DANE D. MORGAN, AS TRUSTEE, APPELLANT,
v.
RICHARD KELLY, ET AL., APPELLEES
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Morgan, a mortgagee, appealed a post-foreclosure deficiency judgment, arguing the trial court used an incorrect formula to calculate the deficiency. The court reversed, holding that a deficiency judgment must equal the total debt minus the fair market value of the property, not the sale price minus fair market value, and remanded for the trial court to reconsider using the correct formula.
The court held that the correct formula for a deficiency judgment is the total debt as secured by the final judgment of foreclosure minus the fair market value of the property as determined by the court. A deficiency judgment for less than the full amount due must be supported by established equitable principles articulated by the trial court; failure to do so constitutes an abuse of discretion.
[1] A mortgagee is entitled to a deficiency judgment for the balance due when a judicial foreclosure sale is insufficient to cover all sums owed, including principal, interes…
[2] A deficiency judgment should not be limited to the principal sum of a mortgage when the foreclosure sale proceeds are insufficient to cover all amounts due under the mort…
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Join FLexlaw to unlock all legal intelligence“the correct formula to calculate a deficiency judgment is the total debt, as secured by the final judgment of foreclosure, minus the fair market value of the property, as determined by the court”
Establishes the controlling legal standard for calculating deficiency judgments
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Join FLexlaw to unlock all legal intelligenceMorgan obtained a final judgment of foreclosure for $387,087.28 and purchased the property at foreclosure sale for $100,000. The trial court determine…
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GERSTEN, Judge.
Appellant, mortgagee Dane . D. Morgan (Morgan), appeals a post-foreclosure deficiency judgment, claiming the trial court erred in entering judgment for less than the amount due. We agree and reverse.
Morgan was awarded a final judgment of foreclosure in the amount of $387,087.28. Morgan then purchased the property for $100,000. After the sale, Morgan moved for a deficiency judgment.
Upon competent evidence, the trial court determined that the fair market value of the property was $215,000. The trial court then subtracted the sale price of the property from its fair market value to arrive at a deficiency judgment of $115,000.
However, the correct formula to calculate a deficiency judgment is the total debt, as secured by the final judgment of foreclosure, minus the fair market value of the property, as determined by the court. Norwest Bank Owatonna, N.A. v. Millard, 522 So. 2d 546 (Fla. 4th DCA 1988) (citing CSI Servs., Ltd. v. Hawkins Concrete Constr. Co., 516 So. 2d 337, 338 (Fla. 1st DCA 1987)). See R.K. Cooper Constr. Co. v. Fulton, 216 So. 2d 11 (Fla.1968); Liberty Business Credit Corp. v. Schaffer/Dunadry, 589 So. 2d 451 (Fla. 2d DCA 1991); Flagship State Bank of Jacksonville v. Drew Equip. Co., 392 So. 2d 609 (Fla. 5th DCA 1981). Here, the trial court erred in using an incorrect formula to determine the deficiency, resulting in a judgment for less than the full amount of the debt. See Mizner Bank v. Adib, 588 So. 2d 825 (Fla. 4th DCA 1991).
A trial court’s discretion with regard to deficiency judgments is not absolute. Carlson v. Becker, 45 So. 2d 116 (Fla.1950); Coral Gables Federal Savs. and Loan Ass’n v. Whitewater Enters., Inc., 614 So. 2d 682 (Fla. 5th DCA 1993). “[W]hen a deficiency decree is entered for less than the amount due and owing, the judgment must be supported by established equitable principles.” Trustees of Central States Southeast and Southwest Areas, Pension Fund v. Indico Corp., 401 So. 2d 904, 906 (Fla. 1st DCA 1981). When a court does not state any legal or equitable principles justifying an award for less than the full amount of the deficiency, the award is an abuse of discretion. Mizner Bank, 588 So. 2d at 325; Norwest Bank Owatonna, N.A., 522 So. 2d at 546.
Because the trial court failed to articulate any reasons for awarding less than the full amount due, we reverse the deficiency judgment and remand to the trial court. Should the court find that an equitable principle justifies a reduced award, then the court should state that principle with particularity. See Mizner Bank, 588 So. 2d at 326.
Reversed and remanded.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By (12 total)
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Waqar Ahmad (Mickey) Khan v. Simkins Indus., Inc., 687 So. 2d 16 (Fla. 3d DCA 1996)…rt finding on value of pi’operty). “The correct formula to calculate a deficiency judgment is the total debt, as secured by the final judgment of foreclosure, minus the fair market value of the property, as determined by the court.” Morgan v. Kelly, 642 So. 2d 1117 (Fla. 3d DCA 1994) (court used incorrect formula, resulting in an award for less than the full amount due). We have carefully studied the record in this ease and we find no abuse of discretion by the trial court in its determination of the amount du…
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Vantium Cap., Inc. v. Hobson, 137 So. 3d 497 (Fla. 4th DCA 2014)…hase Manhattan Bank, 374 So. 2d 1121, 1122 (Fla. 3d DCA 1979). “When a court does not state any legal or equitable principles justifying an award for less than the full amount of the deficiency, the award is an abuse of discretion.” Morgan v. Kelly, 642 So. 2d 1117, 1118 (Fla. 3d DCA 1994) (citations omitted). “The secured party has the initial burden of proving that the fair market value of the property was less than the total debt determined by the final judgment.” Chidnese v. McCollem, 695 So. 2d 936, 938…
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Chidnese v. McCOLLEM, 695 So. 2d 936 (Fla. 4th DCA 1997)…. Federal Deposit Ins. Corp. v. Motley, 915 F. 2d 1517 (11th Cir.1990). When a court does not state any legal or equitable principles justifying an award for less than the full amount of the deficiency, it is an abuse of discretion. Morgan v. Kelly, 642 So. 2d 1117 (Fla. 3d DCA 1994). We have not encountered a case where the court has denied a deficiency judgment prior ■ to ascertaining what price the property will fetch on sale or a determination of the fair market value of the property. The court cannot exe…
Previewing 3 of 12 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Carlson v. Becker, 45 So.2d 116 (Fla. 1950)
- R. K. Cooper Constr. Co. v. Fulton, 216 So. 2d 11 (Fla. 1968)
- Norwest Bank Owatonna, N.A. v. Millard, 522 So. 2d 546 (Fla. 4th DCA 1988)
- The Trs. OF Cent. States Se. & Sw. Areas v. Indico Corp., 401 So. 2d 904 (Fla. 1st DCA 1981)
- CSI Servs., Ltd. v. Hawkins Concrete Constr. Co., 516 So. 2d 337 (Fla. 1st DCA 1987)
- Liberty Bus. Credit Corp. v. Schaffer/Dunadry, 589 So. 2d 451 (Fla. 2d DCA 1991)
- Coral Gables Fed. Sayings & Loan Ass'n v. Whitewater Enters., Inc., 614 So. 2d 682 (Fla. 5th DCA 1993)
- Mizner Bank v. Adib, 588 So. 2d 325 (Fla. 4th DCA 1991)
- van Poyck v. State, 392 So. 2d 609 (Fla. 3d DCA 1981)
- Flagship State Bank OF Jacksonville v. Drew Equip. Co., 392 So. 2d 609 (Fla. 5th DCA 1981)