DISTRICT COURT OF APPEAL THE STATE FLORIDA 45 0315 4D11 3038.rehrg

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DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA

FOURTH DISTRICT

July Term 2012

HSBC BANK USA, NATIONAL ASSOCIATION, as trustee for DEUTSCHE

ALT-A SECURITIES, INC., MORTGAGE LOAN TRUST, MORTGAGE

PASS THROUGH CERTIFICATES SERIES 2006-AR3,

Appellant,

v.

MARIE NIXON, MICHAEL NIXON CROSS MEDIA MARKETING

CORPORATION, INC., JAVIER PARRAGUIRE; JOHN DOE and JANE

DOE as tenants in possession of the subject property, and 3L REAL

ESTATE, LLC,

Appellees.

No. 4D11-3038

[December 19, 2012]

ON MOTION FOR REHEARING

CORRECTED OPINION

CONNER, J.

We grant 3L Real Estate’s motion for rehearing, withdraw our

previous opinion, and substitute this opinion in its place.

HSBC Bank USA (“HSBC”) appeals the denial of its motion to vacate a

foreclosure sale, contending the trial court failed to adhere to the

requirements of section 45.031, Florida Statutes (2012), for publication

of the notice of sale. HSBC also contends on appeal that the trial court

erred in denying its motion for rehearing or in the alternative for relief

under rule 1.540(b), which asserted that the sale was improper because

the notice of sale was not published and the sales price was grossly

inadequate. We affirm on all issues.

The trial court entered a final judgment of foreclosure in favor of

HSBC in the amount of $787,473.60. The final judgment scheduled an

electronic foreclosure sale for March 7, 2011. On February 17, 2011,

HSBC’s prior counsel, David J. Stern P.A., moved to withdraw and

sought a sixty-day continuance for HSBC to seek new counsel. Prior

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counsel did not publish notice of the sale or set the motion to withdraw

for a hearing. The sale was held as scheduled, with 3L Real Estate, LLC

(“3L”), submitting the winning bid of $1600.

With new counsel, HSBC moved to vacate the foreclosure sale,

arguing no notice of sale was published as required by section 45.031(2).

The trial court denied the motion without elaboration and ordered the

clerk to issue the certificate of sale. A day later, HSBC moved for

rehearing pursuant to rule 1.530 or in the alternative for relief under

rule 1.540(b), arguing the bid was grossly inadequate, HSBC’s failure to

bid was due to the failure of its prior counsel to make a bid or obtain

postponement of the sale, and the sale was improper since no notice of

sale was published. That motion was denied as well.

The standard of review for the denial of a motion to vacate a

foreclosure sale is gross abuse of discretion. Long Beach Mortg. Corp. v.

Bebble, 985 So. 2d 611, 613 (Fla. 4th DCA 2008). In Blue Star Invs. v.

Johnson, 801 So. 2d 218 (Fla. 4th DCA 2001), this Court stated that to

vacate a foreclosure sale, the trial court must find “(1) that the

foreclosure sale bid was grossly or startlingly inadequate; and (2) that the

inadequacy of the bid resulted from some mistake, fraud or other

irregularity in the sale.”1

We agree the sale bid was grossly inadequate. See Long Beach, 985

So. 2d at 614-615 ($1000 bid was grossly inadequate for a property

appraised at $500,000 and when the final judgment was for

$716,139.60).

Regarding mistake, HSBC argues prior counsel failed to publish

notice of the sale and failed to represent HSBC at the foreclosure sale.

HSBC relies on Long Beach, in which the plaintiff hired two firms to

represent it during the foreclosure proceedings. One handled the

litigation, and one handled the sale. A mix-up between the two firms

caused the sales agent employed by one firm to believe that the sale

would not proceed, so the plaintiff did not bid on the property, and the

property was sold for a grossly inadequate price. The plaintiff moved to

1 Neither trial counsel nor the trial court had the benefit of our decision in

Arsali v. Chase Home Finance, LLC, 79 So. 3d 845 (Fla. 4th DCA 2012) in which

we receded from Blue Star to the extent it held that inadequacy or price must

always be part of the legal equation in a motion to set aside a foreclosure sale.

In its motion for rehearing or relief pursuant to rules 1.530 and 1.540, HSBC

clearly argues the sale price was grossly inadequate, so Blue Star is applicable

to this appeal. We note that HSBC raised no issue of fraud in the trial court or

on appeal.

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set aside the bid, but the purchaser opposed the motion, arguing the

plaintiff’s failure to bid was due to a unilateral mistake. The trial court

denied the motion, but this Court reversed, holding that even a unilateral

mistake which results in a grossly inadequate price was grounds for

vacating a sale. Id. at 614. More recently, in CitiMortgage, Inc. v.

Synuria, 86 So. 3d 1237 (Fla. 4th DCA 2012), this Court held that the

trial court was required to set aside a sale when the bid was 1.9% of the

judgment amount and the lender’s failure to appear at the sale was due

to a substitution of legal counsel. Id.

The bidder, 3L, argues in its answer brief that HSBC never provided

any evidence to demonstrate any mistake that would entitle HSBC to

relief. HSBC asserts that its statements in its motions are sufficient, but

its motions to vacate were not sworn. No transcript of any hearings has

been provided. The only evidence that exists in the record that would

support HSBC’s argument is the motion to withdraw, filed nineteen days

before the foreclosure sale was held. However, that motion alone does

not demonstrate that HSBC lacked notice of the foreclosure sale or was

not represented by an agent at the sale. We agree that HSBC never

provided any evidence to demonstrate any mistake that would entitle

HSBC to relief.

