Preview
Filing # 89099239 E-Filed 05/07/2019 12:04:35 PM
IN THE CIRCUIT COURT OF THE 117
JUDICIAL CIRCUIT IN AND FOR
MIAMI-DADE, FLORIDA
CASE NO.: 2017-01893 1-CA-01
VINCENZO DEPAU,
Plaintiff,
Vv.
MICHAEL STERN, LAYNE HARRIS
STERN, ez. al.
Defendants.
/
DEFENDANT LAYNE HARRIS STERN’S MOTION FOR PARTIAL SUMMARY
JUDGMENT ON PLAINTIFF’S CONTRACT AND FRAUD CLAIMS
Defendant Layne Harris Stern (“Harris”), through undersigned counsel, and pursuant to
Fla. R. Civ. P. 1.510, files her Motion for Partial Summary Judgment, and in support thereof states
as follows:
I. INTRODUCTION
Harris, Co-Defendant Michael Stern (“Stern”), and Co-Defendant Ivor Rose (“Rose”) own
the real property located at 1386 South Venetian Way, Miami, Florida (the “Property”). The three
owners acquired the Property in January 2007. At the time they acquired the property, Harris and
Stern were married, and Rose and Plaintiff Vincenzo DePau (“DePau”) were Stern’s business
associates. Unknown to Harris and Rose, on December 9, 2007, Stern sold DePau a Promissory
Note in the amount of $1,400,000.00 (the “Note”). The Note was secured by a balloon mortgage
on the Property, also dated December 9, 2007 (the “Mortgage”)(collectively, the Note and
Mortgage are the “Loan Documents”). This transaction between Stern and DePau is one of a
1
WALDMAN BARNETT, P.L.
3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133
{00293699.DOCX }number of fraudulent transactions perpetrated by Stern across the country. Asa result of his frauds,
Stern is currently incarcerated in federal prison.
Defendants Harris and Rose, like DePau, are victims of Stern’s fraud. As the Court
previously determined, Stern forged Harris and Rose’s signatures on the Loan Documents and then
stole Harris’ notary stamp and used it to fraudulently authenticate the forged signatures. This
determination gives rise to this motion for summary judgment.
In his original complaint, DePau alleged that Harris executed the Loan Documents and
participated in Stern’s fraud by knowingly authenticating Rose’s forged signature with her notary
stamp. This allegation is referred to herein as the contract/fraud theory because it forms the basis
for DePau’s contract and fraud causes of action. After being served with the original complaint,
Harris, while proceeding pro se, informed DePau’s counsel that her signature was forged and her
notary stamp stolen. Upon learning this, DePau amended his complaint to include an alternative
theory of the facts. This alternative theory is referred to herein as the negligence theory because
it forms the basis for DePau’s negligence claim. The negligence theory acknowledges that Harris’
signature was forged, but argues that she is liable to DePau because she was negligent in
safekeeping her notary stamp, which allowed Stern to steal it and use it to fraudulently authenticate
her and Rose's signatures on the Loan Documents.
The contract/fraud theory and the negligence theory are mutually exclusive because the
underlying factual allegations are contradictory and inconsistent. Ultimately, DePau moved for
and won summary judgment on his negligence claim. In its order granting DePau’s motion for
summary judgment, the Court found that:
2
WALDMAN BARNETT, P.L.
3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133
{00293699.DOCX }[Harris] was unaware of the Loan Documents’ existence, that her notary public
official seal was stolen, and that her signatures on the Loan Documents were
forgeries.!
While Harris respectfully disagrees with the Court’s ruling, the ruling is clear and controlling.”
DePau, having established Harris’ negligence, has disproven his contract/fraud theory. As such,
the contract/fraud theory causes of action fail and partial summary judgment in favor of Harris on
them is appropriate.
I. STATEMENT OF FACTS
Of the nine counts that comprise DePau’s active pleading, the Third Amended Complaint
(the “Complaint”), eight seek relief from Harris.> These eight counts can be divided into two
groups based on the underlying factual theory — the contract/fraud theory counts and the negligence
theory counts.
The contract/fraud theory is the basis for Counts I through VII: Count I — Breach of
Promissory Note; Count II — Money Lent; Count III —- Breach of Mortgage (Waste); Count IV —
Mortgage Foreclosure; Count V — Breach of Mortgage (Forfeiture Proceedings); Count VI— Fraud
in the Inducement; and Count VII — Fraud in the Inducement. DePau’s contract/fraud theory posits
that Harris “executed and delivered the Note [and Mortgage] in favor of DePau” (and is therefore
a party to them) and that she then “fraudulently and falsely acknowledged the Mortgage [with her
notary stamp] in order to trick DePau into thinking the Mortgage was actually executed by Rose
[whose signature was forged] and thereby to induce him to lend the Defendant’s [sic] money.”*
1 See the Court’s Order dated July 9, 2018, pg. 10, attached as Exhibit A (“Order’).
? Harris reserves her right to appeal the Court’s summary judgement in favor of DePau on his negligence claim.
3 See Plaintiff's Third Amended Complaint, attached as Exhibit B (“Compint.”). As discussed below, DePau’s ninth
count, which is for fraud in the inducement falls into the negligence theory category. It seeks damages from Stern for
his theft and misuse of Harris’ notary stamp.
4 See Ex. B 49 64, 85, 124, Compint.
3
WALDMAN BARNETT, P.L.
3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133
{00293699.DOCX }DePau’s negligence theory is the basis for Counts VIII and IX: Count VIII — Negligence
and Count [X — Fraud in the Inducement. The negligence theory is based on Harris’ assertion
that she was unaware of the Loan Documents’ existence, that her notary public
official seal was stolen, and that her signatures on the Loan Documents were
forgeries.*
This assertion was raised by Harris in her answer and affirmative defenses to DePau’s original
complaint, which at that time only alleged the contract/fraud theory.® Upon learning that Harris’
signature on the Loan Documents was forged and her notary stamp stolen, DePau amended his
pleadings to include two causes of action based on his negligence theory.’ Count VIII alleges that
Harris’ was negligent by failing to keep her notary stamp under her direct and exclusive control.*
Count IX, which is not directed at Harris, alleges that Stern fraudulently induced DePau to loan
him money by using Harris’ stolen notary stamp to fraudulently authenticate the signatures on the
Mortgage
During summer 2018, Harris and DePau each filed motions for summary judgment.’
DePau moved the Court to grant summary judgment on his negligence cause of action.!° The
Court granted DePau’s motion for summary judgment and denied Harris’ motion for summary
judgement.'' In its order, the Court held that
Due to Harris’ admitted failure to both keep her notary seal under her direct and
exclusive control as well as her failure to timely report its loss to the appropriate
authorities, DePau’s Mortgage is not secured by the entire Property. Asa result, he
has been injured. !?
5 See Ex. A, pg. 10, Order.
® See Ex. A, pg. 10, Order.
” See Ex. A, pg. 10, Order.
8 See Ex. B, Count VIII, Compint.
° See Ex. A, Order.
1° See Ex. A, Order.
" See Ex. A, pg. 13, Order.
1 See Ex. A, pg. 12, Order.
4
WALDMAN BARNETT, P.L.
3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133
{00293699.DOCX }Ill. SUMMARY JUDGMENT STANDARD
Pursuant to Florida Rule of Civil Procedure Rule 1.510(c), summary judgment is proper if
there is no genuine issue of material fact and if the moving party is entitled to a judgment as a
matter of law. Menendez v. Palms West Condominium Ass'n, 736 So.2d 58, 60 (Fla. 1st DCA
1999). Once the movant has carried the burden of demonstrating the non-existence of any genuine
issue of material fact, the Court must enter summary judgment unless the opposing party comes
forward with competent evidence sufficient to reveal a genuine issue of material fact. F/a. Bar v.
Mogil, 763 So. 2d 303, 307 (Fla. 2000).
IV. ARGUMENT
Florida courts recognize “the universal rule which forbids the successful assertion of
inconsistent positions in litigation.” See Salcedo v. Asociacion Cubana, Inc., 368 So. 2d 1337,
1338 (Fla. 3d DCA 1979). The Salcedo court explained:
The real meaning of the rule concerning estoppels . . . is that a party, who in an
earlier suit on the same cause of action, or in an earlier proceeding setting up his
status or relationship to the subject-matter of his suit, successfully assumes a
factual_position on the record to the prejudice of his adversary, whether by
verdict, findings of fact, or admissions in his adversary's pleadings operating as a
confession of facts he has alleged, cannot, in a later suit on the same cause of
action, change his position to his adversary's injury, whether he was successful in
the outcome of his former litigation or not.”
See id. (emphasis added). The U.S. Supreme Court has described the doctrine as follows
Under the judicial estoppel doctrine, where a party assumes a certain position in a
legal proceeding, and succeeds in maintaining that position, he may not thereafter,
simply because his interests have changed, assume a contrary position.
See New Hampshire v. Maine, 532 U.S. 742, 742 (2001)(emphasis added).
The doctrine of election of remedies also precludes a party from pursing separate causes of
action based on mutually exclusive factual theories. See Sec. & Inv. Corp. of the Palm Beaches v.
Droege, 529 So. 2d 799, 802 (Fla. 4th DCA 1988)(“If the two remedies are inconsistent or
5
WALDMAN BARNETT, P.L.
3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133
{00293699.DOCX }mutually exclusive, so that one implies negation of the underlying facts necessary for the other,
then the mere choice of one remedy and certainly, pursuit of one remedy to judgment, operates as
an election.”). The test of inconsistency has been described in the following manner:
It has been said that the so-called ‘inconsistency of remedies' is not in reality an
inconsistency between the remedies themselves, but must be taken to mean that
acertain state of facts relied on as the basis of a certain remedy is inconsistent
with, and repugnant to, another certain state of facts relied on as the basis of
another remedy. For one proceeding to be a bar to another for inconsistency, the
remedies must proceed from opposite and irreconcilable claims of right and must
be so inconsistent that a party could not logically assume to follow one without
renouncing the other.
See Klondike, Inc. v. Blair, 211 So. 2d 41, 42-43 (Fla. 4th DCA 1968). As explained by the Florida
Supreme Court
If the allegations of facts necessary to support one remedy are substantially
inconsistent with those necessary to support the other, then the adoption of one
remedy waives the right to the other. A party will not be permitted to enforce wholly
inconsistent demands respecting the same right. It is not permissible to both
approbate and reprobate in asserting the same right in the courts.
See Am. Process Co. v. Florida White Pressed Brick Co., 47 So. 942, 944 (Fla. 1908). “When a
party elects between two or more inconsistent courses and has knowledge of all the pertinent facts,
he binds himself to the course he adopts first and cannot later withdraw from this knowing
election.” See Barbe v. Villeneuve, 505 So. 2d 1331, 1334 (Fla. 1987).
Here, DePau adopted two inconsistent positions — the contract/fraud theory and the
negligence theory. While the law permitted DePau to pursue both theories initially, it recognizes
that a time would come when DePau could only proceed on one theory since both cannot be true
That time is now. DePau elected to pursue his negligence theory cause of action through summary
judgment. In doing so, DePau assumed the factual position:
6
WALDMAN BARNETT, P.L.
