EDUARDO ORBE

v.

LEYZA BLANCO

REBULL, J.

Filing # 105413587 E-Filed 03/25/2020 12:34:53 PM [*2] “Actions against the receiver are in law actions against the receivership or the funds in the hands of the receiver, and his contracts, misfeasances, negligences, and liabilities are official, and not personal, and judgments against him as receiver are payable only from the funds in his hands.” McNulta v. Lochridge, 141 U.S. 327, 332 (1891). This statement of the law by the United States Supreme Court over 120 years ago was true then, and it is true now. Based on the “tipsy coachman doctrine,” we affirm the trial court’s result as right for the wrong reasons.¹ Because there is no basis for entry of an attorney’s fee award against Horizons West Property Owners Association, we affirm the trial court’s decision not to enter such an award. Mr. Orbe’s sole remedy for his award of attorney’s fees was to make a claim in the receivership to any funds which may have been available in the receivership estate. And as the receivership judge concluded that no such funds exist to compensate him for his atttorney’s fees, he may not seek such fees from Horizons West here.

I.

Mr. Orbe originally signed a lease with Condo Court Receivers, LLC, the original receiver appointed at the request of the Association. This lease was for Mr. [*3] Orbe to be a residential tenant in Unit 305 of Horizons West Condominium # 9 for $700 a month. Condo Court Receivers never signed the lease. Not long after Mr. Orbe signed that lease, the trial court presiding over the receivership of the various Horizons West properties and condo associations appointed attorney Leyza Blanco to replace Condo Court Receivers as the receiver for the various Horizons West entities. Soon after her appointment, Ms. Blanco sought and received direction from the receivership court regarding the amount of rent which should be paid for Mr. Orbe’s unit. That court entered an order authorizing Ms. Blanco to enter into a lease with Mr. Orbe for $950 a month. When Ms. Blanco and Mr. Orbe couldn’t come to an agreement, Ms. Blanco filed an eviction lawsuit against Mr. Orbe. That eviction action gave rise to this appeal. After a nonjury trial in the eviction, the trial judge entered a final judgment in favor of Mr. Orbe. The court found that Mr. Orbe had a month to month tenancy at $700 per month, because Condo Court Receivers never signed the written lease, but there was part performance by Mr. Orbe. The court further found that because the receiver did not give the 15-day notice required to properly terminate a month to month tenancy [§ 83.57(3), Fla. Stat. (2013)], the eviction was improper. Accordingly, the trial court entered judgment for the tenant, Mr. Orbe. [*4] After the final judgment in his favor, Mr. Orbe filed a motion for entitlement to attorney’s fees. Mr. Orbe argued for fees under section 83.48 of the Florida Statutes, and under the written lease he signed, but which was not signed by Condo Court Receivers. We fail to see how there was a legal basis for Mr. Orbe to argue for fees under the written lease, where the final judgment in his favor declared: “In this case the court finds that the Defendant was a tenant on a month to month because the lease was not executed by both parties but there was part performance by the tenant.” In finding that Mr. Orbe was a month to month tenant, the court necessarily found that the one-year written lease was not effective. Mr. Orbe was clearly entitled, on the other hand, to fees under the plain language of section 83.48 of the Florida Statutes: “In any civil action brought to enforce the provisions of the rental agreement or this part, the party in whose favor a judgment or decree has been rendered may recover reasonable attorney fees and court costs from the nonprevailing party.” § 83.48, Fla. Stat. (2014). Recognizing that she was the “nonprevailing party” in the eviction action, and that Mr. Orbe was the party in whose favor the final judgment was rendered, the receiver agreed to Mr. Orbe’s claim for entitlement to an award of attorney’s fees. As a result, on September 5, 2014, the trial court entered an agreed order granting Mr. Orbe’s entitlement to attorney’s fees and costs. [*5] Soon thereafter, the trial court in the receivership action entered a very significant order on September 23, 2014 which, among other things, terminated and discharged the receiver. The language of that order bears repeating in full: The Court finds that there are no funds remaining in the receivership estate and that all estate funds have been properly distributed in accordance with this Court's receivership orders.

Leyza F. Blanco as Receiver, having fully and faithfully discharged the duties given her under the Amended Receivership Order and any other prior receivership order of this Court, is hereby released and discharged as the Receiver from all further and future duties, obligations, and responsibilities as Receiver under the Amended Receivership Order and any other prior receivership order of this Court. All actions of the Receiver, her legal counsel, special eviction counsel and other professional advisors and consultants taken pursuant to and in reliance upon the Amended Receivership Order and any other prior receivership orders of this Court, are hereby ratified and approved having fully, effectively and faithfully represented the Receiver in this case. Notwithstanding the release and discharge of the Receiver and the termination of this estate, the Receiver and her agents acting in furtherance of the Amended Receivership Order and any other prior receivership orders of this Court shall be subject to judicial immunity and the protections afforded to them, which shall survive, the discharge of the Receiver and the termination of the Receivership.

