                                             In the
                          Missouri Court of Appeals
                                     Western District

                                                  
 COMMUNITY FIRST BANK,                            
                                                     WD79251
                 Respondent,                         OPINION FILED:
 v.                                               
                                                     October 4, 2016
 GREGG HANIFIN, et al.,                           
                                                  
                  Appellants.                     
                                                  
                                                  


                  Appeal from the Circuit Court of Bates County, Missouri
                          The Honorable James K. Journey, Judge

Before Division One: Anthony Rex Gabbert, P.J., Thomas H. Newton, and Alok Ahuja, JJ.


         Gregg Louis Hanifin and Carys Mai Hanifin (hereinafter “Appellants”) appeal the

circuit court’s judgment in favor of Community First Bank (hereinafter “Community”) on

Community’s Petition for Deficiency Due Under Promissory Note. In Appellants’ sole point on

appeal, they argue that the trial court erred as a matter of law in awarding a deficiency judgment

in respondent’s favor because the trial court lacked subject matter jurisdiction over the deficiency

claim in that: (i) the Florida foreclosure court reserved exclusive jurisdiction over any

subsequent deficiency actions and (ii) the Florida court judgment is entitled to full faith and

credit. We affirm.
                                       Factual Background

         On or about September 6, 2006, BC National Banks of Butler, Missouri loaned

Appellants the amount of $636,300.00 by promissory note (“the Note”) identifying Appellants as

the borrowers. The Note contains a choice of law provision which calls for the application of

Federal law applicable to the Lender and, to the extent not preempted by federal law, the law of

the State of Missouri without regard to its conflicts of law provisions. Specifically, the Note

states that: “[t]his Note will be governed by federal law applicable to [l]ender and, to the extent

not preempted by federal law, the laws of the State of Missouri without regard to its conflicts of

law provision.” The Note also provides that “[I]f there is a lawsuit, Borrower agrees upon

Lender’s request to submit to the jurisdiction of the courts of Bates County, State of Missouri.”

The mortgage signed by the parties states that the Note and mortgage were applied for,

considered, approved, made and accepted in the State of Missouri.

        The Appellants defaulted in their obligation to BC Banks under the terms of the Note and

on March 19, 2010, BC National Banks obtained a final judgment in foreclosure against

Appellants in an equitable suit filed in Collier County, Florida circuit court. The Appellants were

found liable to BC Banks for a total of $702,338.96, coupled with an interest rate of 6%. The

Florida judgment court reserved jurisdiction of the cause for the purpose of making any and all

further orders as may be necessary and proper, including deficiency judgments. BC National

Banks took title to the Florida property at the foreclosure sale with a bid of $100.00.

        On or about April 30, 2010, Community acquired the assets of BC National Banks from

the Federal Deposit Insurance Corporation (the “FDIC”). Included in these assets were the rights

to Appellant’s loan, including the foreclosed Florida property. On or about October 6, 2010,

                                                  2
Community sold the property to a third party and netted proceeds of $258,476.13 from the sale.

After this sale, there still remained an outstanding balance of $364,772.25 due to Community by

Appellants. After adding interest, charges and fees advanced by Community, the full balance

owed to Community as of April 16, 2015 totaled $582,686.02.

         Five years later, on or about April 22, 2015, Community filed suit against Appellants in

the circuit court of Bates County, Missouri seeking judgment on the Note and for the remaining

balance due. Appellants filed a Motion to Dismiss for lack of subject matter jurisdiction and the

motion was denied. Thereafter, Appellants filed their Answer asserting lack of subject matter

jurisdiction as an affirmative defense while also arguing that the Florida foreclosure judgment

prevented another court from exercising subject matter jurisdiction over the Respondent’s suit for

the balance on the Note. After a bench trial, the trial court entered judgment in favor of

Community and ordered Appellants to pay the deficiency on the Note along with associated

expenses totaling $593,474.19.

                                       Standard of Review

          Whether a judgment is void for lack of subject matter jurisdiction is a question of law

that we review de novo. Hope’s Windows, Inc. v. McClain, 394 S.W.3d 478, 481 (Mo. App.

2013). We defer to the circuit court’s factual findings and will reverse the judgment only if it is

not supported by substantial evidence, is against the weight of the evidence, or erroneously

declares or applies the law. Id.

                                         Legal Discussion

      Section 702.06 of the Florida Statutes provides that: [i]n all suits for the foreclosure of

mortgages heretofore or hereafter executed the entry of a deficiency decree for any portion of a

deficiency, should one exist, shall be within the sound discretion of the court…the complainant

                                                  3
shall also have the right to sue at common law to recover such deficiency, unless the court in the

foreclosure action has granted or denied a claim for a deficiency judgment.1 Fla. Stat. § 702.06.

