Montgomery Bank, N.A. v. Alico Road Business Park, LP et al
OPINION AND ORDER granting 93 Plaintiff's Motion for Summary Judgment as to Count I of the Second Amended Complaint for Commercial Foreclosure and judgment shall issue in favor of plaintiff and against defendants Alico Road Business Park, LP, Franz J. Rosinus, Gold Coast Fire Protection, LLC, Gold Coast Fire and Security, Inc., World Electric Supply, Inc., Alico Road Business Park Condominium Association, Inc., Lee Road Extension Association, Inc., Formosa 129 Industrial Park Community As sociation, Inc., and VR Labs, Inc. as set forth herein; granting 93 Plaintiff's Motion for Default Judgment as to Count I of the Second Amended Complaint for Commercial Foreclosure and judgment shall issue in favor of plaintiff and against def endants Ferguson Enterprises, Inc., GCM Contracting Solutions, Inc., Trane U.S., and CFS Facility Services, LLC as set forth herein. Matthew J. Meyer is appointed as special master to advertise and sell the Foreclosure Parcel. Plaintiff shall submi t, via email, a Final Judgment of Partial Foreclosure to the Court within 14 days of this Opinion and Order. The Clerk is directed to enter judgment accordingly. The Final Pretrial Conference scheduled for Monday, November 17, 2014, is cancelled. See Opinion and Order for details. Signed by Judge John E. Steele on 11/13/2014. (MAB)
UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
FORT MYERS DIVISION
MONTGOMERY BANK, N.A.,
Case No: 2:13-cv-802-FtM-29CM
ALICO ROAD BUSINESS PARK,
LP, FRANZ J. ROSINUS, GOLD
COAST FIRE PROTECTION, LLC,
FERGUSON ENTERPRISES, INC.,
WORLD ELECTRIC SUPPLY, INC.,
GCM CONTRACTING SOLUTIONS,
INC., TRANE U.S., INC., CFS
ALICO ROAD BUSINESS PARK
INC., LEE ROAD EXTENSION
ASSOCIATION, INC., FORMOSA
COMMUNITY ASSOCIATION, INC.,
VR LABS, INC., and GOLD
COAST FIRE AND SECURITY,
OPINION AND ORDER
This matter comes before the Court on the plaintiff’s Motion
for Summary Judgment and Default Judgment (Doc. #93) filed on June
Defendants Alico Road Business Park, LP, Franz J.
Rosinus, Alico Road Business Park Condominium Association, Inc.,
Lee Road Extension Association, Inc., and Formosa 129 Industrial
Park Community Association, Inc. filed a Notice of No Objection
(Doc. #101) on July 3, 2014.
Defendant VR Labs, Inc. filed a
Response in Opposition to Plaintiff’s Motion for Summary Judgment
(Doc. #106) on July 11, 2014, and plaintiff filed a Reply to VR
Labs, Inc.’s Response (Doc. #111) on August 11, 2014.
filed a Supplement to Motion for Summary Judgment (Doc. #115) on
September 2, 2014, and VR Labs, Inc., with leave of the Court,
filed a Supplemental Response to Plaintiff’s Motion for Summary
Judgment (Doc. #118) on September 23, 2014.
For the reasons set
forth below, plaintiff’s motion is granted.
Alico Road Business Park, LP (Alico) owns 22.8 acres of real
property (the Property) located in Lee County, Florida.
In order to improve the Property, Alico entered into a
Construction Loan Agreement (CLA) with plaintiff Montgomery Bank,
N.A. (Montgomery Bank or plaintiff).
The CLA was executed on or
about April 15, 2006, and provided Alico with a revolving line of
credit, not to exceed the principal sum of $7,000,000.
Alico obtained the loan by executing a promissory note (the
Note), dated April 15, 2006, in the original principal amount of
$7,000,000, to be secured by a mortgage (the Mortgage) on the
Montgomery Bank and Alico periodically modified the
Note and the Mortgage to extend the maturity date of the loan.
