184 So. 3d 1196
Fla. Dist. Ct. App.2016Background
- Laguna obtained a final judgment to foreclose a homeowners’ association lien; a foreclosure sale was scheduled and held in November 2012.
- St. Michael purchased the property from the homeowner and, before the sale, paid off the senior mortgage and tendered $8,000 to Laguna to satisfy the association judgment (payment sent five days before the sale through the title company).
- Due to a paralegal’s failure to notify counsel to cancel the sale, the foreclosure proceeded; appellant was the high bidder, received a certificate of sale and a certificate of title, and began work on the property.
- Upon discovering the error, Laguna and St. Michael moved to intervene and to vacate the certificate of sale and certificate of title, asserting that St. Michael had timely exercised the right of redemption by tendering payment before the sale.
- The trial court granted the motions to vacate; the purchaser (appellant) appealed. The Fourth District Court of Appeal affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether failure to object within 10 days under §45.031(5) bars vacatur of certificate of title | Appellant: statutory 10-day objection rule precludes vacating certificate of title | Laguna/St. Michael: right of redemption exercised before sale permits vacatur despite no timely statutory objection | Court: Kane controls — failure to object under §45.031(5) does not prevent cancellation when redemption was timely exercised; vacatur permitted |
| Whether defendants proved satisfaction of the judgment and exercise of redemption | Appellant: insufficient proof that lien was fully satisfied before sale | Laguna/St. Michael: produced evidence of payment/tender satisfying the lien before sale | Court: rejected appellant’s insufficiency argument; found redemption was exercised prior to sale |
| Whether right of redemption requires notice to clerk or purchasers before sale | Appellant: lack of recorded deed and lack of notice prevented protection for bona fide purchaser; redemption ineffective without notice | Laguna/St. Michael: law does not require clerk or third parties have actual or constructive notice to effectuate redemption | Court: right of redemption need not be noticed to clerk or third parties prior to sale; timely, proper motion can vacate certificate of sale/title |
| Whether relief appropriately granted under Fla. R. Civ. P. 1.540(b) for mistake | Appellant: (implicit) procedural bars prevent setting aside sale/title | Laguna/St. Michael: motion to vacate based on mistake is authorized under rule 1.540(b) and applicable case law | Court: endorsed use of rule 1.540(b) jurisprudence to set aside sale and vacate certificates when mistake occurred and relief sought timely |
Key Cases Cited
- U.S. Bank, N.A. v. Vogel, 137 So. 3d 491 (Fla. 4th DCA) (standard of review for setting aside foreclosure sale)
- Virgo v. Nat’l City Mortg. Co., 115 So. 3d 1072 (Fla. 4th DCA) (applying Rule 1.540(b) to vacate a foreclosure sale)
- Chase Home Loans, LLC v. Sosa, 104 So. 3d 1240 (Fla. 3d DCA) (motion to vacate foreclosure sale under Rule 1.540(b))
- CCC Properties, Inc. v. Kane, 582 So. 2d 159 (Fla. 4th DCA) (failure to object under §45.031 does not bar cancellation when redemption exercised)
- Indian River Farms v. YBF Partners, 777 So. 2d 1096 (Fla. 4th DCA) (right of redemption belongs to mortgagor and those claiming under it; tender to mortgagee or clerk sufficient)
- Sudhoff v. Fed. Nat’l Mortg. Ass’n., 942 So. 2d 425 (Fla. 5th DCA) (describing the right of redemption as an equitable protection)
- VOSR Indus., Inc. v. Martin Props., Inc., 919 So. 2d 554 (Fla. 4th DCA) (right of redemption as inherent to mortgages)
- Cooper Smith Prop. v. Flower’s Baking Co., 432 So. 2d 683 (Fla. 5th DCA) (satisfaction of judgment/exercise of redemption may be permissible without court consent)