Wilmington Trust Company v. Pearce et al

Filing 20

ORDER: Plaintiff Wilmington Trust Company as Trustee for Structured Asset Securities Corporation 2005-4xs Trust Fund's Motion for Entry of Consent Judgment as to Pearce Defendants and/or Default Judgment as to MERS (Doc. # 19 ) is GRANTED. The Clerk shall close the case. Signed by Judge Virginia M. Hernandez Covington on 3/22/2017. (KAK)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
TAMPA DIVISION
WILMINGTON TRUST COMPANY
AS TRUSTEE FOR STRUCTURED
ASSET SECURTIES CORPORATION
2005-4XS TRUST FUND,
Plaintiff,
v.

CASE NO.: 8:16-cv-3531-T-33TBM

DAVID ALEXANDER PEARCE,
KRISTI PEARCE, A/K/A
KRISTI DARLENE LYNCH,
SERGIO MORENO, and
MORTGAGE ELECTRONIC
REGISTRATION SYSTEMS, INC.,
Defendants.
_______________________________/
FINAL CONSENT JUDGMENT
AND DEFAULT JUDGMENT
This matter comes before the Court pursuant to Plaintiff
Wilmington

Trust

Company

as

Trustee

for

Structured

Asset

Securities Corporation 2005-4xs Trust Fund’s Motion for Entry of
Consent Judgment as to Pearce Defendants and/or Default Judgment
as to MERS (Doc. # 19), which was filed on March 17, 2017.
After finding that a hearing is not required, the Court grants
the Motion and this Final Consent Judgment and Default Judgment
is entered as follows.
Background
Plaintiff
Structured

Wilmington

Asset

Securities

Trust

Company

Corporation

1

as

2005-4xs

Trustee

for

Trust

Fund

filed its Complaint on December 30, 2016, naming David Alexander
Pearce, Kristi Pearce (AKA Kristi Darlene Lynch), Sergio Moreno,
and

Mortgage

Electronic

Defendants. (Doc. # 1).

Registration

Systems,

Inc.

as

The Complaint concerns foreclosure of

real property and contains the following counts: Establishment
of Lost Note as to all Defendants (Count 1); Equitable Lien and
Equitable Mortgage as to all Defendants (Count 2); Constructive
Trust as to all Defendants (Count 3); Judicial Foreclosure of
Real Property against all Defendants (Count 4); Possession and
Assignment

of

Rents

as

to

all

Defendants

(Count

5);

and

Enforcement of Instruments as to David Pearce (Count 6).
The Complaint contains allegations which satisfy the Court
that the parties are completely diverse. Plaintiff states that
it is a citizen of Delaware. (Id. at ¶ 1). The Pearce Defendants
and MERS are citizens of Tennessee and/or Virginia. (Id. at ¶¶
2, 3).

As explained herein, Plaintiff has dropped Sergio Moreno

as a Defendant.

The Court is satisfied that the jurisdictional

amount in controversy is satisfied because this case concerns a
debt in the agreed amount of $107,932.88.
Personal
Defendants

jurisdiction

claim

ownership

and
and

venue
lien

are

proper

interests

in

as

the

the

real

property at issue, located in Sarasota County, Florida. (Id. at
¶¶ 6-7).
The real property is described as:
2

Lot 12, Block S, Sun Haven, Unit No. 3, according to the
Plat thereof as recorded in Plat Book 9, Page 52, of the
public records of Sarasota County, Florida.
Address: 5732 Beneva Road, Sarasota Florida, 34231.

(Id. at ¶ 8). Title to the real property at issue vested in
David Pearce, who was at that time married to Kristi Pearce, by
a Warranty Deed. (Id. at ¶ 9; Doc. # 19-1).

On January 28,

2005, David Pearce executed and delivered a First Promissory
Note in the principal sum of $108,000.00 to Lehman Brothers Bank
to purchase the Property. (Doc. # 1 at ¶ 5; Doc. # 19-2). Also
on January 28, 2005, David Pearce executed a First Mortgage to
Mortgage Electronic Registration Systems as nominee for Lehman,
securing the Property as collateral for the First Note, then
recorded. (Doc. # 1 at ¶ 11; Doc. # 19-3).
In addition, on January 28, 2005, David Pearce negotiated a
Second Note for $20,500.00 to MERS, nominee for Lehman, for
which

the

Property

was

secured

as

collateral

Mortgage. (Doc. # 1 at ¶ 12; Doc. # 19-4).
January

9,

2009,

Note/Mortgage

to

MERS

executed

Aurora.

(Doc.

an
#

1

Assignment
at

¶

12;

by

a

Second

Thereafter, on
of

the

First

Doc.

