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IN THE THIRD DISTRICT COURT OF APPEALS
FOR THE STATE OF FLORIDA
XLT INVESTMENT CORP., a Florida
corporation,
CASE NO: 3D17-230
Appellant,
vs. L.T. CASE NO: 12-43649 CA 02
ALYSSA ELSO, MICHAEL ELSO, and
JUAN C. ELSO,
Appellees.
_______________________________________/
APPELLEES’ REPLY TO APPELLANT, XLT INVESTMENT
CORPORATION’S RESPONSE IN OPPOSITION TO MOTION
TO DISMISS NOTICE OF APPEAL OF NON-FINAL
ORDER AND BRIEF FOR LACK OF JURISDICTION
COME NOW, Appellees, ALYSSA ELSO and MICHAEL ELSO, by and
through undersigned counsel, pursuant to Florida Rule of Appellate Procedure
9.300 and file this Reply to Appellant, XLT Investment Corp.’s (“XLT”) Response
in Opposition to Appellees Motion to Dismiss the Notice of Appeal of Non-Final
Order and Initial Brief, and state the following:
INTRODUCTION
Appellant XLT filed a notice of appeal challenging the trial court’s entry of
a Final Default Judgment as to co-Defendant George Elso, by asserting that the
Final Default Judgment determined the right to the immediate possession of
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property, thus, XLT contends this Court has appellate jurisdiction pursuant to
Florida Rule of Appellate Procedure 9.130(a)(3)(C)(ii). However, as set forth in
Appellees Motion to Dismiss and as demonstrated below, XLT not only lacks
standing to appeal the Final Default Judgment entered as to the co-defendant, but
the judgment at issue is not an appealable non-final order within the purview of
Rule 9.130(a)(3)(C)(ii). More importantly, the Final Default Judgment entered by
the trial court as to co-Defendant, George Elso, did not adjudicate any claims,
defenses or counterclaims raised by XLT, nor did it determine XLT’s right to the
immediate possession of property. Consequently, this Court lacks jurisdiction
under Rule 9.130(a)(3)(C)(ii) to review the non-final order.
PROCEDURAL BACKGROUND
1. On November 6, 2012, Appellees Alyssa Elso, Michael Elso and Juan
C. Elso filed their initial complaint for cancellation of deed, constructive fraud,
constructive trust and resulting trust against Defendant, George I. Elso.
2. Defendant, George Elso was served with the complaint on November
30, 2012, and on March 7, 2013, filed an answer and affirmative defenses to the
complaint, but neglected to apprise the Court or Appellees that he had unilaterally
and fraudulently conveyed the property to XLT Investment Corporation on or
about February 7, 2013, and that he no longer held any interest in the property.
3. While awaiting Defendant George Elso’s response to the discovery
3
Orders, Appellees fortuitously discovered that Defendant George Elso during the
pendency of this action, in an effort to deprive Plaintiffs of their rightful interest in
the subject property, falsified and recorded a Quit Claim Deed in his favor and
thereafter executed a Warranty Deed in favor of XLT Investment Corp., thereby
purportedly transferring and/or conveying all of his interest in the subject property
to XLT Investment Corp.
4. As a result of this transfer, which was in violation of the Uniform
Fraudulent Transfer Act, on June 12, 2013, Appellees filed a Motion for Leave to
Amend their Complaint to include two additional parties, XLT Investment Corp.
and Luis A. Torrens, which leave the Court granted on June 24, 2013.
5. Appellees Amended Complaint added two counts, to include a count
to quite title by setting aside the allege mortgage1 and warranty deed held by XLT
Investment Corp., and a count to cancel, rescind and invalidate the warranty deed
in lieu of foreclosure based on the fraudulent conveyance executed by Defendant
George Elso, under Florida Statute § 726.105 (the Uniform Fraudulent Transfer
Act).
6. On July 24, 2014, Circuit Court Judge Spencer Eig entered a
judicial default against Defendant George Elso for failing to file and answer to
1 Although XLT claims to hold a Mortgage encumbering the subject property,
executed by George Elso and Miriam Elso on September 24, 2010, in the amount
of $250,000, XLT now claims that the amount actually loaned was only $150,000.
4
Appellees Amended Complaint.