The most recent modification occurred on March 5, 2014, and is
Documents” collectively consist of the CLA, the Note and all
changes in terms, modifications, and renewals thereto, and the
Over the course of the loan, certain liens were filed against
the Property, prompting the initiation of this lawsuit.
#115, pp. 2-3; Doc. #116-1, p. 11.)
Plaintiff’s Second Amended
Complaint for Commercial Foreclosure, filed March 5, 2014, alleges
that Alico defaulted under the Loan Documents “by permitting liens
and/or claims of liens for performance of work and/or supply of
materials to be filed against a portion of the Property.”
#53, ¶ 35.)
Plaintiff has therefore elected to foreclose on
certain parcels, specifically:
Units 401, 402, 403, 404, 405, 406, 407, 408, 409, 410,
411, and 412, Building 4, Alico Road Business Park, an
Industrial Condominium, according to the Declaration of
Condominium recorded at Instrument No. 2008000153105 of
the Public Records of Lee County, Florida (the
(Doc. #53, ¶ 37.)
Plaintiff also seeks foreclosure on any and all
inferior interests claimed by Franz J. Rosinus (Rosinus), Gold
Coast Fire Protection, LLC (GCFP), Gold Coast Fire and Security,
Inc. (GCFP), Ferguson Enterprises, Inc. (Ferguson), World Electric
Supply, Inc. (WES), GCM Contracting Solutions, Inc. (GCM), Trane
Association, Inc. (Business Park), Lee Road Extension Association,
Association, Inc. (Formosa), VR Labs, Inc. (VRL), and CFS Facility
Services, LLC (CFS), including every lien and lis pendens filed
against the Property.
Plaintiff now moves for summary judgment on its claim for
partial mortgage foreclosure against Alico, Rosinus, GCFP, GCFS,
WES, Business Park, Lee Road, Formosa, and VRL.
Alico, Rosinus, Business Park, Lee Road, and Formosa do not object
disclaimed any and all interest it may have had in the Property
and has waived its right to participate in any further proceedings
VRL, however, contends that summary judgment is not
satisfied that “there is no genuine issue as to any material fact
and that the moving party is entitled to judgment as a matter of
Fed. R. Civ. P. 56(a).
“An issue of fact is ‘genuine’ if
the record taken as a whole could lead a rational trier of fact to
find for the nonmoving party.”
Baby Buddies, Inc. v. Toys “R” Us,
Inc., 611 F.3d 1308, 1314 (11th Cir. 2010).
A fact is “material”
and GCFS have not responded to plaintiff’s motion for
summary judgment and the time for doing so has expired.
if it may affect the outcome of the suit under governing law.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
court must decide ‘whether the evidence presents a sufficient
disagreement to require submission to a jury or whether it is so
one-sided that one party must prevail as a matter of law.’”
Hickson Corp. v. N. Crossarm Co., Inc., 357 F.3d 1256, 1260 (11th
Cir. 2004) (citing Anderson, 477 U.S. at 251).
In ruling on a motion for summary judgment, the Court views
all evidence and draws all reasonable inferences in favor of the
Scott v. Harris, 550 U.S. 372, 380 (2007); Tana
v. Dantanna’s, 611 F.3d 767, 772 (11th Cir. 2010).
reasonable minds might differ on the inferences arising from
undisputed facts, then the court should deny summary judgment.”
St. Charles Foods, Inc. v. America’s Favorite Chicken Co., 198
F.3d 815, 819 (11th Cir. 1999) (quoting Warrior Tombigbee Transp.
Co. v. M/V Nan Fung, 695 F.2d 1294, 1296-97 (11th Cir. 1983)
(finding summary judgment “may be inappropriate even where the
parties agree on the basic facts, but disagree about the factual
inferences that should be drawn from these facts”)).
reasonable fact finder evaluating the evidence could draw more
than one inference from the facts, and if that inference introduces
a genuine issue of material fact, then the court should not grant
Allen v. Bd. of Pub. Educ., 495 F.3d 1306,
1315 (11th Cir. 2007).
