WELCOME EDITOR’S LETTER

Jason M. Vanslette Editor, and Business Unit Leader/Partner

It is hard to believe that we are again reminded (so soon) of the vulnerability of the banking system despite the expansive regulatory enforcement agencies and laws (both Federal and State) that should ultimately make “bank failures” a lesson in a history book. Nonetheless, with the recent collapse of Silicon Valley Bank, Signature Bank and many others financial institutions currently in the crosshairs, it is very apparent that neither regulations or government agencies alone can protect the banking system absent sound board leadership, asset-risk leveraging and portfolio diversification.

Ironically, this is true for any industry that can be greatly affected by politics, economy or the environment—For example, our real estate team represents some of the most prominent financial institutions in the world with their mortgage lending and banking litigation (i.e., foreclosures, FDCPA defense, bankruptcy, etc.) as well as their commercial/residential transactional issues throughout Florida, Illinois, New York and most recently Indiana. Much like our financial industry clients, we too must diversify our practice, exhibit sound leadership and leverage liability risk with all of our cases to effectuate the best outcome for our clients.

Equity Will Act To Prevent The Wrong Result – Foreclosure Sales

SUTTON V. WILMINGTON TRUST, N.A.

2023 WL 1999554

By: Marc Marra, Partner KK TAKEAWAY:

Pursuant to applicable Florida case law foreclosures are convened in equity, and a proper showing of one or more equitable factors, including “gross inadequacy of consideration, surprise, accident, or mistake imposed on complainant, and irregularity in the conduct of the sale,” may support a trial court granting relief from such a sale.

BACKGROUND:

By way of background, husband and wife mortgagors entered a consent final judgment in favor of the Plaintiff bank granting an extended sale date. Shortly before the foreclosure sale, the mortgagor husband passed away unexpectedly. Prior to sale, the mortgagor wife filed a Motion to Postpone foreclosure sale, as did the Plaintiff bank by separate motion. The Plaintiff bank circulated a proposed order granting cancellation of the foreclosure sale, which was objected to by a junior lienholder defendant. Neither mortgagor wife, nor Plaintiff bank, obtained a hearing on their respective motions to cancel sale prior to the sale date and the sale proceeded as scheduled.

After the sale, mortgagor wife filed a timely motion to vacate foreclosure sale alleging she erroneously believed the Plaintiff Bank obtained an order canceling the sale. That motion to vacate sale was denied by the trial court on the basis that she failed to establish fraud or an irregularity in the conduct of the sale. Mortgagor wife then appealed the trial court’s decision to the Third District Court of Appeal of Florida.

The Third DCA reversed the trial court’s decision and remanded for reconsideration as to the equitable grounds alleged by the mortgagor wife in her motion to vacate sale. In doing so, the Third DCA relied upon the Florida Supreme Court’s decision in Arsali v. Chase Home Finance, LLC, 121 So. 3d 511 (Fla. 2013), where that Court ruled there was no “single equitable factor” to be “applied by the trial courts in order to set aside judicial foreclosure sales.” Id. at 517. Rather, litigants must “allege one or more adequate equitable factors and make a proper showing to the trial court that they exist in order to successfully obtain an order that sets aside a judicial foreclosure sale.” Id. at 518.