3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133
{00293699.DOCX }that [Harris] was unaware of the Loan Documents’ existence, that her notary public
official seal was stolen, and that her signatures on the Loan Documents were
forgeries. >
The Court granted DePau’s motion for summary judgment, finding that there is no genuine issue
as to the facts on which the negligence theory is based.'4 Specifically, the Court found that (1)
that Harris was unaware of the Loan Documents when they were executed; (2) Harris’ signatures
on the Loan Documents were forged; and (3) Harris’ notary public stamp was stolen and misused
by Stern without her knowledge.'> Having successfully assumed this position, DePau cannot now
change his position. His election has become irrevocable and he is precluded from pursuing those
causes of action that are based on his contract/fraud theory because they are contradictory to the
established facts.
Logically, Harris is not a party to the Loan Documents because she was not even aware of
them when they were executed. The presence of her forged signature obviously does not make
her a party to them. Accordingly, summary judgment in favor of Harris on Count I Breach of
Promissory Note; Count II —- Money Lent; Count III — Breach of Mortgage (Waste), Count IV —
Mortgage Foreclosure; and Count V — Breach of Mortgage (Forfeiture Proceedings) is warranted. !°
Likewise, the fact that Harris’ notary stamp was stolen and used without her knowledge
establishes that she was a victim of and not a participant in Stern’s fraud. Accordingly, summary
13 See Ex. A, pg. 10, Order.
14 See Ex. A, Order.
15 See Ex. A, pg. 10, Order.
16 Count V alleges that Stern and only Stern breached Section 6 of Mortgage by engaging in fraudulent activities that
subjected the property to forfeiture proceedings. Count V does not allege that Harris breached Section 6 or that Harris
knew that Stern was in breach of Section 6 (but it demands judgment against Harris anyway). See Ex. B, Count V.
Compint. As such, summary judgment in favor of Harris on Count V is proper independent of the reasons given
above.
7
WALDMAN BARNETT, P.L.
3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133
{00293699.DOCX }judgment in favor of Harris on Count VI — Fraud in the Inducement; and Count VII — Fraud in the
Inducement is warranted. !”
Vv. CONCLUSION
DePau presented two mutually exclusive and inconsistent sets of fact in support of his
various causes of action. Having prevailed on one set of facts — his negligence theory - DePau
has disproven the factual allegations underpinning his contract/fraud theory causes of action
Accordingly, summary judgment in favor of Harris on Counts I through VII of the Complaint is
proper.
WHEREFORE, Defendant, Layne Harris Stern, respectfully requests this Court enter an
order granting her Motion for Summary Judgment as to Plaintiffs Contract and Fraud Claims, and
all such other relief as may be just and proper.
Respectfully submitted,
WALDMAN BARNETT, P.L.
3250 Mary Street, Suite 102
Coconut Grove, Florida 33133
Telephone: (305) 371-8809
Telecopier: (305) 448-4155
liiservice@waldmanbarnett.com
Counsel for Defendant/Counter-Plaintiff
By: __/s/ Benjamin L. Keime
Glen H. Waldman, Esq.
Fla. Bar No. 618624
Benjamin L. Keime, Esq.
Fla. Bar No. 118752
™ Count VI alleges that Stern and only Stern fraudulently induced DePau into entering into the Loan Documents by
concealing that he was engaged in criminal acts that could lead to forfeiture proceedings. Count VI does not allege
that Harris participated in this fraud or that Harris knew of Stern’s fraud (but it demands judgment against Harris
anyway). See Ex. B, Count VI, Compint. As such, summary judgment in favor of Harris on Count VI is proper
independent of the reasons given above.
8
WALDMAN BARNETT, P.L.
3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133
{00293699.DOCX }CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a true and correct copy of the foregoing was filed this 7th day
of May, 2019 via the Florida Courts ePortal Service and thereby served on all parties and counsel
of record.
/s/ Benjamin L. Keime
Benjamin L. Keime, Esq.
9
WALDMAN BARNETT, P.L.
3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133
{00293699.DOCX }EXHIBIT AVENTH JUDICIAL CIRCUIT
E COUNTY, FLORIDA
TN THE CIRCUIT COURT OF TH
IN AND FOR MIAMEDA!
VINCENZO DEPAU,
Plaintiff,
v
Case No. 2017-01893 1-CA-O1L
MICHAEL STERN, LAYNE HARRIS
STERN, and IVOR ROSE
Defendants.
This cause came before the Court on June 8, 2018, for hearing on Defendant Layne Harris
Stern's (“Harris”) Motion for Summary Judgment on the Statute of Limitations (‘Motion’) against
Plaintiff Vincenzo DePau's ((DePau”) and on DePan’s Motion for Summary Judgment solely on
his claim for negligence against Harris ((Cross-Motion”}. The Court having reviewed the Motion,
the Cross-Motion, responses, replies, and supplements to both, the court file, having heard
argument of counsel, and being otherwise duly advised in the premises, it is hereupon,
ORDERED AND ADJUDGED that Harris’ Motion is DENIED and that DePau's Cross-
Motion is GRANTED for the reasons set forth below:
i INTRODUCTION
DePan instituted this litigation against Harris and her ex-husband Michael Stem (“Stern”
for breaches of various payment as well as non-payment covenants arising out of a loan agreement
he claims he entered into with Harris as well as for various fraud and negligence claims. Harris
moved for summary judgment on her affirmative defenses based on the statutes of limitations andrepose. In response, DePau filed the Cross-Motion solely on bis claim against Harris for allegedly
losing her notary stamp which was then used to sell DePau a fraudulent mortgage.
Preliminarily, Harris objected to certain arguments raised by DePau that address Harris’
affirmative defenses because a reply was not filed. DePau has since filed a reply to Harris’
affirmative defenses and those arguments are deemed moot.
iL FINDINGS OF FACT
DePau instituted this action on August 4, 2017, against Harris and Stern for claims arising
out of a promissory note (“Nate”) he bought on December 9, 2007. The Note appears to contain
the signatures of cach Stern, Harrie, and Ivor Rose (“Rose”). The obligations set forth in the Note
were supposed to be secured by a waterfront home located at 1386 8. Venetian Way in Miami,
Florida (Property”)}. The Property was owned as tenants in common by Stern, Harris, and Rose.
To perfect his security interest, DePau received a mortgage (“Mortgage”) (Note and Mortgage
collectively the “Loan Documents”) that supposedly encumbered the entire Property and that again
appeared to be signed by each Stern, Harris, and Rose and was notarized using Harms’ notary
public official seal. The Mortgage was duly recorded in the Miami-Dade County Recorder’s Office
and has not been cancelled. The covenants set forth in both the Note and Mortgage are joint and
several.
The Mortgage was inferior to two other mortgages that encumbered the Property to secure
debts with the total principal arnount of $2,962,545 (“Superior Liens”). Both the Superior Liens
remain outstanding to this day.
The Loan Documents required repayment of the Note’s principal amount and interest on
or before July 34, 2008. In addition to the repayment obligation, the Loan Documents required the
borrowers, including Harris, to promptly discharge any lien with priority over the Mortgage, not
engage in conduct that could afford any governmental authority with a right of forfeiture against
the Property, not te allow the tiling of any charges that could lead to forfeiture of the Property or
bsthe loan proceeds, to keep all taxes and insurance premiums on the Property current at all times,
and not to commit waste on the Property.
On February 28, 2009, Stern and Harris submitted a Joint Petition for Bankruptcy under
Chapter 11 in the United States Bankruptcy Court in Miami, Florida. In connection with the
Bankruptcy proceedings, Harrie submitted sworn Bankruptcy Schedules on March 30, 2009, where
she initially Usted DePau as a secured creditor of the Bankruptcy estate on her Bankruptcy
Schedules and acknowledged DePau had a $1,400,000 lien on the Property.
On August 25, 2009, Harris was deposed in the Bankruptcy proceeding, At the deposition,
Harris was presented with a copy of the Mortgage. In response, she claimed the signatures on them
were not hers and that she did not notarize the Marigage. At that depasition, Harris also admitied
she did not know where her notary stamp was and was then informed of ber obligation to report
the lost stamp to the Florida Department of State in writing.
A few months after the deposition, on December 16, 2609, Harris submitted sworn
Amended Bankruptcy Schedules to the Bankruptcy Court. Inthe Amended Schedules, Harris again
listed DePau as a creditor of her Bankruptcy estate and that his claims were at least partially
secured by the Property.
Two weeks after the Amended Schedules were submitied, the U.S. Bankruptcy Trustee
overseeing Harris’ Bankruptcy estate determined that the Property had no equity to be
administered for the benefit of the estate and abandoned the estate’s claim to it. In doing so, the
Yrustee claimed he relied on the documents provided by the debtors, i.e, Harris and her ex-
husband Stern.
The Bankruptcy case remained open until July 24, 2014, when the Bankruptey Court, upon
the trustee’s report that the bankruptcy estate had been fully administered, closed the case.Gn September 12, 2012, Stern was indicted on numerous counts of federal wire and other
fraud. Stern ultimately plead guilty to the counts and eniered into a plea agreement with the U.S.
Government pursuant to which he would forfeit to the Government all property subject to
forfeiture due to the crimes for which he plead. As a result, an Order and Judgment of Forfeiture
was entered against Stern.
Notwithstanding Harris’ sworn staiements in the Bankruptcy case, she has claimed
throughout this litigation that she learned for the first time that she was a purported party to the
Loan Documents only after being served with the complaint. Notably, Harris has submitted no
sworn evidence whatscever, neither in support of her Motion or in oppasition to the Crass-Motion,
1. HARRIS’ MOTION FOR SUMMARY JUDGMENT ON THE STATUTES OF
LIMITATIONS AND REPOSE
Harris’ Motion claims that because the Note became due on or before July 31, 2008, that
the relevant statutes of limitations and repose bar DePau’s claims. Harris also claims that because
DePau's negligence and fraud claims arise out of the Loan Documents, that those claims should
also be dismissed as untimely.
a. The Loan Documents: The Statute of Limitations
The Loan Documents contain a wide range of obligations in addition to repayment. For
example, the Mortgage required the borrowers to promptly discharge any senior liens on the
Property, to keep all Property taxes current, and not to commit waste on the Property. Further, the
Note required the borrowers not to do anything that could afford any governmental authority with
a tight of forfeiture against the Property and to avoid any charges that could lead to such a
forfeiture. The Loan Documents impose joint and several liability.
DePau claims that each of these covenants were breached within the statute of limitations
following the repayment date set forth in the Loan Documents and that this action was brought
within the limitations period following those breaches. DePau also argues that the Defendants,
including Harris, have and remain in a continuous state of default due to their failure to satisfy the
4Superior Liens and for committing waste on the Property. For these reasons, DePau argues that his
claims are timely.
To support his claims of continuous breach, DePau has provided the Court with evidence
of the recorded Superior Liens, the indictment that was entered against Stem as well as the plea
agreement he entered into, and the Forfeiture Order that was entered as a result of it. In addition,
DePau provided an affidavit stating that the Defendants committed waste on the Property by letting
it fall into serious disrepair. Harris has provided no opposing summary judgment evidence.
‘Te support his argument, DePau cites the Florida Supreme Court's decision in Bartram v.
U8. Bank Nat’? Ass'#., 211 So, 3d 1009 (Fla. 2016). In that case, the Court ruled that “[o]nce there
were subsequent defaults, however, the bank had the right to file a future foreclosure action _.. so
long as the foreclosure action was based on a subsequent default, and the statute of limitations had
not run on thet particular default.” Bartram at 1021. Various Florida appellate courts have ruled
that “allegations of the complaint in the underlying action that the borrowers were in a continuing
state of default at the time of the filing of the complaint was sufficient to satisfy the five-year
statute of limitations.” Desylvester v. Bank of New York Mellon, 219 So. 3d 1016, 1018 (Fla. 2d
DCA 2017). Neither party has cited a case to support the notion that non-payment defaults are
somehow excluded from Bartremr’s reach.
