Third District Court of Appeal
State of Florida
Opinion filed February 15, 2023.
Not final until disposition of timely filed motion for rehearing.
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No. 3D22-1274
Lower Tribunal No. 19-23438
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Shirley Sutton,
Appellant,
vs.
Wilmington Trust, N.A., etc., et al.,
Appellees.
An appeal from a non-final order from the Circuit Court for Miami-Dade
County, Migna Sanchez-Llorens, Judge.
Robert Flavell, P.A., and Robert Flavell (Celebration), for appellant.
Robert G. Post P.A., Robert G. Post, Troutman Pepper Hamilton
Sanders LLP, and Hallie S. Evans (Atlanta, GA), for appellees.
Before EMAS, MILLER, and LOBREE, JJ.
MILLER, J.
Appellant, Shirley Sutton, challenges an order denying her motion to
vacate a foreclosure sale. On appeal, Sutton invokes the seminal case of
Arsali v. Chase Home Finance, LLC,
121 So. 3d 511 (Fla. 2013), for the
proposition that the trial court erred in categorically rejecting her motion on
the basis she failed to establish fraud or an irregularity in the conduct of the
sale. Because Sutton alleged facially equitable grounds for relief, we reverse
and remand for further consideration.
BACKGROUND
After they defaulted on their obligations under their mortgage, Sutton
and her husband consented to a final judgment of foreclosure in favor of
appellee, Wilmington Trust, N.A. (the “Bank”). The judgment reflected an
extended judicial sale date. Weeks before the sale was scheduled to
convene, Sutton’s husband unexpectedly passed away. Sutton and the
Bank then separately sought to postpone the sale to finalize a refinancing
agreement.
In the days leading up to the sale, the Bank prepared and circulated a
proposed order canceling the sale. An inferior lienholder objected to both
the form and substance of the order. Due in large part to the fact that a
holiday weekend preceded the sale date, neither Sutton nor the Bank
2
obtained a hearing on their respective motions. The sale proceeded as
scheduled, and a third-party was deemed the successful bidder.
Sutton timely filed a motion seeking to vacate the sale, detailing the
miscommunication. The trial court convened a hearing but denied relief
because Sutton failed to establish fraud or an irregularity in the conduct of
the sale. The instant appeal ensued.
STANDARD OF REVIEW
We ordinarily review an order denying a motion to set aside a
foreclosure sale for an abuse of discretion. See Aparicio v. Deutsche Bank
Nat’l Tr. Co.,
278 So. 3d 814, 816 (Fla. 3d DCA 2019). Whether the trial
court applied the correct legal standard in exercising such discretion,
however, is subject to de novo review. See Paul v. Wells Fargo Bank, N.A.,
68 So. 3d 979, 986 (Fla. 2d DCA 2011).
ANALYSIS
In Florida, foreclosure actions are convened in equity. Tanis v. HSBC
Bank USA, N.A.,
289 So. 3d 517, 520 (Fla. 3d DCA 2019). Consequently,
trial courts are guided by the adage that “equity will act to prevent the wrong
result” in judicial foreclosure sales. Arsali,
121 So. 3d at 519 (quoting Arlt v.
Buchanan,
190 So. 2d 575, 577 (Fla. 1966)). In accord with these principles,
a proper showing of one or more equitable factors, including “gross
3
inadequacy of consideration, surprise, accident, or mistake imposed on
complainant, and irregularity in the conduct of the sale,” may support relief
from such a sale. Moran-Alleen Co. v. Brown,
123 So. 561, 561 (Fla. 1929).
In the instant case, Sutton alleged she erroneously believed the Bank
had obtained an order canceling the sale. The trial court found that, in the
absence of irregularity in the conduct of the sale or fraud, relief was
unavailable. This limitation on relief was eschewed by the Florida Supreme
Court in Arsali,
121 So. 3d at 517. There, the court approved a Fourth District
Court of Appeal decision affirming a ruling granting relief to borrowers on
equitable grounds.
Id. at 519. The borrowers asserted mistake and proved
that the bank “neglected to arrange for the cancelation of the foreclosure
sale with the clerk of court . . . [and they] were not aware that the scheduled
judicial sale of their residence had not been canceled.”
Id. at 513. In
approving the Fourth District’s decision, the Supreme Court observed:
[T]here is a presumption among the district courts that a single
equitable factor (i.e., grossly inadequate bid price) or a specific
combination of previously identified factors must be applied by
the trial courts in order to set aside judicial foreclosure sales. We
state that such a presumption is incorrect.
Id. at 517. The Court further expounded:
Our decisions show that we have consistently held that the mere
allegation of any single factor or any specific combination of
factors is insufficient for litigants to prevail in an action seeking a
set aside of a judicial foreclosure sale. Instead our previous
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decisions have consistently required that litigants allege one or
more adequate equitable factors and make a proper showing to
the trial court that they exist in order to successfully obtain an
order that sets aside a judicial foreclosure sale.
Id. at 518.
Arsali and its progeny have clarified that relief may lie to relieve a party
from the consequences of a mutual mistake in fact surrounding the
scheduling of a foreclosure sale. In Gavidia v. Specialized Loan Servicing,
LLC,
301 So. 3d 413, 415 (Fla. 2d DCA 2020), a mortgage loan servicer and
mortgagor agreed to reinstate a loan prior to a foreclosure sale and
subsequently filed respective motions to cancel the sale. Neither motion was
heard before the sale, and the trial court later denied a motion to vacate the
sale, in part, because there were no allegations of irregularities in the sale
itself. Id. at 417. Underscoring Arsali’s commitment to the principle that a
judicial sale may be vacated and set aside on any or all well-pled equitable
grounds, the Second District concluded that the trial court “applied an
incorrect legal standard and failed to consider the equitable grounds alleged
as Arsali allows.” Id. The court expressly indicated, “[o]n remand, the trial
court should consider the equitable grounds alleged . . . with a hearing to
allow those equitable grounds to be established.” Id. at 418.
Confronting a similar factual scenario, the Fifth District Court of Appeal
adopted the same approach. In Josecite v. Wachovia Mortg. Corp.,
97 So.
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3d 265, 266 (Fla. 5th DCA 2012), the lender and mortgagors entered into a
forbearance agreement days before a foreclosure sale. Notwithstanding the
agreement, the sale proceeded as scheduled.
Id. The mortgagors sought
equitable relief from the sale.
Id. The trial court denied the mortgagors’
motion on the basis that the sale price was not grossly inadequate or
irregular.
Id. The Fifth District remanded, reasoning that “[t]he trial court’s
conclusion that a foreclosure sale may only be vacated for a grossly
inadequate bid price or other sale irregularity deprives the courts of their
equitable powers.” Id. at 267.
The facts of this case are on all fours with Arsali, Gavidia, and Josecite.
Accordingly, remand is warranted for reconsideration of the equitable
grounds alleged. 1
Reversed and remanded.
1
We reject the successful bidders’ contention that section 702.036, Florida
Statutes (2019), bars relief. This argument was not raised below, and the
plain language of the statute extends only to challenges to “the validity of a
final judgment” not to motions for relief from a judicial foreclosure sale. §
702.036(1)(a), Fla. Stat.
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