News, Events & Blog

Taxpayer Identity Theft Still a Major Problem

Taxpayer Identity Theft Still a Major Problem

Over the past four years the IRS has blocked more than 19 million suspicious tax returns from being processed. Unfortunately, not all of the fraudulent returns filed under taxpayer’s stolen tax identification numbers have been blocked and, last year alone, 1400 criminals were prosecuted for receiving funds by filing fabricated returns and refund claims.

The IRS has been aggressively pursuing these individuals and informing the public of the risk to it of these false returns. Not only does it impact the individual whose return is involved, but it hurts all taxpayers because the government is losing money when it pays these false refunds.

To help combat these criminals, the IRS has released Publication 5027 “Identity Theft Information for Taxpayers”. It sets out the warning signs that you may be a victim, steps to follow if you become a victim and tips on how to reduce your risk of becoming a victim. The later includes:

  1. Don’t carry your Social Security card or papers bearing your SSN on them.
  2. Don’t provide a business your SSN just because they ask.
  3. Take steps to protect your financial information at home and on your computers.
  4. Check your credit report at least annually.
  5. Check your Social Security Administration earnings statement annually
  6. Don’t give personal information over the phone, through the mail or the internet unless you initiated the contact and you know for sure who is asking for it. Note the IRS does not contact taxpayers by email, text messages or social media channels to request this type of information.

For further information, please see the above Publication or visit and the FTC’s The government has just announced another resource to help protect your identity. Please visit: Taxes. Security. Together.

Joint Return versus Separate Returns for Spouses

Joint Return versus Separate Returns for Spouses

In an ever evolving environment of professional liability, some recent conversations with tax preparers have raised the question of what is the duty of a tax preparer in discussing with spouses the pros and cons of filing jointly or separately. Historically, a brief statement to the taxpayers that the tax will be lower if you file jointly was all that was stated and usually proved to be all that they wanted to know.

However, things have changed. The legal definition of spouse has recently changed in light of court rulings saying that gay marriage is legal. Also, more and more women work and many are professionals or have their own businesses and assets. These may generate income and losses. They may also generate non-dischargeable trust fund penalties for non-payment of withholding tax that, in addition to any income tax liabilities, will create liens resulting in any tax refunds being seized by the IRS and encumbering those separately held assets. Many individuals are coming forward to disclose foreign bank accounts and foreign assets that generate income tax issues and other significant penalties for not filing a host of different information returns related to those foreign assets. Frequently, only one spouse owns the account, but the other may be aware of it. Sometimes the other spouse is in the dark.

The tradeoff for filing jointly and receiving a lower tax bill is that, if any adjustments are made by the IRS or if the tax is not paid, then both spouses are liable. While there are innocent spouse and separation of liability provisions available in post filing proceedings, the former requires lack of knowledge and no benefit from any unreported income, while the latter requires some disintegration of the spousal relationship, whether divorce, legal separation and or physical separation of the parties. They also require time and, frequently, money for professional assistance. While the IRS has greatly expanded these relief provisions, there is no guarantee they will succeed in a given fact situation.

In this environment, some practitioners are suggesting that more than just a passing statement that you will save by filing jointly is required. Their recommendations? Prepare both separate and joint returns. Then meet with the taxpayers and explain the differences between and the consequences of the two returns. Explain that if a joint return is filed, both will be liable to pay the amount on the return, but, just as importantly, any future additions in taxes, penalties, and interest due. These may come from places not contemplated by either the taxpayers or the preparer at the time of preparation of a return. Definitely, food for thought.

Beware Tax Scammers Pretending to be the IRS

Beware Tax Scammers Pretending to be the IRS

In a recent statement, the IRS advises that over 4000 people have been cheated to the tune of 20 million dollars by various tax schemes currently in vogue. These scammers operate by scaring people into believing that they must act immediately to avoid arrest, deportation and other frightening consequences unless they send money immediately. They even have the ability to cause your call scanner to reflect that the call is from the IRS. They also use official looking letters and emails.

The IRS warns that the only official website for the IRS is They also advise that they would never do any of the following, which scammers often do:

  1. Demand payment immediately over the phone in a first contact initiated by them. They would first send you a bill.
  2. Threaten to have local police arrest you for not paying them.
  3. Demand payment without providing an opportunity to challenge the amount claimed. (However, be aware that if you move and don’t notify the IRS of your new address, that notice may never reach you).
  4. Specify that payment must be by credit card or debit card.
  5. Ask for credit card or debit card information over the phone.

