Arsali v. Chase Home Finance LLC
121 So. 3d 511
| Fla. | 2013Background
- Borrowers (Wilson & Manning) faced a final summary judgment of foreclosure for $86,979.93; a judicial sale was scheduled for May 9, 2011.
- Borrowers and mortgagee Chase reached a reinstatement/settlement offer requiring a $12,018.98 lump-sum payment by May 6, 2011; borrowers timely sent a cashier’s check that counsel for Chase received on May 4.
- Chase’s counsel failed to cancel the scheduled sale; the foreclosure sale occurred on May 9, 2011, and a third party (INT, later assigning rights to Arsali) purchased the property for $125,300.
- Borrowers timely moved (within 10 days) to vacate the sale and certificate of sale under section 45.031, Fla. Stat.; the trial court vacated the sale and certificate, ordered return of the purchaser’s funds, and dismissed the foreclosure judgment.
- Arsali intervened and appealed; the Fourth District, en banc, affirmed the trial court and certified the question whether the Arlt test applies when bid adequacy is not at issue.
- The Florida Supreme Court granted review, approved the Fourth District’s result, and clarified the governing legal standard for setting aside judicial foreclosure sales.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether proof of inadequate bid price is required to set aside a judicial foreclosure sale | Borrowers: not required; equitable grounds (e.g., settlement/reinstatement + failure to cancel sale) suffice | Arsali (purchaser): trial court erred; borrowers failed to show gross inadequacy of price and no evidentiary hearing was held | Court held inadequacy of bid price need not be alleged or proven; equitable showing may justify vacatur |
| Whether Brown and Arlt conflict as legal tests for setting aside sales | Fourth District (earlier reading): Brown applies when bid adequacy not at issue; Arlt when it is | Arsali: district courts should treat them as distinct, conflicting tests | Court held Brown and Arlt are not in conflict and any such district-court distinctions are improper |
| Whether trial court abused its discretion in vacating this sale and dismissing foreclosure | Borrowers: trial court properly exercised equity power given reinstatement agreement and failure to cancel sale | Arsali: reversal required because purchaser’s bid was not shown grossly inadequate and process was regular | Court affirmed: trial court’s equitable decision was supported; no abuse of discretion |
| Whether a specific set of "indispensable equitable factors" must be pleaded and proven | Borrowers: no fixed list required; any adequate equitable showing suffices | Arsali: district precedent required certain factors or gross inadequacy to set aside sale | Court held no mandatory checklist; courts have broad equitable discretion and require a proper showing of equitable grounds, not a fixed formula |
Key Cases Cited
- Moran-Alleen Co. v. Brown, 123 So. 561 (Fla. 1929) (historic statement that judicial sales may be vacated on equitable grounds such as gross inadequacy, mistake, fraud, or irregularity)
- Arlt v. Buchanan, 190 So.2d 575 (Fla. 1966) (equity may set aside a sale where gross inadequacy results from mistake, fraud, misconduct, or irregularity producing injustice)
- Ohio Realty Inv. Corp. v. S. Bank of W. Palm Beach, 300 So.2d 679 (Fla. 1974) (trial court set-aside affirmed where circumstances supported equitable relief)
- Arsali v. Chase Home Finance, LLC, 79 So.3d 845 (Fla. 4th DCA 2012) (Fourth District en banc affirmed vacatur and certified question of great public importance)
- Ingorvaia v. Horton, 816 So.2d 1256 (Fla. 2d DCA 2002) (discussed distinct tests applied by district courts for setting aside foreclosure sales)
- Blue Star Investments, Inc. v. Johnson, 801 So.2d 218 (Fla. 4th DCA 2001) (prior Fourth District precedent receded from to the extent it required inadequacy of price in every set-aside attempt)