FEDERAL DEPOSIT INSURANCE CORPORATION, AS RECEIVER/LIQUIDATOR OF THE BANK OF LAKE HELEN, APPELLANT,
v.
CIRCLE BAR RANCH, INC., A DISSOLVED FLORIDA CORPORATION, ET AL., APPELLEES
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The FDIC, as receiver of a failed bank, appealed a deficiency judgment that limited recovery to the difference between the original principal and sale proceeds, rather than the full amount owed including accrued interest and costs. The court reversed, holding that mortgagees are entitled to deficiency judgments for all sums due under the mortgage when foreclosure proceeds are insufficient, absent fraud or improper conduct.
A mortgagee is entitled to a deficiency judgment for the balance of all sums due under the mortgage (principal, interest, and costs) when the foreclosure sale proceeds are insufficient to cover them, absent fraud, mortgagee interference with the sale, or legal error by the clerk. The mere difference between the foreclosure sale price and the property's appraised market value does not justify limiting the deficiency to the principal only.
[1] A mortgagee is entitled to a deficiency judgment for the balance due when a judicial foreclosure sale is insufficient to cover the outstanding principal indebtedness, int…
[2] A deficiency judgment should not be limited to the principal sum when the foreclosure sale proceeds are insufficient to cover all sums due, including interest and costs.
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Join FLexlaw to unlock all legal intelligence“When a mortgage secures the outstanding principal indebtedness together with all interest and costs and the judicial foreclosure sale is insufficient to cover all such sums, the mortgagee is entitled to a deficiency judgment for the balance due.”
Establishes the core legal principle that mortgagees are entitled to deficiency judgments for all sums due under a mortgage, not just the principal
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Join FLexlaw to unlock all legal intelligenceThe FDIC held a mortgage securing $1,026,110.10 in principal, interest, and costs. After a judicial foreclosure sale under Florida law, the property s…
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PER CURIAM.
Appellant appeals from a judgment awarding a deficiency decree in an amount less than the amount claimed by appellant. We reverse and remand for entry of judgment awarding a deficiency for the total amount claimed.
The final judgment of foreclosure adjudicated that appellant/mortgagee was entitled to $1,026,110.10 for principal, interest, and costs. At the judicial sale held pursuant to court order under section 45.031, Florida Statutes, (1981), the security property was sold to a third party for $520,200 cash. Appellant moved for entry of a deficiency judgment for $640,457.81 representing the amount of the final judgment, plus further accrued interest and costs, less the sale proceeds. The mortgagor presented an appraisal made four months before the foreclosure sale which valued the mortgaged property at $1,360,000 and argued that the security property was worth much more than it brought at the sale. The trial court entered a deficiency judgment for $229,800, the difference between the original principal amount of the mortgage ($750,000) and the sale proceeds ($520,200).
When a mortgage secures the outstanding principal indebtedness together with all interest and costs and the judicial foreclosure sale is insufficient to cover all such sums, the mortgagee is entitled to a deficiency judgment for the balance due. To limit the mortgagor’s liability and the deficiency to the principal sum deprives the contracting party of the benefit of a lawful contract. See Flagship Bank of Orlando v. Bryan, 384 So. 2d 1323 (Fla. 5th DCA 1980); Larsen v. Allocca, 187 So. 2d 903 (Fla. 3d DCA), cert. denied, 195 So. 2d 566 (Fla.1966). Under the facts here, and where there is no fraud or interference by the mortgagee with the foreclosure sale nor any legal error in the clerk’s conduct of the sale, the mere difference between the foreclosure sale price and the “market value” of the property does not justify denial of a deficiency judgment for the balance of all sums due. See Flagship State Bank of Jacksonville v. Drew Equipment Company, 392 So. 2d 609 (Fla. 5th DCA 1981).
REVERSED and REMANDED.
DAUKSCH, FRANK D. UPCHURCH and COWART, JJ., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Coral Gables Fed. Sayings & Loan Ass'n v. Whitewater Enters., Inc., 614 So. 2d 682 (Fla. 5th DCA 1993)…r to support the equitable grounds argued on appeal, the First Union court reversed the order and remanded with instructions to the trial court to enter a deficiency judgment. Similarly, in Federal Deposit Insurance Corp. v. Circle Bar Ranch, Inc., 450 So. 2d 921, 922 (Fla. 5th DCA 1984), this court held that when a mortgage secures the outstanding principal indebtedness and all of the related expenses, such as interest, costs, and fees, and when the judicial foreclosure sale of the collateral is insufficien…
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Bashar Ahmad v. Cobb Corner, Inc., 762 So. 2d 944 (Fla. 4th DCA 2000)…at the date of the foreclosure sale, as determined by the trial court, is the rule rather than the exception. See, e.g., Chidnese, 695 So. 2d at 938; Khan v. Simkins Indus., Inc., 687 So. 2d 16 (Fla. 3d DCA 1996); F.D.I.C. v. Circle Bar Ranch, Inc., 450 So. 2d 921 (Fla. 5th DCA 1984). Applying these established principles it is clear the trial court erred in denying a deficiency. First, there is no doubt that Ahmad, as the assignee of the Resolution Trust Corporation, owned the rights to the Cobb Corner, Inc…
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First Union Nat'l Bank OF Fla. v. Goodwin Beach P'ship, 644 So. 2d 1361 (Fla. 5th DCA 1994)…hat the fair market value of the realty securing the debt exceeded the judgment debt at the time of the foreclosure sale. See Ricard v. Equitable Life Assurance Society of U.S., 462 So. 2d 592 (Fla. 5th DCA 1985); F.D.I.C. v. Circle Bar Ranch, Inc., 450 So. 2d 921 (Fla. 5th DCA 1984). The decision below is flawed in several respects, necessitating reversal for a new trial on the deficiency issue. In 1990, First Union’s predecessor in interest, Southeast Bank, N.A., filed a foreclosure action against Goodwin…1 / 2
Previewing 3 of 7 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Flagship Bank OF Orlando v. Jackson Bryan, 384 So. 2d 1323 (Fla. 5th DCA 1980)
- Larsen v. Allocca, 187 So. 2d 903 (Fla. 3d DCA 1966)
- van Poyck v. State, 392 So. 2d 609 (Fla. 3d DCA 1981)
- Flagship State Bank OF Jacksonville v. Drew Equip. Co., 392 So. 2d 609 (Fla. 5th DCA 1981)
- City of Miami v. Mitjans, 195 So. 2d 566 (Fla. 1966)
- Diamond T. Sales & Serv. Co. v. Enix, 195 So. 2d 566 (Fla. 1966)