In connection with the motions pending in the eviction case of Leyza F. Blanco as Receiver vs. Eduardo Orbe, Case Number 2013- 6323-CC-26 (03), ("Eviction Case"), the Court finds that there is no benefit to the receivership estate for the Receiver and her counsel to incur legal fees and costs to defend Non-Party Eduardo Orbe's Motion to Determine Reasonable Attorneys' Fees and Costs in the Eviction Case and as such, this Court releases and discharges the Receiver from having to defend and hire an expert in the Eviction Case in connection with such motion. However, Receiver is ordered to file this Order in the Eviction Case to advise the judge in the Eviction Case of same. [*6] Again, the Court finds that there is no money in this estate and as such there are insufficient funds to pay Orbe's claim, but this Court will nonetheless permit for the filing of Orbe's claim in this case for the record. The Court reiterates that the Receiver and her agents acting in furtherance of the Amended Receivership Order and any other prior receivership order of this Court are subject to judicial immunity and the protections afforded to them, which shall survive the discharge of the Receiver and the termination of the Receivership.

(emphasis added). At this point, what is not clear from the record, is how Mr. Orbe’s award of entitlement to attorney’s fees from the “nonprevailing party” in the eviction action, that is, Leyza Blanco as receiver, morphed into him seeking and obtaining a judgment for fees against The Horizons West Property Owners Association, Inc. But that is what happened. The record reflects that on April 15, 2015, the trial court rendered an approximately $42,000 judgment for attorney’s fees against the Horizons West entity. That judgment was the subject of the earlier appeal in this case. This Court reversed that judgment because Horizons West was not a party to the eviction action. Among other things, this Court wrote: A receiver is an officer of the court. Se. Bank, NA. v. Ingrassia, 562 So. 2d 718, 721 (Fla. 3d DCA 1990). See also Edenfield v. Crisp, 186 So. 2d 545, 549 (Fla. 2d DCA 1966). A receiver is a disinterested person appointed by the court for the protection or collection of property. Granada Lakes Villas Condo. Ass 'n, Inc. v. Metro-Dade Invs. Co., 125 So. 3d 756, 758 (Fla. 2013) (quoting Black's Law Dictionary 1383 (9th ed. 2009)) (internal quotation marks omitted). [*7] * * * The Receiver was not a representative of the Appellant and was not acting directly on its behalf, even if Appellant was aware of the ongoing litigation. The Final Judgement was entered against the Appellant, an entity which was not a party to the case and which was not served with initial process or notice of hearing. As such, the trial court should not have entered the Final Judgment against the Appellant because it could not adjudicate the rights of a non-party.

(emphasis added). Having reversed the attorney’s fee judgment entered against Horizons West, this Court then remanded this case to allow Horizons West to intervene in the action.

On remand, in light of the fact that this Court had reversed the judgment entered against it, Horizons West withdrew its motion to intervene in the eviction action. Mr. Orbe, on the other hand, sought to have the trial court force Horizons West to be a party to the eviction proceeding. The trial judge held a hearing on all pending issues on February 14, 2019.

We have reviewed the transcript of that hearing, and we sympathize with the trial judge’s frustration. Among several concerns she had to address was the fact that she “inherited” the final judgment entered against Horizons West from a predecessor judge. Ultimately, the trial judge entered the order now on appeal. That order is titled as an Amended Order Denying Defendant’s Motion for Award of Attorney’s Fees. While the trial court wrote that it denied Mr. Orbe’s motion for an award of attorney’s fees because it believed it lacked jurisdiction to enter such [*8] an award; we affirm the trial court’s order because it reached the right result, that is, not entering any attorney’s fee award against Horizons West.

II.

As the trial judge correctly recognized at the February 14, 2019 hearing, the outcome of these issues turns on a proper application of the law governing receiverships. As we noted in our earlier opinion, a “receiver is an officer of the court . . . .” Se. Bank, N.A. v. Ingrassia, 562 So. 2d 718, 721 (Fla. 3d DCA 1990). Put differently, a “receiver is an arm of the court and the funds in its possession are as though they were in the hands of the court and held for the benefit of all lawful claimants.” Sunland Mortg. Corp. v. Lewis, 515 So. 2d 1337, 1338 (Fla. 5th DCA 1987). Conversely, in this case, what the receiver clearly was not, was an agent or representative of Horizons West Property Owners Association.

