Summary
holding that a city lien arising from a loan for home repairs was not superior to a preexisting mortgage because it was not the result of municipal services, a special assessment, or any type of lien covered by the city code of ordinances
Summary of this case from Fla. Bankers Ass'n v. Fla. Dev. Fin. Corp.Opinion
Case No. 4D02-2036
Opinion filed August 13, 2003
Appeal from the Circuit Court for the Seventeenth Judicial Circuit, Broward County; Leonard L. Stafford, Judge; L.T. Case No. 01-017119(02) CACE.
Donna S. Glick of Law Offices of David J. Stern, P.A., Plantation, for appellant.
Joseph F. Poklemba of James C. Brady Associates, Fort Lauderdale, for Appellee-City of Lauderdale Lakes.
We review the determination of the priority of liens in a mortgage foreclosure action. The trial court ruled that the lien of appellee, City of Lauderdale Lakes (City), was superior to and had priority over the purchase money mortgage of appellant, First Nationwide Mortgage Corporation (First Nationwide). We reverse.
In 1997, a purchase money mortgage on the property was assigned to and recorded by First Nationwide. The following year, Carolyn Brantley took title to the property. On June 6, 2001, Brantley executed a Home Loan Agreement and mortgage in favor of the City. The agreement stated that the loan was given in connection with the City's Home Investment Partnership Program for the purpose of making home repairs to the property.
On October 4, 2001, First Nationwide filed a Complaint to Foreclose Mortgage, claiming a default under the terms of the note and mortgage. The City answered the complaint, contending that its lien was superior to First Nationwide's mortgage. The court entered summary judgment in favor of First Nationwide, but reserved jurisdiction to determine the issue of priority of liens. Thereafter, the court ruled that the City's lien was superior to and had priority over First Nationwide's mortgage, basing its ruling on the authority of Miami Shores Village v. Gibraltar Savings Loan, 561 So.2d 27 (Fla. 3d DCA 1990), and Gailey v. Robertson, 123 So. 692 (Fla. 1929).
In Gailey, Gailey held a mortgage which he claimed was superior to a lien claimed by the City of Winter Haven. The city's lien was a special assessment against property for a local improvement — the paving of certain streets abutting the property. In holding that the city's lien took priority, the court noted:
All private rights and interests in real property in a muncipality are subject to the statutory powers of the municipality to levy assessments for local improvements pursuant to its governmental functions; and the legislature may b[y] statute create liens upon private property in favor of a municipality for local improvements, and make such liens superior to other liens acquired subsequent to the enactment of the statute. The intention of the law making power to give priority to a municipal lien for local improvements over contract liens of individuals may be implied from the language of the law creating the lien and from the nature and purpose of the lien.
Id. at 693. Therefore, because the improvement served a valid public purpose, the city's lien was superior.
In Miami Shores, the trial court ruled that Gibralter's lien was superior to Miami Shores' special assessment lien for unpaid waste fees against the subject property. The third district reversed, holding that 1) the waste collection lien was superior to the mortgage lien; and 2) Miami Shores had the authority to impose such a lien. Id. at 28. This holding was based upon the reasoning of Gleason v. Dade County, 174 So.2d 466 (Fla. 3d DCA 1965). There, the court found that certain waste fees due to the county after the enactment of a city ordinance imposing them as special assessment liens were superior to Gleason's mortgage. Id. at 469.
First Nationwide acknowledges the power of municipalities to attain superior liens under certain circumstances, but argues that this situation is distinguishable because the mortgage held by the City arises from nothing more than the lending of money for home improvements. The City responds that its mortgage was a municipal lien, superior to that of First Nationwide, because the loan to Brantley was part of community redevelopment and related services. It relies on section 23-68 of its Code of Ordinances, which states:
Each and every municipal lien existing from the delivery of municipal services, including liens for special assessments, code endorsement and the like, shall be deemed to be prior in dignity to any other lien, including mortgages, irrespective of the date of the recording of the municipal lien or the date of the recording of any mortgage or any other lien on real property, and such lien shall survive any action to foreclose such inferior lien whether such inferior lien arises by virtue of a mortgage, a mechanic's lien or other security interest in real property: provided, however, that nothing here contained shall be construed to be respecting the priority of liens, and where such law or statute specially provides for the priority of liens, the provisions hereof shall be construed to achieve harmony therewith.
Here, although the City's loan to Brantley was provided in connection with the Home Investment Partnership Program, it was nonetheless given for the purpose of making home repairs. While an improved home ultimately may positively affect the surrounding property values and make the neighborhood more attractive for potential home buyers, the lien held by the City was not the result of municipal services, special assessments or any other type lien covered under section 23-68 of the City's Code of Ordinances. It therefore does not take priority over First Nationwide's purchase money mortgage.
REVERSED.
FLEET, J. LEONARD, Associate Judge, concurs specially with opinion.
I concur.
While laudable in its goal, the Community Redevelopment Act of 1969 must still comport with fundamental constitutional requirements. Article I, Section 10 of the United States Constitution and Article I, Section 10 of Florida's Declaration of rights each specifically prohibit governmental bodies from enacting any law which impairs the obligation of contract. To accept the proposition that governmental assistance to an individual, natural or corporate, for residential improvement automatically becomes superior in dignity to a previously recorded mortgage simply fails to pass constitutional muster.
NOT FINAL UNTIL THE DISPOSITION OF ANY TIMELY FILED MOTION FOR REHEARING.