7. On October 28, 2016, based on the entry of the Court’s August 22,
2016 Order affirming entry of Default as to Defendant George Elso, Appellees
filed their Motion for Final Default Judgment as to Defendant George Elso only,
and scheduled it for hearing on November 29, 2016.
8. Interestingly and without any basis, at the November 29, 2016
hearing, counsel for co-Defendant/Appellant XLT noted his objection to the entry
of a Final Default Judgment against co-Defendant, George Elso, and despite XLT’s
lack of standing, requested an opportunity to submit a response to the Motion for
Final Default Judgment as to co-Defendant, George Elso. The Court granted
XLT’s request to submit a memorandum of law in support of their position.
9. On January 4, 2017, after having considered XLT’s November 30,
2016 response, the Court entered a Final Default Judgment in Favor of Plaintiffs
and Against Defendant, George I. Elso Only.
10. On January 30, 2017, XLT filed a Notice of Appeal of Non-Final
Order, by which XLT seeks to appeal the entry of a Final Default Judgment
entered against another defendant, namely, Defendant George I. Elso.
11. Appellant, XLT Investment Corp. lacks standing to appeal the entry
of a Final Default Judgment against Defendant, George I. Elso, and XLT’s
5
Notice of Appeal of that Final Judgment as if it were a Non-Final Order, is
unauthorized.
ARGUMENT
I. XLT INVESTMENT CORPORATION LACKS STANDING TO
APPEAL A FINAL DEFAULT JUDGMENT ENTERED AGAINST
CO-DEFENDANT GEORGE ELSO.
XLT lacks standing to appeal the Final Default Judgment entered in favor of
Plaintiffs/Appellees and against co-Defendant, George Elso only, as the judgment
entered against co-defendant George Elso did not adjudicate or determine
Appellant XLT’s claims or defenses. As the judgment entered solely against co-
Defendant George Elso succinctly and expressly noted, “this judgment does not
adjudicate claims, defenses or counterclaims between Plaintiffs and XLT
Investment Corp.” (Emphasis added).
Although a party generally has standing if he or she has a sufficient interest
at stake in the controversy which will be affected by the outcome of the litigation,
Gieger v. Sun First Nat’l Bank of Orlando, 427 So.2d 815 (Fla. 5th DCA 1983), the
entry of a Final Default Judgment against co-defendant George Elso did not
determine XLT’s claims or the outcome of the litigation, which remains subject to
determination at trial. Moreover, XLT’s reliance on Khazaal v. Browning, 707
So.2d 399 (Fla. 5th DCA 1998), in support of its standing argument is misplaced, as
the facts are clearly distinguishable. In Khazaal, holders of a security interest in a
6
liquor license sought to foreclose against the grantor of the security interest and the
grantor’s brother, to whom the liquor license had been transferred. The grantor
answered and raised affirmative defenses, but the grantor’s brother suffered a
clerk’s default. The trial court entered a default final judgment of foreclosure,
adjudicating and foreclosing the interests of both the grantor (Nazih) and the
grantor’s brother (Nabil). In fact, the judgment stated that title to the collateral was
either vested in appellant or his brother. Id. at 400. In that case, unlike the
circumstances in the present case, the foreclosure judgment determined the right to
immediate possession of property, which was shortly thereafter redeemed. See
also, Khazaal v. Browning, 717 So.2d 1124 (Fla. 5th DCA 1998). In the instant
case, XLT’s right to foreclose on the note and mortgage, which it claims to hold,
remains to be determined at trial.
While XLT, as an alleged mortgagee, may have, subject to the trial court’s
determination, an interest at stake in the underlying litigation, this, however does
not provide standing to appeal on an interlocutory basis, a Final Default Judgment
entered against a co-defendant, especially where that judgment did not determine
anyone’s right to the immediate possession of property as required pursuant to
Rule 9.130(a)(3)(c)(ii), nor did it determine the outcome of the litigation as it
pertains to XLT.
7
Contrary to XLT’s contention, the order on appeal in the case at bar did not
determine the immediate right to possession of property, nor did the judgment call
for a judicial sale of the property, which remains subject to a lis pendens recorded
by XLT.2 While XLT correctly notes that the final default judgment entered
against George Elso ordered the cancellation of two deeds, which on paper affects
record title, the cancellation of the deeds did not determine the immediate right to
possession of property, which at all times has been, and remains in the possession
of the Appellees.