If you have been targeted by a scammer, call the IRS. If you owe taxes, call 1-800- 829-1040. If you don’t owe taxes, call 1-800-366-4484. Remember not to panic. If you receive a call and don’t know what to do, think about these warnings and seek help.

In Federal Court on a Trust or Estate Related Matter and Want to Get Out?  Princess Lida May Be the Answer.

In Federal Court on a Trust or Estate Related Matter and Want to Get Out? Princess Lida May Be the Answer.

In the groundbreaking case of Marshall v. Marshall, 547 U.S. 293, 126 S. Ct. 1735, 164 L. Ed. 2d 480 (2006), the United State Supreme Court scaled back the (widely perceived) extensive parameters of the so-called “probate exception” to federal jurisdiction in cases involving estate fiduciaries or touching upon state court probate proceedings.  As a result, more cases that involve probate issues, estate proceedings or the parties thereto are ending up in federal court.  However, even though a plaintiff may successfully fend off a challenge to federal court jurisdiction based on the probate exception – as several have done (at least in part)[1] – merely clearing this jurisdictional hurdle does not assure that such “victorious” litigant will stay in federal court.

A potential counterbalance to more expansive federal court jurisdiction, given the “loosening” of the probate exception, where state probate (or trust) proceedings are in play, is the doctrine of prior exclusive jurisdiction.  Under such doctrine, it is inappropriate for a federal court to exercise jurisdiction where there are two suits, one in state court and one in federal court, and the suits are in rem or quasi in rem.  This is also known as the Princess Lida doctrine.  This does not refer to a Star Wars character, but, rather, to the Supreme Court decision in Princess Lida of Thurn and Taxis v. Thompson, 305 U.S. 456, 59 S. Ct. 275, 83 L. Ed. 285 (1939).  It has been held that this doctrine of prior exclusive jurisdiction has melded with the probate exception in cases involving state probate proceedings and estate administration, which may conflict with federal jurisdiction.  See Selseth v. Darwit, 536 F. Supp. 2d 883 (N.D. Ill. 2008).

In Princess Lida, state court proceedings in Pennsylvania were commenced concerning a trust set up to benefit Princess Lida of Thurn and Taxis, formerly Lida Eleanor Purcell Fitzgerald, emanating from her divorce from George P. Fitzgerald and payments from the divorce settlement.  The Pennsylvania state court maintained jurisdiction of this matter for years, which included the filing and review of accountings.  After several years of having the trust in the Pennsylvania state court, and while the same was still pending, Lida instituted suit in federal court in the Western District of Pennsylvania alleging mismanagement of the trust funds and requesting various relief.  Subsequently, both the state court and the federal court enjoined the parties in the other action from pursuing the same.  The state court’s ruling was affirmed by the Pennsylvania Supreme Court.  Obviously, at a stalemate, with each court (the state and federal) ordering the parties not to pursue the other case, the United States Supreme Court accepted jurisdiction and acted.

The United States Supreme Court held that one court’s exercise of jurisdiction over the administration of a trust precluded a second court from exercising quasi in rem jurisdiction over a later lawsuit brought by the beneficiaries of the trust asserting claims against the trustees for mismanaging the trust.  The Court noted that two courts may have concurrent jurisdiction over cases involving in personam claims, and both may “proceed with the litigation at least until judgment is obtained in one of them which may be set up as res judicata in the other.”  However, the Court held that there cannot be concurrent jurisdiction over in rem or quasi in rem claims.  The Court stated:

[I]f the two suits are in rem, or quasi in rem, so that the court, or its officer, has possession or must have control of the property which is the subject of the litigation in order to proceed with the cause and grant the relief sought the jurisdiction of the one court must yield to that of the other.

We have said that the principle applicable to both federal and state courts that the court first assuming jurisdiction over property may maintain and exercise that jurisdiction to the exclusion of the other, is not restricted to cases where property has been actually seized under judicial process before a second suit is instituted, but applies as well where suits are brought to marshal assets, administer trusts, or liquidate estates, and in suits of a similar nature where, to give effect to its jurisdiction, the court must control the property.

The Supreme Court thus ruled that the Common Pleas Court of Pennsylvania had acquired jurisdiction, and that the federal court for the Western District of Pennsylvania was without jurisdiction of the suit subsequently brought for the same or similar relief, and that the parties in that suit were properly enjoined from pursuing it.