It is undisputed that: (1) Alico executed and delivered to
Montgomery Bank the Note and the Mortgage; (2) the Mortgage was
properly recorded in the public records of Lee County, Florida;
(3) Montgomery Bank is the owner and holder of the Note and
Mortgage; and (4) the Foreclosure Parcel is owned by Alico.
final element that must be established in a foreclosure action is
See David v. Sun Fed. Sav. & Loan Ass’n, 461 So. 2d
93, 95-96 (Fla. 1984) (delineating the elements of a foreclosure
Here, plaintiff alleges that Alico is in default because
liens were filed against the Property.
VRL contends that the
filing of liens against the Property does not constitute an event
foreclosure is not warranted because plaintiff’s interest in the
Property is not jeopardized by the liens. 2
As a preliminary matter, the Court finds that VRL lacks the
standing necessary to challenge the interpretation of the Loan
“The question of whether, for standing purposes, a
non-party to a contract has a legally enforceable right therein is
a matter of state law.”
Bochese v. Town of Ponce Inlet, 405 F.3d
964, 981 (11th Cir. 2005).
Under Florida law, a third party may
leases a portion of the Foreclosure Parcel pursuant to
the Alico Space Lease Agreement between Alico and VRL.
be an intended beneficiary or an incidental beneficiary.
party is an intended beneficiary of a contract between two other
parties only if a direct and primary object of the contracting
parties was to confer a benefit on the third party.
Id. at 982.
“If the contracting parties had no such purpose in mind, any
benefit from the contract reaped by the third party is merely
‘incidental,’ and the third party has no legally enforceable right
in the subject matter of the contract.”
circumstantial evidence suggesting that Montgomery Bank and Alico
expressed an intent to benefit VRL.
Because VRL was not an
interpretation of the Loan Documents agreed upon by Montgomery
Bank and Alico.
Even if VRL had standing to challenge the interpretation of
the Loan Documents, the Court finds its arguments to be without
When Alico executed the CLA, it affirmatively covenanted
that it will keep the property free of all liens and “take all
reasonable steps necessary to remove all claims of lien against
(Doc. #9-2, pp. 4-5.)
Alico also covenanted and
agreed that it “shall not, without the prior written consent of
[Montgomery Bank] . . . create or allow to be created any lien or
charge upon the Collateral or the Improvements.”
(Id. at 6.)
failure to comply with any of these covenants constitutes a default
under the terms of the CLA.
The Note also states that Alico
garnishment, or the filing of any lien against the Collateral
(Doc. #115-1, p. 6.)
In the event of a default,
Montgomery Bank may, at its option, accelerate the indebtedness
under the terms of the Note.
(Doc. #9-2, p. 4.)
The Mortgage contains similar provisions.
Under the terms of
the Mortgage, Alico “shall not allow any subsequent liens or
mortgages on all or any portion of the Property without the prior
written consent of Lender.”
(Doc. #9-4, p. 3.)
The section of
the Mortgage pertaining to taxes and liens provides that Alico
“shall maintain the Property free of any liens having priority
over or equal to the interest of Lender under this Mortgage, except
for those liens specifically agreed to in writing by Lender, and
except for the lien of taxes and assessments not due as further
specified in the Right to Contest paragraph.”
(Id. at 4.)
Right to Contest provision states as follows:
[Alico] may withhold payment of any tax, assessment, or
claim in connection with a good faith dispute over the
obligation to pay, so long as Lender’s interest in the
Property is not jeopardized.
If a lien arises or is
filed as a result of nonpayment, [Alico] shall within
fifteen (15) days after the lien arises or, if a lien is
filed, within fifteen (15) days after [Alico] has notice
of the filing, secure the discharge of the lien, or if
requested by Lender, deposit with Lender case or a
sufficient corporate surety bond or other security
satisfactory to Lender in an amount sufficient to
discharge the lien plus any costs and reasonable
attorneys’ fees, or other charges that could accrue as
a result of a foreclosure or sale under the lien. In
any contest, [Alico] shall defend itself and Lender and
shall satisfy any adverse judgment before enforcement
against the Property. [Alico] shall name Lender as an
additional oblige under any surety bond furnished in the
VRL argues that the filing of inferior liens on the Property
does not amount to a default because the Mortgage states that liens
may be filed against the Property as long as plaintiff’s interest
in the Property is not jeopardized.
