Monday, June 13, 2016

Florida Trial Judge Directed To Set Aside Foreclosure Sale After Improperly Allowing It To Take Place While A Defendant's Timely Motion For Rehearing Was Pending

In a recent court ruling, a Florida appeals court reminded all trial judges presiding over foreclosures in Florida that a foreclosure sale cannot take place when a defendant files a timely motion for rehearing, and said motion remains pending on the scheduled date of sale. Under Florida law, the enforcement of a final judgment is suspended by the filing of a rehearing motion.

As a result of the screw-up, the appeals court directed the trial judge to set aside the improperly held foreclosure sale, and essentially, directing a 'do-over' of that part of the proceedings beginning at the point that the rehearing motion was filed by the defendant.

It should be noted that the foreclosing bank's attorney, possibly knowing that the foreclosure sale was, in fact, improperly allowed to go forward, decided not to file a response to the defendant's petition with the appeals court. The appeals court treated this failure to file a response to the petition as the equivalent of a confession of error.

From the court's ruling:
  • On May 5, 2015, a bench trial was held in the Bank's foreclosure action, and a final judgment of foreclosure was entered in the Bank's favor. The judgment set a foreclosure sale for June 29, 2015.

    On May 20, 2015, Petitioners (defendants in the Bank's action) timely filed a rule 1.530 motion for rehearing directed toward the Bank's judgment. On June 26, 2015, the trial court cancelled the June 29, 2015 foreclosure sale date pursuant to Petitioners' motion to cancel the sale on the basis that the final judgment had not yet rendered. The trial court rescheduled the foreclosure sale for August 10, 2015.

    Because Petitioners' motion for rehearing remained pending on the rescheduled August 10, 2015 sale date, Petitioners filed a second motion to cancel the foreclosure sale. This motion to cancel the sale was heard by the trial court on the morning of the scheduled sale. The trial court summarily denied the motion and the foreclosure sale proceeded. Respondent Tania Cienfuegos was named the winning bidder of the unit at the foreclosure sale. The Petitioners' rule 1.530 motion has not been adjudicated and remains pending.

    Petitioners' seek certiorari review of the trial court's summary order denying their motion to cancel the foreclosure sale.[1]

    It is well settled that a foreclosure sale cannot be held while a timely motion for rehearing is pending because enforcement of a final judgment is suspended by the filing of the rehearing motion. United Invs. Ltd. P'ship v. Resolution Tr. Corp., 566 So. 2d 370, 370 (Fla. 3d DCA 1990) (Mem). Accordingly, the trial court erred by not cancelling the August 10, 2015 foreclosure sale, and the foreclosure sale must be set aside. See Hoffman v. BankUnited, N.A., 137 So. 3d 1039 (Fla. 2d DCA 2014) (Mem).

    Based on the foregoing, we grant the petition, quash the order denying Petitioners' motion to cancel the sale of foreclosure, direct the trial court to set aside the foreclosure sale to Cienfuegos, and remand for proceedings consistent herewith.

    Petition granted.
For the court ruling, see 944 CWELT-2007 LLC v. Bank of Am., N.A., Case No. 3D15-2091 (Fla. 3d DCA May 25, 2016).

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