On the facts of this case, we cannot say the trial court abused its

discretion in refusing to vacate the sale, grant rehearing, or grant relief

from judgment on the grounds that the failure to publish a notice of the

sale constitutes an irregularity in the sale procedure. In our recent

decision in Simonson v. Palm Beach Hotel Condominium Association, Inc.,

93 So. 3d 436 (Fla. 4th DCA 2012), we held that when a trial court

“adopts the statutory framework of section 45.031, it must adhere to the

statute’s provisions.” Here, as in Simonson, the final judgment required

that the foreclosure sale be conducted in accordance with section

45.031, Florida Statutes (2012).

However, section 45.031 begins by stating:

In any sale of real or personal property under an order of

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.

(emphasis added). As 3L points out, Palm Beach County Circuit Court

Administrative Order 3.301-5/10 specifically provided in paragraph B.3.:

Failure to provide proof of publication or pay the clerk sale

fee prior to the sale is not grounds for canceling a sale.

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The administrative order was entered after the supreme court issued its

opinion In re Amendments To The Florida Rules Of Civil Procedure, 44 So.

3d 555 (Fla. 2010). In that opinion, our supreme court accepted the

recommendation of the Task Force on Residential Mortgage Foreclosure

Cases to adopt a form motion to cancel foreclosure sales.2 In adopting

the recommendation, our supreme court quoted the petition by the Task

Force:

Currently, many foreclosure sales set by the final judgment

and handled by the clerks of court are the subject of vague

last-minute motions to reset sales without giving any specific

information as to why the sale is being reset. It is important

to know why sales are being reset so as to determine when

they can properly be reset, or whether the sales process is

being abused. . . . Again, this is designed at promoting

effective case management and keeping properties out of

extended limbo between final judgment and sale.

Id. at 558. The Palm Beach County Circuit Court Administrative Order

established that in the Fifteenth Circuit, failure to provide proof of

publication is not grounds for canceling a foreclosure sale.3 It is logical

to assume that the Fifteenth Circuit made an administrative decision to

prohibit the cancelation of a foreclosure sale when a notice of sale was

not published because plaintiffs’ counsel could avoid the need for filing a

motion to cancel a foreclosure sale by simply failing to publish a notice of

sale.4 As allowed by the statute itself, the Administrative Order alters the

sale procedure under section 45.031. On the facts of this case, the trial

court had the discretion to deny relief under rules 1.530 and 1.540,

despite lack of publication of the notice of sale.

We distinguish this case from Simonson because there was no issue in

Simonson about the effect of an administrative order altering the sale

procedure under section 45.301.

“The purpose of a [1.530] motion for rehearing is to give the trial court

an opportunity to consider matters which it overlooked or failed to

2 Florida Rules of Civil Procedure, Form 1.996(b).

3 We note that Form 1.996(b) does not state that failure to publish a notice of

sale is listed ground for canceling a sale (although, arguably speaking, it could

be listed under “other”).

4 3L also points out in its answer brief that with the advent of online sales,

publication in a newspaper is not as necessary as it used to be, and the pool of

bidders is now larger, thanks to the internet, than the readership of a

newspaper.

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consider, and to correct any error if it becomes convinced that it has

erred.” Francisco v. Victoria Marine Shipping, Inc., 486 So. 2d 1386, 1389

(Fla. 3d DCA 1986) (internal citation omitted). Rule 1.540 provides an

additional, but restrictive mechanism to correct an erroneous decision by

the trial court. Id. at 1390. HSBC failed to make an evidentiary showing

it is entitled to relief under rule 1.540(b). SunTrust Bank v. Puleo, 76 So.

3d 1037, 1039 (Fla. 4th DCA 2011) (“If the allegations in the moving

party’s motion for relief from judgment ‘raise a colorable entitlement to

rule 1.540(b)(3)’s relief, a formal evidentiary hearing on the motion, as

well as permissible discovery prior to the hearing, is required.’”); Dynasty

Express Corp. v. Weiss, 675 So. 2d 235, 239 (Fla. 4th DCA 1996) (quoting

Southern Bell Tel. & Tel. Co. v. Welden, 483 So. 2d 487, 489 (Fla. 1st DCA

1986)). HSBC has failed to provide this court with a transcript of the

hearings on its motions. Judicial discretion exercised by the trial court

is abused when no reasonable judge would take the view adopted by the

trial judge. Canakaris v. Canakaris, 382 So. 2d 1197, 1203 (Fla. 1980).

Since the record before us is inadequate to demonstrate the trial court

abused its discretion, we affirm. Applegate v. Barnett Bank of

Tallahassee, 377 So. 2d 1150 (Fla. 1979).

Affirmed.

GROSS and HAZOURI, JJ., concur.

* * *

Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm

Beach County; John J. Hoy, Judge; L.T. Case No.

502008CA034262XXXXMB (AW).

Justin C. Leto of The Leto Law Firm, Miami, for appellant.

Jonathan J. Alfonso of Wesoloski Carlson, P.A., Miami, and Dinah

Stein of Hicks, Porter, Ebenfeld & Stein, P.A., Miami, for appellee 3L Real

Estate, LLC.

Not final until disposition of timely filed motion for rehearing.