Because DePau has demonstrated that the Loan Documents were in a continuous state of
default, which included defaults within the five-years preceding commencement of the action, his
claims are not barred by the statute of limitations even if the mitial payment breach occurred more
than five years ago. See Klebanoff v. Bank of New York Mellon, 228 So. 3d 167 (Fla. Sth DCA
2017) (“Because the Bank alleged and proved that the subject mortgage was in a continuous state
of default, which inchided defaults within the five-year statute of limitations, its action was not
barred, even if the initial default was alleged to have occurred more than five years prior to the
filing of the complaint”).
unin addition, Harris failed to sufficiently prove her affirmative defense of statute of
limitations. For example, Harris has not provided any affidavits concerning any potential absences
from the State or whether she has ever used a false name unknown to DePau, each of which is
relevant to determine whether the statute of limitations was tolled. See Fla. Stat. § 95.051(1 a}
{b). In addition, Harris herself has claimed that certain payments were made under the Loan
Documents. These payments would also have tolled the limitations period. Fla. Stat. §
95.0510 KB.
Harris’ Bankruptcy proceedings also tolled the statute of limitations. See Windebrooke
Dev. Corp. Envir. Enter. Inc., $24 F.2d 461, 463 (5th Cir. 1975) (holding statute of limitations
tolled upon filing of bankruptcy petition)’ see also Morgan v, United States (In re Morgan), 182
F3d 775, 778 (i ith Cir, 1999) (per curiam) (“Section 108(c} extends the statute of Hmitations for
creditors, ‘if applicable nonbankruptcy Jaw ... fixes a period for commencing or continuing a civil
action in a court other than a bankruptcy court on a claim against the debtor’ and the creditor is
hampered from proceedings outside the bankruptcy because of the automatic stay.”}, see alsu
Northeutt v. Batkenty, 727 So. 2d 382, 386 (Fla. Sth DCA 1999) (“there is considerable support in
federal bankruptey lew for the proposition that section 108(c} of the bankruptcy code acts, itself,
as a toll of a state statute of limitation without regard to whether that state statete of limitation
itself recognizes the bankruptcy proceeding as a tolling device.”).
During the Bankruptcy proceedings, Harris repeatedly affirmed the Loan Documents under
oath ~ and thereby precluded DePau from seeking to enforce them. These statements alone would
estop Harris from even raising a statute of limitations defense. See Morsani v. Major League of
Rasehali, 739 So. 2d 610 (equitable estoppel valid defense to statute of Hmitations)
; Bormer v. City of Prichard, Ala, 661 F.2d 1206, (ith Cir. 1981) “decisions of the
United States Court of Appeals for the Fifth Circuit ... aa that court existed on September 30, 1981,
handed down by that court priar to the close of business on that date, shall be binding as precedent
in the Eleventh Circuit, for this court, and district courts, and the bankruptcy courts in the circuit.”).
6For these reasons, Harris’ Motion as to the application of the statute of Limitations to the
Loan Documents is denied.
Harris also argues that the statute of repase has extinguished the Morigage lien. The statute
of repose provides that “[t]he lien of a mortgage or other instrument encumbering real property,
herein called a mortgage ... shall terminate after the expiration of the following periads of time.”
Fla, Stat. § 95.28144).
By its own terms, the statute of repose acts only to extinguish the underlying lien created
by a mortgage but does nothing to otherwise prevent enforcement of either of the Loan Documents.
Houck Corp. v. New River, Lid, Pasco, 900 So. 2d 601, 602 (Fla. 2d DCA 2005) (“section 95.281
is a statute of repose that prescribes the enforceable life of a mortgage lien, but does not operate to
preclude an action to foreclose the mortgage”). Further, the statute of repose also “does not direct
the limitation period for filing a foreclosure action.” fd at 603,
Besides the limited scope of the statute of repose, it was actually tolled by Harris’
bankruptcy proceedings. See Brown v. MRS Mig. Co., 617 So. 2d 788, n. 5 (Fla. 4th DCA 1993)
{any suspension of a limitations period “resulting from the pendency of bankruptcy proceedings
should apply equally well to statutes of repose.”}
Jn addition to suing te foreclose on the Mortgage lien, DePau has brought claims for money
lent and breach of the Note. As such, even if the statute of repose somehow did extinguish the
Mortgage lien, it would only prevent DePau’s action to forectose. It would not in any way Bar his
claim for the money DePau claims he is owed. Harris’ Motion as to the application of the statute
of limitations and repose is denied.
DePau brought two claims for fraud against Harris. The first alleges that Harris knowingly
falsely represented to DePau that neither she nor Stern had done anything that would afford anygovernment with right of forfeiture as against the Property to induce DePau to lend. The second
alleges that Harris notarized the Mortgage even though she knew that Rose did not sign it, solely
to induce DePau to lend his money
Before any claim can be barred by reason of the statute of limitations, it must first have
accrued. Fla. Stat, § 95.031 provides that the limitations period for an action founded upon fraud
begins only “with the period running from the time the facts giving rise to the cause of action were
discovered or should have been discovered with the exercise of due diligence, instead of running
from any date prescribed elsewhere in s. 95.11(3).” This naturally requires a factually intensive
inquiry.
Harris argues that DePau could have exercised due diligence by suing on the Loan
Documents immediately after payment came due. However, this again ignores that Haris was
cloaked with the protections of the Bankruptcy Code’s automatic stay for more than five years and
that DePau was forbidden from suing. See 11 U.S.C. § 362 bankruptcy petitions stays issuance of
all judicial process that could otherwise have been commenced). More important, is that Harris
actually acknowledged the Mortgage under oath in the Bankruptcy schedules. For these reasons,
there was really no due diligence DePau could have exercised to discover the frauds any earlier
than he did. Even if there was, Harris has provided zero summary judgment evidence on this issue.
To the contrary, DePau did file an Affidavit claiming that Stern repeatedly promised him
the loan would be repaid and that he withheld action on the basis of those promises. Harris has not
filed any sworn evidence in this case, and specifically has not filed any statements that would
counter DePau’s claimed reliance on Stern's promises of repayment. She has also not provided
any evidence that she was unaware of Stern’s promises or that she was not complicit in making
these false promises of repayment.
‘
in light of Harris’ statements in the Bankruptcy proceedings acknowledging the Loan
Documents, the length of the Bankruptcy proceedings, as well as DePau’s sworn affidavit (andHarris’ lack of any supporting sworn statements), genuine issues of material fact remain as to when
DePau could reasonably have discovered the factual premise underlying his fraud claims. Finally,
significant fact discovery remains to be had to determine whether Harris is estopped from raising
the statute of limitations defense to the fraud claims against her. For these reasons, Harris’ Motion
as to DePau’s fraud claims are denied.
d. Delay's Negligence Claims
DePau’s claim for negligence centers around Harris’ assertions that she Jost her notary
starap and that it was used by her husband Stern to defraud DeFau without her knowledge.
Notary publics are governed by a detailed statutory scheme. See Fla. Stat. Ch. 117. A notary
public’s most important duty is to keep her notary public official seal under her direct and exclusive
control. Fla. Stat. § 117.05 Xb}. This obligation is so important that “{a] notary public whose
official seal is lost, stolen, or believed to be in the possession of another person shall immediately
notify the Department of State or the Governor in writing.” Fla. Stat. § 117.05GKe).
The transcript from Harris’ 2009 deposition establishes that Harris was presented with a
copy of the Mortgage as early as 2009. She then claimed the signatures on them were not hers and
that she did not notarize the Mortgage. At that deposition, Harris also admitted she did not know
the location of her notary stamp and was informed of her obligation to report the lost stamp to the
Florida Department of State in writing.
Thus, pursuant to Fla. Stat. § 117.05(3}(c), Harris was statutorily obligated to immediately
report her lost or stolen notary stamp to either the Department of State or the Governor in writing
in 2009, Harris, however, did not report her notary stamp as missing until 2017. By failing to
comply with a statutorily imposed obligation of which she was specifically informed, Harris is
estopped from arguing that a limitations period bars DePau’s action: failure to satisfy her legal
duty kept hima in the dark of the fraud perpetrated upon him as a direct result of her negligence.
Marsani vy. Major League of Baseball, 739 So. 2d 610 (equitable estoppel valid defense to statuteof limitations), see also Travelers Ins. Co. v, Spencer, 397 So. 2d 358 (Fla. Ist DCA 1981)
{omission sufficient to imply equitable estopped where party failed to act when under duty to do
30).
tn light of Harris’ staiements in the Bankruptcy proceedings where she admitied she lost
her notery stamp and was informed of ber duty to inform appropriate authorities, as well ae her
acknowledgement of her obligations to DePau in front of the Bankruptcy tribunal, Harris’ Motion
as to DePau’s count for negligence is denied
iV, DEPAU’S MOTION FOR SUMMARY JUDGMENT ON HIS CLAIM FOR
NEGLIGENCE
DePau’s negligence claim centers around Harris’ admission that she failed to maintain her
mand control and let it fall into her ex-
notary public official seal under her exclusive pos!
husband’s hands who then used it to sell DePau a fraudulent Mortgage.
After this tigation commenced, Harris claimed that she was unaware of the Loan
Documents’ existence, that her notary public official seal was stolen, and that her signatures on
the Loan Documents were forgeries. In light of Harris’ claims, DePau amended his Complaint to
include the claim for negligence at issue here.
A cause of action for a ence requires a duty, a breach of that duty, a causal connection
between the breach and the resulting injury, and foss or damages. Clay Elec. Co-Cp., Inc. v.
Johnson, 873 So. 2d 1182, 1186 (citing Prosser and Keaton on the Law of Torts 164-65 (W. Page
Keeton ed, Sth ed. 1984)
As a notary public, Harris’ duty was imposed by Fla. Stat. § 117.05(3)(b), which provides
that “[t]he notary public official seal and the certificate of notary public commission are the
exclusive property of the notary public” and mandates that it “must be kept under the direct and
exclusive contro! of the notary public.” Fla. Stat. $ 117.05(3)\(b). As discussed above, “[a] notary
public whose official seal is lost, stolen, or believed to be in the possession of another person shall
immediately notify the Department of State or the Governor in writing.” Fla, Stat. § E17. 05K}.
10Harris admitted that she failed to keep her notary public official seal under her direct and
exclusive control and that it was used on the Mortgage at issue in this case without her knowledge
or consent. As such, Harris was obligated to immediately notify the Department of State or the
Governor in writing” of her lost notary stamp. See Fla. Stat. § 117.053\(0).
Harris was presented with a copy of the Mortgage on August 25, 2009 and swore that the
signature on it was not hers. When she was asked where she keeps ber notary stamp admitted that
she did not know and did not have it anymore and that when she did have it, that she kept it in an
unlocked desk drawer where both her family as well as anybody who entered her home woutd
have had access to it. Harris was informed on the record of her obligation to notily the appropriate
authorities due io her lost notary stamp.
Harris has submitted no evidence that she reported her last notary stamp upon being
informed of her obligation to do so in 2009. instead, she only reported her lost notary stamp a8
stolen to the Florida Department of State and Governor's office after this litigation commenced on
August 14, 2017, In those letters, which she attached to her Anawer and Affirmative Defenses, she
falsely claimed to have only “recently” discovered the stamp’s misuse.
