Lead Opinion
Appellant Eduardo Eduartez, defendant/mortgagor below, appeals a trial court order denying Eduartez's rule 1.540 motion to vacate an earlier trial court order disbursing surplus funds-realized after a foreclosure sale of Eduartez's condominium-to appellee Sunshores Condominium Association, Inc. ("Association"). Although the trial court, as a matter of statutory construction, incorrectly determinеd that the sixty-day window for subordinate lienholders to file claims for surplus proceeds commenced upon the clerk's issuance of a Certificate of Title, rather than upon the foreclosure sale, we nevertheless affirm the trial court's order denying Eduartez's motion because the September 6, 2016 disbursement order was merely erroneous rather than void.
I. Relevant Facts and Procedural Background
A. The Final Judgment of Foreclosure
In March 2011, Eduartez executed and delivered to JPMorgan Chase Bank a promissory note secured by a mortgage on a residential condominium unit Eduartez owned in North Miami Beach. In 2014, Eduartez defaulted on his obligations, which led JP Morgan to file its mortgage foreclosure complaint in October 2014. The complaint named Association as a subordinate lienholder by virtue of Association's July 2014 lien for approximately $7,000 in unpaid assessments. Association аnswered JP Morgan's foreclosure complaint and in its affirmative defenses alleged that, should the property be sold at a foreclosure sale, Association would be entitled to all surplus proceeds. In March 2015, Federal
In relevant part, Paragraph 8 of the final judgment reads:
Jurisdiction . The Court retains jurisdiction of this action to enter further orders that are proper, including, without limitation, writs of possession and deficiency judgments.
IF THIS PROPERTY IS SOLD AT PUBLIC AUCTION, THERE MAY BE ADDITIONAL MONEY FROM THE SALE AFTER PAYMENT OF PERSONS WHO ARE ENTITLED TO BE PAID FROM THE SALE PROCEEDS PURSUANT TO THE FINAL JUDGMENT.
IF YOU ARE A SUBORDINATE LIEN HOLDER CLAIMING A RIGHT TO FUNDS REMAINING AFTER THE SALE, YOU MUST FILE A CLAIM WITH THE CLERK NO LATER THAN SIXTY (60) DAYS AFTER THE SALE. IF YOU FAIL TO FILE A CLAIM, YOU WILL NOT BE ENTITLED TO ANY REMAINING FUNDS.
(Bold and all capital letters in original; underlining emphasis added).
In the final judgment, the trial court set April 21, 2016, as the date of the foreclosure sale.
B. The Foreclosure Sale
Due to a pending rehearing motion (ultimately denied by the trial court), the trial court cancelled the April 21, 2016 initial foreclosure sаle and, on May 20, 2016, the clerk rescheduled the foreclosure sale for June 21, 2016. Consistent with the above-cited language appearing in paragraph 8 of the final judgment, the clerk's notice of the rescheduled foreclosure sale contained the following notation:
ANY PERSON CLAIMING AN INTEREST IN THE SURPLUS FROM THE SALE, IF ANY, OTHER THAN THE PROPERTY OWNER AS OF THE DATE OF LIS PENDENS MUST FILE A CLAIM WITHIN 60 DAYS AFTER THE SALE.
(All capital letters in original; underlining emphasis added).
The foreclosure sale occurred on June 21, 2016. In conformity with sectiоn 45.031(4) of the Florida Statutes, the clerk, on June 24, 2016, issued a Certificate of Sale informing that the property was sold to third-party purchaser Degel, LLC ("Degel") for $116,100 at the June 21, 2016 foreclosure sale.
C. The Certificates of Title and Disbursements
Having received no objections to the sale within ten days after the filing of the Certificate of Sale, the clerk, pursuant to section 45.031(5), issued the Certificate of Title on July 8, 2016. Also on July 8, 2016, in conformity with section 45.031(7), the clerk issued the Certificate of Disbursements, identifying a surplus realized by the foreclosure sale in the amount of $41,578.63. As required by section 45.031(7)(b), the Certificate of Disbursements contained the following instructions to Association:
IF YOU ARE A PERSON CLAIMING A RIGHT TO FUNDS REMAINING AFTER THE SALE, YOU MUST FILE A CLAIM WITH THE CLERK NO LATER THAN 60 DAYS AFTER THE SALE. IF YOU FAIL TO FILE A CLAIM, YOU WILL NOT BE ENTITLED TO ANY REMAINING FUNDS. AFTER 60 DAYS, ONLY
THE OWNER OF RECORDS [sic] 1 AS OF DATE OF THE LIS PENDENS MAY CLAIM THE SURPLUS.
