SUZANNE FERRY

v.

E-Z CASHING, LLC

LaROSE, Judge. Suzanne Ferry appeals the trial court's "Amended Final Judgment of Foreclosure," as well as its "Order Granting Creditor E-Z Cashing, LLC's Motion for Assignment of Leases and Rents." We have jurisdiction. See Fla. R. App. P. 9.030(b)(1)(A); 9.130(a)(3)(C)(ii). We reverse the amended final judgment. We affirm the trial court's order assigning leases and rents.

Background In 2005, Ms. Ferry executed a note, secured by a mortgage, to finance the purchase of commercial property. InterBay Funding, LLC, was the lender. Ms. Ferry also executed a separate "Assignment of Leases and Rents" in favor of InterBay. In 2006, InterBay transferred its interest in the note, mortgage, and assignment of leases and rents to Bayview Loan Servicing, LLC. Ms. Ferry defaulted on her payment obligations. Bayview filed a foreclosure action in 2007.

In October 2010, the trial court entered a "Consent Final Judgment of Foreclosure" in favor of Bayview. The consent foreclosure judgment is silent as to the assignment of leases and rents. Prior to a scheduled foreclosure sale in early 2011, Ms. Ferry filed for bankruptcy protection. As a result, the foreclosure action was stayed. See 11 U.S.C. § 362(a).

The case lay dormant for nearly a decade. The bankruptcy court lifted the stay in 2020. In late 2019, however, Bayview assigned the mortgage to E-Z Cashing. Bayview also executed an "Assignment of Leases and Rents" in favor of E-Z Cashing. That document also transferred the note to E-Z Cashing. See Wells Fargo, N.A. v. Cook, 276 So. 3d 997, 1001 (Fla. 2d DCA 2019) (concluding that Wells Fargo established standing through introduction of "[t]he assignment of mortgage attached to the complaint and introduced into evidence at trial [which] assigned and transferred all interest in the mortgage—together with the note . . . to Wells Fargo").

In June 2020, E-Z Cashing sought to substitute itself as the plaintiff in the foreclosure action. See Fla. R. Civ. P. 1.260(c). E-Z

Cashing wanted "to enforce the Loan Documents as the holder in due course."¹ Some six months later, E-Z Cashing filed an "Amended Motion to Amend Final Judgment and Reschedule Foreclosure Sale." E-Z Cashing claimed that its "standing to enforce the loan documents and Final Judgment" sprang from Bayview's 2019 assignments. E-Z Cashing "request[ed] that the [consent foreclosure judgment] be amended to reflect the current indebtedness owed under the Loan Documents . . . and that the foreclosure sale . . . be rescheduled." After another six months, E-Z Cashing filed its "Motion to Determine Amount of Final Judgment and For Order Rescheduling Foreclosure Sale" and "Motion for Order Assigning Leases and Rents." Ms. Ferry opposed these motions, arguing that E-Z Cashing's "claim [wa]s barred by the doctrine of merger." Following a February 2022 hearing, the trial court entered the amended final judgment and order now before us. The amended final judgment recites that E-Z Cashing "holds a first priority mortgage/lien against the real property." The trial court also granted E-Z Cashing entitlement to all leases and rents Ms. Ferry received from April 2020 through the sale of the foreclosed property. Analysis Our record contains no transcript of the February 2022 hearing. This deficiency often proves fatal to the appellant's case. See, e.g., 1321 Whitfield, LLC v. Silverman, 67 So. 3d 435, 437 (Fla. 2d DCA 2011) (affirming final foreclosure judgment where, due to absence of hearing¹ E-Z Cashing used the term "loan documents" to collectively refer to the "Note, Mortgage[,] and Assignment of Leases and Rents." transcript, this court was unable to meaningfully review the trial court's findings).

But not always. See MTGLQ Invs., L.P. v. Merrill, 312 So. 3d 986, 993 (Fla. 1st DCA 2021).

The absence of a transcript does not hinder our review when a legal error plainly appears on the face of the record. See Reyes v. Home Loans Servicing L.P., 226 So. 3d 354, 356 (Fla. 2d DCA 2017) ("Although BAC urges this court to affirm in light of the lack of a transcript, we are not constrained to do so if there is error apparent on the face of the record.").

That is the case here as to the amended final judgment.