There is no doubt that Harris’ duties are statutorily imposed on her and that she assumed
those duties willingly by seeking a notarial appointment. By failing to both keep her notary seal
under her direct and exclusive control and then failing to report the loas or theft of ber stamp,
Harris breached duties intended to safeguard members of the public like DePau. Nicosia v. Otis
Elevator Co,, 848 So, 2d 854, 855 (Fla. 3d DCA 1989) (citing de Jesus c. Seaboard Coast Line
RAR Co., 281 So. 2d 198 (Fla. 1973) (violation of a statute which establishes a duty to take
precautions to protect a particular class of persons from a particular type of injury constitutes
negligence per se). “The well-established rule is that it is ‘negligence per se’ for a defendant to
violate a statute which establishes a duty to protect a particular class of persons from a particulartype of injury.” First Overseas inv. Corp. vy. Cotton, 491 So, 2d 293, 295 (Fla, 3d DCA 19863
(citing de Jesus and collecting cases).
It is common sense that “being able to rely on documents is the purpose of having them
notarized.” Ameriseal Of Ne Fig. inc. v. Leiffer, 673 So. 2d 69, 70 (Fla. Sth DCA 1996), Harris
points to siatements made by DePau that he did not read the Loan Documents when he purchased
them and could not have relied on them in this case. Such a direct reliance requirement, however,
would run entirely contrary to the purpose of the notary scheme in modem commerce. ia. (“being
able to rely on documenis is the purpose of having them noterized”). To require members of the
public to actually rely that the specifically designated notary witnessed the execution of the
underlying documents before permitting a cause of action would judicially remove any protection
offered by the notarial scheme. See, e.g., Garton v. Title Ins, & Trust Co., 106 Cal. App. 3d 365
(3d Dist. 1980) (notarial Hability to all proximately injured is well established),
Dus to Harris’ admitted failure to both keep her notary seal under her direct and exclusive
control as well as her failure to timely report its loss to the appropriate authorities, DePau’s
Mortgage is not secured by the entire Property. As a result, he has been injured
Still, Harris argues that DePau’s claims for negligence should be barred by the statute of
limitations. This is her only defense. To prevail on this argument, Harris first has to establish when
the cause of action accrued. To the extent she has tried to claim the action accrued when the Loan
Documents were issued, she is judicially estopped from making this argument due to her swom
statements to the Bankruptcy Court affirming their validity. Blumberg v. USAA Cas. bes, Co,, 790
So. 2d 1061, 1066 (Fla. 2001) (Judicial estoppel is an equitable doctrine that is used to prevent
litigants from taking totally inconsistent positions in separate judicial, including quasi-judicial,
proceedings”) (internal citations omitted).
Harris was under a statutory duty to report her lost or stolen notary stamp, she was
explicitly informed of this obligation, and skirted it entirely. See Gauthier v. Fla. int'l Univ,, 38
12So.3d 221, 225 (Fla. ist DCA 2010) ("We agree with claimant that the E/C is estopped from
relying on a statute of limitations defense because claimant showed by uncontested evidence that
the E/C failed to act when it was under a duty to do so and that claimant was misled to her detriment
due to the B/C’s omission.” ); see also Travelers fas. Co. v, Spencer, 397 So. 24 358 (Fla. 1st DCA
1981) (omission sufficient to imply equitable estopped where party failed to act when under duty
to de so). Her negligence provided the patina of legitimacy to what was otherwise a transaction
rife with fraud perpetrated on DePau.
DePau has proven his negligence claim Harris, on the other hand, was demonstrably told
of her statuiory duties and ignored them. Considering that Harris herself has moved for summary
judgment on the statute of Hmitations on this issue, the Court assumes there is no additional
evidence she could present on this issue that would affect the outcome reached here.
For these reasons, DePau’s Croas-Motion is GRANTED.
¥. CONCLUSION
For the reasons set forth above, Defendant Layne Harris Stern’s Motion for Summary
Judgment on the Statute of Limitations is DENEED and Plaintiff Vincenzo DePau's Motion for
Summary Judgment solely on his claim for negligence is GRANTED.
DONE AND ORDERED in Chambers at Miami-Dade County, Florida, on 07/09/18.
JACQUELANE HOGAN SCOLA
CIRCUIT COURTIUDGE
The parties served with this Order are indicated in the accompanying 11th Circuit email
confirmation which includes all emails provided by the submitter. The movant shall
IMMEDIATELY serve a true and correct copy of this Order, by mail, facsimile, email or
13hand-delivery, to all parties/counsel of record for whom service is not indicated by the
accompanying 11th Circuit confirmation, and file proof of service with the Clerk of Court.
Signed original order sent electronically to the Clerk of Courts for filing in the Court file.EXHIBIT BFiling # 77410001 E-Filed 09/04/2018 04:34:57 PM
IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT
IN AND FOR MIAMI-DADE COUNTY, FLORIDA
VINCENZG DEPAU,
Plamtiff,
¥.
MICHAEL STERN, LAYNE HARRIS STERN,
IVOR H. ROSE, RITA STARR, SEMONE
ZAMYATIN, OCEAN BANK, PAUL STENGEL, . CASENO, 20L7-018931-CA-0F
COLLEGE HEALTH Tl GP, INC, HARDING
INVESTMENTS, LLC, BOARD OF MIAMI
TY COMMISSIONERS, FLORIDA
DEPARTMENT OF REVENUE, RANMAN
REALTY, INC, PROFIT SHARING PLAN,
OF AMERICA
T OF JUSTICE, UNITED STATES
OF AMERICA DEPARTMENT OF THE
TREASURY, MIAMI DESIGN
PRESERVATION LEAGUE, DWIGHT 1
/, AND ALL UNKNOWN TENANTS IN
Defendants.
THIRD AMENDED COMPLAINT
Plaintiff Vincenzo DePau (“DePau”) sues Defendants Michael Stem (“Stem”), Layne
Harris (formerly known as Layne Harris Stern) (“Harris”} (Stem and Harris each a “Loan
Defendant” and collectively the “Loan Defendants”), Fvor H. Rose! (“Rose”) (Stem, Harris, and
Rose each an “Owner Defendant” and collectively the “Owner Defendants”), Rita Starr (Stan)
Semone Zamyatin (‘Zamyatin’), Ocean Bank (“Ocean Bank”), Paul Stengel (“Stengel”), College
Health T1 GP, Inc. (College Health”), Harding Investments, LLC (Harding”}, Board of Miami-
Dade County Commissioners (“County”), Florida Department of Revenue (‘FDOR”), Raijman
1 As axplataed balow, Hose is also a “Juntor Lien. Holder Defendant.”
OU Bani, BL S951 + FRealty, Inc., Profit Sharing Plan, a Florida corporation (“Raijman”}, United States of America
Department of Justice (DOM’}, United States of America Department of the Treasury Intemal
Revenue Service (“IRS”), Miami Design Preservation League (MDPL”) and Dwight J. Feeney
(“Feeney”) (Rose, Starr, Zamyatin, Ocean Bank, Stengel, College Health, Harding, County,
FDOR, Raijman, DOI, IRS, MDPL and Feeney each a “Junior Lien Holder Defendant” and
collectively the “Funior Lien Holder Defendants”), and all unknown tenants in possession (each of
the foregoing individually a “Defendant” and collectively the “Defendants”) and alleges the
following both cumulatively and alternatively.
PR, iE: JBRISDICTION AND VENUE
L This is an action, inter alia, to foreclose a mortgage that exceeds $15,000.00 on real
property in Miami-Dade County, Florida.
2. DePau is an individual who at all times relevant hereto resided in Miami-Dade
County, Florida.
3. Stern is an individual who at all times relevant hereto resided in Miami-Dade
County. Stern is currently incarcerated and in the custody of the Federal Bureau of Prisons, Until
recently, Stern was in a federal prison in Miami-Dade County, Florida.
4. Harris is an individual who at all times relevant hereto resided in Miami-Dade
County.
5. Rose was previously added to this action as a party-defendant pursuant to this
Court's April 6, 2018 Order requiring Plaintiff to amend the operative pleadings to this effect.
6, The Junior Lien Holder Defendants are named as defendants in this action only for
procedural purposes because each of them may have, and Plaintiff does not admit that any of them
have, a lien(s) on the Property (as defined below) by virtue of an instrument recorded in the public
Page 2 of 20records of Miami-Dade County, Florida after the time the Mortgage (as defined below) was
recorded and therefore inferior.
7. No relief is sought against the Junior Lien Holder Defendants other than a
determination that their interests in the Property, if any, are subject to and inferior to Plaintiff's
Mortgage.
8. By naming the Junior Lien Holder Defendants as Defendants in this case, Plaintiff
is providing notice to them that he is asserting a superior interest in the subject Property and that,
if Plaintiff succeeds on his claim thereto, the relief he seeks is, infer alia, to extinguish and
foreclose any interest the Junior Lien Holder Defendants may have therein.
9. Rose and his wife Starr are named as Junior Lien Holder Defendants by virtue of
an Abstract of Judgment Notice filed in the Official Records of Miami-Dade County in Book
30917 Page 1895 narning them as parties in whose favor judgments have been obtained against
Stem.
10. Zanvyatin is named as a Junior Lien Holder Defendant by virtue of his judgment in
Case No. 12-14728 and filed in the Official Records of Miami-Dade County in Book 30283 Page
3880.
11. Qcean is named as a Junior Lien Holder Defendant by virtue of (i) its judgment in
Case No. 09-23781 and filed in the Official Records of Miami-Dade County im Book 28210 Page
3161; and (iid its judgment in Case No. 09-22446 and filed in the Official Records of Miami-Dade
County in Book 28842 Page 1894.
12. Stengel is named as a Junior Lien Holder Defendant by virtue of his judgment in
Case No. 08-64187 and filed in the Official Records of Miami-Dade County in Book 27774 Page
3078.
Page 3 of 2013. College Health is named as a Imior Lien Holder Defendant by virme of its
judgment in Case No. 68-12690 and filed in the Official Records of Miami-Dade County in Book
26903 Page 3283.
14. _ Harding is named as a Junior Lien Holder Defendant by virtue of its judgment in
Case No. 08-55066 and filed in the Official Records of Miami-Dade County in Book 27106 Page
61.
15. County is named as a Junior Lien Holder Defendant by virtue of a municipal code
violation lien filed in the Official Records of Miami-Dade County in Book 26903 Page 3283.
16. FDOR is named as a Junior Lien Holder Defendant by virtue of a warrant filed in
the Official Records of Miami-Dade County in Book 27140 Page 987,
17. Raijman is named as a Junior Lien Holder Defendant by virtue of () its judgment
in Case No, 09-11490 and filed in the Official Records of Miarni-Dade County; (ii) its judgment
filed in Book 27896 Page 1822; (ii) Book 28317 Page 2567; and (iti) its padgment filed in 29843
Page 4446,
18. DOJ is named as a mior Lien Holder Defendant by virtue of: () an Order and
Judgment of Forfeiture filed in the Official Records of Miami-Dade County in Book 29382 Page
1875; Gi} a Notice of Lien for Fine and/or Restitution filed in the Official Records of Miami-Dade
County in Book 28977 Page 3913; (iii) a Notice of Lien for Fine and/or Restitution filed in the
Official Records of Miami-Dade County in Book 29533 Page 1124; (iv) an Abstract of
Judgment/Order filed in the Official Records of Miami-Dade County in Book 29589 Page 2132;
{v}a Clerk’s Certification of a Judgment to be Registered in Another District filed im the Official
Records of Miarni-Dade County in Book 29658 Book 4104; and (vi) an Abstract of Judgment
Notice filed in the Official Records of Miami-Dade County in Book 30917 Page 1895,
Page 4 of 2019. IRS is named as a Junior Lien Holder Defendant by virtue of: (1) a Notice of Federal
‘tox Lien filed in the Official Records of Miami-Dade County in Book 27780 Book 3745; (i) a
Notice of Federal Tax Lien filed in the Official Records of Miami-Dade County in Book 30354
Book 2828.
