Real Property and Business Litigation Report Volume IX, Issue 31 August 1, 2016 Manuel Farach Citibank v. Unknown Heirs, --- So. 3d ----, 2016 WL 3974864 (Fla. 1st DCA 2016). A final judgment entered during a bankruptcy automatic stay is void, even if the court and the party seeking judgment were not aware of the bankruptcy filing. Dhanasar v. JP Morgan Chase Bank, N.A., --- So. 3d ----, 2016 WL 4035727 (Fla. 3d DCA 2016). A foreclosure suit alleging default by the failure to make mortgage payments as of a date certain and all payments thereafter, some of which missed payments were within and some of which were outside five years from date of filing suit, is not barred by Florida’s Statute of Limitations. Kane v. Stewart Tilghman Fox & Bianchi, P.A., --- So. 3d ----, 2016 WL 4016280 (Fla. 4th DCA 2016). The garnishment statute, Florida Statute section 77.01 et. seq., does not bar a creditor from seeking successive garnishments, even if a prior garnishment was dismissed upon an affidavit of exemption having been filed in the prior garnishment. Corrections Corporation Of America v. City of Pembroke Pines, --- So. 3d ----, 2016 WL 4016206 (Fla. 4th DCA 2016). A municipality has no obligation to provide utility services outside its boundaries unless it has contracted to do so or has otherwise assumed the duty to so by holding itself out as the public utility for the affected area. Lasala v. Nationstar Mortgage, LLC, --- So. 3d ----, 2016 WL 4035653 (Fla. 4th DCA 2016). A final judgment that is defective for failure to prove all damages will be reversed and remanded for further proceedings when plaintiff has proven some of its damages, but will be reversed for dismissal when plaintiff has fully failed to prove its damages.

CITIBANK, N.A., NOT INDIVIDUALLY BUT SOLELY AS TRUSTEE FOR THE HOLDERS OF BEAR STEARNS ASSET BACKED SECURITIES I TRUST 2006-HE3, ASSET-BACKED CERTIFICATES SERIES 2006-HE3,

Appellant,

v.

UNKNOWN HEIRS, BENEFICIARIES, DEVISEES, ASSIGNEES, LIENORS, CREDITORS, TRUSTEES AND ALL OTHERS WHO MAY CLAIM AN INTEREST IN THE ESTATE OF JOSEPH E. JAMES; UNKNOWN TENANT(S),

Appellees.

IN THE DISTRICT COURT OF APPEALFIRST DISTRICT, STATE OF FLORIDA

NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED

CASE NO. 1D15-2502

_____________________________/

Opinion filed July 25, 2016.

An appeal from the Circuit Court for Duval County.Aaron Bowden, Senior Judge.

Wm. David Newman, Jr. of Choice Legal Group, P.A., Fort Lauderdale, for Appellant.

No appearance, for Appellees.

2

BILBREY, J.

Appellant appeals from the trial court’s order denying Appellant’s motion to

vacate the summary judgment of foreclosure, to dismiss the complaint, and to

dissolve the lis pendens. Appellant’s motion was filed in the trial court pursuant to

section 702.07, Florida Statutes (2015), and rule 1.540(b), Florida Rules of Civil

Procedure. The order denying the motion to vacate is an appealable final order

under rule 9.130(5), Florida Rules of Appellate Procedure.

Because the record of the trial court proceedings demonstrates that the

judgment at issue was entered the day after the defendant/debtor’s petition for

bankruptcy was filed in federal court, the judgment was entered during the

pendency of the automatic stay imposed by 11 U.S.C. § 362. The judgment was

therefore void. See McMahon v. Ryan, 964 So. 2d 198, 200 (Fla. 5th DCA 2007).

This is so, even though Appellant and the trial court did not have notice of the

automatic stay until after the judgment was entered. Personalized Air

Conditioning, Inc. v. C.M. Sys. of Pinellas Cty., Inc., 522 So. 2d 465, 466 (Fla. 4th

DCA 1988); Woods v. Lloyds Asset Mgmt., LLC, --- So. 3d ---, 41 Fla. L. Weekly

D1071, 2016 WL 2342898 (Fla. 4th DCA May 4, 2016). The trial court had no

discretion to deny the motion to vacate a void judgment. Segalis v. Roof Depot

USA, LLC, 178 So. 3d 83, 85 (Fla. 4th DCA 2015).

With the void judgment vacated, the trial court should also have allowed

3

dismissal of the action. Rule 1.420(a), Florida Rules of Civil Procedure, allows a

plaintiff to dismiss an action without order of the trial court. “The trial court has

no authority or discretion to deny the voluntary dismissal.” Pino v. Bank of New

York, 121 So. 3d 23, 31 (Fla. 2013).

Finally, with the action dismissed, the trial court should have dissolved the

lis pendens. “[W]hen the action no longer affects the subject property, the court

shall control and discharge the recorded notice of lis pendens as the court would

grant and dissolve injunctions.” § 48.23(3), Fla. Stat. (2015). The action in which

the lis pendens was filed will no longer affect the subject property after the action

is dismissed. Therefore the lis pendens should have been dissolved.

Accordingly, the order denying the motion to vacate the summary final

judgment in foreclosure, dismiss the complaint, and dissolve the lis pendens is

REVERSED and this cause REMANDED for entry of an order granting the

motion.

LEWIS and WINOKUR, JJ., CONCUR.

Third District Court of AppealState of Florida

Opinion filed July 27, 2016.Not final until disposition of timely filed motion for rehearing.

