MELLON SQUASHES P2D2
BONY Mellon -v- P2D2, No. 2D11-3661, slip op., (Fla. 2d DCA, October 31, 2012)
Lessee under a 100 year ground lease mortgaged the property. In all respects the mortgage instrument gives the appearance of a garden variety mortgage given by a land owner to secure a loan. Also signed on that date and handled by the same title agent was an assignment of the ground lease and the lessor’s consent thereto. When the lessee failed to pay rent to P2D2 an action was filed seeking possession, judgment for rent due, and a declaration quieting title, which action named as defendants the lessee (i.e the mortgagor) and the bank. P2D2 argued that the mortgage document was a nullity since, on its face, it purports to mortgage lands not owned by the lessee.
However, the appellate court found that when all the facts and circumstances were considered, the lessee had actually mortgaged its leasehold interest. The appellate court held for the bank on its appeal seeking to reverse entry of summary judgment on the quiet title count, but sustained entry of default against the bank under the count for possession. The Forcewas not with P2D2.
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Author - Rex Russo
Over 35 years experience with Appeals, Real Estate Litigation, and Bankruptcy Actions and Adversary Defense.