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Attorney Christopher Jones has one again been selected by Super Lawyers as a Michigan Rising Star for 2015.  Super Lawyers recognizes attorneys who have distinguished themselves in their legal practice.  Their patented selection process is rigorous, involves peer nominations and results in a third-party validation of their professional accomplishments.   Christopher W. Jones   Attorney […]
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In Florida, generally the transfer of a mortgage note transfers with it the related mortgage. The mortgage note is regarded as the principal item with the mortgage being regarded as a mere accessory. Hence the adage "the mortgage follows the note."

The Restatement (Third) of Property provides in  Mortgages section 5.4(a) (1997) that "[a] transfer of an obligation secured by a mortgage also transfers the mortgage unless the parties to the transfer agree otherwise."  Florida law is apparently in accordance with the Restatement. The stated objective of the Restatement is to avoid economic waste to the lender and a windfall to the borrower if the note and mortgage are split rendering the mortgage note as a practical matter unsecured. The Restatement cites the United States Supreme Court decision in Carpenter v. Longan, 83 U.S. 271 (1827) which held that "[a]ll the authorities agree that the debt is the principal thing and the mortgage an accessory."

The Restatement's exception provides that a transfer of a mortgage note is possible without the transfer of the mortgage if the parties so agree, but the effect of such a transfer would be to make it impossible to foreclose the mortgage unless the transferor of the mortgage note is made the assignee's agent or trustee with authority to foreclose on the behalf of the assignee of the mortgage note.

Assignment of the Mortgage

The opposite situation is presented if a mortgage is transferred without the transfer of the mortgage note. The apparent rule in Florida is that an assignment of a mortgage without an assignment of the related mortgage note is deemed a nullity and creates no right in the assignee because a mortgage is a mere lien incidental to the obligation it secures. 37 Fla. Jur. 2nd, Mortgages, Section 511. See e.g., Sobel v. Mutual Development, Inc., 313 So.2d 77 (Fla. 1st DCA 1975). Vance v. Fields, 172 So.2d 613 (Fla. 1st DCA 1965).

Jordan E. Bublick - Miami Bankruptcy Lawyer - North Miami & Kendall Offices - (305) 891-4055 - www.bublicklaw.com

The Nebraska Court of Appeals has issued an important decision that clarifies the right to set aside default judgments, regardless of how old the judgment is, when the defendant had no actual service of the lawsuit papers. Well, the issue is now clear, except when it is not clear, which is to say I’m confused again.
In Capital One Bank vs. Lehmann, the defendant, Nelseena J. Lehman was sued in  November of 2009 for $2,942.37 for an unpaid credit card account.  The court summons was sent by Certified Mail and was signed by her estranged husband who did not inform her of the lawsuit.   Since Lehmann did not respond to the lawsuit, a motion for default judgment was awarded in February 2010.
Lehmann claims that she had no actual notice of the lawsuit since she moved to Oklahoma in September of 2009 and did not return to Nebraska until June of 2011.  Upon receiving a garnishment notice she motioned the court to set aside the default judgment in June 2014. That motion was denied and Lehmann filed her appeal.
The first half of the court ruling gives great assurance that default judgments obtained without notice to the defendant may be set aside at any time.  “A judgment entered without personal jurisdiction is void.”  The court cites the case of Ehlers vs. Grove, 147 Neb. 704 (1946) to underscore the basic rule that “every court possesses the inherent power to vacate void judgment, either during the term at which it was rendered or after its expiration.”  The Ehlers case states declared that “. . . Nor is it necessary that a meritorious defense be shown on the part of the defendant . . .” The fact that no service was obtained is enough to set aside a default judgment at any time for any reason or no reason at all.
The second half of the opinion was not so great.
The Court of Appeals focused on Nebraska’s service of summons law, Neb. Rev. Stat. §25-505.01 which provides that “Certified mail service which shall be made by (i) within ten days of issuance, sending the summons to the defendant by certified mail with a return receipt requested showing to whom and where delivered and the date of delivery, and (ii) filing with the court proof of service with the signed receipt attached.”
Citing a prior case, the court declared that “due process requires notice to be reasonably calculated to apprise interested parties of the pendency of the action and to afford them the opportunity to present their objections.”  Doe v. Board of Regents, 280 Neb. 492, 508 (2010).
The court noted that here was no record of Lehmann notifying the bank that she moved to Oklahoma or that she forwarded her mail.  “It is unclear how Lehmann’s temporary marital or living status affects Capital Ones’ reasonable reliance on, presumably, an address provided to them by Lehmann for the purpose of her maintaining an account.”  Unlike the Ehlers case where there was no service of summon at all, in this case due process was not violated because notice was reasonably calculated to apprise Lehmann of the lawsuit.  So, the court ruled that Lehmann was properly served and her appeal was dismissed.
The court’s conclusion is difficult to comprehend.  Why does it matter that Lehmann failed to provide a new address?  Has it been determined that it was, in fact, her account?  Was that fact admitted in the motion?  Would it have made a difference if Lehmann was a battered spouse requiring an immediate exit from the family home?  Would that make her failure to change the address more reasonable?  If her estranged husband admitted that he purposely hid the lawsuit to get back at her would that have made a difference?  If the certified mail receipt was signed by a subsequent tenant of the home instead of the estranged husband, would that make a difference? Of course it would.  The court seems to be saying that it is Lehmann’s fault for not getting notice. The court talks about whether notice was reasonably calculated to apprise the interested parties, but then it goes on to attack Lehmann’s conduct as not being reasonable.
Is it the the plaintiff’s conduct that must be reasonable in serving notice or is it the defendant’s behavior that must be reasonable to be available for notice?  Isn’t every notice sent by a creditor to the last know address of the customer reasonably calculated to provide notice?
The undisputed fact in this case is that the defendant never received notice until her paycheck was being garnished.  That should have made a difference.
Image courtesy of Flickr and The U.S. National Archives.

David Siegel:   Of course, the creditors have an opportunity to show up at this meeting, and witness it, ask a few questions, possibly tell the trustee about something that they may know about the debtor.  For example, if there’s property in Wisconsin that was not disclosed or an old Corvette that miraculously didn’t make the schedules. + Read More
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