IN THE CIRCUIT COURT OF THE SEVENTEENTH JUDICIAL CIRCUIT, IN AND FOR BROWARD COUNTY, FLORIDA

OFFICE OF THE ATTORNEY GENERAL, DEPARTMENT OF LEGAL AFFAIRS, STATE OF FLORIDA,

PLAINTIFF, vs. CASE NO.: 12-26987 (12)

EDWARD CHERRY, LAWRENCE DIODATO, PAUL GELLENBECK, SHANE FRANKOVIC, ANTHONY C. PINTSOPOULOS, THE FIDELITY LAND TRUST COMPANY, LLC, THE SUNSHINE STATE LAND TRUST COMPANY, LLC, FLORIDA LAND TRUST SERVICES, LLC, GROWTH CAPITAL FUNDING, LLC, ZION PARTNERS IRREVOCABLE TRUST, LLC, ZION PARTNERS IRREV TRUST, L.L.C., AUGUST BELMONT AND COMPANY, LLC, ESQUIRE LITIGATION SUPPORT, LLC, ESQLITIGATIONSUPPORT.COM, LLC, CLICK MEDIA CONSULTING, LLC doing business as FLORIDA HOME RESCUE MISSION, and AMERICAN FEDERAL TRUST, LLC,

DEFENDANTS.

ORDER

THIS CAUSE having come before the Court on the Motion to Dissolve Order Granting

Temporary Injunction and Asset Freeze without Notice or in the Alternative to Modify Said

Order filed by Defendants Paul Gellenbeck and The Fidelity Land Trust Company, LLC, and the

Court after having considered the testimony, hearing exhibits, affidavits and other evidence

submitted at hearing on November 28, 2012 and December 13,2012, and after having made the

following factual findings and conclusions oflaw,

It is hereby ORDERED and ADJUDGED that:

The Motion to Dissolve Order Granting Temporary Injunction and Asset Freeze without

Notice or in the Alternative to Modify Said Order is DENIED.

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FACTUAL FINDINGS

1. The Fidelity Land Trust Company, LLC (Fidelity) was organized by Defendant

Edward Cherry (Cherry) in December of 2011 using a fictitious name. Cherry, Defendant

Lawrence Diodato (Diodato) and Defendant Paul Gellenbeck (Gellenbeck) are individuals who

participate in or otherwise control or have the authority to control the deceptive acts or practices

hereinafter described.

2. Cherry and Diodato have been partners or owners of Fidelity Land Trust Partners

which until September 5, 2012 was the managing member of Fidelity according to the public

records filed with the Florida Secretary of State. There is presently no manager of Fidelity

according to the public records filed with the Florida Secretary of State. Cherry and Diodato are

participants in the operation of Fidelity through Defendants Esquire Litigation Support, LLC

and/or EsqIitigationsupport.Com, LLC and/or otherwise have control authority. Gellenbeck also

is a participant in the operation of Fidelity as a partner or owner and/or otherwise has control

authority.

3. There is no evidence that there are two legally separate entities comprising The

Fidelity Land Trust Company, LLC as asserted by Gellenbeck in his affidavit and which

Gellenbeck refers to as "Fidelity North" and "Fidelity South".

4. Fidelity induces consumers to pay Fidelity to take title to the homeowner's

property through a "Land Trust". Fidelity gives no consideration to the homeowner for this title

transfer. Fidelity engages counsel to file "quiet title" actions against consumers' mortgagees to

obtain default judgments declaring the homeowner's original mortgage is canceled or otherwise

void, falsely alleging that the "Land Trust" is a subsequent purchaser for value although Fidelity

gives no consideration for the title transfer to the "Land Trust". The consumer remains owing

the note to the original mortgagee while making payment to Fidelity for a "new" mortgage.

