BLUE STAR INVESTMENTS, INC., APPELLANT,
v.
BRITT A. JOHNSON AND BA MORTGAGE, LLC, APPELLEES
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Blue Star Investments purchased a home at foreclosure for $41,459.10, which was 69.09% of the property's appraised value of $60,000. The mortgagor moved to set aside the sale eleven days later, and the trial court granted the motion. Blue Star appealed, and the appellate court reversed, holding that the purchase price was not grossly inadequate as required to vacate a foreclosure sale.
The court reversed the trial court's order vacating the foreclosure sale because the mortgagor failed to make the two-part showing required under Florida law: the purchase price of 69.09% of appraised value was not grossly or startlingly inadequate, and the mortgagor did not demonstrate that the inadequacy resulted from mistake, fraud, or other irregularity in the sale process.
[1] A foreclosure sale may be vacated only upon a two-part showing: (1) that the foreclosure sale bid was grossly or startlingly inadequate, and (2) that the inadequacy of th…
[2] Mere inadequacy of price alone is insufficient to set aside a judicial sale.
Previewing 2 of 4 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“The general rule is, of course, that standing alone mere inadequacy of price is not a ground for setting aside a judicial sale. But where the inadequacy is gross and is shown to result from any mistake, accident, surprise, fraud, misconduct or irregularity upon the part of either the purchaser or other person connected with the sale, with resulting injustice to the complaining party, equity will act to prevent the wrong result.”
Establishes the foundational legal standard for vacating foreclosure sales, requiring both gross inadequacy of price and causation from irregularity.
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Join FLexlaw to unlock all legal intelligenceBlue Star Investments purchased a foreclosed home for $41,459.10; the property's appraised value was $60,000. The mortgagor moved to set aside the for…
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GROSS, J.
Blue Star Investments, Inc. was the purchaser of a home at a foreclosure sale. Blue Star purchased the home for $41,459.10; the appraised value of the home was 060,000. Eleven days after the sale, the mortgagor moved to set the sale aside. As grounds, the mortgagor demonstrated that the mortgagee, BA Mortgage, LLC, had agreed to extend the date for the foreclosure sale, but no one took any steps to effectuate the extension. The trial court set aside the foreclosure sale, conditioned on the payment of the mortgage obligation in full. Blue Star timely appealed.
We reverse because the record does not demonstrate that the mortgagor made the two part showing required before a judge may vacate a foreclosure sale.
In Arlt v. Buchanan, 190 So. 2d 575, 577 (Fla.1966), the supreme court set forth the general rule regarding the setting aside of foreclosure sales:
The general rule is, of course, that standing alone mere inadequacy of price is not a ground for setting aside a judicial sale. But where the inadequacy is gross and is shown to result from any mistake, accident, surprise, fraud, misconduct or irregularity upon the part of either the purchaser or other person connected with the sale, with resulting injustice to the complaining party, equity will act to prevent the wrong result.
Thus, to vacate a foreclosure sale, the trial court must find “(1) that the foreclosure sale bid was grossly or startlingly inadequate; and (2) that the inadequacy of the bid resulted from some mistake, fraud or other irregularity in the sale.” Cueto v. Mfrs. & Traders Trust Co., 791 So. 2d 1125, 1126 (Fla. 4th DCA 2000) (quoting Mody v. Cal.Fed. Bank, 747 So. 2d 1016, 1017-18 (Fla. 3d DCA 1999)).
This case fails the first requirement of the test. The purchase price was 69.09% of the property’s appraised value, an amount that is not grossly or startlingly inadequate. See Mody, 747 So. 2d at 1018 (holding that sale bid of 67.3% of the highest appraisal value not grossly inadequate); Moody v. Glendale Fed. Bank, 643 So. 2d 1149, 1149 (Fla. 3d DCA 1994) (finding that sale for 72.18% of property’s value not grossly inadequate). Generally, cases where foreclosure sales have been properly vacated have involved “situations in which a very small, usually only nominal, amount has been bid for property of substantial value.” Id. at 1150. For example, in Kaplan v. Dade Federal Savings and Loan Ass’n of Miami, 381 So. 2d 1184, 1185 (Fla. 4th DCA 1980), we found that a sale price of $150 was “grossly inadequate” for a property where the final judgment of foreclosure was in the amount of $34,472.13.
We reverse the order setting aside the foreclosure sale.
GUNTHER and WARNER, JJ., concur.
Cases With Similar Vibessemantic neighbors from the corpus
Citator
Cited By
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Arsali v. Chase Home Fin. LLC, 121 So. 3d 511 (Fla. 2013)…sale at issue. The Fourth District, sitting en banc, affirmed the trial court’s judgments in Ar-sali, 79 So. 3d at 845. In its decision, the Fourth District explained that it was receding from its decision in Blue Star Investments, Inc. v. Johnson, 801 So. 2d 218 (Fla. 4th DCA 2001), to the extent it requires that inadequacy of price be applied to every attempt to set aside a foreclosure sale. The Fourth District correctly concluded that the requirement it adopted in Blue Star is contrary to the proposition…
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Ingorvaia v. Horton, 816 So. 2d 1256 (Fla. 2d DCA 2002)…inal judgment of foreclosure and accompanying judicial sale in reliance on Brown because of accumulation of errors). In cases in which adequacy of price was an issue, the test set forth in Arlt has been applied. See Blue Star Invs., Inc. v. Johnson, 801 So. 2d 218 (Fla. 4th DCA 2001); Cueto v. Mfrs. & Traders Co., 791 So. 2d 1125 (Fla. 4th DCA 2000); Mody v. Cal. Fed. Bank, 747 So. 2d 1016 (Fla. 3d DCA 1999). We also find Horton’s argument more persuasive because there is nothing in Arlt to suggest that the…
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Arsali v. Chase Home Fin., LLC, 79 So. 3d 845 (Fla. 4th DCA 2012)…evidentiary hearing, so that it could not have determined that the sale price was grossly inadequate; a grossly inadequate sale price is one of the two requirements for vacating a foreclosure sale set forth in Blue Star Investments, Inc. v. Johnson, 801 So. 2d 218 (Fla. 4th DCA 2001). There, relying on Arlt v. Buchanan, 190 So. 2d 575, 577 (Fla.1966),2 we wrote, “[T]o vacate a foreclosure sale, the trial court must find ‘(1) that the foreclosure sale bid was grossly or startlingly inadequate; and (2) that th…
Previewing 3 of 10 citing cases — full citator treatment, depth of discussion, and citing context are member features.
Join FLexlaw to unlock all legal intelligenceAuthorities Cited
- Leatha Fleeman Arlt v. Buchanan, 190 So. 2d 575 (Fla. 1966)
- Suresh Mody and Richard Cava v. Cal. Fed. Bank, 747 So. 2d 1016 (Fla. 3d DCA 1999)
- Cueto v. Mfrs. & Traders Tr. Co., 791 So. 2d 1125 (Fla. 4th DCA 2000)
- Richards v. Dysart, 643 So. 2d 1149 (Fla. 3d DCA 1994)
- Moody v. Glendale Fed. Bank, 643 So. 2d 1149 (Fla. 3d DCA 1994)
- Romero v. State, 381 So. 2d 1184 (Fla. 3d DCA 1980)
- Kaplan v. Dade Fed. Sav. & Loan Ass'n OF Miami, 381 So. 2d 1184 (Fla. 4th DCA 1980)