Press "Enter" to skip to content

Fla. Supreme Court Holds Foreclosure Buyer Could Recover for Property Improvements If Sale Was Later Vacated

mortgage lawThe Supreme Court of Florida recently held that trial courts have continuing jurisdiction to hear a third party purchaser’s motion to recover the value of repairs and improvements made to property purchased at a foreclosure sale that was later vacated, quashing and reversing the contrary ruling of Florida’s First District Court of Appeal.

A copy of the opinion in Griffin v. LaSalle Bank, N.A. is available at:  Link to Opinion.

A mortgagee obtained a final judgment of foreclosure. Prior to the foreclosure sale, the owners entered into a “short sale agreement” to sell the property to a third party for $900,000. “However, due to an error, the law firm representing [the mortgagee] at the time did not file a motion to cancel the sale.” The property sold at the foreclosure sale to a third party purchaser for $75,000.

The mortgagee moved to set aside the sale and certificate of title to the purchaser. In opposition to the motion, the third party purchaser argued “that he had spent approximately $160,000 related to the repair of the property.” The trial court granted the motion and vacated the sale, finding “that the foreclosure bid was grossly inadequate, and that while there was no misconduct, [the purchaser’s] bid could not be characterized as a good faith bid.”

The third party purchaser moved for rehearing on the grounds that the trial court “failed to order the return of his purchase funds to him and had not reserved jurisdiction to determine the amount of money he was owed for his improvements to the property.”

The trial court entered an amended order setting aside the sale and providing that the purchaser “was entitled to a return of his foreclosure sale purchase price” and reserving jurisdiction to determine whether the purchaser was entitled to relief for the repairs and improvements he made to the property.

Shortly thereafter, the third party purchaser “filed a motion for damages due to betterment[,]” seeking “the value of the improvements he had made to the property, in the amount of $368,000.” The motion remained pending for more than four years, and in the interim, the foreclosure sale was rescheduled two more times. The judge referred the matter to mediation, which was unsuccessful. Eventually, the property sold to another bank as “successor trustee.”

The judge referred the matter to mediation again and the third party purchaser “moved to strike the order referring the case to mediation, arguing the circuit court was without jurisdiction to order it to mediate the motion for damages more than seven years after the foreclosure judgment had become final.”  The trial court denied this motion.

The third party purchaser appealed.  The First District concluded that the trial court “did not have jurisdiction to entertain [the third party purchaser’s] motion for damages after it rendered the final judgment in 2010.’”

The purchaser appealed to the Florida Supreme Court.

The Florida Supreme Court agreed with the purchaser’s argument that the trial court “presiding over the foreclosure action has continuing jurisdiction to consider his motion for damages for repairs and improvements made to the property he purchased at a foreclosure sale that was later vacated[,]” and quashed the First District’s decision.

Citing a 2014 decision from the Third District Court of Appeal and a 1904 Florida Supreme Court case, the Court reasoned that “‘[i]n a foreclosure case, after entry of a final judgment and expiration of time to file a motion for rehearing or for a new trial, the trial court loses jurisdiction of the case … unless jurisdiction was reserved to address that matter or the issue is allowed to be considered post-judgment by statute or under a provision of the Florida Rules of Civil Procedure.’ … However, 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.’”

The Florida Supreme Court cited a 1941 Florida Supreme Court case holding that “‘[t]he purchaser also is entitled to be put into the same situation he was before the purchase[,]’ [and] … the purchaser is also entitled to such sums the purchaser may have paid out in good faith, relying on the validity of the title transferred under the sales, for improvements on the property, at least to the extent that the value of the property was increased by such improvements.”

The Court in that 1941 case directed the lower court to require the purchasers to account for any rents they collected after the foreclosure sale was set aside and order the parties to file appropriate pleadings, “‘thereby arriving at issues as to the credits and debits which have accrued since the entry of the final decree’; and enter judgment on those new pleadings.”  Accordingly, the trial court “retained jurisdiction to address claims the [purchasers] could have raised arising after the order vacating their title.”

The Florida Supreme Court explained that “[c]ontrary to [its 1941 decision], the First District in this case concluded that the circuit court lost jurisdiction to address a purchaser’s claims arising after the final judgment and that the [third party purchaser’s] claims are appropriately the subject of a new proceeding.” The First District’s decision was “too broad” because “circuit courts retain postjudgment jurisdiction to address a number of possible issues that can arise.”

Accordingly, the Court quashed the First District’s decision and remanded the case “for further proceedings consistent with this opinion.”

Print Friendly, PDF & Email

Hector E. Lora manages the firm’s Florida office and has substantial experience in all phases of complex commercial litigation, including bench and jury trials as well as appellate practice. Hector represents lenders, servicers, debt collectors and debt buyers in complex mortgage foreclosure actions, quiet title actions, federal TILA, RESPA, TCPA, and FDCPA actions and Florida FCCPA actions brought by borrowers or debtors. He also represents creditors in bankruptcy litigation, purchasers of accounts receivable or factoring companies that provide revenue-based financing to small and mid-sized businesses in collection actions, and landlords in commercial and residential evictions. Hector’s broad litigation experience includes over a decade of defending civil enforcement actions filed by the Federal Trade Commission as well as real estate contract disputes and partition actions, contested mortgage foreclosure and condominium lien foreclosure actions and the foreclosure of UCC Article 9 security interests. Hector also has advised a variety of types of businesses regarding their compliance with applicable federal and state consumer protection laws, including the Federal Trade Commission Act, the Telephone Consumer Protection Act (TCPA), the Telemarketing and Consumer Fraud and Abuse Prevention Act, the Telemarketing Sales Rule, the Controlling the Assault of Nonsolicited Pornography and Marketing Act of 2003, and Florida laws governing telephone solicitation and communication. Hector received his Juris Doctor from the Georgetown University Law Center, and his undergraduate degree with honors from the University of Florida. For more information, see

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.