Court: District Court of Appeal of Florida; January 24, 2012; Florida; State Appellate Court
The court is reconsidering a previous line of cases regarding the requirements to set aside a foreclosure sale, following a conflict with Florida Supreme Court precedent. In September 2010, a final judgment of mortgage foreclosure was issued in favor of Chase Home Finance against the defendants, leading to a public sale on May 9, 2011, where Iron National Trust won the bid of $125,300. Subsequently, the defendants sought to vacate the sale, claiming that Chase had offered them a loan reinstatement option which they accepted by sending a cashier’s check prior to the sale. The defendants provided supporting documents, including the offer letter and proof of delivery of the check, but did not argue the sale price's inadequacy as grounds for vacating. Iron National Trust assigned its interest to Nicholas Arsali, who intervened in the case after the defendants noticed their motion to vacate. The circuit court vacated the sale and final judgment on May 26, agreeing with the defendants, without a transcript available from the hearing. Arsali contended that the lack of an evidentiary hearing prevented the court from determining if the sale price was grossly inadequate, which is a required condition for vacating the sale according to established case law. The court referenced the case Blue Star Investments, which necessitates a finding of gross inadequacy and accompanying irregularities to vacate a sale. The excerpt also highlights that the Florida Supreme Court's position allows for a sale to be vacated on various grounds, not strictly limited to the two-part test cited in Blue Star.
Surprise, accident, or mistake, along with irregularity in the conduct of the sale, are four independent grounds for setting aside a foreclosure sale, as established by the Supreme Court's reference to the Brown decision. The court clarified that the Ohio Realty ruling does not negate the principles set forth in Brown. The second district reconciled conflicting interpretations between Brown and Arlt, stating that Brown applies when the challenge is based on grounds other than inadequate bid price, while Arlt is relevant when the adequacy of the bid price is questioned. The court affirmed that a circuit court did not abuse its discretion in setting aside a sale based on a settlement agreement between the bank and defendants, indicating that gross inadequacy of price is not a prerequisite for this relief. The trial court was not required to conduct a hearing on the adequacy of the sale price due to the independent grounds outlined in Brown. The ruling emphasizes the necessity for clarity in foreclosure sale challenges in light of their prevalence in Florida's civil dockets. The court certified the question of whether the Arlt test for vacating a foreclosure sale applies when the bid price adequacy is not contested. Additionally, it reiterated that an intervener must accept the existing record and cannot challenge the plaintiff's claims without the chancellor's permission. The standard of review for appeals regarding motions to set aside foreclosure sales is whether the trial court grossly abused its discretion.