20. MODPL is named as ¢ Imior Lien Holder Defendant b
Preview
Filing # 89099239 E-Filed 05/07/2019 12:04:35 PM IN THE CIRCUIT COURT OF THE 117 JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE, FLORIDA CASE NO.: 2017-01893 1-CA-01 VINCENZO DEPAU, Plaintiff, Vv. MICHAEL STERN, LAYNE HARRIS STERN, ez. al. Defendants. / DEFENDANT LAYNE HARRIS STERN’S MOTION FOR PARTIAL SUMMARY JUDGMENT ON PLAINTIFF’S CONTRACT AND FRAUD CLAIMS Defendant Layne Harris Stern (“Harris”), through undersigned counsel, and pursuant to Fla. R. Civ. P. 1.510, files her Motion for Partial Summary Judgment, and in support thereof states as follows: I. INTRODUCTION Harris, Co-Defendant Michael Stern (“Stern”), and Co-Defendant Ivor Rose (“Rose”) own the real property located at 1386 South Venetian Way, Miami, Florida (the “Property”). The three owners acquired the Property in January 2007. At the time they acquired the property, Harris and Stern were married, and Rose and Plaintiff Vincenzo DePau (“DePau”) were Stern’s business associates. Unknown to Harris and Rose, on December 9, 2007, Stern sold DePau a Promissory Note in the amount of $1,400,000.00 (the “Note”). The Note was secured by a balloon mortgage on the Property, also dated December 9, 2007 (the “Mortgage”)(collectively, the Note and Mortgage are the “Loan Documents”). This transaction between Stern and DePau is one of a 1 WALDMAN BARNETT, P.L. 3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133 {00293699.DOCX }number of fraudulent transactions perpetrated by Stern across the country. Asa result of his frauds, Stern is currently incarcerated in federal prison. Defendants Harris and Rose, like DePau, are victims of Stern’s fraud. As the Court previously determined, Stern forged Harris and Rose’s signatures on the Loan Documents and then stole Harris’ notary stamp and used it to fraudulently authenticate the forged signatures. This determination gives rise to this motion for summary judgment. In his original complaint, DePau alleged that Harris executed the Loan Documents and participated in Stern’s fraud by knowingly authenticating Rose’s forged signature with her notary stamp. This allegation is referred to herein as the contract/fraud theory because it forms the basis for DePau’s contract and fraud causes of action. After being served with the original complaint, Harris, while proceeding pro se, informed DePau’s counsel that her signature was forged and her notary stamp stolen. Upon learning this, DePau amended his complaint to include an alternative theory of the facts. This alternative theory is referred to herein as the negligence theory because it forms the basis for DePau’s negligence claim. The negligence theory acknowledges that Harris’ signature was forged, but argues that she is liable to DePau because she was negligent in safekeeping her notary stamp, which allowed Stern to steal it and use it to fraudulently authenticate her and Rose's signatures on the Loan Documents. The contract/fraud theory and the negligence theory are mutually exclusive because the underlying factual allegations are contradictory and inconsistent. Ultimately, DePau moved for and won summary judgment on his negligence claim. In its order granting DePau’s motion for summary judgment, the Court found that: 2 WALDMAN BARNETT, P.L. 3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133 {00293699.DOCX }[Harris] was unaware of the Loan Documents’ existence, that her notary public official seal was stolen, and that her signatures on the Loan Documents were forgeries.! While Harris respectfully disagrees with the Court’s ruling, the ruling is clear and controlling.” DePau, having established Harris’ negligence, has disproven his contract/fraud theory. As such, the contract/fraud theory causes of action fail and partial summary judgment in favor of Harris on them is appropriate. I. STATEMENT OF FACTS Of the nine counts that comprise DePau’s active pleading, the Third Amended Complaint (the “Complaint”), eight seek relief from Harris.> These eight counts can be divided into two groups based on the underlying factual theory — the contract/fraud theory counts and the negligence theory counts. The contract/fraud theory is the basis for Counts I through VII: Count I — Breach of Promissory Note; Count II — Money Lent; Count III —- Breach of Mortgage (Waste); Count IV — Mortgage Foreclosure; Count V — Breach of Mortgage (Forfeiture Proceedings); Count VI— Fraud in the Inducement; and Count VII — Fraud in the Inducement. DePau’s contract/fraud theory posits that Harris “executed and delivered the Note [and Mortgage] in favor of DePau” (and is therefore a party to them) and that she then “fraudulently and falsely acknowledged the Mortgage [with her notary stamp] in order to trick DePau into thinking the Mortgage was actually executed by Rose [whose signature was forged] and thereby to induce him to lend the Defendant’s [sic] money.”* 1 See the Court’s Order dated July 9, 2018, pg. 10, attached as Exhibit A (“Order’). ? Harris reserves her right to appeal the Court’s summary judgement in favor of DePau on his negligence claim. 3 See Plaintiff's Third Amended Complaint, attached as Exhibit B (“Compint.”). As discussed below, DePau’s ninth count, which is for fraud in the inducement falls into the negligence theory category. It seeks damages from Stern for his theft and misuse of Harris’ notary stamp. 4 See Ex. B 49 64, 85, 124, Compint. 3 WALDMAN BARNETT, P.L. 3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133 {00293699.DOCX }DePau’s negligence theory is the basis for Counts VIII and IX: Count VIII — Negligence and Count [X — Fraud in the Inducement. The negligence theory is based on Harris’ assertion that she was unaware of the Loan Documents’ existence, that her notary public official seal was stolen, and that her signatures on the Loan Documents were forgeries.* This assertion was raised by Harris in her answer and affirmative defenses to DePau’s original complaint, which at that time only alleged the contract/fraud theory.® Upon learning that Harris’ signature on the Loan Documents was forged and her notary stamp stolen, DePau amended his pleadings to include two causes of action based on his negligence theory.’ Count VIII alleges that Harris’ was negligent by failing to keep her notary stamp under her direct and exclusive control.* Count IX, which is not directed at Harris, alleges that Stern fraudulently induced DePau to loan him money by using Harris’ stolen notary stamp to fraudulently authenticate the signatures on the Mortgage During summer 2018, Harris and DePau each filed motions for summary judgment.’ DePau moved the Court to grant summary judgment on his negligence cause of action.!° The Court granted DePau’s motion for summary judgment and denied Harris’ motion for summary judgement.'' In its order, the Court held that Due to Harris’ admitted failure to both keep her notary seal under her direct and exclusive control as well as her failure to timely report its loss to the appropriate authorities, DePau’s Mortgage is not secured by the entire Property. Asa result, he has been injured. !? 5 See Ex. A, pg. 10, Order. ® See Ex. A, pg. 10, Order. ” See Ex. A, pg. 10, Order. 8 See Ex. B, Count VIII, Compint. ° See Ex. A, Order. 1° See Ex. A, Order. " See Ex. A, pg. 13, Order. 1 See Ex. A, pg. 12, Order. 4 WALDMAN BARNETT, P.L. 3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133 {00293699.DOCX }Ill. SUMMARY JUDGMENT STANDARD Pursuant to Florida Rule of Civil Procedure Rule 1.510(c), summary judgment is proper if there is no genuine issue of material fact and if the moving party is entitled to a judgment as a matter of law. Menendez v. Palms West Condominium Ass'n, 736 So.2d 58, 60 (Fla. 1st DCA 1999). Once the movant has carried the burden of demonstrating the non-existence of any genuine issue of material fact, the Court must enter summary judgment unless the opposing party comes forward with competent evidence sufficient to reveal a genuine issue of material fact. F/a. Bar v. Mogil, 763 So. 2d 303, 307 (Fla. 2000). IV. ARGUMENT Florida courts recognize “the universal rule which forbids the successful assertion of inconsistent positions in litigation.” See Salcedo v. Asociacion Cubana, Inc., 368 So. 2d 1337, 1338 (Fla. 3d DCA 1979). The Salcedo court explained: The real meaning of the rule concerning estoppels . . . is that a party, who in an earlier suit on the same cause of action, or in an earlier proceeding setting up his status or relationship to the subject-matter of his suit, successfully assumes a factual_position on the record to the prejudice of his adversary, whether by verdict, findings of fact, or admissions in his adversary's pleadings operating as a confession of facts he has alleged, cannot, in a later suit on the same cause of action, change his position to his adversary's injury, whether he was successful in the outcome of his former litigation or not.” See id. (emphasis added). The U.S. Supreme Court has described the doctrine as follows Under the judicial estoppel doctrine, where a party assumes a certain position in a legal proceeding, and succeeds in maintaining that position, he may not thereafter, simply because his interests have changed, assume a contrary position. See New Hampshire v. Maine, 532 U.S. 742, 742 (2001)(emphasis added). The doctrine of election of remedies also precludes a party from pursing separate causes of action based on mutually exclusive factual theories. See Sec. & Inv. Corp. of the Palm Beaches v. Droege, 529 So. 2d 799, 802 (Fla. 4th DCA 1988)(“If the two remedies are inconsistent or 5 WALDMAN BARNETT, P.L. 3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133 {00293699.DOCX }mutually exclusive, so that one implies negation of the underlying facts necessary for the other, then the mere choice of one remedy and certainly, pursuit of one remedy to judgment, operates as an election.”). The test of inconsistency has been described in the following manner: It has been said that the so-called ‘inconsistency of remedies' is not in reality an inconsistency between the remedies themselves, but must be taken to mean that acertain state of facts relied on as the basis of a certain remedy is inconsistent with, and repugnant to, another certain state of facts relied on as the basis of another remedy. For one proceeding to be a bar to another for inconsistency, the remedies must proceed from opposite and irreconcilable claims of right and must be so inconsistent that a party could not logically assume to follow one without renouncing the other. See Klondike, Inc. v. Blair, 211 So. 2d 41, 42-43 (Fla. 4th DCA 1968). As explained by the Florida Supreme Court If the allegations of facts necessary to support one remedy are substantially inconsistent with those necessary to support the other, then the adoption of one remedy waives the right to the other. A party will not be permitted to enforce wholly inconsistent demands respecting the same right. It is not permissible to both approbate and reprobate in asserting the same right in the courts. See Am. Process Co. v. Florida White Pressed Brick Co., 47 So. 942, 944 (Fla. 1908). “When a party elects between two or more inconsistent courses and has knowledge of all the pertinent facts, he binds himself to the course he adopts first and cannot later withdraw from this knowing election.” See Barbe v. Villeneuve, 505 So. 2d 1331, 1334 (Fla. 1987). Here, DePau adopted two inconsistent positions — the contract/fraud theory and the negligence theory. While the law permitted DePau to pursue both theories initially, it recognizes that a time would come when DePau could only proceed on one theory since both cannot be true That time is now. DePau elected to pursue his negligence theory cause of action through summary judgment. In doing so, DePau assumed the factual position: 6 WALDMAN BARNETT, P.L. 3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133 {00293699.DOCX }that [Harris] was unaware of the Loan Documents’ existence, that her notary public official seal was stolen, and that her signatures on the Loan Documents were forgeries. > The Court granted DePau’s motion for summary judgment, finding that there is no genuine issue as to the facts on which the negligence theory is based.'4 Specifically, the Court found that (1) that Harris was unaware of the Loan Documents when they were executed; (2) Harris’ signatures on the Loan Documents were forged; and (3) Harris’ notary public stamp was stolen and misused by Stern without her knowledge.'