II. THE COURT LACKS JURISDICTION TO REVIEW THE FINAL
DEFAULT JUDGMENT WHICH DID NOT DETERMINE THE
RIGHT TO IMMEDIATE POSSESSION OF PROPERTY AS
REQUIRED BY FLORIDA RULE OF APPELLATE PROCEDURE
9.130(a)3(C)(ii).
Rule 9.130, of the Florida Rules of Appellate Procedure, strictly limits the
types of non-final orders that may be reviewed on appeal in order “to reduce the
number of appealable pretrial orders and to discourage piecemeal review.”
Travelers Ins. Co. v. Burns, 443 So.2d 959, 961 (Fla. 1994). Courts have therefore
“narrowly construed the scope of the rule” so that only those orders specifically
identified by Rule 9.130 may be reviewed by district courts. Id. at 961. See also,
Walker v. Florida Gas Transmission Co., LLC, 134 So.3d 571 (Fla. 1st DCA 2014)
2 It should be noted that XLT, as an alleged mortgagee, has never had possession
of the property (immediate or otherwise), which is the subject of this litigation, and
in fact, has never set foot inside the residence.
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(Trial court’s order was not an appealable non-final order, especially where
appellants have not met immediacy requirement under Rule 9.130(a)(3)(c)(ii));
Tarik, Inc. v NNN Acquisitions, Inc., 17 So.3d 912 (Fla. 4th DCA 2009) (Rule
allowing interlocutory appeals of orders determining the right to immediate
possession of property should be narrowly interpreted.)
Notwithstanding that the Final Default Judgment states that it is directed
only against George Elso, XLT claims that the entry of the judgment against
George Elso somehow permits XLT to seek piecemeal, interlocutory appellate
review. Contrary to XLT’s contention, the entry of a final default judgment as to
co-Defendant George I. Elso is not a non-final appealable order as to XLT, because
the judgment did not determine the right to the immediate possession of property
and, thus, was not an appealable interlocutory order. Moreover, XLT has not met
the immediacy requirement under Rule 9.130(a)(3)(C)(ii). See Walker, 134 So.3d
at 573. Here, like in Walker, the trial court’s judgment did not address or
adjudicate XLT’s claims, defenses or counterclaims, nor did it determine its right
to the immediate possession of property.
In Miami-Dade County v. Perez, 988 So.2d 40 (Fla. 3d DCA 2008), this
Court dismissed an appeal in which the trial court had denied a motion for
summary judgment regarding the parties’ rights and interests in certain real estate.
This Court reasoned that “the effect of the order was simply to deny summary
9
disposition of the parties’ respective claims to immediate possession - not to
determine those claims. The claims remain subject to determination at trial.” Id.
at 41(emphasis in original). In the instant case, despite XLT’s protestations to the
contrary, the Final Default Judgment entered against co-Defendant George Elso
made no determination of XLT’s rights, which like in Perez, remain subject to
determination at trial.
Similarly, in Marina Bay Hotel & Club, Inc. v. McCallum, 733 So.2d 1133
(Fla. 4th DCA 1999), the appellant (lessor) argued that the trial court’s order
denying the motion for summary judgment was appealable because it determined
the right to immediate possession of property. However, the Fourth District,
reciting a duty to narrowly construe Rule 9.130(a)(3), dismissed the appeal, noting
that a party’s summary judgment motion does not determine the “immediate right
to possession” even though it may resolve the underlying legal issues. Here, while
the Final Default Judgment may have resolved the underlying legal issues and
determined property rights as to co-Defendant George Elso, it did not determine
the immediate right to possession of property. XLT has clearly not met the
immediacy requirement under Rule 9.130
In Corzo v. Pineiro, 990 So.2d 1177 (Fla. 3d DCA 2008), this Court
dismissed an appeal brought pursuant to Rule 9.130(a)(3)(C)(ii), where this Court
found it had no jurisdiction and noted that the circuit court had not yet tried or
10
otherwise ruled upon the convoluted claims of ownership, unwritten lease rights,
and corporate trickery asserted by the parties against one another. In the instant
case, just like in Corzo, the circuit court has not yet addressed XLT’s claims,
defenses or counterclaims, which remain subject to determination at trial. Simply
put, if XLT, as a mortgagee, can establish that it is a bona fide lender who actually
provided consideration for the alleged Mortgage, then XLT would be entitled to
foreclose on the note and mortgage at trial. Thus, its interests are not affected by a
judgment entered against a co-defendant.
