LR5A-JV v. Little House, LLC

• Decision Date: 10 December 2010
• Docket Number: No. 5D09-3857.,5D09-3857.
• Parties: LR5A-JV, etc., Appellant, v. LITTLE HOUSE, LLC, et al., Appellee.
• Court: Florida District Court of Appeals

50 So.3d 691

LR5A-JV, etc., Appellant,

v.LITTLE HOUSE, LLC, et al., Appellee.

No. 5D09-3857.

District Court of Appeal of Florida, Fifth District.

Dec. 10, 2010.

Steven Ellison and Talina Bidwell, of Broad & Cassel, West Palm Beach, for Appellant.

Edward Ronsman, of Christine & Christine, P.A., St. Augustine, for Appellee.

ORFINGER, J.

LR5A-JV, LP ("LR5A"), a Massachusetts limited partnership, seeks review of a non-final, post-judgment order setting a date for sale of real property, which was the subject of a 2008 final judgment of foreclosure. LR5A contends that the trial court was not authorized to order a post-judgment, judicial sale of the mortgaged property, or, if the trial court possessed such authority, it abused its discretion in ordering the sale. We disagree and affirm.

In 2005, Little House, LLC, and Little Lakes, LLC (collectively, the "Borrowers"), entered into a loan agreement with LR5A, whereby LR5A loaned the Borrowers $17,500,000 to fund the construction of several condominium conversion projects throughout Florida. The Borrowers executed and delivered a promissory note to LR5A secured by a mortgage that encumbered undeveloped real property in Flagler County. Additional real property in Broward County, Florida also served as collateral for the obligation.

The Borrowers defaulted on the note and mortgage and LR5A filed a foreclosure action on the Flagler County property.¹ LR5A joined the Matanzas Shores Owners Association (the "Association") as a defendant in the Flagler County action in an effort to foreclose claims of lien filed by the Association. The Association filed an answer and cross-claim, seeking damages against the Borrowers for unpaid assessments totaling approximately $400,000.

LR5A filed a motion for summary final judgment of foreclosure on the Flagler County property, asserting priority over the rights of the Association. The trial court entered a final judgment of foreclosure, finding that LR5A was due $30,651,523.93, and set a date for a judicial sale of the property. Believing that orders of clarification and rehearing as to the Association's liens may have adversely affected the priority of its mortgage, LR5A appealed. As a result, the sale was cancelled. This Court subsequently affirmed the final judgment of foreclosure, ruling that LR5A's 2005 recorded mortgage was superior to the Association's assessment liens and that section 720.3085(2), Florida Statutes (2007), did not dictate otherwise. See LR5A-JV, LP v. Little House, LLC, 998 So.2d 1173 (Fla. 5th DCA 2008). The cause was remanded with instructions to proceed to foreclose LR5A's superior mortgage. The Association then moved the trial court to set a sale date. Following a hearing on the motion, and over LR5A's objection, the court entered an order setting a date for a judicial sale. LR5A now appeals this order.²

LR5A contends that as the judgment holder, it has the right to control when, if at all, a foreclosure sale takes place under section 45.031, Florida Statutes (2010). According to LR5A, the Association, as a junior lien holder, cannot demand that a foreclosure sale date be set, and the trial court erred as a matter of law in setting the date for the judicial sale. The Association counters that section 45.031(1), gives the trial court the ultimate authority to order a judicial sale. We agree with the Association.

Section 45.031(1) governs the procedures for judicial sales following entry of a final judgment of foreclosure. It provides in pertinent part:

45.031. Judicial sales procedure

In any sale of real or personal property under an order or judgment, the procedures provided in this section and ss. 45.0315-45.035 may be followed as an alternative to any other sale procedure if so ordered by the court.

(1) Final judgment.—

(a) In the order or final judgment, the court shall direct the clerk to sell the property at public sale on a specified day that shall be not less than 20 days or more than 35 days after the date thereof, on terms and conditions specified in the order or judgment. A sale may be held more than 35 days after the date of final judgment or order if the plaintiff or plaintiff's attorney consents to such time....

§ 45.031(1)(a), Fla. Stat. (2010) (emphasis added). This statute clearly required the trial court to set a judicial sale date between 20 to 35 days after entry of the final judgment or order directing a judicial sale, but allows an extension with the plaintiff's consent.

Florida decisional law reflects that the matter of fixing the time for a judicial sale is set by statute, but that the trialcourt has reasonable discretion within the statutory framework to set or reset the date for such sale. State ex rel. Raulerson v. Sloan, 134 Fla. 632, 184 So. 128 (1938); Macfarlane v. Macfarlane, 50 Fla. 570, 39 So. 995 (1905); Commw. Mortg. Corp. of Am., L.P. v. Frankhouse, 551 So.2d 599 (Fla. 4th DCA 1989). This seems consistent with the equitable nature of such proceedings. See § 702.01, Fla. Stat. (2010) ("All mortgages shall be foreclosed in equity ...."); see also Marsh v. Marsh, 72 Fla. 142, 72 So. 638 (1916) (stating that courts of equity have supervision over judicial sales made under their decree); Cross v. Fed. Nat'l Mortg. Ass'n, 359 So.2d 464 (Fla. 4th DCA 1978) (reiterating that mortgage foreclosure is equitable action).

LR5A relies on U.S. Bank National Ass'n v. Tadmore, 23 So.3d 822 (Fla. 3d DCA 2009), Bankers Trust Co. of California, N.A. v. Weidner, 688 So.2d 453 (Fla. 5th DCA 1997), and First Nationwide Savings v. Thomas, 513 So.2d 804 (Fla. 4th DCA 1987), to support its contention that under section 45.031, the judgment holder enjoys the right to control the timing of a judicial sale. Each is distinguishable.

Tadmore held that it was error for the trial court, in a foreclosure action involving a condominium unit, to enter an order requiring the plaintiff bank to proceed diligently to conclude its foreclosure action or pay the monthly maintenance fee on the unit. The appellate court explained that the bank was not liable to pay the condominium maintenance fee prior to obtaining title to the unit. The decision makes no mention of the trial court's authority to set a date for a judicial sale pursuant to section 45.031(1). Weidner holds that the trial court erred in granting the family of the mortgagor, who had recently died, an indefinite stay of a scheduled foreclosure sale. This Court held there was no legitimate basis for entry of an indefinite stay, the inverse of the situation here. Finally, Thomas, like Weidner, similarly involved reversal of an order permanently cancelling a scheduled foreclosure sale without explanation. The Fourth District stated that "[a] lender has the right, under the statutes, except under extraordinary circumstances not found in this record, to proceed with the sale of any real estate on which it has successfully foreclosed its mortgage." Thomas, 513 So.2d at 805. Thomas neither holds nor suggests that a lender, who has undertaken foreclosure proceedings, has the unilateral right to control the process, including when or if a judicial sale occurs.

In our earlier opinion in this dispute, we remanded the matter with instructions "to proceed to foreclose the superior mortgage of LR5A-JV." LR5A-JV, LP, 998 So.2d at 1175. Once the mandate issued and jurisdiction again resided in the trial court, the provisions of section 45.031(1) authorized the trial court to set a date for the judicial sale. The trial court's order setting the judicial sale fully comports with the statute.

LR5A alternatively argues that the trial court abused its discretion in setting the date of the judicial sale, thereby, subjecting it to the "whims of the Association." "Discretion is abused only when the judicial action is arbitrary, fanciful, or unreasonable, which is another way of saying that discretion is abused only where no reasonable person would take the view adopted by the trial...