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5. Notwithstanding the legal distinction between the title to real estate and the lien

interest of a mortgage holder, Fidelity misrepresents to Florida homeowners the legal effect of its

services as a mechanism for avoiding foreclosure and/or mortgages greater than the home's

market value ("upside-down") when there are no conflicting claims of title, only claims of title

and mortgage lien(s). Fidelity deceptively and/or unfairly solicits, markets and advertises to

homeowners in the State of Florida that Fidelity can obtain clear title as subsequent purchasers

and avoid the original mortgage obligation of the homeowner.

6. In making these deceptive and/or unfair representations, Fidelity represents to

consumers that it can cancel or otherwise void a distressed homeowner's then-current "upside-

down" mortgage and replace it with a new affordable mortgage that has a lower principal and

lower monthly payments. Fidelity deceptively and/or unfairly represents to homeowners that a

previously recorded mortgage is unenforceable and void against Fidelity because the mortgage

was assigned but the assignment was not recorded.

7. Fidelity's representations are false and deceptively and/or unfairly mislead

consumers and are contrary to the established law of Florida that the provisions of Florida

Statutes Chapter 701 do not protect transferees of the homeowner/mortgagor. See JP Morgan

Chase v. New Millennial, LC, 6 So. 3d 681, 685 (2d DCA 2009), review dismissed, 10 So. 3d

632 (Fla. 2009) (Chapter 701 does not protect the mortgagor, nor anyone "claiming under a

mortgagor."). See also Rhodes v. JPMorgan Chase Bank, N.A., 2012 WL 2504043, *3 (S.D. Fla.

June 28,2012) ("Likewise, a failure by Defendant to record its assignment is 'applicable only to

and enforceable by competing creditors or subsequent bona fide purchasers of the mortgagee, not

by the mortgagor." JP Morgan Chase v. New Millennial, LC, 6 So.3d 681, 685 (Fla. 2d DCA

2009)").

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8. Despite the established principles of law, Fidelity has misled numerous

consumers within Florida since 2011.

9. Fidelity is making false and deceptive or unfair promises and representations to

consumers in order to induce consumers to transfer title to their homes to Fidelity for no

consideration and to pay Fidelity thousands of dollars in advance fees for services that cannot be

delivered.

10. Fidelity's acts and/or practices violate Florida Statutes Section 501.1377(3),

which prohibits any person providing foreclosure-related rescue services from charging an up-

front fee prior to the completion of the services. Fidelity charges up-front advance fees for

foreclosure-related rescue services. Fidelity is a person providing foreclosure-related rescue

services. Fidelity is not an attorney providing foreclosure-related rescue services as an ancillary

matter. A violation of Florida Statutes Section 501.1377 is a per se violation of FDUTPA.

11. Fidelity's acts and/or practices violate Florida Statutes Section 501.1377(5),

which requires any person engaging in foreclosure-rescue transactions to afford certain specific

rights to the homeowner. Fidelity does not afford to the homeowners the rights mandated by

Florida Statutes Section 501.1377(5). Fidelity is a person engaging in foreclosure-rescue

transactions. Fidelity is not an attorney providing foreclosure-related rescue services as an

ancillary matter. A violation of Florida Statutes Section 501.1377 is a per se violation of

FDUTPA.

12. Gellenbeck participates in Fidelity's activities as the Director of Operations and

spends 100% ofhis working time overseeing Fidelity's day-to-day operations.

13. Cherry and Diodato endeavor to hide their participation in and/or control of

Fidelity by having other individuals undertake activities on their behalf and/or by taking title to

homes in the name of The Sunshine State Land Trust Company, LLC.

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CONCLUSIONS OF LAW

14. JP Morgan Chase v. New Millennial, LC, 6 So. 3d 681, 685 (2d DCA 2009)

establishes the following principles:

a. "[Chapter 701] applies to purchasers of mortgages, not to purchasers of real property

or their lenders." Id at 685.

