743 Mahoney, LLC v. MDC 5, LLC

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED
IN THE DISTRICT COURT OF APPEAL
OF FLORIDA
SECOND DISTRICT
743 MAHONEY, LLC, as Assignee of )
NRG Investment Partners, LLC, )
)
Appellant, )
)
v. ) Case No. 2D15-1854
)
MDC 5, LLC, MEDALLION )
CONVENIENCE STORES, INC., and )
KENNETH L. WOOD, )
)
Appellees. )
________________________________ )
Opinion filed November 16, 2016.
Appeal from the Circuit Court for
Hillsborough County; Charles E.
Bergmann, Judge.
Michael I. Bernstein and Brian G.
Winger of The Bernstein Law Firm,
Miami Beach, for Appellant.
No appearance for Appellees.
KELLY, Judge.
Appellant, 743 Mahoney, LLC, as assignee of NRG Investment Partners,
LLC, challenges an order denying its claim for a deficiency judgment after a foreclosure
sale. We reverse.
A final judgment of foreclosure was entered against appellees in the
amount of $2,455,564.57. 743 Mahoney purchased the property at a foreclosure sale
for $100, and thereafter filed an amended motion for deficiency judgment against
appellees. At the hearing on the motion, 743 Mahoney presented evidence of the
foreclosure judgment, the assignment of the judgment, and the certificate of sale dated
June 14, 2013. It also proffered, over objection, the testimony of its appraisal expert
and an appraisal report that valued the property at $1,910,000 on June 20, 2013. The
trial court precluded 743 Mahoney's expert from explaining the factors used in
evaluating the property and from offering any opinion as to the fair market value of the
property as of June 14, 2013, the date of the foreclosure sale. The court deemed the
expert's testimony and report irrelevant because the appraisal was conducted six days
after the foreclosure sale "making it impossible to calculate any deficiency." Finding
that 743 Mahoney failed to satisfy its burden to demonstrate a deficiency existed as of
the foreclosure sale date, the trial court declined to award a deficiency judgment.
A trial court's decision to accept or reject expert testimony is reviewed for
an abuse of discretion. Eagle's Crest, LLC v. Republic Bank, 42 So. 3d 848, 850 (Fla.
2d DCA 2010). A trial court may not reject expert testimony unless it is so "incredible,
illogical, and unreasonable as to be unworthy of belief." Id. (quoting Dep't of Transp. v.
Myers, 237 So. 2d 257, 261 (Fla. 1st DCA 1970)). Here, there was no dispute that 743
Mahoney's expert was qualified to render an opinion regarding the value of the property.
However, the trial court excluded his testimony and appraisal report because the report
was dated six days after the foreclosure sale. This ruling was an abuse of discretion.
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It is well-settled that for purposes of calculating a deficiency judgment, the
relevant date for determining the fair market value of property is the foreclosure sale
date. See, e.g., Empire Developers Grp., LLC v. Liberty Bank, 87 So. 3d 51, 53 (Fla. 2d
DCA 2012). However, Florida law recognizes that a party seeking a deficiency
judgment may provide testimony to link the value of property on the date of an appraisal
to the value of property on the date of the foreclosure sale. See Beach Cmty. Bank v.
First Brownsville Co., 85 So. 3d 1119, 1121-22 (Fla. 1st DCA 2012) (reversing an order
denying a deficiency judgment because the trial court refused to consider
uncontroverted expert testimony that the property's value had not significantly changed
between the date of the foreclosure sale and the appraisal conducted six weeks later);
Thunderbird, Ltd. v. Great Am. Ins. Co., 566 So. 2d 1296, 1305 (Fla. 1st DCA 1990)
(finding testimony of appraisal expert admissible even though it was not as of the
foreclosure sale date where the expert testified there was no change in the market
value of the property subsequent to the appraisal). Here, we cannot say that the
passage of a mere six days rendered 743 Mahoney's appraisal so devoid of probative
value as to be irrelevant, especially in light of the court's refusal to allow 743 Mahoney's
expert to explain whether the intervening days affected the value of the property.
Accordingly, we reverse the trial court's order denying 743 Mahoney's amended motion
for deficiency judgment and remand for further proceedings consistent with this opinion.
Any determination that a deficiency judgment should be denied "must be supported by
established equitable principles and the record must disclose sufficient facts and
circumstances" to support that judgment. See Norwest Bank of Owatonna, N.A. v.
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Millard, 522 So. 2d 546, 547 (Fla. 4th DCA 1988) (quoting Trustees, Etc. v. Indico
Corp., 401 So. 2d 904, 906-07 (Fla. 1st DCA 1981)).
Reversed and remanded.
SALARIO and BADALAMENTI, JJ., Concur.
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