________________

No. 3D15-10Lower Tribunal No. 13-28478

________________

Devina Dhanasar,Appellant,

vs.

JPMorgan Chase Bank, N.A.,Appellee.

An appeal from the Circuit Court for Miami-Dade County, Eugene J. Fierro, Senior Judge.

Scanziani Law Group and Denise Martinez-Scanziani and Paul John Scanziani, for appellant.

Kula & Associates and Elliot B. Kula and W. Aaron Daniel, for appellee.

Before SUAREZ, C.J., and WELLS and EMAS, JJ.

SUAREZ, C.J.

Devina Dhanasar appeals from a final judgment of foreclosure. We affirm.

Dhanasar defaulted on her mortgage payments in April 2008. The

predecessor bank, Washington Mutual, sent a notice of default and acceleration

with a thirty-day cure provision. The foreclosure Complaint that is the subject of

this appeal was filed on August 31, 2013. The 2013 Complaint sought the

accelerated amounts due from April 2008 forward. Dhanasar filed her Answer,

asserting nineteen affirmative defenses, the last being the five-year statute of

limitations on mortgage foreclosure actions pursuant to section 95.11(2)(c), Florida

Statutes (2013).

The trial was held December 2014. At trial, both parties stipulated that they

would proceed solely on the statute of limitations issue. Dhanasar’s counsel

argued that the July 18, 2008 notice of default and thirty-day cure option triggered

the start of the five-year statute of limitation on the foreclosure action when the

thirty days expired. Thus, Dhanasar argued, the statute of limitation expired on

July 18, 2013 and the Bank’s August 31, 2013 Complaint was time barred.1

JPMorgan Chase, the successor Bank, argued at trial that acceleration did

not occur until the Complaint in foreclosure was filed on August 31, 2013, because

the filing of the complaint is what triggers the start of the statute of limitation.

Further, the Bank argued, the foreclosure was based on the Mortgage, not the letter

1 As the notice letter was not in the record, both parties stipulated at the 2013 trial that the notice of acceleration [how the parties characterized the notice] was sent to appellant on June 18, 2008.

2

of default, and the Mortgage contains an optional acceleration clause providing

that the lender may, at its option, choose to accelerate the Note. In other words,

the acceleration did not occur automatically thirty days after the default letter was

sent, but rather when the Bank sought to foreclose by filing its 2013 Complaint.

The trial court entered Final Judgment of Foreclosure against Dhanasar.2

The question is whether the Bank could proceed with the action for

foreclosure where Dhanasar failed to make her April 2008 payment and any

subsequent payments, where the notice letter was sent to her in July of 2008, and

where the foreclosure complaint was not filed until August of 2013. Because the

Bank’s complaint specifically alleged that Dhanasar had failed to pay the April

2008 payment and all subsequent payments, and the action was filed within five

years of a default payment, we agree with the trial court’s conclusion that the

action survived the asserted statute of limitations bar. We followed this analysis in

Deutsche Bank Trust Co. Americas v. Beauvais, 188 So. 3d 938, 944-45 (Fla. 3d

DCA 2016) (en banc), and it is entirely applicable to the facts at hand.

2 The Appellant raises for the first time on appeal the suggestion that the Bank had filed a prior complaint in foreclosure that accelerated the Note and caused the five-year statute of limitations to have expired by the time the Bank filed the 2013 Complaint. Appellant’s trial counsel failed, however, to raise and argue the matter of the alleged foreclosure complaint to the trial court. It may not be considered for the first time on appeal and the issue is waived. See Dade County School Bd. v. Radio Station WQBA, 731 So. 2d 638 (Fla. 1999) (a claim not raised in the trial court will not be considered on appeal); Dober v. Worrell, 401 So. 2d 1322 (Fla. 1981) (appellate court will not consider issues not presented to the trial judge on appeal from final judgment on the merits).

3

The order under review is therefore affirmed.

4

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FOURTH DISTRICT

CHARLES J. KANE, HARLEY N. KANE, and KANE & KANE, P.A.,

Appellants,

v.

STEWART TILGHMAN FOX & BIANCHI, P.A., a professional association; WILLIAM C. HEARON, P.A., a professional association; and

TODD S. STEWART, P.A., a professional association; et al., Appellees.

Nos. 4D14-780, 4D14-3984, and 4D14-3993

[July 27, 2016]

Consolidated appeals from the Circuit Court for the Fifteenth Judicial

Circuit, Palm Beach County; Catherine M. Brunson, Judge; L.T. Case No. 502004CA006138XX.

Stephen Rakusin of The Rakusin Law Firm, Fort Lauderdale, for

appellants. Detra Shaw-Wilder of Kozyak Tropin & Throckmorton LLP, Coral

Gables, for appellees.

FORST, J. Appellants Charles Kane and Harley Kane (“the Kanes”), both attorneys, were accused of impropriety in settling a number of lawsuits. See Kane v. Stewart Tilghman Fox & Bianchi, P.A., 85 So. 3d 1112 (Fla. 4th DCA 2012). After prevailing in a non-jury trial, Appellees Stewart Tilghman Fox & Bianchi, P.A., William C. Hearon, P.A., and Todd S. Stewart, P.A., obtained a substantial judgment against the Kanes. The Appellees subsequently sought to garnish payments from the Kanes’ law firm, Appellant Kane & Kane, P.A. (“the firm”), to satisfy the judgment, filing two writs of garnishment. The trial court denied the Appellants’ motion to dissolve the second writ of garnishment and entered a final judgment of garnishment. On appeal, the Appellants argue, inter alia, that the second writ was improper after the expiration of the first and that the monies flowing from the firm to the Kanes were not garnishable. We disagree and affirm with respect to all of the Appellants’ challenges to the trial court’s decision, specifically addressing two of the issues raised by the Appellants on

2

appeal.