This principle, which has become known as the “Princess Lida Doctrine”, has been applied routinely throughout the country. See Dailey v. National Hockey League, 987 F. 2d 172, 175 (3d Cir. 1993) (acknowledging the continuing validity of the Princess Lida doctrine).  In short, “[t]he Princess Lida doctrine requires abstention based upon principles of comity and in rem jurisdiction.”  Selton v. U.S. Bank Trust Nat. Assn., SD, No. 6:14-cv-1278-ORL-37KRS, 2015 WL 4987706, *4, 2015 U.S. Dist. LEXIS 109487 (M.D. Fla. August 19, 2015).

As indicated, the Princess Lida doctrine applies equally to state and federal courts. See Cartwright v. Garner, 751 F. 3d 752, 761 (6th Cir. 2014) (“The principle that the court first assuming jurisdiction over the property may maintain and exercise that jurisdiction is applicable to both state and federal courts.”).  As a consequence, Princess Lida also applies where no federal court is involved and both the first and second actions are pending in the courts of different states.  In such cases, where a court in one state first assumes in rem or quasi in rem jurisdiction over property, a court in a later-filed action in another state must abstain from hearing claims relating to the same property. In re Rust’s Estate, 17 Pa. D. & C.3d 627 (Pa. Com. Pl. 1979) (expressly holding that Princess Lida applies where two actions are pending in the courts of different states, and that the exercise of in rem or quasi in rem jurisdiction by a court in one state deprives a court in a different state of jurisdiction over a later-filed in rem or quasi in rem action concerning the same subject matter as the first action); Interfirst Bank-Houston v. Quintana Petroleum, 699 SW 2d 864, 878 (Tex. Ct. App. 1985) (applying Princess Lida and holding that “Where the jurisdiction of a court [of another state] has attached, and the proceeding is quasi in rem, as is the administration of a trust, other courts should not interfere with that jurisdiction.”)

Florida courts have likewise adopted the principles enumerated in Princess Lida and noted their applicability to cases involving trusts.  Blake v. Blake, 172 So. 2d 9, 10 (Fla. 3d DCA 1965) (“As between courts of concurrent jurisdiction, it has generally been held that the court which first exercises jurisdiction over a matter retains such jurisdiction to the termination of the cause.”).  Indeed, prior to Princess Lida, the Florida Supreme Court held that “a court which has in its rightful possession or under its control property involved in litigation may exercise jurisdiction over such property to the exclusion of all other courts, and another court of concurrent jurisdiction cannot interfere and wrest from it the jurisdiction first obtained.” Maddox Grocery Co. v. Hay, 100 So. 747, 747 (Fla. 1924).

1 See, e.g., Jones v. Brennan, 465 F.3d 304 (7th Cir. 2006); May v. J.P. Morgan Chase & Co., 2009 WL 482719 (E.D. Mich 2009).

Defenses to a Foreign Judgment – Is Ineffective Service a Defense to the Domestication and Enforcement of an Out of Country Foreign Judgment

Defenses to a Foreign Judgment – Is Ineffective Service a Defense to the Domestication and Enforcement of an Out of Country Foreign Judgment

Section 55.601, Florida Statutes, is Florida’s Uniform Out-of-Country Foreign Money-Judgment Recognition Act (the “Act”), and it governs the recognition of out-of-country foreign money judgments. The Act provides that an out-of-country foreign judgment that is final, conclusive and enforceable where rendered is conclusive between the parties to the extent that it grants or denies recovery of a sum of money. See Fla. Stat. § 55.604. There are, however, certain mandatory and permissive exceptions. Specifically, an out-of-country foreign judgment is not conclusive if the judgment was rendered in a system which does not provide impartial tribunals or due process, the foreign court lacked personal jurisdiction or the foreign court lacked subject matter jurisdiction. See Fla. Stat. § 55.605(1). In contrast, a Florida court may exercise its discretion to refuse to recognize an out-of-country foreign judgment if: (i) the defendant did not receive notice of the foreign proceedings in sufficient time to enable it to present a defense; (ii) the judgment was obtained by fraud; (iii) claim for relief is repugnant to Florida’s public policy; (iv) the judgment conflicts with another final order; (v) the foreign proceeding was contrary to an agreement between the parties to settle the dispute out of court – i.e. an arbitration agreement; (vi) the foreign proceedings a seriously inconvenient forum; (vi) the foreign jurisdiction would not recognize a Florida judgment; or (vii) the foreign judgment is one for defamation under laws that do not provide much protection for freedom of speech and press in that case as would be provided by the United States. See Fla. Stat. §§ 55.605(2).