(Doc. #106, 5-8.)
Property, the Mortgage states that any default under the terms of
the CLA or any other related document shall also be an event of
default under the Mortgage.
(Doc. #9-4, pp. 2-3)
Because the CLA
and the Note explicitly state that Alico must keep the Property
free of all liens, the Court finds that the attachment of any liens
to the Property constitutes an event of default.
The fact that
Montgomery Bank may, at its own option, remove or challenge a lien
does not change the outcome because plaintiff is not obligated to
do so under the terms of the Loan Documents.
VRL also contends that the Court should refuse to foreclose
on the Property because the breach of the Loan Documents was merely
a technical one and did not place the security in jeopardy.
#106, p. 8.)
In Delgado v. Strong, 360 So. 2d 73, 75 (1978), the
Florida Supreme Court stated:
It is well-established that courts of equity may refuse
to foreclose a mortgage when an acceleration of the due
date would render the acceleration unconscionable and
the result would be inequitable and unjust . . .
Consistent with this principle, courts have denied
foreclosure of a mortgage where breach of the mortgage
was merely a technical one and such breach did not place
the security in jeopardy.
The Mortgage in this case was recorded on August 18, 2006,
giving it priority over the other liens filed against the Property.
See Fla. Stat. § 713.07(3).
Because the lien of a senior mortgagee
is not extinguished by a foreclosure action initiated by a junior
mortgagee, Abdoney v. York, 903 So. 2d 981, 983 (Fla. 2d DCA 2005),
VRL argues that Montgomery Bank’s security interest in the Property
was not jeopardized (Doc. #106, p. 8).
The Court disagrees.
Although plaintiff’s lien on the Property would not be extinguished
by the foreclosure of an inferior lien, the resulting transfer of
ownership could threaten plaintiff’s interest in the Property.
(See Doc. #116-2, pp. 17-18.)
Accordingly, the Court finds that
justifies the foreclosure.
See Pezzimenti v. Cirou, 466 So. 2d
274, 277 (Fla. 2d DCA 1985) (upholding a foreclosure caused by the
defendant’s failure to pay the attorney’s fees incurred in the
removal of mechanic’s liens).
The Answer an Affirmative Defenses filed by VRL asserts that
its leasehold interest in the Foreclosure Parcel should not be
foreclosed because Montgomery Bank is guilty of unclean hands.
(Doc. #61, p. 5.)
In Florida, unclean hands is tantamount to
“[u]nscrupulous practices, overreaching, concealment, trickery or
other unconscientious conduct.”
Shahar v. Green Tree Servicing,
LLC, 125 So. 3d 251, 253 (Fla 4th DCA 2013 (quoting Congress Park
Office Condos II, LLC v. First-Citizens Bank & Trust Co., 105 So.
3d 602, 609 (Fla. 4th DCA 2013)).
In order to successfully raise
the defense of unclean hands, the defendant must come forward with
egregious facts that justify its application.
Congress Park, 105
So. 3d at 610.
Plaintiff’s corporate representative, Ralph Green (Green),
testified that Montgomery Bank valued the Foreclosure Parcel at
two million dollars and is prepared to reduce the balance of the
loan by the same.
(Doc. #116-2, p. 12.)
Green also admitted that
Montgomery Bank’s valuation of the Foreclosure Parcel is higher
than the amount proposed by property appraisers. (Id.) VRL argues
that plaintiff’s willingness to provide a credit in an amount
greater than the appraisers’ valuations is evidence of unclean
(Doc. #116, p. 4.)
There is, however, no evidence
suggesting that the amount of the potential credit was the product
potential credit was not communicated to Alico.
13; Doc. #116-2, p. 12.)
(Doc. #116-1, p.