Background

As noted above, the Appellees (three law firms) obtained a substantial monetary judgment (approximately $2 million) against Charles and Harley Kane. After the Appellants’ attempts to discharge the debt in bankruptcy failed, the Appellants formed a new law practice, Kane & Kane, P.A.

In March 2013, the Appellees obtained a writ of garnishment, seeking any funds held by the firm that were owed to the Kanes. Charles and Harley Kane each filed a claim of exemption as the heads of their respective families.1 When the Appellees failed to file a sworn denial to the exemption, the writ of garnishment was automatically dissolved.

In July 2013, the Appellees moved for a second writ of garnishment,

again seeking monies held by the firm. The writ was issued to the firm and the Kanes again claimed head-of-household exemptions. This time, however, the Appellees filed sworn denials of the exemptions. The firm admitted it owed the Kanes approximately $56,000 each, but did not state the time frame in which the debt accrued. The firm additionally alleged several affirmative defenses, including res judicata, collateral estoppel, and waiver. The Appellants moved to dissolve the second writ of garnishment.

The trial court held an evidentiary hearing on the claims of exemption

and the motion to dissolve the writ. At the hearing, the firm first argued that the second writ was legally precluded by the failure of the Appellees to object to the claim of exemption in the first writ. The Appellees disagreed that the automatic dissolution of the first writ was an adjudication on the merits and precluded a second writ of garnishment.

The facts elicited at the hearing indicated that the firm was created in

2009 after the Kanes’ prior firm was put into bankruptcy by the underlying case. The firm handled cases originated by the prior firm under an agreement with the bankruptcy trustee. The Kanes are the sole shareholders, officers, and directors of the firm. Their employment by the firm was governed by written “employment agreements” drafted in 2011

1 “Disposable earnings of a head of a family, which are greater than $750 a week, may not be attached or garnished unless such person has agreed otherwise in writing.” § 222.11(2)(b), Fla. Stat. (2012). “‘Head of Family’ includes any natural person who is providing more than one-half of the support for a child or other dependent.” § 222.11(1)(c).

3

and negotiated between the Appellants. The employment agreements call for the Kanes to get paid every two weeks. In practice, however, the Kanes were only paid if the firm had cash on hand. If the firm lacked sufficient money to pay them, their compensation was deferred until the firm obtained its fees from one of its cases. Appellant Harley Kane testified that although his employment agreement called for him to receive a salary of $120,000 per year, he had never received that much.

The trial court denied the Appellants’ claims of exemption and motion

to dissolve the writ of garnishment. The court found that the money owed to the Kanes from the firm was “the equivalent of shareholder distributions from their wholly-owned law firm” and therefore not subject to exemptions. The trial court also found that the Appellee’s failure to deny the exemption in the first writ did not legally preclude the second writ. This appeal followed.

Analysis

A. Validity of the Second Writ

“Because the issue requires this Court to interpret the statutory

provisions of Florida garnishment law, we apply a de novo standard of review.” Arnold, Matheny & Eagan, P.A. v. First Am. Holdings, Inc., 982 So. 2d 628, 632 (Fla. 2008).

Under section 77.01, Florida Statutes (2013), “[e]very person or entity

who has sued to recover a debt or has recovered judgment in any court against any person or entity has a right to a writ of garnishment, in the manner hereinafter provided, to subject any debt due to defendant by a third person . . . .” However, the debtor in a garnishment proceeding can seek to avoid the garnishment. § 77.041. Wages payable to a head of household are exempt from garnishment unless the debtor agrees in writing to allow garnishment of wages over $750 per week. § 222.11(2). Once a head of household exemption is claimed,

notice of same shall be forthwith given to the party, or her or his attorney, who sued out the process, and if the facts set forth in such affidavit are not denied under oath within 2 business days after the service of said notice, the process shall be returned, and all proceedings under the same shall cease.

§ 222.12, Fla. Stat. (2012) (repealed July 1, 2013); but see § 77.041(3), Fla. Stat. (2013) (“If the plaintiff or the plaintiff’s attorney does not file a sworn written statement that answers the defendant’s claim of exemption within

4

8 business days after hand delivering the claim and request or, alternatively, 14 business days, if the claim and request were served by mail, no hearing is required and the clerk must automatically dissolve the writ and notify the parties of the dissolution by mail.”). In this case, it is undisputed that the Kanes filed claims of exemption to the first writ as heads of household under section 222.11 and that the Appellees failed to deny these claims of exemption. The Appellants argue the failure of this initial writ acts as a bar on subsequent attempts to enforce the judgment via garnishment. We disagree. Akerman Senterfitt & Eidson, P.A. v. Value Seafood, Inc., 121 So. 3d 83 (Fla. 3d DCA 2013), addressed a similar issue. In that case, a plaintiff obtained the rights to a money judgment against the defendant. Id. at 85. The plaintiff obtained a writ of garnishment against third-party garnishees alleged to have monies owed to the defendant. Id. Two-and-a-half years later, the garnishees moved to dissolve the writ, arguing that the writs had automatically dissolved when plaintiff failed to file a motion for final judgment within 6 months, as required by section 77.07(5), Florida Statutes (2012). Akerman, 121 So. 3d at 85. The trial court dissolved the initial writs. Id. The plaintiff subsequently issued new writs of garnishment and the garnishees moved to dissolve or dismiss the new writs, arguing that the initial dissolution was “tantamount to a final judgment.” Id. at 86. The trial court agreed and dismissed the second writs, finding that allowing a second writ would “‘circumvent[] the intent and meaning of § 77.07(5)’ to allow ‘a plaintiff/judgment creditor . . . to file another subsequent writ of garnishment after a prior writ of garnishment was dissolved pursuant to § 77.07(5)[.]’” Id. (omission in original).

