Chapter 6-3 The Parties
6-3 The Parties
As discussed previously, the parties must be identified by their full names in the caption of the complaint. However, the allegations in the body of the complaint ultimately will determine who is a party to the action.55 The mere inclusion of a party's name in the caption, without allegations against that party in the body, generally is not enough to state a cause of action against that party.56 Accordingly, care should be taken to adequately allege the facts relating to each party and the claims stated against each party in the complaint.
6-3:1 The Plaintiff
A plaintiff may foreclose any interest that is inferior to its own in a mortgage foreclosure action.57 The plaintiff may be either the real party in interest—the person in whom the claim rests—or a party prosecuting the action on behalf of the real party in interest.58 A personal representative, an administrator, a guardian, a trustee, a beneficiary of a contract, or a party expressly authorized by statute may sue in that person's own name without joining the real party in interest.59 Known as Florida's "real party in interest" rule, the rule is permissive rather than mandatory.60 Accordingly, a party that is acting on behalf of the real party in interest may—but is not obligated to—bring the action in its own name on behalf of the real party in interest.61
For example, a mortgage loan servicer may file a mortgage foreclosure complaint and maintain the action in its own name on behalf of the real party in interest.62 In such a case, the question of the servicer's authority to act on behalf of the real party in interest will be an issue subject to proof at trial.63
Occasionally, the original plaintiff in an action will convey its interest in the note and mortgage to another entity while the action is pending. In this situation, the entity who acquires the interest in the note is not obligated to amend the complaint or move for an order deeming it the new plaintiff.64 If it chooses to move for an order substituting it in the place of the original plaintiff, it acquires whatever standing the original plaintiff had based on the initial complaint.65 The substituted plaintiff is not obligated to prove its standing at the time of the substitution, though; it inherits the standing of the original plaintiff.66
6-3:2 The Defendants
The complaint must name as a defendant any person with an interest in the property that is subordinate to the plaintiff's to ensure a successful foreclosure of the plaintiff's mortgage.67 Generally, the complaint should name any person materially interested, either legally or beneficially, in the subject matter of a suit.68 Below is a discussion regarding the various kinds of subordinate interests that a plaintiff should identify and include in its complaint to ensure a successful foreclosure action.
6-3:3 The Borrowers
Borrowers (the note signors) and mortgagors (the persons who execute the mortgage) generally are indispensable parties to the mortgage foreclosure action.69 Often, the borrowers and the mortgagors are the same people, but not always. The complaint must contain allegations to state a cause of action against each of the borrowers and the mortgagors.70 The factual allegations should be detailed enough to identify the mortgage and note that is being foreclosed, since the borrowers may have executed second or third mortgages on the property as well.
The exception to the general rule requiring joinder of borrowers is when the original mortgagors, who are not obligated under the note, have conveyed away all of their interest in the property.71 Otherwise, they must be named as parties.
6-3:4 Junior Lienholders
The plaintiff must also name any junior lienholders who have an interest in the property. Junior lienholders may include the holder of a life estate, the holder of a second or third mortgage recorded after the plaintiff's mortgage, the holder of a recorded final judgment against the property that post-dates the recording of the plaintiff's own mortgage, or a person who acquired an ownership interest in the property after the plaintiff's mortgage was recorded, among others.
The act of foreclosing a senior lien such as a first mortgage cuts off the right of redemption that any junior lienholders otherwise would have up until the issuance of a certificate of sale.72 The foreclosure of a senior mortgage only extinguishes the liens of any junior mortgagees if the junior lienholders are listed in the final judgment.73
Accordingly, a foreclosure complaint must include allegations against any junior lienholders whose interests the plaintiff wishes to foreclose. The nature of those allegations will depend on the kind of junior lien being foreclosed. The sections below discuss the kinds of junior interests that may be connected with a property.
6-3:5 Owners of the Property
The mortgagor usually is the owner of the property, but sometimes the property changes hands before the plaintiff files its lis pendens.74 Sometimes mortgagors convey their interest away. Sometimes, a plaintiff may find that a condominium association or homeowner's association has foreclosed its own lien and is now the owner through a certificate of title. Occasionally, the borrower surrenders the property to the bankruptcy trustee in a bankruptcy proceeding. Regardless of the circumstances, the owner of the property at the time the plaintiff files its foreclosure complaint is an indispensable party to the action.75 A final judgment that fails to include the current owner is void, so it is imperative to name the owner in the complaint.76
The same is not true of a person who purchases the property after the plaintiff records its lis pendens. A purchaser who acquires its interest after the recording of a lis pendens is known as a purchaser pendente lite.77 Purchasers pendente lite are deemed to have taken their interest subject to the pending foreclosure action and the plaintiff is not required to amend the complaint to add them as parties.78
6-3:6 Tenants by the Entirety and Other Spousal Interests in the Property
Another example of a title holder who generally is an indispensable party is the spouse of the borrower who holds title to a piece of homestead property as a tenant by the entirety.79 Husbands and wives cannot convey interests in their homestead property without their spouse joining in the transaction, that is, without their spouse's signature on the mortgage.80 In a similar vein, a plaintiff cannot foreclose on homestead property without naming the spouse of a married borrower in the complaint, even if the spouse failed to execute the mortgage.81 If the marital status of a...
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