In a residential foreclosure case that could have larger consequences, the Third District Court of Appeal ruled Wednesday that a couple whose home was lost to foreclosure should have received the money left over after its sale.
In the ruling reversing Miami-Dade Circuit Judge Diane Ward, the appellate court ordered $99,500 to be returned to Miami residents Walter and Eider Pineda. The court cited the case as a “cautionary tale to bidders at foreclosure sales.”
The case involved a couple whose home was sold at a foreclosure auction in March 2013. The Pinedas had two mortgages—one from Wells Fargo and the other from Florida Bankers Realty LLC.
Their home was purchased by Nocari Investments LLC for $184,000. After satisfying the Florida Bankers judgment, a surplus of $99,500 remained.
In November 2013, Nocari filed a motion with Miami-Dade Circuit Court for disbursement of the surplus to Wells Fargo. The Pinedas also filed a motion for the funds.
Nocari argued the Pinedas would be unjustly enriched by recouping the surplus funds since they filed for bankruptcy protection and received a discharge of their debt to the bank. The Pinedas would be getting a windfall if awarded the surplus, the company argued.
The Pinedas opposed Nocari’s motion, arguing third-party purchasers such as Nocari are not entitled to direct surplus funds.
Ward awared the surplus to Nocari and directing them to pay Wells Fargo.
The Pinedas, represented by Miami attorney Michael Farrar, appealed Ward’s ruling.
District Judge Ed Scales, joined by Judges Kevin Emas and Richard J. Suarez, wrote that state law clearly says the property owner of record at the time of the sale is entitled to any surplus proceeds.
“While we are sympathetic to Nocari’s equitable argument, the fact remains that distribution of surplus foreclosure proceeds is governed by a plain and unambiguous statutory procedure which clearly provides that the owner of record is entitled to the surplus proceeds,” the ruling said. “Where the Legislature has provided such a process, courts are not free to deviate from that process absent express authority.”
The court reversed Ward and remanded the case with directions to deposit the disputed funds inthe court registry to be disbursed to the Pinedas.
“I’m very happy with the Third District Court of Appeal’s decision, and I look forward to getting the money placed back in the court registry so I can again reclaim it on behalf of my clients,” Farrar said.
Nocari’s attorney, Miami attorney Lawrence Shapiro, did not return calls and emails for comment by deadline.