In applying and analyzing Fla. Stat. § 702.06, Florida courts have consistently held that unless

the foreclosure court has granted or has declined to grant a deficiency judgment, a plaintiff may

pursue deficiency relief in a separate action in a foreign court. See Garcia v. Dyck-O’Neal, Inc.,

178 So. 3d 433, 436 (Fla. 3d DCA 2015). The Florida Court of Appeals has ruled that Fla. Stat.

§ 702.06 allows for a separate action to pursue a deficiency, notwithstanding the foreclosure

court’s reservation in its final judgment to consider a deficiency. Garcia; Dyck-O’Neal, Inc. v.

Weinberg, 190 So. 3d 137 (Fla. 3d DCA 2016); Dyck-O’Neal, Inc. v. Beckett, 41 Fla. L. Weekly

D 1551 (Fla. 5d DCA 2016) (finding that, although the foreclosure trial court reserved

jurisdiction to award a deficiency judgment, if appropriate, the party who was assigned the note

was permitted to file a separate action at law against the defendant to recover the remaining

deficiency judgment in a court foreign from the foreclosure court). Further, in cases where the

parties have contractually agreed to a selected forum, the parties consent to personal jurisdiction

in the selected forum and waive any basis to dispute that forum’s jurisdiction.

         Precedent explicating Fla. Stat. § 702.06 clearly establishes that a mortgage creditor

reserves two options when seeking to collect a deficiency after a foreclosure judgment has been

entered; the creditor may either pursue the deficiency in the foreclosure court, or pursue the

deficiency in a foreign court. Hence, Appellants’ claims on appeal have no merit. Although the

Collier County, Florida court originally reserved jurisdiction to enter any further orders,



1
  “Generally, the preclusive effect of a judgment is determined by the law of the jurisdiction in which the judgment
was rendered.” Walters Bender Strobehn & Vaughan, P.C. v. Mason, 397 S.W.3d 487, 494 (Mo. App. W.D. 2013)
(citations omitted).

                                                          4
Community’s petition for deficiency filed in Missouri was permissible because the foreclosure

court did not rule on the deficiency issue.

          To support their argument that Missouri courts must recognize the Florida court’s

jurisdiction as exclusive, Appellants reference various Missouri holdings relating to exclusive

jurisdiction by foreign courts, specifically citing L & L Wholesale, Inc. v. Gibbens.2 L & L

Wholesale held that a Colorado court’s determination establishing subject matter jurisdiction was

due full faith and credit and the issue was precluded from relitigation because the appellant had

raised the defense of lack of subject matter jurisdiction, and the issue was litigated, a final

judgment on the issue was entered, and the appellant chose not to appeal the matter in the foreign

court. L & L Wholesale is clearly distinguishable from the case at hand. Here, the issue of

Community’s right to a deficiency judgment, and the amount of any such judgment, were never

litigated in the Florida court, and thus, there is no ruling on any substantive issue by the Florida

court to which the circuit court failed to give full faith and credit.

             Further discounting the Appellants argument that the Bates County, Missouri trial

court lacked subject matter jurisdiction is the fact that they agreed to and signed the mortgage

contract within the Note which featured a forum selection clause.3 By consenting to the forum

selection clause in the mortgage, the Appellants consented to Bates County, Missouri jurisdiction

and waived any basis to dispute Bates County’s jurisdiction.4



2
  108 S.W.3d 74 (Mo. App. 2003).
3
  The Forum Selection Clause explicitly provides that: “[I]f there is a lawsuit, Borrower agrees upon Lender’s
request to submit to the jurisdiction of the courts of Bates County, State of Missouri.”
4
  Appellants also suggest that jurisdiction in a Missouri court is inappropriate, because Missouri’s substantive law
concerning the calculation of deficiency judgments differs from Florida’s. The note and mortgage in this case
specifically provide that Missouri law would apply to substantive issues arising thereunder, unless preempted by
federal law. A choice-of-law clause in a contract identifies which jurisdiction’s law is to be used in the event a legal
issue arises. Hope’s Windows, Inc. v. McClain, 394 S.W.3d at 483.

                                                           5
      We conclude, therefore, that the judgment by the Collier County, Florida court did not

preclude the Bates County, Missouri circuit court from exercising subject matter jurisdiction over

Community’s deficiency claim. The Florida court did not rule on the deficiency issue and,

despite the Florida court reserving jurisdiction to rule on further actions, this did not prevent

Community from filing a separate deficiency action in a foreign court. Additionally, Appellants

contractually agreed to Missouri jurisdiction by signing the forum selection clause, thereby

waiving their right to contest jurisdiction. We affirm the circuit court’s judgment.




                                                       Anthony Rex Gabbert, Judge


All concur.




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