(All capital letters; underlining emphasis added).
On July 26, 2016, the clerk issued a Corrected Certificate of Disbursements correcting the amount of disbursements to the mortgagee, resulting in an adjusted surplus amount of $41,569.05. This Corrected Certificate of Disbursements contained the same instructions to Association-in all capital letters-as in the initial Certificate of Disbursements.
D. Disbursement Motions and the Disbursement Order
Notwithstanding the language contained in (i) the final judgment, (ii) the clerk's notice of sale, and (iii) the Certificate of Disbursements, Association did not file a claim for the surplus funds within sixty days of the June 21, 2016 foreclosure sale (i.e., on or before August 20, 2016). Rather, on August 25, 2016, sixty-five days after the foreclosure sale, the third-party purchaser, Degel, filed a motion requesting the court to disburse $31,087.58 to Association.
The record reflects that, on September 6, 2016, the trial court held, on its uniform motion calendar, a non-evidentiary hearing on the two disbursement motions, and that Eduartez's counsel appeared telephonically at this hearing. There is no transcript of this hearing. After the hearing, the trial court entered its September 6, 2016 order directing the clerk to disburse $32,601.05 of the surplus funds to Association's counsel ("the September 6, 2016 disbursement order"). Eduartez filed no rehearing motion directed toward the September 6, 2016 disbursement order, nor did Eduartez appeal this order.
E. Surplus Trustee Petition and Resulting "Agreed" Order
Several months later, on February 23, 2017, in an effort to disburse the remaining $8,938.00 in surplus proceeds being held by the clerk,
Presumably to avoid his having to pay the approximately $536 in statutory fees due to the surplus trustee, Eduartez, through counsel, objected to the appointment of the surplus trustee and the surplus trustee's petition. Nothing, however, in Eduartez's objection challenged the September 6, 2016 disbursement order. Ultimately, the trial court entered a May 15, 2017 "agreed" order authorizing the disbursement of the $8,938.00 remaining surplus proceeds, minus the surplus trustee's fee and allowable clerk's fee, to Eduartez.
F. Eduartez's Rule 1.540(b)(4) Motion and the Order on Appeal
Three days after the entry of this May 15, 2017 "agreed" disbursement order, Eduartez filed a Florida Rule of Civil Procedure 1.540(b)(4) motion challenging, for the first time, the Seрtember 6, 2016 disbursement order. In his rule 1.540 motion, Eduartez asserted that the trial court was without subject matter jurisdiction to entertain either Degel's August 25, 2016 disbursement motion or Association's September 1, 2016 disbursement motion, because neither motion was filed within sixty days of the June 21, 2016 foreclosure sale. Eduartez argued (as he does on appeal) that the September 6, 2016 disbursement order is therefore void.
On May 30, 2017, the trial court cоnducted a hearing on Eduartez's rule 1.540 motion. At the hearing, the parties presented the trial court with two competing district court of appeal opinions regarding when the sixty-day period commences for a junior lienholder to file a claim for surplus proceeds: (i) Straub v. Wells Fargo Bank, N.A.,
II. Standard of Review
A trial court's denial of a rule 1.540 motion is generally reviewed for an abuse of discretion. Foche Mortg., LLC v. CitiMortgage, Inc.,
III. Analysis
A. Introduction
Eduartez argues that Association's September 1, 2016 disbursement motion was filed outside the statutorily prescribed, sixty-day time period that commenced with the June 21, 2016 foreclosure sale. Association argues that the sixty-day period commenced not upon the foreclosure sale date, but rather, upon the clerk's July 8, 2016 issuance аnd filing of the Certificate of Title; and because Association's motion
This issue has recently been decided by two of our sister courts in conflicting opinions. The Fourth District concluded that the sixty-day period starts when the clerk issues and files the Certificate of Title. Straub,
B. Text of Relevant Statutory Provisions
The Florida Statutes prescribe a very specific procedure for foreclosure sales and the disbursement of proceeds generated from foreclosure sales. The relevant procedures are codified in section 45.031, and inсorporated into the Florida Supreme Court-promulgated final foreclosure judgment form, Form 1.996.
Section 45.031(1)(a) requires that, in each final foreclosure judgment, the trial court "shall direct the clerk to sell the property at public sale on a specified day that shall be not less than 20 days or more than 35 days after the date" the judgment is entered. § 45.031(1)(a), Fla. Stat. (2016)
IF THIS PROPERTY IS SOLD AT PUBLIC AUCTION, THERE MAY BE ADDITIONAL MONEY FROM THE SALE AFTER PAYMENT OF PERSONS WHO ARE ENTITLED TO BE PAID FROM THE SALE PROCEEDS PURSUANT TO THE FINAL JUDGMENT.
