Florida Appellate Court Finds Lenders Must Administer Probate Proceedings in Order to Obtain a Valid Foreclosure Judgment

By Adam Diaz, Esq.

Diaz Anselmo & Associates, PA*

USFN Member (FL, IL, IN, KY, OH, WI)

Florida’s 4th Appellate District reversed a foreclosure judgment for a lender with a groundbreaking decision creating new required steps to foreclose the interest of a deceased party. The Court’s decision in Desbrunes v. US Bank Nat’l Ass’n, as Tr. for Structured Asset Sec. Corp. Mortgage Pass-Through Certificates, Series 2006-AM1, 2024 WL 591432, at *1 (Fla. 4th DCA Feb. 14, 2024) represents a detrimental break in Florida jurisprudence that has governed foreclosure proceedings for decades.

The facts of Desbrunes are like many typical foreclosure proceedings involving a deceased party. US Bank National Association, as Trustee for Structured Asset Securities Corp. Mortgage Pass Through Certificates, Series 2006-AM1 (“Plaintiff”) filed a one count action for foreclosure naming Francois Desbrunes as a defendant. Desbrunes actively litigated the case, but ultimately passed away before the entry of the judgment, wherein his counsel filed a suggestion of death.

The plaintiff sought to Amend the Complaint. The purpose of the amendment was to drop Desbrunes as a party, add known and unknown heirs, as well as appoint a Guardian Ad Litem. This is the standard process in Florida.

However, Desbrunes’ counsel, who was no longer representing any party, filed a Motion to Abate pursuant Fla. R. Civ. P. 1.260(a), requesting the Court require the plaintiff to administer a probate in order to continue the action. The Trial Court denied the motion because Desbrunes’ counsel was not a party to the case, but did not rule on whether a probate is a required task to obtain a valid judgment.

The Trial Court granted judgment in favor of the plaintiff, and an heir, Ronald Desbrunes, appealed the ruling. The heir argued on appeal the denial of the Motion to Abate should have been granted. The 4th District Court of Appeal only considered the arguments regarding 1.260. The Court held that the plaintiff improperly substituted Desbrunes with the heirs pursuant to Rule 1.260(a) despite the fact the plaintiff never moved for substitution under the Rule. The 4th held that only an estate can be substituted in for a deceased party citing non-foreclosure cases involving money judgments.

The 4th went further to find any judgment where a probate was not opened would be a “nullity.” This language causes the most concern as it would open completed cases to attack. Due to the severity of this ruling a rehearing was filed.

The opinion failed to account for Florida Probate law which governs the transfer of title upon a title holder’s death. Under Florida Law when a property is homestead, the property will pass entirely outside of the estate. See Buettner v. Fass, 21 So. 3d 14, (Fla. 4^th DCA 2009). This transfer is codified within Florida Statutes s. 732.401, 731.102, 732.103. Therefore, a deceased borrower’s estate never holds title and would not be a necessary party to the foreclosure. See Citibank, N.A. v. Villanueva, 174 So. 3d 612, 613 (Fla. 4th DCA 2015) (“The fee simple title holder is an indispensable party in an action to foreclose a mortgage on property.”) (citations omitted)

The Firm, on behalf of USFN, also filed an Amicus Curie brief, along with ALFN and Legal League. The purpose of the Amici was to bring to the attention of the Court that if the opinion is not revised, or reversed, it will significantly impact the mortgage industry, and cause severe consequences this Court may not have anticipated or intended.

Currently, the rehearing is under review with the Court.

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USFNews - April 3

* Denotes firm is a 2023 USFN Award of Excellence recipient.