FLORIDA DCA AFFIRMS AWARD OF LENDER’S POST JUDGMENT EXPENDITURES

Last month, Florida’s Fourth DCA affirmed an order which authorized the reimbursement of various expenses incurred by the mortgagee/lender after the entry of a foreclosure judgment. Distressed Invs., LLC v. US Bank Tr., N.A. as trustee for LSF11 Master Participation Tr., No. 4D2023-1900, 2024 WL 3351364, at *1 (Fla. 4th DCA July 10, 2024).  The winning bid at the foreclosure sale resulted in a significant surplus beyond what was owed in the judgment.[i] Three days after the foreclosure sale, the lender filed a motion seeking an additional $16,257.68 for advances made post-judgment to pay insurance premiums, taxes, property inspections, and additional attorneys’ fees and costs.

The property owner’s assignee also sought a portion of the surplus proceeds and argued that the assignee and junior lienholders were entitled to the surplus, not the lender. The assignee reasoned that the lender could not recoup the post-judgment advances without amending its foreclosure judgment. The trial court disagreed, awarded the lender the additional $16,257.68 in advances and the assignee appealed.[ii] The Fourth DCA affirmed the lower court pointing out the judgment included a reservation of jurisdiction so the trial court properly entertained US Bank’s motion. The Court also concluded the amounts the lender expended could be reimbursed because they were specifically authorized by the mortgage and the foreclosure judgment.

Further, the Fourth DCA rejected the assignee’s argument that “the proceeds of the sale automatically became section 45.031.(7)(c) ‘surplus funds’” payable to the assignee. The Court noted that Fla. Stat. § 45.031 defined “surplus funds” as the funds remaining after “payment of all disbursements required by the final judgment…and shown on the certificate of disbursements.” Since US Bank’s expenditures were authorized by the final judgment and US Bank filed the motion ten days before the clerk issued the certificate of disbursements, the lender was entitled to be reimbursed for the post-judgment advances out of the sale proceeds. The Fourth DCA affirmed the trial court.

[i] Distressed Invs., at *1. Future references to this case are to this citation until indicated otherwise.

[ii] Distressed Invs., at *2. Future references to this case are to this citation.