In short: Under the Florida Supreme Court’s 2018 decision in Bank of New York Mellon v. Glenville, the 60 days to claim foreclosure surplus run from the clerk’s certificate of disbursements, not from the auction. In Eduartez v. Federal National Mortgage Association, a former Miami-Dade unit owner tried to void an order paying the surplus to Sunshores Condominium Association and the auction buyer, arguing their claims were late. After the Supreme Court sent the case back in light of Glenville, the Third District affirmed on February 20, 2019, and the Supreme Court later declined further review.
The Facts
Fannie Mae foreclosed its mortgage on Eduardo Eduartez’s condominium unit, and the unit was sold at a clerk’s online auction to a third-party buyer, Degel, LLC. The sale produced a surplus. Sunshores Condominium Association had a recorded claim of lien for assessments and had filed its own lien foreclosure against Eduartez before the bank’s case. The bank’s final judgment foreclosed the defendants’ interests except claims or rights under chapters 718 and 720.
The buyer and the association each moved for disbursement of the surplus. At argument, the association’s counsel said the motions were filed within 60 days after the certificate of title but, as Eduartez argued, more than 60 days after the auction. On September 6, 2016, after a short motion-calendar hearing, the trial court entered an order disbursing the surplus. Eduartez later moved under rule 1.540(b) to vacate that order as void, and the trial court denied the motion on May 30, 2017. At argument:
- Eduartez argued the claims were untimely if the 60 days ran from the auction, that the court lacked jurisdiction to pay the association because the final judgment did not foreclose its lien, that the association’s separate foreclosure was the place to decide what he owed, and that the statute required an evidentiary hearing or summary judgment.
- The association argued the 60 days ran from the certificate of title, that its in rem lien was cut off by the bank’s foreclosure so it was a junior lienholder entitled to claim the surplus, that it supported its claim with a sworn affidavit, and that Eduartez’s counsel attended the hearing without objecting or asking for an evidentiary hearing.
- Asked by the panel, Eduartez’s counsel said the association’s separate foreclosure had been dismissed for lack of prosecution.
The Decision
The case went up and back. On June 13, 2018, the Third District affirmed in a per curiam opinion. It agreed with the Second District that a surplus claim had to be filed within 60 days after the sale, not after the certificate of title, and certified conflict with the Fourth District’s decision in Straub v. Wells Fargo Bank. But it held the disbursement order was erroneous, not void, so a rule 1.540(b) motion could not undo it. Rehearing was denied.
Meanwhile, the Florida Supreme Court decided Bank of New York Mellon v. Glenville, 252 So. 3d 1120 (Fla. 2018), holding that the 60-day period starts when the clerk issues the certificate of disbursements. On December 7, 2018, it quashed the Third District’s decision and sent the case back for reconsideration under Glenville.
On remand, after supplemental briefing, the Third District affirmed again on February 20, 2019, agreeing with Degel and Sunshores that Glenville “requires affirmance” of the order denying Eduartez’s motion to vacate. In April 2019 the court withdrew an earlier order awarding Sunshores appellate attorney’s fees and denied that fee motion. On November 25, 2019, the Supreme Court declined to accept jurisdiction of a second petition. The remand opinion does not separately discuss the arguments about the association’s lien or the lack of an evidentiary hearing.
The Law
Section 45.031 governs judicial sales and requires a person claiming surplus to file a claim within 60 days after the sale. Section 45.032 governs how the court decides who gets the surplus, and refers to the 60 days after the clerk issues a certificate of disbursements. In Glenville, construing the 2015 statutes, the Supreme Court used that language to hold the clock starts with the certificate of disbursements, and it disapproved Straub to the extent it tied the period to the certificate of title.
A condominium association’s lien is junior to a first mortgage of record that predates its claim of lien under section 718.116(5)(a), so the bank’s foreclosure cuts off the lien on the unit. A junior lienholder whose lien is cut off may claim surplus. At the same time, section 718.116(1)(a) keeps the former owner personally liable for assessments, and makes the next owner jointly and severally liable for unpaid assessments that came due before the transfer, subject to the first mortgagee safe harbor.
Rule 1.540(b)(4) lets a court vacate a void judgment or order at any time. An order that is only erroneous must be challenged by rehearing or appeal within the normal deadlines.
Lessons
- Calendar the surplus deadline from the clerk’s certificate of disbursements, and file early if there is any doubt about the applicable statute version.
- Owners who dispute an association’s claim to surplus should object in writing, ask for an evidentiary hearing, and get a court reporter. Here there was no transcript of the hearing.
- A rule 1.540 motion to vacate as “void” is not a substitute for a timely appeal of an order you think is wrong.
- In Eduartez, the association’s separate lien foreclosure against the owner did not keep the surplus out of its hands in the bank’s case.
Source: Eduartez v. Federal National Mortgage Ass’n, No. 3D17-1448 (Fla. 3d DCA Feb. 20, 2019) (on remand); earlier opinion June 13, 2018, quashed, No. SC18-1436 (Fla. Dec. 7, 2018); ACIS docket.
Watch the Oral Argument
This is the recording of the actual oral argument, posted on the channel. What lawyers and judges say at argument is not the ruling; the decision is summarized above.
Foreclosure Surplus Paid to a Condo Association Whose Lien Survived: Is the Disbursement Void?
Read the Law on FloridaRules.net
The statutes and court rules discussed in this article, free to read on FloridaRules.net:
Go Deeper
- Tax Deed Surplus Funds in Florida: Who Gets the Money and How Fast You Must Claim It
- How Far Back Does a Condo Buyer Owe Unpaid Assessments? (Park West v. Londono)
- WARNING- Appealing A Final Judgment You MUST Have a Court Reporter!
Frequently Asked Questions
How long do I have to claim surplus funds after a Florida foreclosure sale?
The statute gives 60 days, and under Bank of New York Mellon v. Glenville the 60 days run from the clerk’s certificate of disbursements, not the auction date. Check the current versions of section 45.031 and section 45.032 and file as early as you can.
Can my condo association take the surplus from my foreclosure sale?
It can claim it. When the bank’s foreclosure cuts off the association’s lien, the association can seek the surplus for unpaid assessments, as Sunshores did in Eduartez. The owner can contest the amount, but should do so at the surplus hearing.
Can I undo a surplus order after the time to appeal has passed?
Only if the order is void, under rule 1.540(b)(4). An order that is merely wrong is not void. In Eduartez, the Third District’s first opinion (later quashed for reconsideration under Glenville) called the disbursement order erroneous, not void, and on remand the court again affirmed the denial of the motion to vacate after applying Glenville.
Do I still owe the condo association after the bank forecloses?
Usually yes, personally. The bank’s foreclosure cuts off the association’s lien on the unit, but section 718.116 keeps the former owner liable for assessments that came due during ownership. Surplus paid to the association reduces that debt.
Talk to a Florida real estate litigation lawyer
Weidner Law, P.A. handles Florida real estate disputes, title problems and appeals from St. Petersburg. If you need a real estate litigation lawyer, call (727) 954-8752 or email weidner@mattweidnerlaw.com.
Read the law yourself, free: every Florida statute and court rule is on floridarules.net.
This article is general information about Florida law, not legal advice about your situation. Reading it, watching the videos, or contacting the firm does not create an attorney-client relationship. Every case turns on its own facts, and past results do not guarantee a similar outcome. The hiring of a lawyer is an important decision that should not be based solely upon advertisements.