Insufficiency of service of process is not expressly listed as a grounds for non-recognition of an out of country foreign judgment. Moreover, the Act provides that a “foreign judgment shall not be refused recognition for lack of personal jurisdiction if the defendant was served personally in the foreign state.” Fla. Stat. 55.606(1). Nevertheless, ineffectual service in a location other than the foreign state may still serve as a defense to a foreign judgment by forming the basis for an argument that the foreign court lacked personal jurisdiction. See Fla. Stat. § 55.605 (1)(b) (“An out of country foreign judgment is not conclusive if…. the foreign court did not have personal jurisdiction over the defendant.”).

In Florida, a court’s exercise of personal jurisdiction is dependent on strict compliance with the requirements of service of process. See Kolenski v. Flaherty, 116 So. 2d 767, 769 (Fla. 1959) (“[I]t is the fact of valid service–or the fact of invalid service–as shown by the evidence, that is controlling insofar as the question of jurisdiction over the person of the defendant is concerned…”); Abbate v. Provident Nat’l Bank, 631 So. 2d 312, 315 (Fla. 5th DCA 1994) (“Absent strict compliance with the statutes governing service of process, the court lacks personal jurisdiction over the defendant.”).  Importantly, when analyzing personal jurisdiction, a Florida Court should conduct its own analysis of a foreign court’s exercise of personal jurisdiction, irrespective of the foreign court’s conclusions. See Restatement (Third) of Foreign Relations Law § 482 (1987) (“Even if the rendering court had jurisdiction under the laws of its own state, a court in the United States asked to recognize a foreign judgment should scrutinize the basis for asserting jurisdiction in the light of international concepts of jurisdiction to adjudicate.”); Wellington v. Dept. of Revenue ex rel. Kober, 708 So.2d 1040 (Fla. 4th DCA 1998) (holding Iowa court’s statement about personal service was not determinative where judgment was entered by default). As a result, where a there is ineffective service of process, a foreign court should lack personal jurisdiction providing a defense to the enforcement of the judgment in Florida.

Nevertheless, in a 2008 opinion, the Third District Court of Appeals held that insufficiency of service of process did not provide a defense to enforcement under the Act. See Israel v. Flick Mortgage Investors, Inc., 23 So. 3d 1196 (Fla. 3d DCA 2008). In Flick, the defendant argued that the foreign court lacked jurisdiction because it was notified of the foreign lawsuit by registered mail. The Court rejected that argument holding that “[o]n the particular facts and circumstances of this case, this claim must fail.”  Flick, 23 So. 3d at 1198 (emphasis added). In reaching that conclusion, the court reasoned that: (i) Section (2)(a) of the Florida Act is the only provision potentially authorizing an attack on a foreign money-judgment due to insufficiency of service of process; (ii) Section (2)(a) focuses not the manner in which a defendant received notice of a foreign lawsuit, but on whether the defendant received notice in sufficient time to present a defense; (iii) the defendant actually appeared in the foreign proceedings and presented a defense; and (iv) the defendant challenged the foreign court’s personal jurisdiction in the foreign proceedings, but did not raise insufficiency of service of process as a basis for the foreign court’s lack of personal jurisdiction and therefore, waived that defense. As explained below, the reasoning underlying the Flick opinion is flawed.

First, the Flick court’s holding rests on the faulty premise that Section (2)(a) is the only provision of the Florida Act that relates to insufficiency of service of process. See id. at 1198. Florida law requires effective service of process as a prerequisite to the exercise personal jurisdiction over a defendant, see Kolenski, 116 So. 2d at 769; Abbate, 631 So. 2d at 315, and Section (1)(b) of the Florida Act provides that “[a]n out of country foreign judgment is not conclusive if…. the foreign court did not have personal jurisdiction over the defendant.” Fla. Stat. § 55.605(1)(b). Thus, Section (1)(b) of the Act relates to the sufficiency of service of process. See also Restatement (Third) of Foreign Relations § 482 (“Even if the rendering court had jurisdiction under the laws of its own state, a court in the United States asked to recognize a foreign judgment should scrutinize the basis for asserting jurisdiction in the light of international concepts of jurisdiction to adjudicate.”). As a result, the Flick court mistakenly failed to consider whether ineffective service of process precluded a foreign court from obtaining personal jurisdiction and therefore is a ground for non-recognition of a foreign judgment under Section (1)(b) of the Florida Act.

