KEY POINTS: FL APPELLATE COURT AFFIRMS ORDER QUIETING TITLE AGAINST MORTGAGE HOLDER

1. Florida’s Fourth Appellate District recently affirmed a judgment which quieted title against U.S. Bancorp (“Bancorp”) in favor of third-party purchaser, Taharra Assets. S. Bancorp v. Taharra Assets 5544, Inc., 2024 WL 252945 (Fla. 4th DCA 2022). Taharra took title from Jasco via a quitclaim deed after Bancorp filed its foreclosure action and while the foreclosure was pending. Although Jasco had obtained its ownership interest before the foreclosure proceedings were filed, Bancorp held a first mortgage which Jasco took subject to. Originally, Bancorp named Jasco as a defendant in the foreclosure proceedings; however, it dropped Jasco prior to the entry of judgment.

2. Taharra brought a quiet title action against Bancorp. In the quiet title action Taharra asserted that the foreclosure judgment was invalid and a cloud on Taharra’s title. The trial court agreed and entered a summary judgment in Taharra’s favor. Bancorp appealed arguing that both Jasco and Taharra were “purchasers pendent lite, who took the property subject to the foreclosure.” On appeal the Fourth DCA found Bancorp’s foreclosure judgment to be void because Bancorp dropped Jasco, an indispensable party, from the proceedings.

3. The Fourth DCA concluded that Taharra had legal title to the property and affirmed the summary judgment which quieted title against Bancorp. Although dropping Jasco in the original proceedings proved to be a costly mistake, Bancorp was not without recourse. The DCA clarified that Bancorp’s mortgage remained a valid, first-priority lien which could still be foreclosed.

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