I. Amended Final Judgment Contrary to the trial court's finding, E-Z Cashing had no enforceable interest in the note and mortgage. Any interest in those instruments had merged into the October 2010 consent foreclosure judgment. See Nassau Realty Co. v. City of Jacksonville, 198 So. 581, 582 (Fla. 1940) ("In judgments and decrees rendered in suits foreclosing a preexisting lien the establishment of the lien is accomplished by the judgment or decree and the lien foreclosed is by the judgment of the court merged into the judgment or decree."); Nack Holdings, LLC v. Kalb, 13 So. 3d 92, 94 n.2 (Fla. 3d DCA 2009) ("The mortgage . . . merged into the judgment, [wa]s thereby extinguished, and 'los[t] its identity.' " (quoting Whitehurst v. Camp, 699 So. 2d 679, 682 (Fla. 1997))); Chrestensen v. Eurogest, Inc., 906 So. 2d 343, 345 n.4 (Fla. 4th DCA 2005) (" 'The doctrine of merger operates to extinguish a cause of action on which a judgment is based and bars a subsequent action for the same cause.' Under this doctrine, 'the debt or cause of action on which an adjudication is predicated is said to be merged into the final judgment.' " (quoting Sunshine Utils. Equip., Inc. v. Treasure Coast Utils., Inc., 421 So. 2d 1096, 1097 (Fla. 4th DCA 1982))); see also Weston Orlando Park, Inc. v. Fairwinds Credit Union, 86 So. 3d 1186, 1187 (Fla. 5th DCA 2012) ("The doctrine of merger provides that when a valid and final judgment is rendered in favor of a plaintiff, the original debt or cause of action upon which an adjudication is predicated merges into the final judgment, and, consequently, the cause's independent existence terminates. As such, the promissory notes and the mortgages merge[] into the final judgment." (citations omitted)).

As a result, any interest E-Z Cashing held in the note and mortgage lacked legal significance. Cf. Nullity, Black's Law Dictionary 1236 (Deluxe 10th ed. 2014) (defining a "nullity" as "[s]omething that is legally void").

Notably, as far as our record discloses, E-Z Cashing acquired no interest in the consent foreclosure judgment from Bayview. Under these circumstances, the trial court's finding that E-Z Cashing "holds a first priority mortgage/lien against the real property" is wrong. See JPMorgan Chase Bank, N.A. v. Hernandez, 99 So. 3d 508, 511 (Fla. 3d DCA 2011) ("The Promissory Note and the Mortgage merged into the final judgment upon its entry."); One 79th St. Ests., Inc. v. Am. Inv. Servs., 47 So. 3d 886, 889 (Fla. 3d DCA 2010) ("When a mortgage is foreclosed, the mortgage is 'merged' into the final judgment and loses its separate identity.").

The trial court erred in amending the foreclosure judgment premised upon the assignment of extinguished "loan documents." See Diamond R. Fertilizer Co. v. Lake Packing P'ship, 743 So. 2d 547, 548 (Fla. 5th DCA 1999) ("[A] cause of action upon which an adjudication is predicated merges into the judgment and . . . consequently, the cause of action's independent existence perishes upon entry of the judgment."); Vernon v. Serv. Trucking, Inc., 565 So. 2d 905, 907 (Fla. 5th DCA 1990) ("[A] debt reduced to final judgment merges into the final judgment and loses its prejudgment identity.").

II. Order Granting Creditor E-Z Cashing's Motion for Assignment of Leases and Rents Ms. Ferry also attacks the trial court's "Order Granting Creditor E-Z Cashing, LLC's Motion for Assignment of Leases and Rents." She insists that the October 2010 consent foreclosure judgment "extinguished any cause of action that may have arisen thereunder based upon the principle of merger." On this score, Ms. Ferry's argument stalls. She offers no cases supporting her merger theory as to the assignment of leases and rents. Our own research uncovered no support for her position. "[A] mortgagor and mortgagee are free to contract for an assignment of rents, and enforcement of that assignment will be governed by [section 697.07, Florida Statutes (1993)]."² Holdings, Inc., 645 So. 2d 490, 498 (Fla. 3d DCA 1994).