More importantly, however, the Flick court reasoned that actual notice of a foreign lawsuit, as opposed to strict compliance with Florida Statutes governing service of process, is all that is required for recognition of a foreign judgment under the Florida Act. Flick, 23 So. 3d at 1198. That reasoning is contrary to Florida law, which requires valid service of process, not actual notice, for a court to acquire personal jurisdiction over a defendant. See Abbate, 631 So. 2d at 315 (“The plaintiff asserts a harmless error argument, that service of process is designed to assure that a defendant is given notice of the institution of civil proceedings against him and that this was done here. This argument, however, runs counter to the overwhelming law in Florida that strict compliance with the statutes governing service of process is required. Absent strict compliance with the statutes governing service of process, the court lacks personal jurisdiction over the defendant.”) (internal citations omitted).

Finally, the Flick court’s ultimate holding did not rest on the sufficiency or insufficiency of the plaintiff’s service of process rested on the defendant’s waiver of any argument related to ineffective service of process. See id. at 1199.

While Flick is the only Florida Court to squarely address the question of whether ineffective service of process is a defense to enforcement of a foreign judgment, the Fourth District has indicated that a lack of service may provide a defense to enforcement due to a lack of personal jurisdiction. See Chabert v. Bacquie, 694 So.2d 805 (4th DCA 1997). In Chabert the defendant objected to the recognition of a French judgment arguing that the French court lacked personal jurisdiction over him due to “improper or inadequate service of notice.” Chabert, 694 So. 2d at 811. Considering the defendant’s argument, the Fourth District stated that:

[S]ubsection (1) of section 55.605 of the Act is phrased in mandatory terms: if any of the grounds listed in subsection (1) are found to exist, then the foreign judgment is not conclusive, and a Florida court cannot recognize it. This contrasts with subsection (2) of section 55.605 which is phrased in permissive terms. Hence if Chabert is correct that the French court lacked personal jurisdiction over him under the Hague Service Convention, then under section 55.605(1)(b) we may not accord recognition to the French judgment.

Id. at 811 (emphasis added). The court ultimately overruled the defendant’s objection finding that he had been personally served at the commencement of the foreign suit and therefore the Court could not refuse to recognize the judgment pursuant to Section 55.606, Florida Statutes. Id. at 812. Nevertheless, the Court’s dicta indicated a willingness to consider and accept an argument that the foreign judgment was unenforceable because the court lacked personal jurisdiction due to ineffective service of process.

Courts interpreting other states’ versions of the Uniform Out-of-country Foreign Money-Judgment Recognition Act have reached the same result. In Franco v. Dow Chem. Co., 2003 U.S. Dist. LEXIS 26639, Case No. CV 03-5094 NM (PJWx) (C.D. Cal. Oct. 20, 2003) foreign plaintiffs attempted to domesticate a foreign judgment against Dow Chemical Company (“Dow”). In the foreign lawsuit, the plaintiffs attempted to serve Dow, but mistakenly served an affiliated corporation, Dow Agro Sciences.  See Franco, 2003 U.S. Dist. LEXIS 26639 at *5. The District Court held that the judgment was unenforceable because the foreign court lacked personal jurisdiction. Id at *26-27.

A natural reading of the Act and the Fourth District’s opinion in Chabert support the argument that ineffective service in a foreign litigation is a defense to the enforcement of a foreign judgment in Florida. Notwithstanding the opinion in Flick, a party facing domestication of an out of country judgment in Florida should carefully scrutinize service of process in the underlying lawsuit to determine whether it was defective.

Community Associations Should Consider Changes to Documents Due to Westwood Gardens Decision

Community Associations Should Consider Changes to Documents Due to Westwood Gardens Decision

Many homeowners associations and condominium associations in Florida will be greatly impacted by a Florida appellate court decision that was issued in May of 2015. On May 27, 2015, the Fourth District Court of Appeal, in the case of Pudlit 2 Joint Venture, LLP v. Westwood Gardens Homeowners Association, Inc., No. 169 So. 3d 145 (Fla. 4th DCA 2015), interpreted the provisions of Section 720.3085, Florida Statutes, which allow a homeowner’s association to recover a portion of the past due amounts owed on an account in which title has been transferred through the issuance of a certificate of title (“COT”) in a mortgage foreclosure action, as being inapplicable where the association’s own declaration provides for a recovery which would be less than the recovery provided for under this section of the Florida Statutes.