The Third District Court of Appeal reversed, holding that “there is no basis in the language of section 77.07(5) to support the trial court’s conclusion” that it would be thwarted by allowing a second writ. Id. The court held that the clear language of the statute called for the automatic dissolution of the writ, but no more, when the plaintiff failed to file for a final judgment. Id. at 87. The court further held that it could not “conclude that the dissolution here is also tantamount to a final judgment adjudicating the merits” of the writ. Id. (distinguishing that case from Matthews v. First Fed. Sav. & Loan of Englewood, 571 So. 2d 2 (Fla. 2d DCA 1990), as the Matthews opinion failed to state why the first writ was dissolved).

We agree with the decision in Akerman and note that is it consistent

with the outcome suggested by the Florida Supreme Court in Miami Herald Publishing Co. v. Payne, 358 So. 2d 541 (Fla. 1978). In Payne, a husband

5

owed his ex-wife’s attorney fees from the attorney’s representation in the husband’s and wife’s divorce. Id. at 542. The attorney sought to garnish the husband’s earnings, but the husband’s employer asserted that the husband was entitled to a head of household exemption. Id. The wife and the attorney failed to file a legally sufficient denial of the exemption. Id. Although the court’s holding that a sworn denial was required was later overturned in Waddell v. Schwarz, 405 So. 2d 978 (Fla. 1981), the court’s suggestion that “[i]t may be that [wife]’s attorney will be required to seek successive writs of garnishment against [the husband]’s creditors” implies that the failure to file a sworn denial does not preclude a later writ of garnishment after the initial garnishment action “was terminated by operation of law when [the attorney] failed to comply with the statutory directive for defeating a debtor’s garnishment exemption.” Payne, 358 So. 2d at 543.

We recognize that the Appellants have cited cases which point in the

opposite direction. However, these cases are distinguishable and, to the extent that they address the issue here, we believe they demonstrate faulty reasoning. For instance, the Appellants rely on Hill v. Haywood, 735 So. 2d 539 (Fla. 2d DCA 1999). In that case, a judgment creditor obtained a writ of garnishment against a judgment debtor. Id. at 540. The debtor filed affidavits supporting her claim of exemption as head of household. Id. The trial court refused to quash the writ, but the Second District Court of Appeal reversed, noting that “[s]hould the garnishor fail to timely file a sworn statement disputing facts alleged to support the creditor’s exemption, all proceedings under the writ must cease.” Id.

However, this statement of the law regarding the termination of that

specific writ is undisputed. The point that the Appellants attempt to draw from Hill for the purposes of preventing future writs (“[f]ailure to file controverting affidavit operates as admission of facts alleged in debtor’s affidavit which claimed garnishment exemption”) is not a statement by the Hill court at all, but is actually found in in a parenthetical describing the holding of another case, Sokolsky v. Kuhn (Sokolsky I), 386 So. 2d 806 (Fla. 1st DCA 1980). Sokolsky I does indeed make that point of law. Id. at 807. However, Sokolsky I does not cite any support for that proposition and was overturned by Sokolsky v. Kuhn (Sokolsky II), 405 So. 2d 975, 978 (Fla. 1981), albeit for reasons unrelated to that specific point. To the extent the point from Sokolsky I stands, it appears to be contrary to the holding of Akerman and the implication of Payne. The Appellants’ other cases relying on Hill are likewise distinguishable.

The failure to file a sworn denial of a claim of exemption to a writ for

garnishment does not operate as an adjudication on the merits of the

6

exemption issue. Like the Third District in Akerman, we look to the language of the statute at issue. The language of section 222.12, like that of section 77.07(5) (at issue in Akerman), does not provide a basis to conclude that the Legislature intended the failure of a creditor to deny an exemption with respect to one writ of garnishment to operate as a bar on future writs.2 This would be a particularly harsh result where the denial must be sworn and made in a very short time frame. Accordingly, we affirm the trial court’s determination that the second writ was allowed by law.

B. Status of Monies held by the Firm for the Appellants

The classification of monies sought in a garnishment proceeding “is a

question of statutory interpretation that is reviewed de novo.” Baker v. Storfer, 51 So. 3d 652, 653 (Fla. 4th DCA 2011).

The party seeking an exemption from garnishment has the burden of

proving entitlement to the exemption. Cadle Co. v. G & G Assocs., 757 So. 2d 1278, 1279 (Fla. 4th DCA 2000). Under section 222.11(2), “disposable earnings of a head of family” under $750 per week are exempt from garnishment, while disposable earnings over $750 per week are exempt unless the debtor agrees to garnishment. The statute defines “earnings” to include “compensation paid or payable, in money of a sum certain, for personal services or labor whether denominated as wages, salary, commission, or bonus.” § 222.11(a).

The issue in this case is whether the payments flowing from the firm to

the Kanes are exemptible wages or salary, or some other form of compensation. “To decide whether monies from employment qualify for the section 222.11(2)(b) exemption, the relevant inquiry is often whether a person’s employment is a salaried job or is in the nature of running a business.” Brock v. Westport Recovery Corp., 832 So. 2d 209, 211 (Fla. 4th DCA 2002).