IF YOU ARE A SUBORDINATE LIEN HOLDER CLAIMING A RIGHT TO FUNDS REMAINING AFTER THE SALE, YOU MUST FILE A CLAIM WITH THE CLERK NO LATER THAN SIXTY (60) DAYS AFTER THE SALE. IF YOU FAIL TO FILE A CLAIM, YOU WILL NOT BE ENTITLED TO ANY REMAINING FUNDS.9
(All capital letters in original; underlining emphasis added).
Section 45.031(2) requires the publication of the notice of sale once a week for two consecutive weeks in a newspaper of general circulation. The published notice must contain, among other things, "[a] description of the property to be sold,"
Section 45.031(5) requires the clerk to file a Certificаte of Title "[i]f no objections to the sale are filed within 10 days after filing the certificate of sale...." (Emphasis added.) Section 45.031(6) requires the clerk to record the Certificate of Title and states that "title to the property shall pass to the purchaser named in the certificate" of title when the clerk files same.
Section 45.031(7)(a) requires the clerk, "on filing a certificate of title," to disburse the sales proceeds and file a Certificate of Disbursements outlining how the sales proceeds have been disbursed, including any surplus retained by the clerk. Finally, section 45.031(7)(b) requires the Certificate of Disbursements to contain the following notation in all capital letters, immediately following the section outlining any surplus funds:
IF YOU ARE A PERSON CLAIMING A RIGHT TO FUNDS REMAINING AFTER THE SALE, YOU MUST FILE A CLAIM WITH THE CLERK NO LATER THAN 60 DAYS AFTER THE SALE. IF YOU FAIL TO FILE A CLAIM, YOU WILL NOT BE ENTITLED TO ANY REMAINING FUNDS. AFTER 60 DAYS, ONLY THE OWNER OF RECORD AS OF THE DATE OF THE LIS PENDENS MAY CLAIM THE SURPLUS.
§ 45.031(7)(b), Fla. Stat. (2016). (Emphasis added.)
C. Statutory Construction Discussion
As is apparent from the relevant provisions of section 45.031, the foreclosure sale is an event separate, apart, and distinct from the clerk's issuance of a Certificate of Title. The "sale" is the public auction of the property, occurring on the date, at the place, and in the manner set forth in the foreclosure judgment, and as noticed for two consecutive weeks in the notice of sale. The clerk's issuance of the Certificate of Title is a ministerial act undertaken by the clerk at least ten days following the sale , assuming no objections to the sale have been filed; it is an altogether distinct event from the foreclosure sale. Critically, each and every reference in section 45.031 as to when subordinate lienholders are required to file a claim to surplus proceeds relates to the sixty-day period after the "sale." Conversely, the statute contains no such referencе to the sixty-day period commencing with the clerk's issuance of the Certificate of Title. Had the Legislature intended for the sixty-day period to commence with the clerk's issuance of the Certificate of Title, it certainly could have drafted section 45.031 to accomplish such intent. Rather, employing plain language, the Legislature defined the contours of the sixty-day period to commence with the sale, and we are constrained by that language. Akerman Senterfitt & Eidson, P.A. v. Value Seafood, Inc.,
Based on our de novo review of the text of the relevant statutory provisions, we are unable to conclude, as did the Fourth District and the trial court, that in section 45.031, the Legislature's use of the wоrd "sale" means anything but the foreclosure sale. We agree with the Second District that a subordinate lienholder must file a claim for surplus funds no later than sixty days following the foreclosure sale. Glenville,
We certify conflict with Straub.
D. Voidness/Jurisdiction Discussion
Notwithstanding our determination that the trial court erred in construing the relevant portions of chapter 45, we nevertheless affirm the trial court's denial of Eduartez's rule 1.540 motion under the "Tipsy Coachman" rule. See Dade Cty. Sch. Bd. v. Radio Station WQBA,
To come within the limited remedy provided by rule 1.540, Eduartez contends that the September 6, 2016 disbursement order was void because the court lacked jurisdiction. See generally Balmoral Condo. Ass'n v. Grimaldi,
In summary, simply because the September 6, 2016 disbursement order was contrаry to law because the disbursement motions were untimely filed, such legal error rendered the resulting September 6, 2016 disbursement order erroneous, but not void. The trial court did not lack subject matter jurisdiction over the issue. Therefore, the September 6, 2016 disbursement order was not void, and we affirm the trial court's decision to deny Eduartez's rule 1.540 motion.