In an effort to satisfy the immediacy requirement of Rule 9.130(a)(3)(c)(ii),
XLT relies on Shepard v. Ouellete, 854 So.2d 251 (Fla 5th DCA 2003), Luneke v.
Becker, 621 So.2d 744 (Fla. 2d DCA 1993), and Amerifirst Federal Savings and
Loan Ass’n v. Cohen, 454 So.2d 626 (Fla. 3d DCA 1984). All three cases are
distinguishable. In Shepard, the Court found that it had jurisdiction to review a
“partial final judgment” ordering a judicial sale of property because it determined
the immediate right to possession. However, the appellate review was limited to
the question as to the propriety of the ordered sale of the property. Here, the
judgment entered against co-Defendant George Elso did not order a judicial sale,
or affect the disposition of the property, which as noted previously herein, remains
subject to a lis pendens recorded by XLT.
11
In Luneke v. Becker, 621 So.2d 744 (Fla. 2d DCA 1993), the non-final order
determined the right to immediate possession of property because it ejected the
defendant from the property and granted plaintiff an immediate writ of possession.
In the instant case, the judgment at issue did not order the ejectment of XLT nor
did it grant Appellees or any party, a writ of possession.
Finally, in Amerifirst Federal Savings and Loan Ass’n v. Cohen, 454 So.2d
626 (Fla. 3d DCA 1984), this Court held that a non-final order requiring the
delivery of a mortgage and promissory note to plaintiff, plainly determined the
right to immediate possession of property. Here, the judgment entered against co-
Defendant George Elso did not order the delivery of a mortgage and promissory
note, nor did it extinguish or determine the validity of XLT’s alleged mortgage and
note, which remains subject to determination at trial.
Not only has XLT not met the immediacy requirement under Rule
9.130(a)(3)(c)(ii), but it has failed to demonstrate that it would be left without an
appropriate appellate remedy after its claims, defenses and counterclaims are
determined at trial, requiring interlocutory review. In short, XLT requests that this
Court engage in the type of piecemeal review that Rule 9.130 was implemented to
discourage. See Burns, 443 So.2d at 961.
12
CONCLUSION
Appellees Alyssa Elso and Michael Elso submit that Appellant XLT
Investment Corporation, lacks standing to appeal the Final Default Judgment
which was entered against co-Defendant, George Elso only, as XLT’s rights
remain subject to determination at trial and where the judgment at issue did not
determine the right to immediate possession of property, as required.
WHEREFORE, Appellees request that this Court dismiss Appellant XLT
Investment Corp.’s appeal for lack of jurisdiction.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true copy of the foregoing was provided via
Email to: Juan C. Zorrilla, Esq., Fowler White Burnett, P.A., jzorrilla@fowler-
white.com, 1395 Brickell Avenue, Miami, Florida 33131; Carlos D. Lerman, Esq.,
Lerman & Whitebook, P.A., [email protected] 2611 Hollywood Boulevard,
Hollywood, Florida 33020; and to Jorge E. Silva, Esq., [email protected], 236
Valencia Avenue, Coral Gables, FL 33134 10th day of February, 2017.
Respectfully submitted,
By: s/ Raphael Lopez
RAPHAEL LOPEZ, ESQ.
Florida Bar No.: 95328
LOPEZ ROCA, P.A.
Courthouse Tower
44 West Flagler Street, Suite 1750
Miami, Florida 33130
Telephone: (305) 373-0702
Facsimile: (305) 373-0706
13
Primary Email: [email protected]
Secondary Email: [email protected]
CERTIFICATE OF COMPLIANCE WITH FONT STANDARD
I certify that this brief complies with Fla. R. App. P. 9.210 and has been
typed in Times New Roman, 14 Point.
By: s/Raphael Lopez
Raphael Lopez, Esq.
Florida Bar No. 95328