 (Fla. 2d DCA 1970). But see, e.g., Hobbs v. Florida First Nat. Bank of Jacksonville, 480 So.2d 153 (Fla. 1st DCA 1985); Spring v. Ronel Refining, Inc., 421 So.2d 46 (Fla. 3d DCA 1982); Smith v. City of Lakeland, 392 So.2d 262 (Fl......
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    ...the mortgage, the appellants are proper parties to the foreclosure action. See, e.g., Hobbs v. Florida First Nat'l Bank of Jacksonville, 480 So.2d 153, 155 n. 1 (Fla. 1st DCA 1985) (noting endorsers of the mortgage note are proper parties to the foreclosure action and mortgagee is not requi......
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