Courts have looked to a number of factors when determining if

payments are salary/wages or actually come from the running of the business, including how the debtor defines the payments. Id. at 212 (noting that the debtor “characterized his earnings as disbursements from profits”). However, this self-determination is not dispositive. “A debtor

2 The situation before us presents a case where the first writ of garnishment was automatically dissolved, and there was no adjudication on the merits. Res judicata and similar defences may apply to other cases wherein a second writ of garnishment was filed after an adjudication on the merits of a first writ.

7

that owns or controls a business cannot exempt the funds he distributes to himself from the business simply by calling the distributions wages.” In re Harrison, 216 B.R. 451, 454 (Bankr. S.D. Fla. 1997); see also 13 FLA. JUR. 2d Creditors’ Rights § 12.

Establishing that the debtor receives “regular compensation dictated by

the terms of an arms-length employment agreement” is a factor favoring a finding that the payments are exemptible wages. Brock, 832 So. 2d at 212 (quoting In re Manning, 163 B.R. 380, 382 (Bankr. S.D. Fla. 1994)); see also Harrison, 216 B.R. at 454 (same). Courts are more likely to find income to be wages where the debtor has less control “over the amount of his compensation and the terms of his employment,” Brock, 832 So. 2d at 212, including whether the debtor was able to be fired. Manning, 163 B.R. at 382 (finding that income was not exemptible where, “[a]s a practical matter,” the debtor was not subject to firing where his wife was sole owner of corporation and the debtor “sometimes did not take the salary if [the business] was running low on cash”); see also In re Im, 495 B.R. 46, 51 (Bankr. M.D. Fla. 2013) (“Florida courts have held, in essence, that where the debtor controls the timing and amount of distributions from a family owned business, those distributions do not qualify as ‘earnings’ for purposes of Fla[.] Stat. § 222.11.” (quoting In re McDermott, 2011 WL 740727, at *2 (Bankr. M.D. Fla. 2011))).

In this case, the Kanes operated under contracts that were negotiated

only between themselves. They controlled the firm, were not able to be terminated except by themselves, and were not paid in accordance with their purported contracts, but rather received payment when the firm could afford to do so. One Appellant testified that since the contracts were formed, he had yet to receive the amounts of money the contract promised. These facts lead to the conclusion that the payments flowing from the firm to the Kanes were not salary, in the ordinary sense of the word, but were actually akin to shareholder distributions that were outside the scope of the exemption found in section 222.11. Therefore, we agree with the trial court and hold that these funds were not exempt from garnishment.

Conclusion

For the foregoing reasons, we affirm the trial court’s decision allowing

the entry of a second writ of garnishment and finding that the monies owed to the Kanes from the firm were not exempt. Affirmed. DAMOORGIAN, J., and PERLMAN, SANDRA, Associate Judge, concur.

8

* * *

Not final until disposition of timely filed motion for rehearing.

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FOURTH DISTRICT

CORRECTIONS CORPORATION OF AMERICA, a foreign corporation,

Appellant,

v.

CITY OF PEMBROKE PINES, a municipal corporation, and CCA PROPERTIES OF AMERICA, LLC, a Tennessee limited

liability company, Appellees.

No. 4D14-4815

[July 27, 2016]

Appeal from the Circuit Court for the Seventeenth Judicial Circuit,

Broward County; Carol-Lisa Phillips, Judge; L.T. Case No. 12-007337 CACE (25).

Leonard K. Samuels, Paul S. Figg and Ashley Dillman Bruce of Berger

Singerman LLP, Fort Lauderdale, for appellant. Usher L. Brown and Victor Kline of Greenspoon Marder, P.A.,

Orlando, for appellee City of Pembroke Pines. Alfredo Marquez-Sterling and Keith M. Poliakoff of Arnstein & Lehr

LLP, Fort Lauderdale, for Amicus Curiae the Town of Southwest Ranches.

KLINGENSMITH, J.

Corrections Corporation of America (“CCA”) appeals an order ruling that the City of Pembroke Pines did not have a duty to provide water and sewer services to CCA’s site, as well as a final order dismissing CCA’s counterclaims. CCA contends that Pembroke Pines is bound to provide those services because of the adoption of two agreements between Pembroke Pines and the Town of Southwest Ranches. CCA claims that these agreements demonstrated Pembroke Pines’ expressed intention to provide water and sewer services to the CCA site, which is located just outside Pembroke Pines’ corporate boundaries in the adjacent Southwest Ranches. For the reasons set forth below, we affirm the trial court’s orders.

2

Pembroke Pines operates potable water and sewer systems that service properties within its boundaries, as well as some properties outside of those boundaries. Southwest Ranches does not have potable water or sewer systems to service its residents, and Pembroke Pines is the only provider in the area. The CCA site is surrounded by four other properties, all of which are, or were at one time, serviced by Pembroke Pines’ water or sewer systems (or both). Only one of these properties is actually located within the boundaries of Pembroke Pines,1 and those services provided outside of the boundaries extend to only a limited number of residential and commercial properties. At all times relevant to this dispute, Pembroke Pines admitted that it had the capacity to provide water and sewer services to the CCA site through its systems that abut the site.

In 2005, CCA and Southwest Ranches entered into an agreement

concerning the development of a correctional facility on the CCA site. The agreement provided that “all required water, sewer and other utility services were available” at the CCA site. CCA was advised that while a water and sewer agreement with Pembroke Pines would be required, it was unclear whether the Pembroke Pines City Commission would grant those services.