#

19-5).

Aurora purportedly attempted to enforce the First Note/Mortgage
in

state

court

as

to

the

Pearce

Defendants,

but

ultimately

foreclosed a different note and mortgage, executed by them, on
other realty. (Doc. # 1 at ¶¶ 15-25).

3

On May 6, 2014, Aurora executed an assignment of the First
Note and Mortgage to Plaintiff. (Doc. # 1 at ¶ 26; Doc. # 19-6).
The

First

Note

was

mistakenly

and

inadvertently

lost

or

destroyed while in possession of Plaintiff’s predecessors.
David

Pearce

must

defend

and/or

establish

senior interest. (Doc. # 1 at ¶¶ 27-28).

Plaintiff’s

He breached the First

Note and Mortgage which Plaintiff had standing to enforce. All
interests in the Property are subordinate to Plaintiff’s First
Note and Mortgage for which all conditions precedent occurred,
were

fulfilled,

waived,

unnecessary

and/or

futile.

Plaintiff

seeks no monetary relief. (Id. at ¶¶ 29-32).
Plaintiff
MERS,

and

each

filed

suit,

Defendant

naming
has

been

the

Pearce

served.

Defendants

(Doc.

##

and

11-13).

Plaintiff seeks to establish the missing First Note and declare
its senior interest in the Property. (Doc. # 1 at ¶¶ 35-44).
Plaintiff also seeks to judicially foreclose the Property and
obtain possession of the Property. (Id. at ¶¶ 64-70).
Plaintiff now withdraws its claims for equitable lien as
stated in Count 2 of the Complaint. Plaintiff also withdraws its
claims

for

constructive

trust

as

stated

in

Count

3

of

the

Complaint. Furthermore, Plaintiff relinquishes its request for
in-personam relief as to the Pearce Defendants, such as fees and
costs, rent, and enforcement of the debt and its claims as to
Defendant Moreno, who no longer occupies the property. Those
4

claims

and

Defendant

Moreno

are

dismissed

from

this

case,

pursuant to Fed. R. Civ. P. 41.
The Court entered an Order to Show Cause on March 8, 2017,
after Plaintiff did not respond to a prior Court Order directing
Plaintiff to file a status report on service of process. (Doc.
## 9, 10). Plaintiff responded by explaining that “Plaintiff’s
counsel

diligently

worked

on

a

resolution

of

the

case

with

counsel for the Pearce Defendants, just effectuated on 3/10/17.”
(Doc. # 15 at 2). Plaintiff and the Pearce Defendants executed a
Stipulation, which was filed on March 10, 2017. (Doc. # 14).
The

Stipulation

sets

forth

the

in-rem

relief

sought

by

Plaintiff on the Property, the consent of Pearce Defendants to
that relief, and the Pearce Defendants’ waiver of defenses to
this relief on the Property, including its sale and possession.
(Id.).
The outstanding loan balance is agreed as:
Unpaid Principal Balance:
$107,932.88
Last Payment Made:
10/1/2008
No interest, costs or fees are sought.
The Pearce Defendants are not currently in and have not
been in the military for the last 30 days and are not subject to
the protection of 50 U.S.C. § 3901 et seq.
On March 11, 2017, Plaintiff filed an application for entry
of Clerk’s Default as to MERS. (Doc. # 16).

With no appearance

on the docket for MERS and no response to the Complaint after
5

service

being

accomplished,

the

Clerk

entered

its

Default

pursuant to Rule 55(a), Fed. R. Civ. P., as to MERS on March 13,
2017. (Doc. # 17).
Analysis
The

Court

may

grant

the

Consent

Motion

and

enter

the

Consent Judgment pursuant to the Stipulation. White v. Alabama,
74

F.3d

1058,

Stipulation
reached
granting

a

1073

(11th

reflect
binding

this

that

Cir.

Plaintiff

settlement

Motion

and

1996).

to

entering

and
be

The
the

record

Pearce

enforced

the

by

Consent

and

the

Defendants
the

Court

Judgment.

The

Stipulation sets forth the relief sought by Plaintiff, consent
of

Pearce

defenses.

Defendants
The

to

Stipulation

the

relief,

details

and

their

Plaintiff

will

waiver
only

of

obtain

relief on the Property, including its sale. (Doc. # 14 at 1-3).
Under

Fed.

R.

Civ.

P.

55

and

the

entry

of

default,

Defendant MERS admitted the Complaint’s well-pled allegations.
Buchanan

v.

Bowman,

820

F.2d

359,

361

(11th

Cir.

1987).

