Pino v. Bank of New York
121 So. 3d 23, 2013 WL 452109, 38 Fla. L. Weekly Supp. 168 (2013)
Rule of Law:
A trial court has jurisdiction to reinstate a voluntarily dismissed action based on alleged fraud on the court only when the plaintiff's proven fraud resulted in the plaintiff securing affirmative relief to the defendant's detriment, and the dismissal was taken to prevent the court from remedying the improperly obtained relief.
Facts:
- In October 2008, Bank of New York Mellon (BNY Mellon) initiated a mortgage foreclosure action against Roman Pino, who was in default on his mortgage.
- BNY Mellon's original complaint attached a mortgage document listing Silver State Financial Services, Inc. as the lender and Mortgage Electronic Registration Systems, Inc. (MERS) as the mortgagee, with no reference to BNY Mellon.
- BNY Mellon's initial complaint alleged it owned the promissory note and mortgage by assignment but did not attach proof of assignment and stated the original note was "lost, destroyed or stolen."
- In February 2009, BNY Mellon filed an amended complaint, attaching an "Adjustable Rate Note" (listing Silver State Financial Services) and an "Assignment of Mortgage" showing MERS assigning the note and mortgage to BNY Mellon.
- The Assignment of Mortgage attached to the amended complaint was dated September 19, 2008, which was twenty days before BNY Mellon filed its original foreclosure complaint.
- On February 17, 2009, Pino filed a motion for sanctions under section 57.105, Florida Statutes, alleging the Assignment of Mortgage was fraudulently backdated to deceive the court.
- On March 9, 2009, before Pino's scheduled depositions and within the 21-day safe harbor period of the sanctions statute, BNY Mellon served a notice of voluntary dismissal without prejudice.
- In August 2009, BNY Mellon refiled an identical foreclosure action against Pino, attaching a new Assignment of Mortgage notarized July 14, 2009, which was after the voluntary dismissal of the first action.
Procedural Posture:
- Bank of New York Mellon (BNY Mellon) commenced a mortgage foreclosure action against Roman Pino in the trial court.
- Pino moved to dismiss BNY Mellon's original complaint.
- BNY Mellon filed an amended complaint.
- Pino filed a motion for sanctions under section 57.105, Florida Statutes, alleging fraudulent documentation.
- BNY Mellon served a notice of voluntary dismissal of the foreclosure complaint without prejudice.
- BNY Mellon refiled an identical foreclosure action against Pino.
- Pino filed a motion in the original, voluntarily dismissed action, seeking to strike BNY Mellon’s notice of voluntary dismissal and reinstate the case to dismiss it with prejudice as a sanction for fraud on the court, invoking Florida Rule of Civil Procedure 1.540(b).
- The trial court denied Pino’s Rule 1.540(b) motion.
- Pino appealed the trial court's denial to the Fourth District Court of Appeal.
- The Fourth District Court of Appeal, sitting en banc, affirmed the trial court's denial and certified a question of great public importance to the Florida Supreme Court.
- Pino sought review from the Florida Supreme Court, which accepted jurisdiction and denied the parties' joint stipulated dismissal, electing to retain jurisdiction and address the merits.
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Issue:
Does a trial court have jurisdiction and authority under Florida Rule of Civil Procedure 1.540(b), or under its inherent authority, to grant relief from a voluntary dismissal where the motion alleges a fraud on the court in the proceedings, but no affirmative relief on behalf of the plaintiff has been obtained from the court?
Opinions:
Majority - Pariente, J.
No. A trial court does not have jurisdiction or inherent authority to strike a plaintiff's voluntary dismissal based on an allegation of fraud on the court when the plaintiff has not obtained affirmative relief from the court. Florida Rule of Civil Procedure 1.420(a)(1) grants plaintiffs an "absolute" right to voluntarily dismiss an action once without prejudice before certain critical stages, and such a dismissal instantaneously divests the court of jurisdiction over the case. While Rule 1.540(b) allows a trial court to relieve a party from a "proceeding" due to fraud, this relief is contingent on the movant demonstrating an "adverse impact" from the proceeding. In the context of a voluntary dismissal, such an adverse impact for a defendant occurs only when the plaintiff's fraud resulted in the plaintiff securing affirmative relief to the detriment of the defendant, and the dismissal was then taken to prevent the court from undoing that improperly obtained relief (as established by interpreting Select Builders of Florida, Inc. v. Wong). In this case, BNY Mellon did not obtain any affirmative relief, such as foreclosing on the mortgage, prior to its voluntary dismissal, thus Pino suffered no adverse impact from which he needed relief under Rule 1.540(b). The court also found no inherent authority for a trial court to strike a voluntary dismissal solely to impose a dismissal with prejudice sanction for fraud in such circumstances; inherent authority to sanction fraud applies to ongoing proceedings, not to reopen dismissed cases. Similarly, amended Rule 1.110(b), requiring verification of foreclosure complaints and intended to give courts greater sanctioning power, does not authorize reopening a voluntarily dismissed case to impose a with-prejudice sanction. While a trial court retains jurisdiction to award monetary sanctions under section 57.105, Florida Statutes, even after a voluntary dismissal, this requires the sanctions motion to be filed after the statutory 21-day safe harbor period has elapsed; BNY Mellon dismissed the case within that period, making such sanctions unavailable in the first action. Other remedies available to Pino include BNY Mellon losing its one 'free' voluntary dismissal, entitlement to costs as a precondition for refiling, and potential referral of the attorney to The Florida Bar.
Concurring - Polston, C.J. and Canady, J.
Chief Justice Polston and Justice Canady concurred in the result only. This indicates they agreed with the ultimate outcome of affirming the Fourth District's decision, but not necessarily with the entirety of the legal reasoning or the rationale presented in the majority opinion.
Analysis:
This case significantly reinforces the 'absolute' nature of a plaintiff's right to voluntary dismissal under Florida Rule of Civil Procedure 1.420(a)(1), limiting judicial discretion to reinstate such cases even in the face of alleged fraud. It clarifies the narrow circumstances under which a defendant can use Rule 1.540(b)(3) to challenge a voluntary dismissal for fraud, specifically requiring the plaintiff to have first obtained 'affirmative relief' through fraudulent means. The ruling highlights a potential gap in the court's ability to sanction fraudulent conduct when a plaintiff strategically dismisses a case, prompting a request for the Civil Procedure Rules Committee to review potential amendments to enhance judicial authority for sanctions.