Later that year, Pembroke Pines and Southwest Ranches entered into

an Interlocal Agreement regarding local roadways and other matters (the “Roadways ILA”), which was approved by the City Commission. The Roadways ILA provided:

Jail Facility. [Pembroke Pines] shall not interfere with [CCA]’s, or its successors or assigns, development and/or operation of the jail facility, or with [Southwest Ranches’] Agreement with [CCA] concerning the development of same.

. . . .

THIRD PARTY BENEFICIARIES: Neither [Pembroke Pines] nor [Southwest Ranches] intend to directly or substantially benefit a third party by this Agreement. Therefore, the parties agree that there are no third party beneficiaries to this Agreement and that no third party shall be entitled to

1 One of the properties was a women’s prison, which is no longer operational. Another property is a future county jail site. Pembroke Pines also provides water and sewer services to Everglades National Park, which is located outside of the boundaries, and near the CCA site.

3

assert a claim against either of them based on this Agreement. The parties expressly acknowledge that it is not their intent to create any rights or obligations in any third person or entity under this Agreement.

Soon thereafter, CCA began the process of obtaining permits for the CCA site infrastructure.

In 2011, Immigration and Customs Enforcement (“ICE”) tentatively selected the CCA site to build a new detention facility. A few days later, Pembroke Pines and Southwest Ranches entered into a second Interlocal Agreement concerning emergency medical and fire services (the “EMS ILA”) that provided:

Jail Facility: [Pembroke Pines] acknowledges that it has sufficient capacity to deliver emergency medical protection and fire prevention services to [Southwest Ranches’] future 2,500 bed detention/corrections facility, located on property currently owned by [CCA]. [Pembroke Pines] agrees to timely provide Broward County, upon request, any documentation that Broward County may require to acknowledge that Pembroke Pines has the capacity, ability, and the willingness to service this facility under the terms and conditions contained herein. . . . Further, [Pembroke Pines] agrees that it has sufficient capacity to provide water and sewer service to [Southwest Ranches’] future 2,500 bed detention/ corrections facility (approximately 500,000 gross square feet of floor area), and that it will expeditiously approve a water/ waste water utility agreement to provide such service, at [Pembroke Pines’] then prevailing rate, in accordance with state law ([Pembroke Pines’] rate + surcharge).

(Emphasis added).2

Further, the EMS ILA contained the same third-party beneficiary provision found in the Roadways ILA:

Third Party Beneficiaries: Neither [Southwest Ranches] nor [Pembroke Pines] intended [sic] that any person shall have a cause of action against either of them as a third party beneficiary under this Agreement. Therefore, the parties

2 Pembroke Pines later voted to terminate the EMS ILA in 2012 pursuant to a nine-month termination provision therein.

4

agree that there are no third party beneficiaries to the Agreement and that no third party shall be entitled to assert a claim against either of them based upon the Agreement. The parties expressly acknowledge that it is not their intent to create any rights or obligations in any third person or entity under the Agreement.

CCA then submitted to Pembroke Pines a proposed Water and Sewer

Installation and Service Agreement (the “W&S Agreement”) for a 1,500-bed facility, and requested that the matter be considered at the first available City Commission meeting. The city attorney and the city manager for Pembroke Pines engaged in negotiations with CCA’s counsel regarding the terms and conditions of the W&S Agreement, but while the negotiators eventually agreed on the contractual terms, the City Commission never voted on whether to approve the agreement for services with CCA. Instead, Pembroke Pines formally adopted a resolution expressing its opposition to erecting the ICE detention center next-door in Southwest Ranches.

Pembroke Pines brought an action for declaratory judgment, seeking a

determination that it was not required to provide CCA with water and sewer services. CCA maintained that Pembroke Pines had assumed a duty to provide the CCA site with those services by acts or omissions, manifesting an expression of desire or intent to provide the services. Following trial, the court entered a thorough order determining that Pembroke Pines did not have a duty to provide water and sewer services to CCA. The court also entered a separate order dismissing the counterclaims asserted by CCA. This appeal followed.

CCA maintains that the evidence established that Pembroke Pines’

actions, by way of its conduct and contracts, created a duty to provide utilities. As such, the court’s rulings concerned a question of fact that “must be sustained if supported by competent substantial evidence.” Bellino v. W & W Lumber & Bldg. Supplies, Inc., 902 So. 2d 829, 832 (Fla. 4th DCA 2005) (quoting State v. Glatzmayer, 789 So. 2d 297, 301 n.7 (Fla. 2001)). We hold that the evidence presented supports the court’s finding that Pembroke Pines had no duty to provide utility services to the CCA site. There was never a guarantee of service or a binding expression of intent to provide it, as demonstrated by the language of the Roadways ILA and the EMS ILA, and the testimony of CCA representatives reflects that CCA knew there were unresolved issues with Pembroke Pines prior to the time it attempted to obtain service.

5

As a general rule, “a municipality has no duty to supply services to areas outside its boundaries.” Allen’s Creek Props., Inc. v. City of Clearwater, 679 So. 2d 1172, 1174 (Fla. 1996). A city may provide services to non-residents, but such extensions of service are not mandated. See § 180.191(1), Fla. Stat. (2012) (providing the guidelines under which a municipality may charge consumers outside its boundaries with certain rates, fees, and charges, but not requiring the municipality to provide such services outside its boundaries).

In Allen’s Creek, the Florida Supreme Court recognized exceptions to

this general rule where: (1) a municipality has agreed to extend its services by contract; and (2) a municipality has assumed a duty to provide such services through its conduct, by “hold[ing] itself out as a public utility for a particular area outside its city limits.” See 679 So. 2d at 1175–76. In this case, neither exception applies.