Because VRL has not produced any evidence
of egregious or unconscionable conduct, its affirmative defense of
unclean hands does not prevent Montgomery Bank from pursuing its
See Citibank, N.A. v. Dalessio, 756 F. Supp.
2d 1361, 1367 (M.D. Fla. 2010).
Plaintiff also seeks a default judgment against Ferguson,
GCM, Trane, and CFS.
Rule 55(a) provides that a
default must be entered against a party that has failed to plead
Fed. R. Civ. P. 55(a).
Here, a Clerk’s Entry of
Default was entered against Ferguson, GCM, Trane, and CFS on May
Therefore, plaintiff has fulfilled the
necessary prerequisite for a default judgment against each of these
After a default is entered against a defendant, he is deemed
to have admitted the plaintiff’s well-pleaded factual allegations,
and on appeal, he is barred from contesting those facts.
Hosp. Physicians, LLC v. SRG Consulting, Inc., 561 F.3d 1298, 1307
(11th Cir. 2009).
“A default judgment is unassailable on the
allegations. [ ] A default defendant may, on appeal, challenge the
sufficiency of the complaint, even if he may not challenge the
sufficiency of the proof.”
Id. (internal quotations and citations
Deeming the facts alleged in the Second Amended Complaint as
admitted, plaintiff is the owner and holder of the Note and
By allowing inferior liens to be filed against the
Property, Alico defaulted under the terms of the Loan Documents.
Because the liens were filed after the recordation of the Mortgage,
Montgomery Bank has priority over the other liens attached to the
The Court therefore finds that a default judgment is
appropriate against Ferguson, GCM, Trane, and CFS to the extent
that any lien or interest they may have on the property is deemed
junior to that of plaintiff.
Plaintiff seeks the appointment of Matthew J. Meyer as special
master to conduct the foreclosure sale.
(Doc. #93, p. 16.)
support, the Declaration of Matthew J. Meyer (Doc. #94) provides
that Mr. Meyer has significant experience in foreclosures and has
no relationship to the parties, the court, or the attorneys such
that disqualification would be required.
The Court will grant the
motion and appoint a master to conduct the sale in lieu of the
Accordingly, it is now
Plaintiff’s Motion for Summary Judgment (Doc. #93) is
Commercial Foreclosure. Judgment shall issue in favor of plaintiff
and against defendants Alico Road Business Park, LP, Franz J.
Rosinus, Gold Coast Fire Protection, LLC, Gold Coast Fire and
Security, Inc., World Electric Supply, Inc., Alico Road Business
Association, Inc., and VR Labs, Inc. as provided herein.
Plaintiff’s Motion for Default Judgment (Doc. #93) is
Commercial Foreclosure. Judgment shall issue in favor of plaintiff
and against defendants Ferguson Enterprises, Inc., GCM Contracting
Solutions, Inc., Trane U.S., and CFS Facility Services, LLC as
Plaintiff holds a lien secured by the Property in the
total amount of $7,000,000.00, $2,000,000.00 of which is secured
by the Foreclosure Parcel, plus interest in the amount of $5,111.11
through May 28, 2014, plus per diem interest in the amount of
$222.22 from May 29, 2014, to the day of judgment, and which lien
is superior to any and all interests claimed by defendants and any
person claiming, by through, under or against any of the defendants
since the filing of the Notice of Lis Pendens.
The Final Renewal
Note and the Mortgage do not merge in the judgment, but survive
positions with the rest of the Property.
Matthew J. Meyer, Ansa Assuncao, LLP, 101 South Ashley
Drive, Tampa, FL 33602; Telephone (813) 221-5403; Facsimile (813)
special master to advertise and sell the Foreclosure Parcel in
accordance with 28 U.S.C. § 2002.
The Clerk shall enter judgment accordingly.
Plaintiff shall submit, via email, a Final Judgment of
Partial Foreclosure to the Court within FOURTEEN (14) DAYS of this
Opinion and Order.
November 17, 2014, is cancelled.
DONE AND ORDERED at Fort Myers, Florida, this
Counsel of record
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?