An assignment of rents serves as added security for repayment of a debt. § 697.07(1), Fla. Stat. (2019); e.g., Seaspray Resort, Ltd. v. UCF I Tr. 1, 260 So. 3d 333, 334 (Fla. 4th DCA 2018) ("The borrowers took out a $4.8 million loan . . . to refinance an existing loan and renovate the hotel. As additional security for the loan, they executed and recorded an 'assignment of leases and rents,' separate from the mortgage."); Oakbrooke Assocs. v. Ins. Comm'r of Cal., 581 So. 2d 943, 943 (Fla. 5th DCA 1991) ("The note was secured by a mortgage and by a collateral assignment of rents and leases."); see 2 Section 697.07(3), Florida Statutes (2019), provides as follows: [T]he assignment of rents shall be enforceable upon the mortgagor's default and written demand for the rents made by the mortgagee to the mortgagor, whereupon the mortgagor shall turn over all rents in the possession or control of the mortgagor at the time of the written demand or collected thereafter . . . to the mortgagee less payment of any expenses authorized by the mortgagee in writing.

generally ch. 702, Fla. Stat. (2020) ("Foreclosure of Mortgages and Statutory Liens"). We recently observed that "[a]n assignment of rents creates a lien on the rents in favor of the mortgagee, and the mortgagee will have the right to foreclose that lien and collect the rents, without the necessity of foreclosing on the underlying mortgage." Green Emerald Homes, LLC v. Residential Credit Opportunities Tr., 256 So. 3d 211, 214 (Fla. 2d DCA 2018) (quoting Ginsberg, 645 So. 2d at 498). The foreclosure of the mortgage and the foreclosure of the assignment of leases and rents are separate and independent actions; foreclosure of one neither prevents nor requires foreclosure of the other.

Consequently, we cannot agree that the assignment of leases and rents merged into the judgment. OPS Shopping Center, Inc. v. Great Southern Federal Savings Bank, 532 So. 2d 1323 (Fla. 1st DCA 1988), buttresses our conclusion. Our sister district was not persuaded that once the foreclosure judgment was entered, Great Southern's liens on the property and rents and profits therefrom, which the receiver was charged with collecting and accounting for, merged with the judgment and no longer had any separate existence so as to deprive the receiver of authority to continue exercising his powers and duties with respect to such property under the receivership order. Id. at 1323-24. OPS Shopping Center, Inc., cited Cone-Otwell-Wilson Corp. v. Commodore's Point Terminal Co., 114 So. 232 (Fla. 1927), in which the supreme court stated that [i]f the mortgagor fails to redeem, and the receiver continues in the management of the property after the final decree and until the purchaser at the sale is put in possession, any additional funds arising during that interval can then be reported by the receiver and distributed under proper order of the court according to the equities of the case and the rights and priorities of the parties to the suit. Id. at 234.

If the receipt of leases and rents can offset any judgment debt, it follows that the collateral assignment survives the foreclosure judgment. OPS Shopping Center, Inc., and Cone-Otwell-Wilson Corp. involved receiverships.

However, that distinction does not alter our outcome. Cf. Ormond Beach Assocs. v. Citation Mortg., Ltd., 634 So. 2d 1091, 1092 (Fla. 5th DCA 1994) ("Under the 'lien theory' of Florida law, there is no transfer of ownership in rents until there is a change in ownership of the underlying property. Before enactment of [section 697.07], a mortgagee's only way to protect rents subject to assignment on default, until title passed through foreclosure, was to obtain appointment of a receiver." (citation omitted)).

As Bayview's assignee, E-Z Cashing possessed the right to leases and rents from April 2020 until the sale of the foreclosed property. See Rhoden v. FDIC, 619 So. 2d 480, 482 (Fla. 2d DCA 1993) ("Mortgaged property remains the property of the mortgagor until he is divested of ownership, normally by the order confirming the sale of the mortgaged property. . . . [T]he notice of sale and certificate of title here described only the real property. As a result, the purchaser 'secured no ownership interest in the rentals except those accruing subsequent to securing the title to the rental property.' " (first citing and then quoting Tymber Skan Props. Ltd. v. Lutheran Mut. Life Ins. Co., 358 So. 2d 1370, 1372-73 (Fla. 2d DCA 1978))).

Conclusion The note and mortgage held by E-Z Cashing merged into the 2010 consent foreclosure judgment.

We reverse the trial court's "Amended Final Judgment of Foreclosure." Finding no merit in Ms. Ferry's arguments challenging the "Order Granting Creditor E-Z Cashing, LLC's Motion for Assignment of Leases and Rents," we affirm that order. Anomalously, E-Z Cashing may collect on the leases and rents from Ms. Ferry while Bayview, as the judgment creditor, may sell the foreclosed property. See § 45.031(1)(a), Fla. Stat. (2022). Given the purpose of the assignment and the scope of the trial court's order, Ms. Ferry will not be exposed to the specter of duplicative financial exposure, as the assignment of rents is merely security for the repayment of the indebtedness.

Affirmed, in part; reversed, in part; remanded for further proceedings consistent with this opinion. NORTHCUTT and BLACK, JJ., Concur. Opinion subject to revision prior to official publication.