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Florida Supreme Court: Lender may file second suit for deficiency claim provided foreclosure court has not adjudicated the claim
On July 5, the Florida Supreme Court held that Section 702.06, Florida Statutes (2014), allows a lender pursuing a deficiency claim in a foreclosure action in one court to bring a separate action against the homeowner in another court provided the foreclosure court that has reserved jurisdiction has not yet adjudicated the deficiency claim. Section 702.06 provides in part that, “In all suits for the foreclosure of mortgages . . . . [t]he complainant shall also have the right to sue at common law to recover for such deficiency, unless the court in the foreclosure action has granted or denied a claim for a deficiency judgment.” At issue was a residential property that was foreclosed by final judgment. In the judgment, the foreclosure court expressly reserved jurisdiction to rule on any future deficiency claim, although no one tried to adjudicate the claim in that forum. The mortgage loan purchaser filed a separate action against the homeowner in a different court and obtained a deficiency judgment. On appeal from that action, the First District Court of Appeal disagreed with several other Florida appellate courts and concluded that the trial court lacked subject-matter jurisdiction because the original foreclosure court had previously reserved jurisdiction. The high court unanimously disagreed, holding that a “reservation of jurisdiction is not a grant or denial of the claim. The foreclosure court would have only ‘granted or denied’ the deficiency judgment if it had adjudicated the claim. Therefore, [§ 702.06, Fla. Stat.] plainly precludes the separate action only where the foreclosure court has actually ruled on the claim—as held by the Second, Third, Fourth and Fifth District Courts of Appeal.” In issuing its ruling, the high court quashed the decision of the First District Court of Appeal and approved the certified conflict decisions of the four other appellate courts.
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- David S. Krakoff to discuss "The DOJ corporate enforcement policy and your disclosure calculus one year in: Are companies benefitting?" at the American Conference Institute International Conference on the Foreign Corrupt Practices Act
- Moorari K. Shah to discuss "Legal & regulatory issues" at the Opal Group Marketplace Lending & Alternative Financing Summit
- Jonice Gray Tucker to discuss "Hot topics in consumer financial services" at the Practising Law Institute Banking Law Institute
- Daniel P. Stipano to discuss "New CDD Rule: Pitfalls in compliance" at the American Bankers Association/American Bar Association Financial Crimes Enforcement Conference
- Daniel P. Stipano to discuss "Anti-money laundering/OFAC compliance" at the Institute of International Bankers U.S. Regulatory/Compliance Orientation Program