Florida Supreme Court Holds Trial Court Had Jurisdiction to Hear Post-Foreclosure Judgment Motion from Foreclosure Sale Purchaser Regarding Betterment

The Supreme Court of Florida recently reversed an appellate court and found that a trial court retained jurisdiction to hear the motion of a foreclosure sale purchaser regarding whether he was entitled to compensation for improving the property before the sale was vacated. See Griffin v. LaSalle Bank, N.A., 2020 WL 579183 (Fla. Feb. 6, 2020).  In the case, a lender obtained a final judgment of foreclosure.  Before the sale, the homeowners reached a short sale agreement with a third party for $900,000, and the lender approved.  The lender forgot to cancel the sale, however, and the property was sold to David Griffin for $75,000.  The lender then moved to cancel the sale.  The court granted the motion, finding that the sale price was grossly inadequate.  The court also found that Griffin was the brother-in-law of the short sale purchaser and “while there was no misconduct, Griffin knowingly capitalized on Petitioner’s law firm’s failure to cancel the sale and his bid could not be characterized as a good faith bid.”  Griffin then filed a motion for damages based on a claim of “betterment,” arguing that he had made $368,000 in improvements to the property before the sale was reversed.  More than five years later, after the trial court referred the parties to mediation for a second time, the lender moved to strike the court’s order, arguing that the trial court was without jurisdiction to hear Griffin’s motion because the court already had granted final judgment of foreclosure.  The trial court denied the motion but, on appeal, the appellate court reversed.  It found that the trial court no longer had jurisdiction to hear Griffin’s motion after it entered final judgment, and quashed the order referring the case to mediation.

On appeal, the Supreme Court reversed. The Court found that “a court of equity has the power to set aside the sale of mortgaged property made pursuant to foreclosure ‘to protect parties from all fraud, unfairness, and imposition,’” even after final judgment.  The Court then found that this jurisdiction extended to other motions “to address a number of possible issues that can arise” after judgment.  Therefore, the Court found that the appellate court’s holding that the circuit court did not have jurisdiction was “too broad,” and the Court reversed it.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Michael Crowley at mcrowley@riker.com, or Andrew Raimondi at araimondi@riker.com.