It is clear from the record that no contract between CCA and

Pembroke Pines was ever in force. The Roadways ILA and the EMS ILA created no contractual obligation between CCA and Pembroke Pines, as CCA was neither a party to those ILAs nor a third-party beneficiary under the plain terms.

With regard to when the conduct exception applies, the court in

Allen’s Creek explained:

We agree that through its conduct a municipality may assume the legal duty to provide reasonably adequate services for reasonable compensation to all of the public in an unincorporated area. See City of Winter Park v. Southern States Utilities, Inc., 540 So. 2d 178, 180 (Fla. 5th DCA 1989) (city’s passage of ordinance requiring property owners outside the city but within a zone designated by the ordinance to connect to the city’s sewer service when available was conduct sufficient to bring into effect law applicable to public utilities). We add however that the conduct must expressly manifest the municipality’s desire or intent to assume that duty. A municipality’s decision to provide service without restriction in an area outside its boundaries would meet this requirement.

679 So. 2d. at 1176 (emphasis added).

As we interpret Allen’s Creek, a clear manifestation of affirmative expression requires some conduct by the local government equivalent to

6

an action taken pursuant to a formal enactment of an ordinance or resolution. In other words, more than mere acquiescence or neutrality is needed — there must be some unequivocal action by a municipality’s legislative body that creates reasonable expectations for inducing justifiable reliance. Here, Pembroke Pines’ actions did not constitute an affirmative expression of intent sufficient to bind it to an obligation to provide services. Any such intent on the part of Pembroke Pines was only implicitly expressed, not affirmatively expressed, as prescribed by Allen’s Creek. See id.

CCA knew that any water and sewer connection for the CCA site

would ultimately require approval by a vote of the City Commission, which did not occur. In fact, the applicable provision of the Pembroke Pines Code of Ordinances states that “property located outside the city limits shall not be allowed to connect to a city utility system unless the connection is authorized by the City Commission.” Pembroke Pines, Fla., Code of Ordinances § 50.10(B) (2012). This authorization can only occur as provided by the Charter of the City of Pembroke Pines, which states that “[n]o action of the Commission . . . shall be valid or binding unless adopted by the affirmative vote of three (3) members of the Commission.” Id. § 3.07(e). As no vote by the City Commission on this matter ever took place, a connection to the CCA site was never properly sanctioned.

Although Pembroke Pines had previously provided some utility

services to customers outside its boundaries, it did so only in limited situations. In light of the fact that CCA was aware that compliance with the applicable provisions of the Code of Ordinances was required, these circumstances on the whole did not amount to an affirmative expression of Pembroke Pines’ intent to serve all prospective utility consumers in that specific geographic area outside its boundaries.

The EMS ILA expressed only a nascent willingness to service some

future facility. The stated desire to “expeditiously approve a water/waste water utility agreement” was insufficient to constitute an affirmative, express manifestation of Pembroke Pines’ unreserved intent. Such a statement is best described as nothing more than an “agreement to make an agreement,” which is unenforceable under Florida law. Irby v. Mem’l Healthcare Grp., Inc., 901 So. 2d 305, 306 (Fla. 1st DCA 2005). As explained in Jacksonville Port Authority, City of Jacksonville v. W.R. Johnson Enterprises, Inc., 624 So. 2d 313, 315 (Fla. 1st DCA 1993):

While it is not necessary that all details of an agreement

be fixed in order to have a binding agreement between parties, if there has been no agreement as to essential terms,

7

an enforceable contract does not exist. Williams v. Ingram, 605 So. 2d 890, 893 (Fla. 1st DCA 1992); Blackhawk Heating and Plumbing Co., Inc. v. Data Lease Financial Corp., 302 So. 2d 404 (Fla. 1974).

So long as any essential matters remain open for further consideration, there is no completed contract. In order to create a contract it is essential that there be reciprocal assent to a certain and definite proposition.

Mann v. Thompson, 100 So. 2d 634, 637 (Fla. 1st DCA 1958). Failure to sufficiently determine quality, quantity, or price may preclude the finding of an enforceable agreement. See Blackhawk Heating and Plumbing Co., Inc. at 408, citing Truly Nolen, Inc. v. Atlas Moving and Storage Warehouse, Inc., 125 So. 2d 903 (Fla. 3d DCA 1961), cert. discharged, 137 So. 2d 568 (Fla. 1962).

The Code of Ordinances clearly contemplates that “[p]rior to receipt of

a permit for any construction, the developer shall have entered into a contract with the city for the connection.” § 50.02(B)(1). Here, CCA (as the developer of the site) never succeeded in securing a contract with Pembroke Pines for the use of its utility main.

In short, Pembroke Pines’ Code of Ordinances imposes requirements

on developers for the connection of utility services. It conditions the connection of utilities outside of Pembroke Pines’ boundaries on City Commission approval, requiring a developer to enter into a contract for utilities that is then approved by a vote. In this case, there was no City Commission approval, no vote, and no contract for utilities.

CCA proceeded on the incorrect assumption that Pembroke Pines

could not change its collective mind on its willingness to provide utility services, failing to consider the fact that it is not uncommon for a municipality to embark on a prospective plan of action, only to reverse course because of the disapproval of its citizens. Respect for the separation of powers precludes us from substituting our own collective judgment for that of Pembroke Pines’ elected leaders who are, and must remain, accountable to their citizens for any policy decisions they make.