Defendant MERS waived all defenses to this case. Pensacola Motor
Sales, Inc. v. E. Shore Toyota, 684 F.3d 1221, 1222 (11th Cir.
2012). Default judgment may be entered against MERS who never
placed this case at issue. Solaroll Shade & Shutter Corp. v.
Bio-Energy Sys., 803 F.2d 1130, 1134 (11th Cir. 1986). There is
a sufficient basis in the pleadings for judgment. Nishimatsu
Constr. Co. v. Houston Nat’l Bank, 515 F.2d 1200, 1206 (5th Cir.
6

1975).

The

Complaint

states

claims

for

which

relief

may

be

granted, as set forth herein. Chudasama v. Mazda Motor Co., 123
F.3d 1353, 1370 at n.41 (11th Cir. 1997). Plaintiff is entitled
to default judgment as to MERS as set forth below.
Plaintiff

has

standing

as

holder

of

the

First

Note/Mortgage. Branch Banking & Trust Co. v. Park Circle, LLC,
No. 2:13-cv-25-FtM-38CM, 2014 U.S. Dist. LEXIS 63661, at *21
(M.D.

Fla.

May

8,

2014).

A

note

and

mortgage

may

be

simultaneously enforced by foreclosure, ejectment, and a suit on
the debt. PNC Bank, N.A. v. Starlight Props. Holdings, LLC, No.
6:13-cv-408-Orl-36KRS, 2014 U.S. Dist. LEXIS 78087 (M.D. Fla.
Apr. 25, 2014); Royal Palm Corp. Ctr. Ass’n v. PNC Bank, N.A.,
89 So. 3d 923, 929 (Fla. 4th DCA 2012); Manley v. Union Bank, 1
Fla. 160 (Fla. 1846). The First Note establishes a prima facie
case for enforcement.
Attacks upon the First Note or its debt must be made by
affirmative defenses which the Pearce and MERS Defendants waived
or otherwise did not meet their burden of proof. Haycook v.
Ostman, 397 So. 2d 743, 744 (Fla. 5th DCA 1981). Based on the
loan

default,

Plaintiff

may

accelerate

the

balance

due.

Zimmerman v. Olympus Fid. Trust, LLC, 936 So. 2d 652, 655 (Fla.
4th DCA 2006). The First Note and Second Mortgage David Pearce
signed contain acceleration clauses. (Doc. # 19-2 at 3, 4; Doc.
# 19-4 at 4).
7

In Count 1, Plaintiff seeks a declaratory judgment of its
senior

interest

declaratory

in

the

judgment

Property.

resolves

Under

a

28

case.

U.S.C.

Malowney

§
v.

2201,

a

Federal

Collection Deposit Grp., 193 F.3d 1342, 1347 (11th Cir. 1999).
“The Plaintiff must allege facts from which the continuation of
the

dispute

may

be

reasonably

inferred.

Additionally,

the

continuing controversy may not be conjectural, hypothetical, or
contingent;
definite,

it

must

rather

be

than

real

and

speculative

immediate,
threat

of

and

create

future

a

injury.”

Emory v. Peeler, 756 F.2d 1547, 1552 (11th Cir. 1985). Plaintiff
presented

a

real

and

immediate

controversy,

resulting

in

definite injury - the clouding of its interest in the Property,
under the lost First Note and prior case. HSBC Bank USA v.
Perez, 165 So. 3d 696 (Fla. 4th DCA 2015); GeoTag, Inc. v.
European Sec. Ltd., No. 8:12-cv-1923-T-23AEP, 2014 U.S. Dist.
LEXIS 74325 (M.D. Fla. May 8, 2014).
Under Fla. Stat. § 673.3091, Plaintiff may establish the
First Note 1) which it could enforce when lost or was obtained
from another entitled to enforce it; 2) loss did not occur from
transfer/seizure;

and

3)

possession

cannot

be

reasonably

obtained. Plaintiff named all parties interested in the Note.
Branch Banking & Trust Co. v. S&S Dev., Inc., No. 8:13-cv-1419T-30TGW, 2014 U.S. Dist. LEXIS 72568 (M.D. Fla. May 28, 2014)
The factors required for establishing a lost note are met.
8