IV. Conclusion
Pursuant to the relevant statutory provisions, we conclude that claims by subоrdinate lienholders to surplus funds generated from foreclosure sales must be filed within sixty days of the foreclosure sale. We nevertheless affirm the trial court's denial of Eduartez's rule 1.540 motion because the trial court's error in construing the relevant statutes rendered the September 6, 2016 disbursement order erroneous, but not void.
Affirmed. Conflict certified.
LOGUE and LINDSEY, JJ., concur.
Notes
Section 45.032(1)(a) defines the term "owner of record" as the person appeаring to own the property being foreclosed upon on the date of the filing of the lis pendens. In this case, Eduartez was the "owner of record," and when we use this term with respect to this case's specific facts, we are referring to Eduartez.
As discussed in footnote 13, infra , neither the relevant statutes nor the standard form foreclosure judgment adopted by the Florida Supreme Court contemplate surplus proceeds claims filed by parties other than subordinate lienholders and the owner of record. Indeed, Degel's disbursement motion did not seek to have any surplus proceeds disbursed to it . Rather, Degel's August 25, 2016 motion sought to have the surplus proceeds disbursed to Association, presumably in response to an August 22, 2016 demand from Association's counsel claiming Degel owed Association $31,087.58 for Eduartez's unpaid fees.
While not relevant to our holding, it bears noting that Eduartez's counsel filed an affidavit asserting he never received a copy of the September 6, 2016 disbursement order.
This $8,938.00 sum should represent the difference between the amount identified in the Corrected Certificate of Disbursements, $41,569.05, and $32,601.05, the amount the trial court ordered disbursed to Association's counsel in the September 6, 2016 disbursement order. There appears to be a thirty dоllar math error.
Because the trial court determined that Association's disbursement motion was timely filed, the trial court obviously did not reach the jurisdictional/voidness issue raised in Eduartez's Rule 1.540(b)(4) motion.
On September 5, 2017, the Florida Supreme Court accepted conflict jurisdiction of Straub and Glenville in case number SC17-954. Neither of the parties in this case has asked us to abate our adjudication pending the Florida Supreme Court's decision. Because the panel is affirming based on the voidness/jurisdictional issue (see section III. D., infra ), we ordinarily would not reach the statutory construction issue. See PDK Labs., Inc. v. U.S. Drug Enf't Admin.,
In 2006, the Florida Legislature amended section 45.031(1) to, among other things, require еvery foreclosure judgment to contain specific language regarding the process by which a subordinate lienholder could claim an entitlement to any surplus proceeds realized at a foreclosure sale. This language included the sixty-day time period at issue in this case. Ch. 06-175, § 1 at 1, Laws of Fla. In 2010, the Florida Supreme Court amended its standard Final Judgment of Foreclosure Form (Form 1.996) to, among other things, incorporate the sixty-day time period into that portion of the form foreclosure judgment governing the trial court's retained jurisdiction over the matter. In Re Amendments to the Florida Rules of Civil Procedure,
Form 1.996(a) effectuates this statutory provision in its paragraph captioned, "Sale of Property," which includes a specific forеclosure sale date and the location of the foreclosure sale. Paragraph 4 of the March 17, 2016 final foreclosure judgment entered by the trial court in this case is virtually identical to the "Sale of Property" paragraph of Form 1.996(a).
Both Form 1.996(a) and paragraph 8 of the March 17, 2016 foreclosure judgment include this statutorily required language in that portion of the final judgment relating to the trial court's continuing jurisdiction in the case. See section I. A. , supra .
§ 45.031(2)(a), Fla. Stat. (2016).
§ 45.031(2)(b), Fla. Stat. (2016). (Emphasis added.)
§ 45.031(2)(f), Fla. Stat. (2016). (Emphasis added.)
As referenced in footnote 2, supra , on August 25, 2016-sixty-five days after the foreclosure sale-third-party purchaser Degel filed its own disbursement motion. Because Degel filed its motion more than sixty days after the foreclosure sale, Degel's motion also was untimely. We need not, and therefore do not, reach the issue of whether Degel's motion was cognizable.
Concurrence in Part
I wholeheartedly concur with the majority's analysis of the statutory construction issue, and concur in the majority's conclusion that the Second District's holding in Glenville is correct. I dissent, however, from section III. D. of the majority opinion that adjudicates, in the first instance , the issue of whether the September 6, 2016 disbursement order is void or merely erroneous. In my view, we should not decide this issue because the trial court never reached it, and the parties have not briefed the issue to us. Therefore, I would remand the case to the trial court to adjudicate, in the first instance, the voidness issue raised in Eduartez's rule 1.540 motion.