BANK OF FLORIDA IN SOUTH FLORIDA, APPELLANT,
v.
RICHARD W. KEENAN AND GAIL VAN DUYNE AND JOHN H. BORGES, APPELLEES
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Bank of Florida appealed summary judgment dismissing its deficiency action against original mortgagors Keenan and Van Duyne after foreclosure on mortgaged property that had been transferred to a third party (Borges) who assumed the mortgage. The court reversed, holding that the bank could pursue a separate deficiency action against the original obligors even though the initial foreclosure suit sought deficiency only against the subsequent owner.
The court held that under Florida Statute §702.06, the bank may pursue a separate deficiency action against the original obligors (Keenan and Van Duyne) following foreclosure, provided no deficiency judgment was entered against them in the foreclosure action. The fact that the foreclosure complaint sought deficiency only against Borges does not preclude the bank from perfecting a deficiency against Keenan and Van Duyne in a subsequent action.
[1] A creditor may sue to recover a deficiency after a foreclosure sale if no deficiency judgment was obtained against the debtors in the foreclosure action, nor was one soug…
[2] A subsequent action at law to recover a deficiency is not barred by the fact that the original foreclosure complaint sought a deficiency against a different party.
Previewing 2 of 5 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“Section 702.06, Florida Statutes (1985), expressly permits the bank to sue to recover a deficiency after foreclosure, so long as the bank neither obtained a deficiency judgment against Keenan and Van Duyne, nor sought and was refused one in the foreclosure action.”
Establishes the statutory framework permitting post-foreclosure deficiency actions under Florida law
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Join FLexlaw to unlock all legal intelligenceBank loaned Keenan and Van Duyne $119,041 secured by a mortgage on Dade County property titled in Van Duyne's name. Van Duyne conveyed the property to…
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BARKDULL, Judge.
This is an appeal by the Bank of Florida from an entry of final summary judgment in favor of Keenan, and Van Duyne.
The bank loaned Keenan and Van Duyne $119,041.00, the repayment of which was secured by a mortgage on property located in Dade County at The Hammocks. The property was titled only in Van Duyne’s name. Van Duyne conveyed the property to Borges by warranty deed, and the deed stated that Borges “assumed and agreed to pay” the mortgage loan to the bank. Keenan and Van Duyne were never released from the obligation. In 1981, Borges defaulted in payment on the loan, and a foreclosure action was brought against Borges and Van Duyne.1 The complaint asked that a deficiency be entered against Borges if the judicial sale of the property was inadequate to satisfy the judgment. No deficiency was requested against Van Duyne, and Keenan was not sued. The trial court entered judgment and found the final amount due to be $161,059.95, reserving jurisdiction to enter a deficiency, if any, against Borges. The bank was the successful bidder at auction, and brought a separate deficiency action against Keenan, Van Duyne, and Borges. Keenan and Van Duyne answered, however Borges defaulted. Keenan and Van Duyne defended and moved for summary judgment, which was granted. The bank appeals.2
The trial court erred in entering summary judgment for the appellees. Section 702.06, Florida Statutes (1985), expressly permits the bank to sue to recover a deficiency after foreclosure, so long as the bank neither obtained a deficiency judgment against Keenan and Van Duyne, nor sought and was refused one in the foreclosure action. As long as no deficiency has been entered against the debtors in the foreclosure action, the creditor bank may bring an action against them after the sale, to satisfy the balance due on the note. Younghusband v. Ft. Pierce Bank & Trust Co., 100 Fla. 1088,130 So. 725 (1930). The fact that the original foreclosure complaint sought a deficiency against Borges does not preclude the bank from perfecting the deficiency against Keenan and Van Duyne in the subsequent action at law. Reid v. Miami Studio Properties, Inc., 139 Fla. 246, 190 So. 505 (1939); NCNB National Bank of Florida v. Pyramid Corporation, 497 So. 2d 1353 (Fla. 4th DCA 1986); Rubin v. Kapell, 105 So. 2d 28 (Fla. 3d DCA 1958); The subsequent action was not barred, and it should have been entertained against Keenan and Van Duyne, regardless of the foreclosure suit complaint seeking deficiency against Borges only. Reid v. Miami Studio Properties, Inc., supra.
We therefore reverse with directions to consolidate the subsequent action with the foreclosure proceedings and to then determine the amount of the deficiency, if any, which may be the responsibility of the appellants and Borges.
Reversed and remanded with directions.
. Van Duyne was joined as a party defendant to foreclose an inferior lien.
. The bank also sought to have the original foreclosure action and the subsequent deficiency action consolidated. This motion to consolidate was denied at the same time the summary judgment was granted.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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PMI Mortg. Ins. Co. v. Cavendar, 615 So. 2d 710 (Fla. 3d DCA 1993)…he original mortgagee becomes the purchaser thereof at foreclosure sale and also is granted a deficiency decree against the original mortgagor. Id. See generally 1 Kendall Coffey, Florida Foreclosures § 17.04 (1992).* In Bank of Florida v. Keenan, 519 So. 2d 51 (Fla.3d DCA 1988), this court held that the lender could bring a separate action for a deficiency against one who had not been a party to the foreclosure suit. In that case Keenan was one of two original mortgagors,. and had not been made a party to…
Authorities Cited
- Younghusband v. Fort Pierce Bank & Tr. Co., 100 Fla. 1088 (Fla. 1930)
- Reid v. Miami Studio Props., Inc., 139 Fla. 246 (Fla. 1939)
- NCNB Nat'l Bank OF Fla. v. Pyramid Corp., 497 So. 2d 1353 (Fla. 4th DCA 1986)
- Rubin v. Kapell, 105 So. 2d 28 (Fla. 3d DCA 1958)