In Count 4, Plaintiff seeks to judicially foreclose the
Property as it holds the First Note/Mortgage to which David
Pearce defaulted on payments, justifying acceleration. Citibank
v. Dalessio, 756 F. Supp. 2d 1361 (M.D. Fla. 2010); Brown Bark
III, L.P. v. Torres, No. 09-22589, 2010 U.S. Dist. LEXIS 3433
(S.D. Fla. Jan. 4, 2010); Citibank FSB v. Grant, No. 06-80263,
2007 U.S. Dist. LEXIS 98518 (S.D. Fla. Mar. 6, 2007); Stearns v.
Farrell, No. 8:11-cv-1725-T-17EAJ, 2012 U.S. Dist. LEXIS 12811
(M.D. Fla. Feb. 2, 2012); Harmony Homes v. USA, 936 F. Supp.
907, 913 (M.D. Fla. 1996).
Plaintiff’s senior interest in the Property is first in
time and first in right. Holly Lake Ass’n v. Fed. Nat’l Mortgage
Ass’n, 660 So. 2d 266, 268 (Fla. 1995). Plaintiff named the
title holders. English v. Bankers Trust Co. of Cal., N.A., 895
So.

2d

1120 (Fla.

4th

DCA

2005).

Plaintiff’s

interest

is

superior to the owners. Jordan v. Sayre, 3 So. 329 (Fla. 1888).
Plaintiff’s

interest

forecloses

inferior

interests.

National

Loan Investors, L.P. v. Burgher, 742 So. 2d 406 (Fla. 4th DCA
1999). Plaintiff’s interest is superior to the marital interest
of Kristi Pearce in the Property, married to David Pearce when
it was purchased. Spikes v. Onewest Bank, FSB, 106 So. 3d 475,
478 (Fla. 4th DCA 2012).
Pursuant to Fed. R. Civ. P. 53, Plaintiff seeks appointment
of a special master to conduct the sale, namely Mediation Inc.,
9

James

Chaplin,

Esq.,

One

Financial

Lauderdale, 33394, [phone].
N.A.

v.

Farrell

Homes,

Inc.,

Plaza,

18th

FL,

Ft.

See, e.g., Stearns Bank,

8:11-cv-1725-T-17EAJ,

2012

U.S.

Dist. LEXIS 12811 (M.D. Fla. Feb. 2, 2012)(appointing special
master).
In Count V, Plaintiff or any purchaser of the Property is
entitled to post-sale possession of the Property, under Fed. R.
Civ.

P.

64

and

pursuant

to

an

ancillary

writ

of

possession/ejectment. Redding v. Stockton, 488 So. 2d 548 (Fla.
5th DCA 1986)(“Foreclosure is a case in equity, and a writ of
possession is ancillary to it.”).
Accordingly, it is
ORDERED, ADJUDGED, and DECREED:
1.

Plaintiff

Wilmington

Trust

Company

as

Trustee

for

Structured Asset Securities Corporation 2005-4xs Trust Fund’s
Motion for Entry of Consent Judgment as to Pearce Defendants
and/or Default Judgment as to MERS (Doc. # 19) is GRANTED by
agreement of the parties, and this Consent Judgment is entered
nunc-pro-tunc to the date of the Stipulation on March 10, 2017.
2.

With regard to Count I of the Complaint, the Court declares

and establishes the missing First Note and First Mortgage are
the

senior

interest

in

the

Property

and/or

its

proceeds,

relating back to their origination, which remain in full force
and effect. The Court reestablishes the First Note, relating back
10

to its date of execution.
3.

Pursuant

to

Count

I

of

the

Complaint

and

its

First

Mortgage, Plaintiff holds a valid first position senior interest
upon all property, rights to property, claim or estate of the
Defendants against the Property and its improvements, buildings,
fixtures,

and

appurtenances

Division,

secured

including

rents

as

located

collateral

derived

from

within
under

this

District

and

instruments,

Property,

the

these

particularly

described above.
4.

Plaintiff’s Mortgage is prior, paramount and superior to

all rights, claims, liens, interests, encumbrances and equities
of

the

Defendants

and

all

persons,

occupants,

entities

and

others claiming by, through or under them, which are subordinate
to

it

and

subject

to

foreclosure

in

this

case.

The

First

Mortgage is foreclosed against the Property, which forecloses
any interest in the Property also subject to Plaintiff’s lis
pendens as provided by Florida law.
5.

Under Fed. R. Civ. P. 53, Mediation Inc., James Chaplin,

Esq. and/or their designee is appointed as Special Master and
authorized to sell the Property, its improvements, buildings,
fixtures, and appurtenances for public sale, at the Sarasota
County Courthouse, or its office, at the usual hour and location
for public sale, per 28 U.S.C. § 2001 et seq and applicable
Florida law, after publication of the advertised notice of the
11

public sale of the Property, once a week for 4 weeks prior to
the

sale

in

a

newspaper

regularly

issued

and

of

general

circulation in Sarasota County. The sale is without right of
redemption pursuant to 28 U.S.C. § 2001 et seq.
6.

