ASSET RECOVERY INC v. WELLS FARGO BANK (2023)

The subject of this appeal is an order granting Wells Fargo Bank, N.A. (“Wells Fargo”) a disbursement for post-judgment costs it expended.¹ On appeal, Asset Recovery, Inc. (“ARI”),² alleges that this was error for several reasons, the first of which merits reversal.

Wells Fargo obtained a final judgment of foreclosure against the original borrower's heirs, Ahmaad Robinson and Isaac Robinson. The final judgment stated that Wells Fargo was due $227,417.03 ³ and ordered Wells Fargo to “advance all subsequent costs of this action.” In return, the judgment stated that Wells Fargo “shall be reimbursed for [the advanced costs] by the clerk ․” The judgment further required the clerk to distribute the proceeds of the sale “by paying: first, all of plaintiff's costs; second, documentary stamps affixed to the certificate; third, plaintiff's attorneys’ fees; fourth, the total sum due to plaintiff, less the items paid, plus interest at the rate prescribed in paragraph 1 from this date to the date of the sale; and by retaining any remaining amount pending further order of this court.”

Following the foreclosure sale, the clerk filed a certificate of title and issued a certificate of disbursements pursuant to section 45.031(7), Florida Statutes (2022). In the certificate of disbursements, the clerk certified that she had disbursed $228,510.11 to Wells Fargo in satisfaction of its lien of judgment and $4,039.50 to LOGS Legal Group LLP for attorney fees due per the final judgment. Then, deducting the amounts disbursed from the sale proceeds, the clerk identified $18,250.39 in surplus funds.

Forty-three days later, Wells Fargo filed a motion asking for an additional disbursement, this time in the amount of $3,575.66 to compensate it for post-judgment costs it expended. ARI objected and argued that Wells Fargo, as the foreclosing plaintiff, had no right to reimbursement once the remaining funds became surplus, which it argued occurred when the clerk issued the certificate of disbursements. After hearing argument of counsel, the trial court granted Wells Fargo's motion. ARI then filed the instant appeal, challenging Wells Fargo's right to the additional disbursement. Our review is de novo. See, e.g., Armstrong v. Harris, 773 So. 2d 7, 11 (Fla. 2000) (“[T]he standard of review for a pure question of law is de novo.”).

The parties agree that under Chapter 45 of the Florida Statutes a foreclosing plaintiff is not within the class of people identified to be entitled to surplus. § 45.032(2), Fla. Stat. (2022) (“There is established a rebuttable presumption that the owner of record of real property on the date of the filing of a lis pendens is the person entitled to surplus funds after payment of subordinate lienholders who have timely filed a claim․ The presumption may be rebutted only by: (a) The grantee or assignee of a voluntary transfer or assignment establishing a right to collect the surplus funds ․ or ․ by virtue of an involuntary transfer or assignment of the right to collect the surplus.”); see also Pineda v. Wells Fargo Bank, N.A., 143 So. 3d 1008, 1011 (Fla. 3d DCA 2014) (interpreting various provisions of Chapter 45 and concluding that parties entitled to surplus are either the owner of record, an assignee of an owner, or subordinate lienholder); Rosen v. Dorn-Kothe, Inc., 171 So. 646, 648 (Fla. 1936) (“It appears to be settled beyond all question that one claiming a surplus or the right to share in a surplus resulting from a sale under foreclosure must either own the equity of redemption at the time of the sale or must be one then holding a lien or vested right in the property.”).

The parties disagree, however, as to when surplus arises. For the following reasons, we find that surplus arises ten days after the clerk issues the certificate of disbursements and no objection is received.

Pursuant to section 45.031(7)(a), Florida Statutes (2022), “[o]n filing a certificate of title, the clerk shall disburse the proceeds of the sale in accordance with the order or final judgment and shall file a report of such disbursements ․” Here, the certificate of disbursements issued by the clerk followed the priority set forth in the final judgment, reported all disbursements made, and identified the funds remaining as surplus funds. But because the certificate of disbursement could have been amended, we reject ARI's argument that the funds became surplus at the moment the clerk issued the certificate of disbursements. See, e.g., Eduartez v. Fed. Nat'l Mortg. Ass'n, 251 So. 3d 227, 230 (Fla. 3d DCA 2018)⁴ (“On July 26, 2016, the clerk issued a Corrected Certificate of Disbursements correcting the amount of disbursements to the mortgagee, resulting in an adjusted surplus amount of $41,569.05.”), rev'd on other grounds in light of Bank of N.Y. Mellon v. Glenville, 252 So. 3d 1120 (Fla. 2018).

Rather, we find that the remaining funds became surplus after the time expired for Wells Fargo to object to the certificate of disbursements. Section 45.031(7)(c) states that “[i]f no objections to the report are served within 10 days after it is filed, the disbursements by the clerk shall stand approved as reported.” Accordingly, we hold that by waiting more than ten days to alert the clerk that it was owed additional funds pursuant to the final judgment, Wells Fargo allowed the certificate of disbursements to become approved and, in effect, indicated that it was paid “all disbursements required by the final judgment of foreclosure and shown on the certificate of disbursements.”⁵ Having concluded that the funds at issue in the present case are surplus funds, Wells Fargo's motion for additional disbursements should have been denied. Accordingly, we reverse and remand for further proceedings.

REVERSED and REMANDED.

FOOTNOTES

1.   This case was transferred from the Second District Court of Appeal to this Court on January 1, 2023.

2.   Isaac Robinson was a party below and as such would have standing to appeal. Because ARI is standing in the shoes of Isaac Robinson, and because ARI itself is not a stranger to the record, ARI has standing on appeal to challenge an additional disbursement to Wells Fargo. See Dove v. McCormick, 698 So. 2d 585, 589 (Fla. 5th DCA 1997) (“On the subject of assignments, the common law ‘speaks in a loud and consistent voice: An assignee stands in the shoes of his assignor.’ ”). In other words, ARI has standing on appeal to preserve surplus funds, so that on remand it may seek an opportunity to prove standing below when it seeks entitlement to the same.

3.   The Final Judgment stated that “[t]he total amount [ ] shall bear interest from this date forward at the prevailing statutory rate of interest.”

4.   It is unclear from this case when/if an objection to the original certificate of disbursements was made, but the corrected certificate was issued within eighteen days after the original certificate of disbursements was issued.

5.   Surplus “means the funds remaining after payment of all disbursements required by the final judgment of foreclosure and shown on the certificate of disbursements.” § 45.032(1)(c), Fla. Stat. (2022).

NARDELLA, J.

WOZNIAK and MIZE, JJ., concur.