Saturday, September 26, 2015

FYI: Fla App Ct (5th DCA) Confirms Mortgagee Need Only Prove FMV to Obtain Foreclosure Deficiency Judgment

The District Court of Appeal of Florida, Fifth District, recently reversed the denial of a motion for deficiency judgment in a foreclosure action, holding that the trial court erroneously required the mortgagee to introduce into evidence the final judgment of foreclosure previously entered in the same case to demonstrate the amount of debt owed.


A copy of the opinion is available at:  Link to Opinion


The trial court granted summary judgment of foreclosure in favor of the mortgagee, specifically reserving jurisdiction to enter further orders, including deficiency judgments.  The borrower did not appeal the judgment of foreclosure. 


The mortgagee then filed a motion for deficiency judgment, seeking the amount of the Final Judgment plus post-judgment interest, minus the fair market value of the subject property.  The deficiency motion attached copies of the judgment of foreclosure and certificate of title.


At a subsequent evidentiary hearing on the deficiency motion, the mortgagee produced a real estate appraiser who testified as to the fair market value of the subject property, which the borrower contested but provided no competing evidence of the fair market value of the property.  The mortgagee did not introduce any other evidence.


The borrower moved for involuntary dismissal, which the trial court granted, holding that the mortgagee failed to provide prima facie evidence of the debt amount owed on the subject property.


On appeal, the Fifth District held that deficiency proceedings are a continuation of original foreclosure suit in Florida.  The Court held that the judgment of foreclosure fixes the validity, priority and extent of a debt, and the mortgagee thereafter need only prove that the fair market value of the property was less than the total debt determined by the final judgment in order to obtain a deficiency. 


The Appellate Court also held that, under Vantium Capital, Inc. v. Hobson, 137 So. 3d 497, 499 (Fla. 4th DCA 2014), after the mortgagee introduces evidence of fair market value, the burden shirts to the borrower to present competing evidence of value, and the trial court may use the foreclosure sale price in calculating a deficiency judgment absent such competing evidence.  Citing this precedent, the Court noted that granting a deficiency decree is "the rule rather than the exception" where the debt is greater than the fair market value of foreclosed property. 


The Appellate Court also held that, under NAFH Nat'l Bank v. Aristizabal, 117 So. 3d 900, 902 (Fla. 4th DCA 2013), the reintroduction of a final judgment of foreclosure is not necessary to establish a lender's right to a deficiency judgment in the same case. 


The Court further rejected the borrower's assertion that the mortgagee should have affirmatively requested the trial court to take judicial notice of the judgment of foreclosure, as there is no such requirement to affirmatively take notice of orders in the same case.  Instead, the Court held, there is only such a requirement for a court to take judicial notice of record matters in other cases. 


The Fifth District held that, "[a]bsent findings of fact demonstrating equitable reasons to deny the [mortgagee's motion for deficiency], the trial court was required to enter a deficiency judgment."


Accordingly, the Appellate Court reversed the trial court's denial of the mortgagee's deficiency motion, and remanded for an entry of a deficiency judgment in favor of the mortgagee, plus interest.




Ralph T. Wutscher
Maurice Wutscher LLP
The Loop Center Building
105 W. Madison Street, 18th Floor
Chicago, Illinois 60602
Direct:  (312) 551-9320
Fax: (312) 284-4751

Mobile:  (312) 493-0874


Admitted to practice law in Illinois




California   |   Florida   |   Illinois   |   Indiana   |   Massachusetts   |   New Jersey   |   New York   |   Ohio   |   Pennsylvania   |   Texas   |   Washington, DC



NOTICE: We do not send unsolicited emails. If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention. Thank you.

Our updates and webinar presentations are available on the internet, in searchable format, at:


Financial Services Law Updates




The Consumer Financial Services Blog








California Finance Law Developments




Insurance Recovery Services