> Having successfully assumed this position, DePau cannot now change his position. His election has become irrevocable and he is precluded from pursuing those causes of action that are based on his contract/fraud theory because they are contradictory to the established facts. Logically, Harris is not a party to the Loan Documents because she was not even aware of them when they were executed. The presence of her forged signature obviously does not make her a party to them. Accordingly, summary judgment in favor of Harris on Count I Breach of Promissory Note; Count II —- Money Lent; Count III — Breach of Mortgage (Waste), Count IV — Mortgage Foreclosure; and Count V — Breach of Mortgage (Forfeiture Proceedings) is warranted. !° Likewise, the fact that Harris’ notary stamp was stolen and used without her knowledge establishes that she was a victim of and not a participant in Stern’s fraud. Accordingly, summary 13 See Ex. A, pg. 10, Order. 14 See Ex. A, Order. 15 See Ex. A, pg. 10, Order. 16 Count V alleges that Stern and only Stern breached Section 6 of Mortgage by engaging in fraudulent activities that subjected the property to forfeiture proceedings. Count V does not allege that Harris breached Section 6 or that Harris knew that Stern was in breach of Section 6 (but it demands judgment against Harris anyway). See Ex. B, Count V. Compint. As such, summary judgment in favor of Harris on Count V is proper independent of the reasons given above. 7 WALDMAN BARNETT, P.L. 3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133 {00293699.DOCX }judgment in favor of Harris on Count VI — Fraud in the Inducement; and Count VII — Fraud in the Inducement is warranted. !” Vv. CONCLUSION DePau presented two mutually exclusive and inconsistent sets of fact in support of his various causes of action. Having prevailed on one set of facts — his negligence theory - DePau has disproven the factual allegations underpinning his contract/fraud theory causes of action Accordingly, summary judgment in favor of Harris on Counts I through VII of the Complaint is proper. WHEREFORE, Defendant, Layne Harris Stern, respectfully requests this Court enter an order granting her Motion for Summary Judgment as to Plaintiffs Contract and Fraud Claims, and all such other relief as may be just and proper. Respectfully submitted, WALDMAN BARNETT, P.L. 3250 Mary Street, Suite 102 Coconut Grove, Florida 33133 Telephone: (305) 371-8809 Telecopier: (305) 448-4155 liiservice@waldmanbarnett.com Counsel for Defendant/Counter-Plaintiff By: __/s/ Benjamin L. Keime Glen H. Waldman, Esq. Fla. Bar No. 618624 Benjamin L. Keime, Esq. Fla. Bar No. 118752 ™ Count VI alleges that Stern and only Stern fraudulently induced DePau into entering into the Loan Documents by concealing that he was engaged in criminal acts that could lead to forfeiture proceedings. Count VI does not allege that Harris participated in this fraud or that Harris knew of Stern’s fraud (but it demands judgment against Harris anyway). See Ex. B, Count VI, Compint. As such, summary judgment in favor of Harris on Count VI is proper independent of the reasons given above. 8 WALDMAN BARNETT, P.L. 3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133 {00293699.DOCX }CERTIFICATE OF SERVICE I HEREBY CERTIFY that a true and correct copy of the foregoing was filed this 7th day of May, 2019 via the Florida Courts ePortal Service and thereby served on all parties and counsel of record. /s/ Benjamin L. Keime Benjamin L. Keime, Esq. 9 WALDMAN BARNETT, P.L. 3250 Mary StREET, SUITE 102 @ Coconut Grove, FLoriDA 33133 {00293699.DOCX }EXHIBIT AVENTH JUDICIAL CIRCUIT E COUNTY, FLORIDA TN THE CIRCUIT COURT OF TH IN AND FOR MIAMEDA! VINCENZO DEPAU, Plaintiff, v Case No. 2017-01893 1-CA-O1L MICHAEL STERN, LAYNE HARRIS STERN, and IVOR ROSE Defendants. This cause came before the Court on June 8, 2018, for hearing on Defendant Layne Harris Stern's (“Harris”) Motion for Summary Judgment on the Statute of Limitations (‘Motion’) against Plaintiff Vincenzo DePau's ((DePau”) and on DePan’s Motion for Summary Judgment solely on his claim for negligence against Harris ((Cross-Motion”}. The Court having reviewed the Motion, the Cross-Motion, responses, replies, and supplements to both, the court file, having heard argument of counsel, and being otherwise duly advised in the premises, it is hereupon, ORDERED AND ADJUDGED that Harris’ Motion is DENIED and that DePau's Cross- Motion is GRANTED for the reasons set forth below: i INTRODUCTION DePan instituted this litigation against Harris and her ex-husband Michael Stem (“Stern” for breaches of various payment as well as non-payment covenants arising out of a loan agreement he claims he entered into with Harris as well as for various fraud and negligence claims. Harris moved for summary judgment on her affirmative defenses based on the statutes of limitations andrepose. In response, DePau filed the Cross-Motion solely on bis claim against Harris for allegedly losing her notary stamp which was then used to sell DePau a fraudulent mortgage. Preliminarily, Harris objected to certain arguments raised by DePau that address Harris’ affirmative defenses because a reply was not filed. DePau has since filed a reply to Harris’ affirmative defenses and those arguments are deemed moot. iL FINDINGS OF FACT DePau instituted this action on August 4, 2017, against Harris and Stern for claims arising out of a promissory note (“Nate”) he bought on December 9, 2007. The Note appears to contain the signatures of cach Stern, Harrie, and Ivor Rose (“Rose”). The obligations set forth in the Note were supposed to be secured by a waterfront home located at 1386 8. Venetian Way in Miami, Florida (Property”)}. The Property was owned as tenants in common by Stern, Harris, and Rose. To perfect his security interest, DePau received a mortgage (“Mortgage”) (Note and Mortgage collectively the “Loan Documents”) that supposedly encumbered the entire Property and that again appeared to be signed by each Stern, Harris, and Rose and was notarized using Harms’ notary public official seal. The Mortgage was duly recorded in the Miami-Dade County Recorder’s Office and has not been cancelled. The covenants set forth in both the Note and Mortgage are joint and several. The Mortgage was inferior to two other mortgages that encumbered the Property to secure debts with the total principal arnount of $2,962,545 (“Superior Liens”). Both the Superior Liens remain outstanding to this day. The Loan Documents required repayment of the Note’s principal amount and interest on or before July 34, 2008. In addition to the repayment obligation, the Loan Documents required the borrowers, including Harris, to promptly discharge any lien with priority over the Mortgage, not engage in conduct that could afford any governmental authority with a right of forfeiture against the Property, not te allow the tiling of any charges that could lead to forfeiture of the Property or bsthe loan proceeds, to keep all taxes and insurance premiums on the Property current at all times, and not to commit waste on the Property. On February 28, 2009, Stern and Harris submitted a Joint Petition for Bankruptcy under Chapter 11 in the United States Bankruptcy Court in Miami, Florida. In connection with the Bankruptcy proceedings, Harrie submitted sworn Bankruptcy Schedules on March 30, 2009, where she initially Usted DePau as a secured creditor of the Bankruptcy estate on her Bankruptcy Schedules and acknowledged DePau had a $1,400,000 lien on the Property. On August 25, 2009, Harris was deposed in the Bankruptcy proceeding, At the deposition, Harris was presented with a copy of the Mortgage. In response, she claimed the signatures on them were not hers and that she did not notarize the Marigage. At that depasition, Harris also admitied she did not know where her notary stamp was and was then informed of ber obligation to report the lost stamp to the Florida Department of State in writing. A few months after the deposition, on December 16, 2609, Harris submitted sworn Amended Bankruptcy Schedules to the Bankruptcy Court. Inthe Amended Schedules, Harris again listed DePau as a creditor of her Bankruptcy estate and that his claims were at least partially secured by the Property. Two weeks after the Amended Schedules were submitied, the U.S. Bankruptcy Trustee overseeing Harris’ Bankruptcy estate determined that the Property had no equity to be administered for the benefit of the estate and abandoned the estate’s claim to it. In doing so, the Yrustee claimed he relied on the documents provided by the debtors, i.e, Harris and her ex- husband Stern. The Bankruptcy case remained open until July 24, 2014, when the Bankruptey Court, upon the trustee’s report that the bankruptcy estate had been fully administered, closed the case.Gn September 12, 2012, Stern was indicted on numerous counts of federal wire and other fraud. Stern ultimately plead guilty to the counts and eniered into a plea agreement with the U.S. Government pursuant to which he would forfeit to the Government all property subject to forfeiture due to the crimes for which he plead. As a result, an Order and Judgment of Forfeiture was entered against Stern. Notwithstanding Harris’ sworn staiements in the Bankruptcy case, she has claimed throughout this litigation that she learned for the first time that she was a purported party to the Loan Documents only after being served with the complaint. Notably, Harris has submitted no sworn evidence whatscever, neither in support of her Motion or in oppasition to the Crass-Motion, 1. HARRIS’ MOTION FOR SUMMARY JUDGMENT ON THE STATUTES OF LIMITATIONS AND REPOSE Harris’ Motion claims that because the Note became due on or before July 31, 2008, that the relevant statutes of limitations and repose bar DePau’s claims. Harris also claims that because DePau's negligence and fraud claims arise out of the Loan Documents, that those claims should also be dismissed as untimely. a. The Loan Documents: The Statute of Limitations The Loan Documents contain a wide range of obligations in addition to repayment. For example, the Mortgage required the borrowers to promptly discharge any senior liens on the Property, to keep all Property taxes current, and not to commit waste on the Property. Further, the Note required the borrowers not to do anything that could afford any governmental authority with a tight of forfeiture against the Property and to avoid any charges that could lead to such a forfeiture. The Loan Documents impose joint and several liability. DePau claims that each of these covenants were breached within the statute of limitations following the repayment date set forth in the Loan Documents and that this action was brought within the limitations period following those breaches. DePau also argues that the Defendants, including Harris, have and remain in a continuous state of default due to their failure to satisfy the 4Superior Liens and for committing waste on the Property. For these reasons, DePau argues that his claims are timely. To support his claims of continuous breach, DePau has provided the Court with evidence of the recorded Superior Liens, the indictment that was entered against Stem as well as the plea agreement he entered into, and the Forfeiture Order that was entered as a result of it. In addition, DePau provided an affidavit stating that the Defendants committed waste on the Property by letting it fall into serious disrepair. Harris has provided no opposing summary judgment evidence. ‘Te support his argument, DePau cites the Florida Supreme Court's decision in Bartram v. U8. Bank Nat’? Ass'#., 211 So, 3d 1009 (Fla. 2016). In that case, the Court ruled that “[o]nce there were subsequent defaults, however, the bank had the right to file a future foreclosure action _.. so long as the foreclosure action was based on a subsequent default, and the statute of limitations had not run on thet particular default.” Bartram at 1021. Various Florida appellate courts have ruled that “allegations of the complaint in the underlying action that the borrowers were in a continuing state of default at the time of the filing of the complaint was sufficient to satisfy the five-year statute of limitations.” Desylvester