Robert G. Reid v. Compass Bank
164 So. 3d 49
| Fla. Dist. Ct. App. | 2015Background
- Compass Bank (Appellee) foreclosed on Reid’s (Appellant) mortgage; a 2009 foreclosure judgment found $969,690.27 owed and expressly reserved jurisdiction to enter a deficiency judgment.
- Compass purchased the property at the foreclosure sale (Oct 2009) and obtained title; it later sold the property for about $350,000 (net proceeds ~$318,200).
- Compass then filed a separate action at law (Jan 2010) seeking recovery on the promissory note/deficiency; Reid moved to dismiss, arguing the foreclosure forum had exclusive jurisdiction because Compass had prayed for a deficiency and the foreclosure court had reserved jurisdiction.
- The foreclosure and law actions were consolidated; the trial court rejected dismissal, treated the matter as a deficiency proceeding, adopted a $350,000 fair-market-value credit (value at date of sale), and entered final judgment that Reid owed $619,690.27.
- On appeal Reid argued Compass was precluded from pursuing the action at law because it had elected equity by seeking a deficiency in the foreclosure and the court had retained jurisdiction; the First DCA affirmed.
Issues
| Issue | Plaintiff's Argument (Reid) | Defendant's Argument (Compass) | Held |
|---|---|---|---|
| Whether filing an action at law after praying for a deficiency and after foreclosure court reserved jurisdiction is barred | Praying for deficiency and reservation of jurisdiction in foreclosure meant Compass elected equity and could not pursue separate law action | Section 702.06 and precedent allow a common-law suit for a deficiency unless the foreclosure court actually adjudicated the deficiency claim | Affirmed: under these facts Compass’s post-foreclosure recovery was permissible because the cases were consolidated and the trial court treated the matter as a deficiency proceeding; no prejudice shown |
| Proper measure for credit when calculating a deficiency judgment | N/A (Reid disputed value) | Deficiency credit should be fair market value at date of foreclosure sale, not net proceeds | Court applied deficiency measure using fair market value at sale ($350,000) and found no error |
| Whether consolidation or proceeding under foreclosure case number prejudiced Reid | Consolidation deprived Reid of forum protections from foreclosure reservation | Compass argued consolidation left the foreclosure court with jurisdiction and the case was handled as deficiency, so no harm | Court found consolidation occurred, Reid did not preserve challenge to consolidation, and no prejudice shown |
| Preclusive effect of reservation of jurisdiction absent adjudication | Reservation alone prevents separate action at law | Unless foreclosure court adjudicates (grants/denies) deficiency, common-law suit remains available per statute/cases | Held that reservation without adjudication does not automatically bar common-law suit, but First Federal Savings limits filing elsewhere where foreclosure court retains jurisdiction — factual nuance led to affirmance here |
Key Cases Cited
- Younghusband v. Ft. Pierce Bank & Trust Co., 130 So. 725 (Fla. 1930) (if no deficiency decree is entered in foreclosure, a suit at law to recover remaining debt is available)
- Cragin v. Ocean & Lake Realty Co., 135 So. 795 (Fla. 1931) (obtaining a deficiency decree in equity precludes subsequent suit at law on the same deficiency)
- Provost v. Swinson, 146 So. 641 (Fla. 1933) (statutory scheme and remedial nature; context on forum election and deficiency relief)
- Belle Mead Dev. Corp. v. Reed, 153 So. 843 (Fla. 1934) (praying for a deficiency is an election of the equity forum and binds the plaintiff to that choice)
- Reid v. Miami Studio Props., 190 So. 505 (Fla. 1939) (where deficiency was prayed for but not considered, plaintiff may still sue at law; distinguishes cases in which the prayer was adjudicated)
- Crawford v. Woodward, 191 So. 311 (Fla. 1939) (where deficiency was prayed for, plaintiff could be precluded from a later action at law depending on facts)
- Luke v. Phillips, 3 So. 2d 799 (Fla. 1941) (reaffirms Reid’s distinction from Belle Mead)
- McLarty v. Foremost Dairies, 57 So. 2d 434 (Fla. 1952) (applies Reid and Luke; prayer for deficiency without adjudication may permit later law action)
- First Fed. Sav. & Loan Ass’n v. Consolidated Dev. Corp., 195 So. 2d 856 (Fla. 1967) (where foreclosure court retained jurisdiction, plaintiff may not switch forums and pursue a separate law action in another forum; factual reservation of jurisdiction matters)
- Empire Developers Grp., LLC v. Liberty Bank, 87 So. 3d 51 (Fla. 2d DCA 2012) (proper deficiency formula: foreclosure judgment debt minus fair market value at date of foreclosure sale)