b. "The recording requirement IS not intended to protect one claiming under a

mortgagor-against whose property there IS already a perfected mortgage-with respect to

subsequent assignments of the mortgage. The mortgagor has actual notice of the original

mortgage, and anyone claiming under the mortgagor has constructive notice if the mortgage is

recorded." (sic) Id

c. "From the point of view of the mortgagor or someone standing in his shoes, a

subsequent assignment ofthe mortgagee's interest-whether recorded or not-does not change the

nature ofthe interest ofthe mortgagor or someone claiming under him. (sic) Nor should a failure

to record any subsequent assignment afford the mortgagor or [anyone] (sic) standing in his shoes

an opportunity to avoid the mortgage." Id

d. "Because the mortgagor's successor 'had constructive notice of a mortgage by

whomever held, (sic) he cannot assume the status of a bona fide purchaser without notice.' Any

other interpretation of section 701.02 would tum well-established secured transaction principles

on their heads: a buyer could effectively ignore a recorded mortgage simply because the

mortgage/note has been sold in the aftermarket to a different financial institution which has

failed to record the assignment." Id at 685-686. (citation omitted).

15. When a court is deciding whether to dissolve an ex parte temporary injunction,

the party who obtained the injunction bears the burden of going forward to establish a prima

facie case supporting injunctive relief. Thomas v. Osler Medical, Inc., 963 So. 2d 896, 900

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(Fla. 5th DCA 2007) (citing Hunter v. Dennies Contracting Co., Inc., 693 So. 2d 615, 616

(Fla. 2d DCA 1997). Specifically, factors to be considered by a court are whether plaintiff will

suffer irreparable harm; whether plaintiff has no adequate remedy at law; whether plaintiff has a

substantial likelihood of success on the merits; and whether the injunction will serve the public

interest. Jouvence Ctr. For Advanced Health, LLC v. Jouvence Rejuvenation Ctrs., LLC, 14 So.

3d 1097, 1099 (Fla. 4th DCA 2009). However, Florida law is well-established that under

FDUTPA, the enforcing authority may obtain temporary injunctive relief based simply upon a

showing of a clear legal right. Millennium Communications & Fulfillment, Inc. v. Office ofthe

Attorney General, Dept. ofLegal Affairs, State ofFlorida, 761 So. 2d 1256, 1260 (Fla. 3d DCA

2000). Irreparable harm is presumed. Id.

16. Millennium holds that "because section 501.207(1) (b) expressly authorizes the

Department to seek injunctive relief on behalf of the state, the Department does not have to

establish irreparable harm, lack of adequate remedy or public interest." Id. at 1260. Plaintiff is

statutorily authorized to seek injunctive relief pursuant to Florida Statutes Section 501.207(1 )(b).

Accordingly, Plaintiff need only show clear legal right for temporary injunctive relief against

Fidelity in the present case, which is amply present in light of Fidelity's deceptive trade

practices.

17. Florida Statutes Section 501.1377(3) prohibits any person providing foreclosure-

related rescue services from charging an up-front fee prior to the completion of the services.

18. "Foreclosure-related rescue services" means any good or service related to, or

promising assistance in connection with: 1. Stopping, avoiding, or delaying foreclosure

proceedings concerning residential real property; or 2. Curing or otherwise addressing a default

or failure to timely pay with respect to a residential mortgage loan obligation.

§ 501.1377(2)(c), Fla. Stat.

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19. Foreclosure-rescue transactions include transactions in which residential property

is conveyed to an equity purchaser and the homeowner maintains a legal or equitable interest in

the residential real property conveyed, including, without limitation, a lease option interest, an

option to acquire the property, an interest as beneficiary or trustee to a land trust, or other

interest in the property conveyed. § 50 I. 1 377(2)(d), Fla. Stat. (emphasis added)

20. Florida Statutes Section 501.1377(5) requires any person engaging in forec1osure-

rescue transactions to afford certain specific rights to the homeowner.

21. A violation of Florida Statutes Section 501.1377 is a per se violation of FDUTPA.

§ 501.1377(7), Fla. Stat.

22. Fidelity has engaged in conduct that constitutes deceptive trade practices under

the FDUPTA, which provides that "unfair methods of competition, unconscionable acts or

practices, and unfair or deceptive acts or practices in the conduct of trade of commerce are

hereby declared unlawfuL" § 501.204, Fla. Stat. Fidelity has violated and, if this injunction is

not continued, would continue to violate FDUTPA by using deceptive or unfair practices in

marketing and advertising of mortgage foreclosure-related rescue services to Florida

homeowners.