v. Bank of New York Mellon, 219 So. 3d 1016, 1018 (Fla. 2d DCA 2017). Neither party has cited a case to support the notion that non-payment defaults are somehow excluded from Bartremr’s reach. Because DePau has demonstrated that the Loan Documents were in a continuous state of default, which included defaults within the five-years preceding commencement of the action, his claims are not barred by the statute of limitations even if the mitial payment breach occurred more than five years ago. See Klebanoff v. Bank of New York Mellon, 228 So. 3d 167 (Fla. Sth DCA 2017) (“Because the Bank alleged and proved that the subject mortgage was in a continuous state of default, which inchided defaults within the five-year statute of limitations, its action was not barred, even if the initial default was alleged to have occurred more than five years prior to the filing of the complaint”). unin addition, Harris failed to sufficiently prove her affirmative defense of statute of limitations. For example, Harris has not provided any affidavits concerning any potential absences from the State or whether she has ever used a false name unknown to DePau, each of which is relevant to determine whether the statute of limitations was tolled. See Fla. Stat. § 95.051(1 a} {b). In addition, Harris herself has claimed that certain payments were made under the Loan Documents. These payments would also have tolled the limitations period. Fla. Stat. § 95.0510 KB. Harris’ Bankruptcy proceedings also tolled the statute of limitations. See Windebrooke Dev. Corp. Envir. Enter. Inc., $24 F.2d 461, 463 (5th Cir. 1975) (holding statute of limitations tolled upon filing of bankruptcy petition)’ see also Morgan v, United States (In re Morgan), 182 F3d 775, 778 (i ith Cir, 1999) (per curiam) (“Section 108(c} extends the statute of Hmitations for creditors, ‘if applicable nonbankruptcy Jaw ... fixes a period for commencing or continuing a civil action in a court other than a bankruptcy court on a claim against the debtor’ and the creditor is hampered from proceedings outside the bankruptcy because of the automatic stay.”}, see alsu Northeutt v. Batkenty, 727 So. 2d 382, 386 (Fla. Sth DCA 1999) (“there is considerable support in federal bankruptey lew for the proposition that section 108(c} of the bankruptcy code acts, itself, as a toll of a state statute of limitation without regard to whether that state statete of limitation itself recognizes the bankruptcy proceeding as a tolling device.”). During the Bankruptcy proceedings, Harris repeatedly affirmed the Loan Documents under oath ~ and thereby precluded DePau from seeking to enforce them. These statements alone would estop Harris from even raising a statute of limitations defense. See Morsani v. Major League of Rasehali, 739 So. 2d 610 (equitable estoppel valid defense to statute of Hmitations) ; Bormer v. City of Prichard, Ala, 661 F.2d 1206, (ith Cir. 1981) “decisions of the United States Court of Appeals for the Fifth Circuit ... aa that court existed on September 30, 1981, handed down by that court priar to the close of business on that date, shall be binding as precedent in the Eleventh Circuit, for this court, and district courts, and the bankruptcy courts in the circuit.”). 6For these reasons, Harris’ Motion as to the application of the statute of Limitations to the Loan Documents is denied. Harris also argues that the statute of repase has extinguished the Morigage lien. The statute of repose provides that “[t]he lien of a mortgage or other instrument encumbering real property, herein called a mortgage ... shall terminate after the expiration of the following periads of time.” Fla, Stat. § 95.28144). By its own terms, the statute of repose acts only to extinguish the underlying lien created by a mortgage but does nothing to otherwise prevent enforcement of either of the Loan Documents. Houck Corp. v. New River, Lid, Pasco, 900 So. 2d 601, 602 (Fla. 2d DCA 2005) (“section 95.281 is a statute of repose that prescribes the enforceable life of a mortgage lien, but does not operate to preclude an action to foreclose the mortgage”). Further, the statute of repose also “does not direct the limitation period for filing a foreclosure action.” fd at 603, Besides the limited scope of the statute of repose, it was actually tolled by Harris’ bankruptcy proceedings. See Brown v. MRS Mig. Co., 617 So. 2d 788, n. 5 (Fla. 4th DCA 1993) {any suspension of a limitations period “resulting from the pendency of bankruptcy proceedings should apply equally well to statutes of repose.”} Jn addition to suing te foreclose on the Mortgage lien, DePau has brought claims for money lent and breach of the Note. As such, even if the statute of repose somehow did extinguish the Mortgage lien, it would only prevent DePau’s action to forectose. It would not in any way Bar his claim for the money DePau claims he is owed. Harris’ Motion as to the application of the statute of limitations and repose is denied. DePau brought two claims for fraud against Harris. The first alleges that Harris knowingly falsely represented to DePau that neither she nor Stern had done anything that would afford anygovernment with right of forfeiture as against the Property to induce DePau to lend. The second alleges that Harris notarized the Mortgage even though she knew that Rose did not sign it, solely to induce DePau to lend his money Before any claim can be barred by reason of the statute of limitations, it must first have accrued. Fla. Stat, § 95.031 provides that the limitations period for an action founded upon fraud begins only “with the period running from the time the facts giving rise to the cause of action were discovered or should have been discovered with the exercise of due diligence, instead of running from any date prescribed elsewhere in s. 95.11(3).” This naturally requires a factually intensive inquiry. Harris argues that DePau could have exercised due diligence by suing on the Loan Documents immediately after payment came due. However, this again ignores that Haris was cloaked with the protections of the Bankruptcy Code’s automatic stay for more than five years and that DePau was forbidden from suing. See 11 U.S.C. § 362 bankruptcy petitions stays issuance of all judicial process that could otherwise have been commenced). More important, is that Harris actually acknowledged the Mortgage under oath in the Bankruptcy schedules. For these reasons, there was really no due diligence DePau could have exercised to discover the frauds any earlier than he did. Even if there was, Harris has provided zero summary judgment evidence on this issue. To the contrary, DePau did file an Affidavit claiming that Stern repeatedly promised him the loan would be repaid and that he withheld action on the basis of those promises. Harris has not filed any sworn evidence in this case, and specifically has not filed any statements that would counter DePau’s claimed reliance on Stern's promises of repayment. She has also not provided any evidence that she was unaware of Stern’s promises or that she was not complicit in making these false promises of repayment. ‘ in light of Harris’ statements in the Bankruptcy proceedings acknowledging the Loan Documents, the length of the Bankruptcy proceedings, as well as DePau’s sworn affidavit (andHarris’ lack of any supporting sworn statements), genuine issues of material fact remain as to when DePau could reasonably have discovered the factual premise underlying his fraud claims. Finally, significant fact discovery remains to be had to determine whether Harris is estopped from raising the statute of limitations defense to the fraud claims against her. For these reasons, Harris’ Motion as to DePau’s fraud claims are denied. d. Delay's Negligence Claims DePau’s claim for negligence centers around Harris’ assertions that she Jost her notary starap and that it was used by her husband Stern to defraud DeFau without her knowledge. Notary publics are governed by a detailed statutory scheme. See Fla. Stat. Ch. 117. A notary public’s most important duty is to keep her notary public official seal under her direct and exclusive control. Fla. Stat. § 117.05 Xb}. This obligation is so important that “{a] notary public whose official seal is lost, stolen, or believed to be in the possession of another person shall immediately notify the Department of State or the Governor in writing.” Fla. Stat. § 117.05GKe). The transcript from Harris’ 2009 deposition establishes that Harris was presented with a copy of the Mortgage as early as 2009. She then claimed the signatures on them were not hers and that she did not notarize the Mortgage. At that deposition, Harris also admitted she did not know the location of her notary stamp and was informed of her obligation to report the lost stamp to the Florida Department of State in writing. Thus, pursuant to Fla. Stat. § 117.05(3}(c), Harris was statutorily obligated to immediately report her lost or stolen notary stamp to either the Department of State or the Governor in writing in 2009, Harris, however, did not report her notary stamp as missing until 2017. By failing to comply with a statutorily imposed obligation of which she was specifically informed, Harris is estopped from arguing that a limitations period bars DePau’s action: failure to satisfy her legal duty kept hima in the dark of the fraud perpetrated upon him as a direct result of her negligence. Marsani vy. Major League of Baseball, 739 So. 2d 610 (equitable estoppel valid defense to statuteof limitations), see also Travelers Ins. Co. v, Spencer, 397 So. 2d 358 (Fla. Ist DCA 1981) {omission sufficient to imply equitable estopped where party failed to act when under duty to do 30). tn light of Harris’ staiements in the Bankruptcy proceedings where she admitied she lost her notery stamp and was informed of ber duty to inform appropriate authorities, as well ae her acknowledgement of her obligations to DePau in front of the Bankruptcy tribunal, Harris’ Motion as to DePau’s count for negligence is denied iV, DEPAU’S MOTION FOR SUMMARY JUDGMENT ON HIS CLAIM FOR NEGLIGENCE DePau’s negligence claim centers around Harris’ admission that she failed to maintain her mand control and let it fall into her ex- notary public official seal under her exclusive pos! husband’s hands who then used it to sell DePau a fraudulent Mortgage. After this tigation commenced, Harris claimed that she was unaware of the Loan Documents’ existence, that her notary public official seal was stolen, and that her signatures on the Loan Documents were forgeries. In light of Harris’ claims, DePau amended his Complaint to include the claim for negligence at issue here. A cause of action for a ence requires a duty, a breach of that duty, a causal connection between the breach and the resulting injury, and foss or damages. Clay Elec. Co-Cp., Inc. v. Johnson, 873 So. 2d 1182, 1186 (citing Prosser and Keaton on the Law of Torts 164-65 (W. Page Keeton ed, Sth ed. 1984) As a notary public, Harris’ duty was imposed by Fla. Stat. § 117.05(3)(b), which provides that “[t]he notary public official seal and the certificate of notary public commission are the exclusive property of the notary public” and mandates that it “must be kept under the direct and exclusive contro! of the notary public.” Fla. Stat. $ 117.05(3)\(b). As discussed above, “[a] notary public whose official seal is lost, stolen, or believed to be in the possession of another person shall immediately notify the Department of State or the Governor in writing.” Fla, Stat. § E17. 05K}. 