At all times, Mr. Orbe knew that he was dealing with a receiver. At the beginning of his lease he was dealing with Condo Court Receivers. The party who filed the eviction complaint against him was “Leyza F. Blanco, the Court appointed Successor Receiver for the Horizons West Property Owners Association, Inc.” Like Mr. Orbe, his counsel certainly also knew he was dealing with a receiver. As we noted at the outset of this opinion in quoting the United States Supreme Court in Lochridge, claims against receivers are only payable from [*9] receivership funds (with some exceptions not applicable to this case). Over one hundred years ago, the Florida Supreme Court described doing business with a receiver in this way: A receiver is the agent of the court, and those who deal with him as such do so with reference to his authority as receiver, the nature and extent of which authority those who so deal should take notice. Those who sell goods to a receiver as such do so upon faith of the property or business of the receivership, and with presumed knowledge of the lawful authority of the receiver. Knickerbocker Tr. Co. v. Green Bay Phosphate Co., 56 So. 699 (Fla. 1911).

A leading treatise has similarly described the situation: One contracting with a receiver is bound to take notice of the limitation on her authority. As has been said:

The receiver is at all times an officer of the court, subject to its orders and directions, an agent, the scope of whose authority is limited by law. … Thus, every one dealing with such receiver knows of the limitations, or lack of limitations, to his power to transact the business of the institution. He cannot without approval of the court relinquish any of the rights of the trust.

Receivers, 12 Williston on Contracts § 35:85 (4th ed. July 2019 Update) (internal footnotes omitted).

Here, although Mr. Orbe and the receiver did not enter into the one-year written lease contract, they nonetheless entered into a month to month tenancy which is governed by the same limitations on the receiver’s authority. Any claim against the receiver arising out of this relationship would have to be made against the receivership estate. [*10] Florida law is clear that a receiver is the custodian for the court, through which the court controls the receivership estate. Murtha v. Steijskal, 232 So. 2d 53 (Fla. 4th DCA 1970) held:

The custody of property by the court through its receiver is the custody of the sovereign power or government acting through the courts, possession by the court of the res gives jurisdiction over the res to the court appointing the receiver and gives such court power to determine all questions concerning the ownership and disposition of the property. Murtha, 232 So. 2d at 55.

In re Chira, 343 B.R. 361, 368 (Bankr. S.D. Fla. 2006), aff'd, 367 B.R. 888 (S.D. Fla. 2007) (emphasis added).

To be clear, no argument or claim has ever been made in this case that Ms. Blanco has any personal liability for the nonprevailing party attorney’s fees arising out of the eviction. Nor could such a claim ever be made in good faith. It is clear that all times Mr. Blanco was acting in her official receivership capacity, and with the express authorization and sanction of the receivership court. Receivers ordinarily enjoy a qualified immunity from personal liability for actions taken within the receivership authority. In other words, receivers are only liable for actions taken in their official capacity. If a receiver obeys the orders of the appointing court, the receiver cannot be held personally liable although the actions taken are erroneous or are subsequently reversed.

16 Fletcher Cyc. Corp., Receivers Liabilities § 7864 (Sep. 2019 Update) (emphasis added) (footnotes omitted). Moreover, a “receiver is not personally liable on a contract made in his or her official capacity unless made without authority.” See id. at § 7864.10 (footnotes omitted). [*11] In this case, Mr. Orbe entered into a month to month tenancy with the receiver. The receivership court later authorized Ms. Blanco to seek a higher monthly rental payment from Mr. Orbe and to enter into a written lease with him. When that was unsuccessful, Ms. Blanco was authorized to file the eviction action against Mr. Orbe. Although Ms. Blanco was unsuccessful in the eviction suit, that did not render her personally liable for attorney’s fees as the nonprevailing party.² The fact that Ms. Blanco agreed to an order on Mr. Orbe’s entitlement to an award of attorney’s fees does not change the analysis at all. Indeed, acquiescing to Mr. Orbe’s motion for attorney’s fees was the only thing Ms. Blanco was authorized to do. In its September 23, 2014 order, the receivership court “released and discharged” Ms. Blanco from having to defend against the motion for attorney’s fees. That court also found that while there was not enough money in the receivership estate “to pay Orbe’s claim,” the court would allow his claim to be filed in the receivership “for the record.” The record on appeal does not reflect that Mr. Orbe or his counsel ever submitted a claim to the receivership court or the estate. But that was their sole remedy.

[*12] Contract and tort claimants must proceed against a receiver as receiver and get their satisfaction from the property held in the receiver's representative capacity, and not from the receiver's personal property. Actions against the receiver are in law actions against the receivership or the funds in the hands of the receiver, and his contracts, misfeasances, negligences and liabilities are official and not personal, and judgments against him as receiver are payable only from the funds in his hands.

Bogert's The Law of Trusts and Trustees § 14 (June 2019 Update) (internal quotations and footnotes omitted).3

III.