While the Westwood Gardens case dealt with a third-party purchaser at a mortgage foreclosure sale rather than a situation involving the acquisition of title by a first mortgage holder, it appears the holding in that case would also apply in the case of a foreclosure sale in which the former first mortgage holder (or its assignee) becomes the owner.

Section 720.3085, Florida Statutes provides that in the event of the completion of a mortgage foreclosure action resulting in the issuance of a COT, the new owner will be liable for a portion of the past due balance that existed as of the date of the issuance of the COT. However, based upon the Westwood Gardens decision, this section will not apply unless the declaration for the association is silent, contains language which matches the language set forth in this section, or contains language which incorporates, by reference, the provisions in this section. The vast majority of homeowners’ association declarations I have reviewed over the past 25 years contain provisions similar to those that were found in the association’s declaration in Westwood Gardens.

While the association in Westwood Gardens was a homeowners association, it appears the holding in that case could also be extended to condominium associations.

As a result, all community associations should consider reviewing their declarations to determine if they contain provisions that deal with the right, if any, of the association to recover amounts that pre-dated the transfer of title, including a situation in which the transfer of title arises through the issuance of a COT from the purchaser at a mortgage foreclosure sale. The association should then consider whether to change that language (assuming the procedures for making an amendment can be satisfied), to allow for the recovery of amounts that pre-dated the transfer. The association could seek to change its declaration to provide for the same recovery as is available under Section 720.3085, Florida Statutes or Section 718.116, Florida Statutes, or it can seek to provide for recovery of amounts which exceed those available under the Florida Statutes.

Community Associations Have Standing to Assert Defenses to Mortgage Foreclosure Actions

When a community association acquires title to a property through the completion of a lien foreclosure action, it must then determine whether to oppose an attempt by a purported lender to foreclose superior mortgage on the property. Lenders have often argued, based upon certain Florida appellate decisions, that the association has no legal standing to assert defenses to a mortgage foreclosure action in situations in which the mortgage was executed by a predecessor owner. However, there now appears to be a recent appellate court case to support the position of a community association.

As far back as 2012, the Fifth District Court of Appeal, at least in dicta, stated that the issue of standing, as it relates to the right to challenge and/or defend against a purported lender’s claims in a mortgage foreclosure action, is not subject to a blanket rule and depends upon the relationship of the party challenging a mortgage to the subject property. Centerstate Bank Cent. Fla., N.A., v. Krause, 87 So.3d 25 (Fla. 5th DCA 2012).

In Centerstate, the court stated “Standing depends on whether a party has a sufficient stake in a justiciable controversy, with a legally cognizable interest that would be affected by the outcome of the litigation.”

The court in Centerstate further stated: “On the other hand, standing to contest the validity of a mortgage belongs to the mortgagor and to third persons whose rights or interests are adversely affected by the mortgage, such as junior mortgagees or creditors with an interest or lien in the underlying property.”

In the recent case of Tanner v. Bayview Loan Serving, LLC, 2015 Fla App. LEXIS 12027 (Fla. 5th DCA 2015), the Fifth District Court of Appeal, relying upon the principles of standing discussed in Centerstate, reversed the entry of a foreclosure judgment based upon arguments made by a junior lienholder, who asserted that the judgment was improper because the lender had failed to present evidence at a trial. The trial court had entered a judgment based upon a stipulation between the lender and the borrower/property owner.

In so doing, the Court recognized the right of a junior lien holder to challenge the enforcement of a first mortgage and to require that first mortgage holder establish its rights to enforce the mortgage and prove the right to recovery of amounts claimed to be due under the mortgage. The Court in Tanner (citing to Centersate) stated: “Third persons whose rights or interests are adversely affected by a mortgage, such as junior mortgages or creditors with an interest or lien in the underlying property, have standing to contest a foreclosure action brought by a party claiming a superior interest.”

Clearly, if a party holding a junior lien on property has standing to assert a defense to the enforcement of an allegedly superior mortgage, an owner of property, whether that person or entity was the owner when the mortgage was created or is a successor owner, would have that standing as well. An owner, even if that owner is a community association, clearly has an “interest” in the underlying property and would be adversely effected by a mortgage.