10Harris admitted that she failed to keep her notary public official seal under her direct and exclusive control and that it was used on the Mortgage at issue in this case without her knowledge or consent. As such, Harris was obligated to immediately notify the Department of State or the Governor in writing” of her lost notary stamp. See Fla. Stat. § 117.053\(0). Harris was presented with a copy of the Mortgage on August 25, 2009 and swore that the signature on it was not hers. When she was asked where she keeps ber notary stamp admitted that she did not know and did not have it anymore and that when she did have it, that she kept it in an unlocked desk drawer where both her family as well as anybody who entered her home woutd have had access to it. Harris was informed on the record of her obligation to notily the appropriate authorities due io her lost notary stamp. Harris has submitted no evidence that she reported her last notary stamp upon being informed of her obligation to do so in 2009. instead, she only reported her lost notary stamp a8 stolen to the Florida Department of State and Governor's office after this litigation commenced on August 14, 2017, In those letters, which she attached to her Anawer and Affirmative Defenses, she falsely claimed to have only “recently” discovered the stamp’s misuse. There is no doubt that Harris’ duties are statutorily imposed on her and that she assumed those duties willingly by seeking a notarial appointment. By failing to both keep her notary seal under her direct and exclusive control and then failing to report the loas or theft of ber stamp, Harris breached duties intended to safeguard members of the public like DePau. Nicosia v. Otis Elevator Co,, 848 So, 2d 854, 855 (Fla. 3d DCA 1989) (citing de Jesus c. Seaboard Coast Line RAR Co., 281 So. 2d 198 (Fla. 1973) (violation of a statute which establishes a duty to take precautions to protect a particular class of persons from a particular type of injury constitutes negligence per se). “The well-established rule is that it is ‘negligence per se’ for a defendant to violate a statute which establishes a duty to protect a particular class of persons from a particulartype of injury.” First Overseas inv. Corp. vy. Cotton, 491 So, 2d 293, 295 (Fla, 3d DCA 19863 (citing de Jesus and collecting cases). It is common sense that “being able to rely on documents is the purpose of having them notarized.” Ameriseal Of Ne Fig. inc. v. Leiffer, 673 So. 2d 69, 70 (Fla. Sth DCA 1996), Harris points to siatements made by DePau that he did not read the Loan Documents when he purchased them and could not have relied on them in this case. Such a direct reliance requirement, however, would run entirely contrary to the purpose of the notary scheme in modem commerce. ia. (“being able to rely on documenis is the purpose of having them noterized”). To require members of the public to actually rely that the specifically designated notary witnessed the execution of the underlying documents before permitting a cause of action would judicially remove any protection offered by the notarial scheme. See, e.g., Garton v. Title Ins, & Trust Co., 106 Cal. App. 3d 365 (3d Dist. 1980) (notarial Hability to all proximately injured is well established), Dus to Harris’ admitted failure to both keep her notary seal under her direct and exclusive control as well as her failure to timely report its loss to the appropriate authorities, DePau’s Mortgage is not secured by the entire Property. As a result, he has been injured Still, Harris argues that DePau’s claims for negligence should be barred by the statute of limitations. This is her only defense. To prevail on this argument, Harris first has to establish when the cause of action accrued. To the extent she has tried to claim the action accrued when the Loan Documents were issued, she is judicially estopped from making this argument due to her swom statements to the Bankruptcy Court affirming their validity. Blumberg v. USAA Cas. bes, Co,, 790 So. 2d 1061, 1066 (Fla. 2001) (Judicial estoppel is an equitable doctrine that is used to prevent litigants from taking totally inconsistent positions in separate judicial, including quasi-judicial, proceedings”) (internal citations omitted). Harris was under a statutory duty to report her lost or stolen notary stamp, she was explicitly informed of this obligation, and skirted it entirely. See Gauthier v. Fla. int'l Univ,, 38 12So.3d 221, 225 (Fla. ist DCA 2010) ("We agree with claimant that the E/C is estopped from relying on a statute of limitations defense because claimant showed by uncontested evidence that the E/C failed to act when it was under a duty to do so and that claimant was misled to her detriment due to the B/C’s omission.” ); see also Travelers fas. Co. v, Spencer, 397 So. 24 358 (Fla. 1st DCA 1981) (omission sufficient to imply equitable estopped where party failed to act when under duty to de so). Her negligence provided the patina of legitimacy to what was otherwise a transaction rife with fraud perpetrated on DePau. DePau has proven his negligence claim Harris, on the other hand, was demonstrably told of her statuiory duties and ignored them. Considering that Harris herself has moved for summary judgment on the statute of Hmitations on this issue, the Court assumes there is no additional evidence she could present on this issue that would affect the outcome reached here. For these reasons, DePau’s Croas-Motion is GRANTED. ¥. CONCLUSION For the reasons set forth above, Defendant Layne Harris Stern’s Motion for Summary Judgment on the Statute of Limitations is DENEED and Plaintiff Vincenzo DePau's Motion for Summary Judgment solely on his claim for negligence is GRANTED. DONE AND ORDERED in Chambers at Miami-Dade County, Florida, on 07/09/18. JACQUELANE HOGAN SCOLA CIRCUIT COURTIUDGE The parties served with this Order are indicated in the accompanying 11th Circuit email confirmation which includes all emails provided by the submitter. The movant shall IMMEDIATELY serve a true and correct copy of this Order, by mail, facsimile, email or 13hand-delivery, to all parties/counsel of record for whom service is not indicated by the accompanying 11th Circuit confirmation, and file proof of service with the Clerk of Court. Signed original order sent electronically to the Clerk of Courts for filing in the Court file.EXHIBIT BFiling # 77410001 E-Filed 09/04/2018 04:34:57 PM IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT IN AND FOR MIAMI-DADE COUNTY, FLORIDA VINCENZG DEPAU, Plamtiff, ¥. MICHAEL STERN, LAYNE HARRIS STERN, IVOR H. ROSE, RITA STARR, SEMONE ZAMYATIN, OCEAN BANK, PAUL STENGEL, . CASENO, 20L7-018931-CA-0F COLLEGE HEALTH Tl GP, INC, HARDING INVESTMENTS, LLC, BOARD OF MIAMI TY COMMISSIONERS, FLORIDA DEPARTMENT OF REVENUE, RANMAN REALTY, INC, PROFIT SHARING PLAN, OF AMERICA T OF JUSTICE, UNITED STATES OF AMERICA DEPARTMENT OF THE TREASURY, MIAMI DESIGN PRESERVATION LEAGUE, DWIGHT 1 /, AND ALL UNKNOWN TENANTS IN Defendants. THIRD AMENDED COMPLAINT Plaintiff Vincenzo DePau (“DePau”) sues Defendants Michael Stem (“Stem”), Layne Harris (formerly known as Layne Harris Stern) (“Harris”} (Stem and Harris each a “Loan Defendant” and collectively the “Loan Defendants”), Fvor H. Rose! (“Rose”) (Stem, Harris, and Rose each an “Owner Defendant” and collectively the “Owner Defendants”), Rita Starr (Stan) Semone Zamyatin (‘Zamyatin’), Ocean Bank (“Ocean Bank”), Paul Stengel (“Stengel”), College Health T1 GP, Inc. (College Health”), Harding Investments, LLC (Harding”}, Board of Miami- Dade County Commissioners (“County”), Florida Department of Revenue (‘FDOR”), Raijman 1 As axplataed balow, Hose is also a “Juntor Lien. Holder Defendant.” OU Bani, BL S951 + FRealty, Inc., Profit Sharing Plan, a Florida corporation (“Raijman”}, United States of America Department of Justice (DOM’}, United States of America Department of the Treasury Intemal Revenue Service (“IRS”), Miami Design Preservation League (MDPL”) and Dwight J. Feeney (“Feeney”) (Rose, Starr, Zamyatin, Ocean Bank, Stengel, College Health, Harding, County, FDOR, Raijman, DOI, IRS, MDPL and Feeney each a “Junior Lien Holder Defendant” and collectively the “Funior Lien Holder Defendants”), and all unknown tenants in possession (each of the foregoing individually a “Defendant” and collectively the “Defendants”) and alleges the following both cumulatively and alternatively. PR, iE: JBRISDICTION AND VENUE L This is an action, inter alia, to foreclose a mortgage that exceeds $15,000.00 on real property in Miami-Dade County, Florida. 2. DePau is an individual who at all times relevant hereto resided in Miami-Dade County, Florida. 3. Stern is an individual who at all times relevant hereto resided in Miami-Dade County. Stern is currently incarcerated and in the custody of the Federal Bureau of Prisons, Until recently, Stern was in a federal prison in Miami-Dade County, Florida. 4. Harris is an individual who at all times relevant hereto resided in Miami-Dade County. 5. Rose was previously added to this action as a party-defendant pursuant to this Court's April 6, 2018 Order requiring Plaintiff to amend the operative pleadings to this effect. 6, The Junior Lien Holder Defendants are named as defendants in this action only for procedural purposes because each of them may have, and Plaintiff does not admit that any of them have, a lien(s) on the Property (as defined below) by virtue of an instrument recorded in the public Page 2 of 20records of Miami-Dade County, Florida after the time the Mortgage (as defined below) was recorded and therefore inferior. 7. No relief is sought against the Junior Lien Holder Defendants other than a determination that their interests in the Property, if any, are subject to and inferior to Plaintiff's Mortgage. 8. By naming the Junior Lien Holder Defendants as Defendants in this case, Plaintiff is providing notice to them that he is asserting a superior interest in the subject Property and that, if Plaintiff succeeds on his claim thereto, the relief he seeks is, infer alia, to extinguish and foreclose any interest the Junior Lien Holder Defendants may have therein. 9. Rose and his wife Starr are named as Junior Lien Holder Defendants by virtue of an Abstract of Judgment Notice filed in the Official Records of Miami-Dade County in Book 30917 Page 1895 narning them as parties in whose favor judgments have been obtained against Stem. 10. Zanvyatin is named as a Junior Lien Holder Defendant by virtue of his judgment in Case No. 12-14728 and filed in the Official Records of Miami-Dade County in Book 30283 Page 3880. 11. Qcean is named as a Junior Lien Holder Defendant by virtue of (i) its judgment in Case No. 09-23781 and filed in the Official Records of Miami-Dade County im Book 28210 Page 3161; and (iid its judgment in Case No. 09-22446 and filed in the Official Records of Miami-Dade County in Book 28842 Page 1894. 12. Stengel is named as a Junior Lien Holder Defendant by virtue of his judgment in Case No. 08-64187 and filed in the Official Records of Miami-Dade County in Book 27774 Page 3078. Page 3 of 2013. College Health is named as a Imior Lien Holder Defendant by virme of its judgment in Case No. 68-12690 and filed in the Official Records of Miami-Dade County in Book 26903 Page 3283. 14. _ Harding is named as a Junior Lien Holder Defendant by virtue of its judgment in Case No. 08-55066 and filed in the Official Records of Miami-Dade County in Book 27106 Page 61. 15. County is named as a Junior Lien Holder Defendant by virtue of a municipal code violation lien filed in the Official Records of Miami-Dade County in Book 26903 Page 3283. 16. FDOR is named as a Junior Lien Holder Defendant by virtue of a warrant filed in the Official Records of Miami-Dade County in Book 27140 Page 987, 17. Raijman is named as a Junior Lien Holder Defendant by virtue of () its judgment in Case No, 09-11490 and filed in the Official Records of Miarni-Dade County; (ii) its judgment filed in Book 27896 Page 1822; (ii) Book 28317 Page 2567; and (iti) its padgment filed in 29843 Page 4446, 18. DOJ is named as a mior Lien Holder Defendant by virtue of: () an Order and Judgment of Forfeiture filed in the Official Records of Miami-Dade County in Book 29382 Page 1875; Gi} a Notice of Lien for Fine and/or Restitution filed in the Official Records of Miami-Dade County in Book 28977 Page 3913; (iii) a Notice of Lien for Fine and/or Restitution filed in the Official Records of Miami-Dade County in Book 29533 Page 1124; (iv) an Abstract of Judgment/Order filed in the Official Records of Miami-Dade County in Book 29589 Page 2132; {v}a Clerk’s Certification of a Judgment to be Registered in Another District filed im the Official Records of Miarni-Dade County in Book 29658 Book 4104; and (vi) an Abstract of Judgment Notice filed in the Official Records of Miami-Dade County in Book 30917 Page 1895, Page 4 of 2019. IRS is named as a Junior Lien Holder Defendant by virtue of: (1) a Notice of Federal ‘tox Lien filed in the Official Records of Miami-Dade County in Book 27780 Book 3745; (i) a Notice of Federal Tax Lien filed in the Official Records of Miami-Dade County in Book 30354 Book 2828. 20. MODPL is named as ¢ Imior Lien Holder Defendant b