MILAN JELIC, APPELLANT,
v.
SEARS MORTGAGE CORPORATION, AN OHIO CORPORATION, ET AL., APPELLEES
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A Florida appellate court reversed the trial court's disbursement of foreclosure surplus funds to the Pearsons (successful bidders) and the Condominium Association. The court held that under settled Florida law, only those holding an equity of redemption, lien, or vested right in the property at the time of the foreclosure sale are entitled to share in the surplus.
The Pearsons were not entitled to share in the surplus funds because they did not own the equity of redemption or hold a lien or vested right in the property at the time of the foreclosure sale. Surplus funds from a foreclosure sale stand in the place of the property itself regarding liens and vested rights therein, and only those holding such interests at the time of sale may claim the surplus.
[1] A party claiming entitlement to surplus funds from a foreclosure sale must have owned the equity of redemption at the time of the sale or held a lien or vested right in t…
[2] Surplus funds arising from a foreclosure sale stand in the place of the land itself with respect to liens or vested rights.
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Join FLexlaw to unlock all legal intelligence“one claiming a surplus or the right to share in a surplus resulting from a sale under foreclosure must either own the equity of redemption at the time of the sale or must be one then holding a lien or vested right in the property”
Establishes the fundamental rule for who may claim foreclosure surplus funds
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Join FLexlaw to unlock all legal intelligenceMilan Jelic was the defendant in a mortgage foreclosure action against a condominium unit at the Juno Ocean Club. Ray and Georgia Pearson were the suc…
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POLEN, Judge.
Appellant brings this non-final appeal from the trial court’s order disbursing surplus funds on deposit with the court in connection with the foreclosure sale of a condominium unit at the Juno Ocean Club. Appellant, Milan Jelic, was the defendant in the mortgage-foreclosure action, while appellees, Ray and Georgia Pearson, were the successful bidders. Following the foreclosure sale, a certificate of disbursements filed by the Clerk of the Circuit Court reflected a balance of $2,806.68. The Pear-sons filed a motion for disbursement of this surplus, asserting entitlement to the surplus as repayment for expenses incurred in making the condominium unit liveable, payment of a quarterly maintenance fee due to the Juno Ocean Club Condominium Association, and/or payment of rents alleged to have been collected by the appellant from tenants occupying the foreclosed property after the foreclosure sale and prior to the Pearson’s occupancy of the property.
We reverse the trial court’s order disbursing proceeds to the Condominium Association and the Pearsons. In Rosen v. Dorn-Korthe, Inc., 126 Fla. 717, 171 So. 646 (Fla. 1936), the court stated:
It appears to be settled beyond all question that one claiming a surplus or the right to share in a surplus resulting from a sale under foreclosure must either own the equity of redemption at the time of the sale or must be one then holding a lien or vested right in the property. In Jones on Mortgages (7th Ed.) § 1684, the author says:
‘Surplus money arising from a sale of land under a decree of foreclosure stands in the place of the land itself in respect to liens thereon or vested rights therein.’
Rosen, 171 So. at 648.
At the time of the foreclosure sale the Pearsons did not own the equity of redemption or hold a lien or vested right in the property. Therefore, pursuant to Ro-sen, the Pearsons were not entitled to share in the surplus resulting from the sale. Nor were the Pearsons entitled to payment or reimbursement from these surplus funds of a maintenance fee apparently owing to the Juno Ocean Club Condominium Association. See Miller v. Stavros, 174 So. 2d 48 (Fla.3d DCA 1965) (purchaser at foreclosure sale not entitled to reimbursement out of surplus funds to which the mortgagor or his trustee in bankruptcy were entitled).
We reverse with instructions that appel-lees deposit the improperly disbursed funds ($2,806.68) into the registry of the court.
REVERSED.
DELL, J., and OWEN, WILLIAM C., Jr., Senior Judge, concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Pineda v. Wells Fargo Bank, N.A., 143 So. 3d 1008 (Fla. 3d DCA 2014)…surplus or the right to share in a surplus resulting from a sale under foreclosure must either own the equity of redemption at the time of the sale or must be one then holding a lien or vested right in the property.”); Jelic v. Sears Mortgage Corp., 614 So. 2d 1149, 1150 (Fla. 4th DCA 1993); see also Garcia v. Stewart, 906 So. 2d 1117, 1120-21 (Fla. 4th DCA 2005). Again, while we sympathize that Nocari was an unsuspecting bidder at a foreclosure sale, “[cjourts of equity have no power to overrule established…
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Authorities Cited
- Rosen v. Dorn-Kothe, Inc., 126 Fla. 717 (Fla. 1936)
- Elliot L. Miller v. Manelous Stavros In Bankruptcy of Edward J. Kubay and Patricia Kubay, 174 So. 2d 48 (Fla. 3d DCA 1965)
- Zeiters v. State, 174 So. 2d 48 (Fla. 2d DCA 1965)