23. Florida Statutes Section 501.207(3) states upon motion of the enforcing authority

the court may impose reasonable restrictions upon the future activities of any defendant "to

impede her or him from engaging in or establishing the same type of endeavor; to order the

dissolution or reorganization of any enterprise; or to grant legal, equitable, or other appropriate

relief" As such, where there exists a common-law right to sue for damages and a statute

expressly authorizing injunctive relief, both remedies are available to the plaintiff. City ofMiami

v. Cosgrove, 516 So. 2d 1125 (Fla. 3dDCA 1987).

24. Fidelity has violated FDUPTA and, if this injunction is dissolved, will continue to

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violate FDUTP A by usmg deceptive and/or unfair practices in marketing and advertising

mortgage foreclosure-related rescue services to Florida homeowners as part of its "land trust"

scheme. Since Fidelity has injured and will likely continue to injure and prejudice the public,

preservation of the status quo can best be accomplished by denial of the Motion to Dissolve and

keeping the temporary injunction in place. The interests in protecting consumers from imminent

irreparable harm that will occur if the Temporary Injunction is dissolved far outweighs the

interests of Fidelity to be able to resume unlawful activities.

25. Florida Statute 501.207(3)(1) specifically includes the freezing of assets as one of

the remedies of an enforcing authority. If Fidelity continues to conduct business and continue the

above-cited deceptive and/or unfair trade practices, the number of consumers aggrieved by these

deceptive and/or unfair acts and practices will continue to mount. Absent the temporary

injunctive relief, Plaintiff has no adequate remedy at law to protect the consuming public against

these continuing deceptive and/or unfair trade practices. Unsuspecting consumers have

transferred title to their residences and paid undetermined amounts to Fidelity for foreclosure-

related rescue services. Irreparable harm will continue to result to consumers including the loss

of the title to their homes and loss of money. The asset freeze precludes dissipation, waste or

distribution of assets until further Order of the Court. This freeze maintains the status quo

pending full hearing on the merits, which is a viable purpose for such a freeze. See MediaOne of

Delaware, Inc. v. E&A Beepers andCeliulars, 43 F. Supp. 2d 1348, 1355 (S.D. Fla. 1998)

26. The Court takes judicial notice of the Court records in Broward Circuit Court

Case No. CACEI1032600 (21) in regard to Frank Carpiniello's incorrect testimony during the

December 13, 2012 hearing. § 90.202(6), Fla. Stat.; Falls v. National Environmental Products,

665 So. 2d 320, 321 (Fla. 4th DCA 1995) (" ... [I]t is fitting and proper that a court should take

judicial notice of other actions filed which bear a relationship to the case at bar."). Counsel of

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record for the Fidelity Land Trust Company, LLC in Broward Circuit Court Case No.

CACE11032600 (21) was present at the hearing on December 13,2012 but failed to apprise the

Court of Mr. Carpiniello's incorrect testimony regarding the entry of a Final Judgment in said

case. Mr. Carpiniello testified that he had a Final Judgment that there was no longer a mortgage

on his property which Judgment he received four to six weeks earlier. The Court records in

Broward Circuit Court Case No. CACE11032600 (21) shows the Final Judgment was entered on

August 24, 2012 by default but was vacated by an Agreed Order of counsel on December 10,

2012. Counsel for Fidelity did not bring this fact to the Court's attention.

27. The Court takes judicial notice of the recorded Warranty Deed to The Fidelity

Land Trust Company, LLC as Trustee for Florida Land Trust No. 60120 from Terry Vincze

dated May 2,2012. § 90.202(11), Fla. Stat.

DONE and ORDERED in Chambers in Broward County, Florida this day of

MICHAE:L L GATESDecember, 2012. Judy€:

JAN 07 2013 Judge Michael Gates Circuit Court Judge A TRUE copy

cc: All counsel of record

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