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Fifth DCA Addresses Bank’s Failure to Attend Foreclosure Sale

Posted: September 6, 2010 Filed under: Case Law, Law-Related News

U.S. Bank, N.A. v. Bjeljac involved a foreclosure gone awry. U.S. Bank obtained a judgment of foreclosure and properly noticed the foreclosure sale but forgot to send a representative to the sale. As a result, the Clerk of Court sold the property to a third party for a “grossly inadequate” price. U.S. Bank immediately realized its mistake and, the day after the sale, filed an objection and a motion to return third-party funds, vacate the certificate of sale and set aside the sale. The trial court denied the bank’s motion twice, both times without a hearing.

On appeal, U.S. Bank contended the trial judge erred in denying its motion. Florida’s Fifth District Court of Appeal affirmed in part and reversed in part. In affirming the trial court, the court of appeal determined that U.S. Bank failed to satisfy the “basic requirement” that its motion to cancel and reset the foreclosure sale “state with particularity the grounds therefore….”

The appellate court reversed the trial court’s order overruling the bank’s objections to the sale price and refusing to set aside the sale, however. In doing so, the Fifth District pointed to section 45.031(8), Florida Statutes (2009), which required that “…objections shall be heard by the court.”

Addressing what it means to be “heard,” the court stopped short of saying that all motions require “an in-court proceeding with counsel physically present.” Being heard does, however, require that the objections not be summarily denied “ex parte and without notice to all interested parties,” wrote the court. Thus the court of appeal sent the case back to the trial court for a hearing on the question whether the bank’s failure to have a representative present at the sale was the result of a mistake. In Florida, a judicial sale may be set aside where a grossly inadequate price results from “mistake, accident, surprise, fraud, misconduct or irregularity upon the part of either the purchaser or other person connected with the sale, with resulting injustice to the complaining party.”

Admitted: Florida, Kansas, New Mexico (inactive)