We agree with the trial court that the bare statement of future intent

contained in the EMS ILA, without a formal vote operating as a clear expression of intent to provide such services, created no reasonable

8

expectation that Pembroke Pines intended to assume the duties of a public utility, thus obligating it to provide water and sewer services to the CCA site.

Affirmed.

CIKLIN, C.J., and TAYLOR, J., concur.

* * *

Not final until disposition of timely filed motion for rehearing.

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA FOURTH DISTRICT

BARBARA LASALA, JAMES LASALA, and RICHARD COULTER,

Appellants,

v.

NATIONSTAR MORTGAGE, LLC, Appellee.

No. 4D15-129

[July 27, 2016]

Appeal from the Circuit Court for the Seventeenth Judicial Circuit,

Broward County; Carol-Lisa Phillips, Judge; L.T. Case No. CACE09052101.

Nicole Moskowitz of Neustein Law Group, P.A., Aventura, for

appellants. Nancy M. Wallace and Michael J. Larson of Akerman LLP, Tallahassee,

and William P. Heller of Akerman LLP, Fort Lauderdale, for appellee. FORST, J. Appellants Barbara Lasala, James Lasala, and Richard Coulter appeal a final judgment of foreclosure entered in favor of Appellee Nationstar Mortgage, LLC. Because we agree with the Appellants that Nationstar failed to prove its damages at trial, we reverse and remand for recalculation of damages. We affirm on the other issues raised by the Appellants without further discussion.

Background A prior plaintiff, Aurora Loan Services, LLC, initiated this foreclosure action against the Appellants in September 2009, alleging the Appellants had defaulted on their obligations under a promissory note. Prior to trial, Nationstar was substituted as the plaintiff. At trial, Nationstar called one of its employees to testify. The employee provided the foundation for the admission of several documents under the business records exception to hearsay, including the original note,

2

mortgage, default letter, and loan payment history.

The employee stated that she had confirmed the amounts in the payment history and that these figures had been verified as part of Nationstar’s boarding process. She further testified that she had reviewed the judgment figures in the proposed final judgment and that they accurately matched the payment history. Notably, however, the proposed final judgment was never admitted into evidence and the employee never provided a specific figure for Nationstar’s damages. The Appellants moved to dismiss, arguing Nationstar failed to establish the debt owed. The trial court denied the motion and later entered final judgment in favor of Nationstar. This appeal followed.

Analysis

On appeal, the Appellants again argue Nationstar failed to prove the amounts owed in the final judgment, as the employee failed to present a total sum due in her testimony and the proposed judgment the employee referred to was not in evidence. As such, the Appellants contend the case should be reversed and remanded for involuntary dismissal. Nationstar admits that the full judgment amount is not supported in the record and urges this Court to recalculate the interest due on the note or remand for recalculation at the trial court.

A claim regarding the sufficiency of the evidence is reviewed for

competent substantial evidence. Colson v. State Farm Bank, F.S.B., 183 So. 3d 1038, 1040 (Fla. 2d DCA 2015).

The current case is analogous to Peuguero v. Bank of America, N.A., 169

So. 3d 1198 (Fla. 4th DCA 2015). In that case, like here, “the only evidence of the amount of interest owed by Appellants came from the witness, who merely testified that the amount written on a proposed final judgment was correct.” Id. at 1203. The proposed judgment was not admitted into evidence and the payment history, though admitted, failed to account for the full interest awarded in the judgment. Id.

Nationstar was required to provide competent substantial evidence of

its damages. The proposed judgment, alone, was insufficient, as a “document that was identified but never admitted into evidence as an exhibit is not competent evidence to support a judgment.” Id. (quoting Wolkoff v. Am. Home Mortg. Servicing, Inc., 153 So. 3d 280, 281-82 (Fla. 2d DCA 2014)). The payment history introduced at trial supports the trial court’s finding as to the principal amount owed on the loan, but does not

3

appear to reflect the amount of interest in the judgment. Therefore, it is clear that Nationstar insufficiently proved its damages in this case.

When faced with plaintiffs that failed to prove damages in an initial

foreclosure action, courts have remanded for either recalculation of damages or dismissal. Compare Peuguero, 169 So. 3d at 1204 (remanding for recalculation), and Sas v. Fed. Nat’l Mortg. Ass’n, 112 So. 3d 778, 780 (Fla. 2d DCA 2013) (same), with Wolkoff, 153 So. 3d at 283 (remanding for dismissal). We discussed the rationale for different outcomes in Beauchamp v. Bank of New York, 150 So. 3d 827 (Fla. 4th DCA 2014), noting that “in Sas, the plaintiff ‘submitted evidence of the amount of indebtedness through witness testimony,’ although that testimony was inadmissible hearsay, unlike the plaintiff in Wolkoff, who failed to offer any evidence at all—whether admissible or not.” Id. at 829 n.2.

In this case, Nationstar attempted to establish the amount of

indebtedness through the testimony of its witness, but failed to admit one of the documents on which she relied. However, like the plaintiff in Peuguero, Nationstar admitted the loan payment history, which provides some evidence the trial court can use to support a judgment on the principal amount owed. Peuguero, 169 So. 3d at 1204. Accordingly, “the proper remedy in this case is to remand for further proceedings to properly establish the damages owed.” Id.

Conclusion

The trial court erred in entering final judgment for an amount not

supported by evidence in the record. We therefore reverse and remand for determination of the amounts owed. Affirmed in part, reversed in part, and remanded. GROSS and KLINGENSMITH, JJ, concur.

* * *

Not final until disposition of timely filed motion for rehearing.