PAUL SCHROTH AND JOSEPHINE SCHROTH, HUSBAND AND WIFE, APPELLANTS,
v.
THE CAPE CORAL BANK, A FLORIDA BANKING CORPORATION, LANDAHL, BROWN & WEED ASSOCIATES, INC., A VIRGINIA CORPORATION, GILVESY CONSTRUCTION, INC., AND LONGARDNER & ASSOCIATES, INC., A FLORIDA CORPORATION, APPELLEES
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The Schroths appealed a foreclosure judgment in which the trial court denied them priority rights to surplus proceeds from the foreclosure sale, finding they had waived such rights by failing to answer the complaint. The appellate court reversed, holding that a defendant's failure to answer does not waive priority rights to surplus proceeds and that the trial court must conduct an evidentiary hearing to determine all claimants' rights to the excess funds.
The court held that the Schroths did not waive their priority interest by failing to answer, and that the trial court erred in denying them priority on that basis. The trial court must conduct an evidentiary hearing to determine the rights of all claimants to the surplus proceeds, regardless of whether they filed responsive pleadings.
[1] A trial court retains jurisdiction to enter additional orders as necessary after a final judgment in a foreclosure suit.
[2] A party's failure to file a responsive pleading in a foreclosure suit does not necessarily waive their priority interest in surplus foreclosure proceeds.
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 trial court entered an order finding that while the Schroths did have priority over another defendant who had filed an answer in the foreclosure suit that, nevertheless, they had waived their priority by failing to answer. We think the court erred in this ruling.”
Establishes the trial court's erroneous legal conclusion that failure to answer waives priority rights.
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Join FLexlaw to unlock all legal intelligenceThe Cape Coral Bank foreclosed on property owned by Paul and Josephine Schroth. The Schroths made no appearance in the foreclosure suit, and a final j…
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SCHEB, Acting Chief Judge.
Appellants, Paul Schroth and Josephine Schroth, were defendants in a suit brought by The Cape Coral Bank to foreclose a mortgage on property owned by them. They made no appearance in the suit, and a final judgment was entered in favor of the Bank in which the trial court retained juris [*CXXXI] diction to enter additional orders as necessary. The foreclosure sale resulted in proceeds exceeding the Bank’s entitlement.
Subsequently, the Schroths filed a motion seeking to establish a priority interest in the surplus proceeds on the basis that they held a security interest in the property superior to the interests of all claimants other than the Bank. The trial court entered an order finding that while the Schroths did have priority over another defendant who had filed an answer in the foreclosure suit that, nevertheless, they had waived their priority by failing to answer. We think the court erred in this ruling.
No party in the foreclosure suit sought any determination of its rights in the surplus proceeds. One party, Gilvesy Construction, Inc., however, did pray that any excess proceeds be paid into the registry of the court for distribution to those whose claims might be established as inferior to those of the Bank. The trial court, therefore, should have determined the interests of the Schroths and the other defendants in the foreclosure suit at an evidentiary hearing.
Accordingly, we reverse and remand with directions to the trial court to conduct an evidentiary hearing to determine the rights to the excess proceeds of all claimants who were defendants in the foreclosure suit, irrespective of whether they filed responsive pleadings. This hearing should follow appropriate notice to the defendants in the foreclosure suit.
OTT and RYDER, JJ., concur.
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Amado Evarito Garcia v. Stewart, 906 So. 2d 1117 (Fla. 4th DCA 2005)…and SHAHOOD, JJ., concur. . Another legal error that occurred was that the trial court disbursed surplus funds without setting an evidentiary hearing. See D.A.D., Inc. v. Poole, 407 So. 2d 1072, 1073 (Fla. 4th DCA 1981); Schroth v. Cape Coral Bank, 377 So. 2d 50, 51 (Fla. 2d DCA 1979).…
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Citibank, FSB v. PNC Mortg. Corp. OF Am. formerly Sears Mortg. Corp., 718 So. 2d 300 (Fla. 2d DCA 1998)…ining the priorities and amounts due to the remaining junior lienholders. After a foreclosure sale, the trial court is required to prioritize the interests of the competing junior lienholders and the amounts due each. See Schroth v. Cape Coral Bank, 377 So. 2d 50 (Fla. 2d DCA 1979). The rights of Citibank arose at the time of foreclosure. See United States v. Sneed, 620 So. 2d 1093 (Fla. 1st DCA 1993). A claim is not lost by the mere failure to attend a disbursement hearing. Id. Inferior junior lienholders h…
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Household Fin. Servs., Inc. v. Bank OF Am., N.A., 883 So. 2d 346 (Fla. 4th DCA 2004)…nly the well pled allegations of the complaint. Thus, when the Bank defaulted, all it admitted was the superiority of Federal’s lien to its own and Federal’s right to foreclose the Bank’s lien interest in the property. In Schroth v. Cape Coral Bank, 377 So. 2d 50, 51 (Fla. 2d DCA 1979), the court held that a property owner who did not appear in a mortgage foreclosure action until after the sale could still assert a claim to any surplus. The court remanded with directions to the trial court to hold a hearing…
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