All of the foregoing discussion regarding the limitations on the liability of receivers is entirely consistent with general Florida cases concerning receiverships. For instance, in Christian Broad. Network, Inc. v. Turner Communications Corp., 368 So. 2d 1345 (Fla. 4th DCA 1979), a lessor sued the lessee for breach of an equipment lease in federal court. The lessor obtained a money judgment against the “A receiver has been described as an arm of the court and therefore funds or property in the possession of a receiver are as though in the hands of the court, held for the benefit of all lawful claimants. The court therefore has the power to determine all questions concerning the disposition of the property. Accordingly, anyone claiming a right to receivership property must submit a claim to the court. Failure to submit a claim to the court and/or resort to self help, with respect to receivership property, could precipitate an action for contempt. Once a receiver is appointed for a business or a person, that entity loses the power to transfer its property subject to receivership. In addition, third parties cannot obtain a valid transfer or effect a valid lien on the property through filing suits and obtaining judgments.”

Bruce J. Berman, Generally—The Court's Control Over Receivership Property,⁴ Fla. Prac., Civil Procedure § 1.620:4 (April 2019 Update) (emphasis added). [*13] lessee for over one million dollars. The lessee was in receivership. The Court held that the lessor had to be allowed to submit its claim in the receivership proceeding, and reversed the trial court’s order striking the claim.

In Asset Recovery Group, LLC v. Cabrera, 233 So. 3d 1173 (Fla. 3d DCA 2017), Cabrera was the victim of a stabbing at an apartment complex. Cabrera sued the owner of the apartment complex for negligent security. The owner of the apartment complex, however, was subject to a court-appointed receiver who had control over the property. The Cabrera Court quashed the trial court’s order denying the receiver’s motion to dismiss Cabrera’s claims. Therefore, pursuant to Barton,[4] prior to filing suit, Cabrera was required to seek leave of court from the court that appointed the Receiver. Thus, we grant the petition for writ of prohibition, quash the order under review, and remand with instructions for the trial court in Case No. 16–31938 to enter an order granting the Receiver's motion to dismiss counts IV and V of the amended complaint without prejudice to allow Cabrera to move to amend his complaint in an attempt to sufficiently allege that the acts or the omissions of the Receiver were outside the authority granted to him by the appointing court, or to seek leave to file the negligence action from the court that appointed the Receiver. Asset Recovery Group, LLC v. Cabrera, 233 So. 3d 1173, 1178 (Fla. 3d DCA 2017).

[*14] In yet another receiver-controlled apartment complex stabbing case, the Third District Court of Appeal once again quashed an order denying the receiver’s motion to dismiss, “without prejudice to Wright seeking leave to file suit against the Receiver from the foreclosure court that appointed the Receiver.” Asset Recovery Group, LLC v. Wright, 271 So. 3d 1088, 1089 (Fla. 3d DCA 2019).

Finally, in Desulme v. Rueda, 252 So. 3d 293, 294 (Fla. 3d DCA 2018), Desulme owned “a unit in a distressed condominium that is subject to a courtordered receivership.” She alleged “that the receiver took possession of her unit, displaced her tenant, altered or repaired the unit without her consent, and collected higher rents from a new tenant.” See id. Desulme sued the receiver. The Court affirmed the trial judge’s order dismissing her claims without prejudice to her seeking leave from the receivership court to proceed with her case against the receiver. The weight of authority discussed herein makes it abundantly clear that if a person has a claim (in tort or contract) against an entity in receivership, absent an allegation that the receiver acted outside of her authority, the person must look to the receivership court for redress of that claim. In Cabrera and Wright, the claimants alleged they were involuntary victims of the receiver’s negligence. In Christian Broadcasting Network, the claimant entered into a lease with a business which ended up in receivership. For all of these claimants, their sole remedy was [*15] with the court who appointed the receiver. Likewise, in this case, Mr. Orbe’s remedy was the receivership court. Conclusion We have sympathy for Mr. Orbe’s argument that the receiver wrongly filed the eviction suit against him and that someone should have to pay for his attorney’s fees. But in a very real legal sense, as we’ve noted, Mr. Orbe is in the same position as the claimants in Cabrera, Wright, and Christian Broadcasting Network: he was “damaged” by someone in receivership. While this may unfortunately leave Mr. Orbe without a remedy, it is no different than having a claim against someone who is involved in bankruptcy proceedings, or having a claim or judgment against an uncollectible defendant.

There is thus no lawful basis for holding Horizons West liable for Mr. Orbe’s claim. This was official action taken solely by the receiver, with the express authorization of the receivership court. As a result, Mr. Orbe must look solely to that court for redress. We affirm the order appealed declining to take further action for attorney’s fees in the eviction case.

AFFIRMED.

TRAWICK AND WALSH, JJ., concur.