Under

exercise

28

the

U.S.C.
same

§

564

powers

and

to

566,

the

Special

conduct

the

sale

as

Master
any

may

local

official or party conducting foreclosure sales, to yield the
best

sale

price

of

the

Property

through

free,

fair,

and

bidder(s)

shall

deposit

at

competitive bidding.
7.

At

the

sale,

the

successful

least 10% of the successful bid with the Special Master, by
cash,

cashier’s

check

or

certified

check,

made

payable

to

Plaintiff’s counsel of record. To be permitted to bid, bidders
shall present proof to the Special Master of their compliance
with this requirement. Plaintiff may place credit bids against
the amount due on the First Note/Mortgage without any payment.
8.

A third-party bidder/purchaser will pay the balance of the

purchase price for the Property in cash, cashier's check, or
certified

check,

payable

to

Plaintiff's

attorney,

within

48

hours after the sale date. If the purchaser defaults on this or
any other condition of sale, then the deposit is forfeited and
shall be applied to expenses of sale. The Property may then be
re-offered

for

sale

or

sold

to

Plaintiff's discretion.
12

a

second

highest

bidder

at

9.

If

Plaintiff

is

the

purchaser,

the

Special

Master

will

credit on Plaintiff's bid the total sums due to Plaintiff, or
such portion necessary to fully pay Plaintiff's bid. If not the
purchaser, Plaintiff will advance all subsequent costs of this
action, for which it will be reimbursed by the Special Master.
10.

Following completion of the sale, the Special Master will

execute a Report of Sale, for filing with the Clerk of Court,
subject to confirmation by the Court.
11.

Plaintiff

may

assign

the

judgment

and/or

credit

bid

by

executing an assignment prior to issuance of an order confirming
the sale of the Property, without further order of the Court.
12.

Under Fed. R. Civ. P. 70, by motion after the sale, the

Court will enter an order confirming the sale of the Property,
conveying title to the purchaser at sale, which shall be filed
and recorded in the local land registry office, with the same
legal effect as a Certificate of Title or other conveyance, per
Fla. Stat. § 45.011 and 702.10 et seq. Or the Special Master may
execute a conveyance of the Property to Plaintiff or any other
purchaser at sale.
13.

A successful third-party bidder at the sale shall pay, in

addition to the amount of the bid, any documentary stamps and
land registry fees and like costs, as provided by law.
14.

Upon entry of the confirmation order, the sale proceeds

will be applied to Plaintiff's costs and disbursements of this
13

case, expenses of sale, including documentary stamps affixed to
the order if applicable, the total sum due to Plaintiff less the
items paid, plus interest at the legal rate from this date to
the sale date.
15.

Under Count II, Plaintiff or any other purchaser at the

sale is granted possession of the Property, its improvements,
fixtures

and

other

contents.

All

other

parties,

occupants,

entities and others will vacate the Property following the sale,
as directed by the U.S. Marshall and/or local law enforcement
officers, their deputies and agents, who are ordered to take any
and all action to remove anyone and their belongings from the
Property, with whom Plaintiff or other purchaser at sale is
authorized

to

coordinate

to

take

all

actions

reasonably

necessary to effectuate same. Refusal or failure to vacate the
Property is punishable by contempt.
16.

Until the Property is sold and the successful bidder takes

physical possession, all other parties, occupants, entities and
others will take all reasonable steps necessary to preserve the
Property

in

improvements,

its

current

fixtures

condition,

and

including

appurtenances,

its

buildings,

including,

without

limitation, maintaining fire and casualty insurance policies on
the Property and providing proof of insurance when requested by
Plaintiff. All parties, occupants, entities and others will not
commit waste, damage or vandalism against the Property or do
14

anything

to

including

impair

but

not

or

reduce

limited

to

its

value

recording

or

marketability,

any

instruments,

publishing any notice, or taking any other action tending to
adversely affect the value of the Property or tending to deter
or discourage potential bidders from participating in the sale
and shall not cause or permit anyone else to do so. Violation of
the above is punishable by contempt of Court.
17.

If any person fails or refuses to remove their personal

property from the Property as specified in this Order, then any
personal property remaining on the Property is deemed forfeited
and

abandoned

and

Plaintiff

or

other

purchaser

at

sale

is

authorized to remove the personal property and dispose of it in
any

manner

it

sees

fit,

including

sale,

in

which

case

the

proceeds of the sale are to be applied first to the expenses of
sale, with the balance being distributed as described within
this Order.
18.

The Clerk shall close this case.
DONE and ORDERED in Chambers in Tampa, Florida, this 22nd

day of March, 2017.

15