4D06-4591-Town of Lake Park v. Grimes

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State: Florida

Court: Florida Fourth District Court

Docket No: 4D06-4591

Case Date: 09/05/2007

Preview:DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
July Term 2007

TOWN OF LAKE PARK, Appellant, v. WILLIAM F. GRIMES, JR., JOANNE E. GRIMES, his wife, and HOUSEHOLD PROPERTIES CORP., a Florida corporation, Appellees. No. 4D06-4591 [September 5, 2007] TAYLOR, J. The Town of Lake Park ("the Town") appeals an order which awarded a foreclosure sale surplus to appellees William and Joanne Grimes, the former owners of the property. The Town claimed it was entitled to the surplus for payment towards code enforcement liens against the property. We agree and reverse. On April 16, 2003, the Grimeses executed a note and mortgage in the amount of $79,950.00, encumbering their home. They accumulated fines from the Town totaling $464,914.19, due to repeated code violations. The orders imposing per diem fines are dated November 21, 2002, May 4, 2004, November 18, 2004, July 7, 2005, and December 1, 2005. On July 15, 2005, Mortgage Investors I, LLC filed its mortgage foreclosure complaint against the subject property, naming the Grimeses and the Town as defendants. The Town answered, alleging the priority of its liens. On September 27, 2005, the trial court entered an order foreclosing the mortgage and ordering public sale of the property. The public sale occurred on January 5, 2006. The property was sold to Household Properties Corp. (HPC) for $151,732.50. After the mortgagee was paid a judgment of $99,977.64, a surplus of $51,754.66 remained in the court registry. Title to the property was transferred to HPC on January 17,

2006, pursuant to a Certificate of Title, which was recorded the following day. On January 18, 2006, the Grimeses entered into an agreement with HPC wherein they assigned to HPC 70% of the surplus, plus attorney's fees, in exchange for HPC's "service" of collecting the surplus for them. The Grimeses continued to reside at the subject property for a short time pursuant to a lease agreement with HPC. According to the Town, the Grimeses then vacated the property. Although the date of their departure is uncertain, it was apparently before HPC sold the property to the new owner on April 28, 2006. On May 10, 2006, the Grimeses and HPC moved for disbursement of the surplus to them. The following day, the Town moved for payment of the surplus towards its liens against the subject property. This action was consolidated with a declaratory action brought by the Grimeses and HPC against the Town over entitlement to the surplus. The Town filed an affidavit of James D. Ryan, Esq., who stated that: 6. During the time which Defendants William F. Grimes Jr. and Joanne E. Grimes owned the Property numerous valid liens were recorded against the property by Lake Park. As the junior lienholder at the time of foreclosure, Lake Park is entitled to payment on its valid liens. .... 8. The former owners the "Grimes" homestead status is irrelevant because on the face of their motion for release of the funds it is clear they have displayed an intent to not use such surplus for acquisition of another homestead but instead have assigned 70% of the surplus to another and have pledged the balance for attorney fees. The Grimeses and HPC presented an affidavit from attorney Preston J. Fields, Sr., which stated: That upon information and belief, the subject real property was the homestead real property of Mr. and Mrs. Grimes. That if the real property foreclosed in the instant matter was the homestead real property of WILLIAM F. GRIMES, JR., and JOANNE E. GRIMES, prior to May 8, 2003, and continuing up through and including September 27, 2005, the date of entry of the Final Judgment of Mortgage Foreclosure, the Code Enforcement Liens set forth in
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Paragraphs 4(b)(c)(d) and (e) above, are also unenforceable against the subject real property, and the net surplus funds, pursuant to Article X, Section 4, of the Florida Constitution, as constitutional prohibition takes priority over the debt or lien and renders the same unenforceable. Miskin v. City of Fort Lauderdale, 661 So. 2d 415 (Fla. 4th DCA 1995). At the hearing on the cross-motions for recovery of the surplus, the parties stipulated that the property was, in fact, the Grimeses' homestead from March 29, 1985 until January 17, 2006, the date the property was transferred to HPC. The trial court determined that the code enforcement liens were not entitled to share in the surplus funds and awarded the surplus to the Grimeses. Florida's provision for homestead exemption is found in the Florida Constitution. Art. X, Section 4 of the Florida Constitution states that, with certain exceptions, "no judgment, decree or execution shall be a lien" on homestead property. The homestead exemption must be liberally construed in the interest of protecting the family home. Havoco of Am., Ltd. v. Hill, 790 So. 2d 1018, 1020 (Fla. 2001). However, the exemption is not to be liberally construed so as to make it an instrument of fraud or imposition on creditors. Id. Section 162.09, Florida Statutes, authorizes county or municipal code enforcement boards to levy fines and impose liens on the deficient property. However, it states: No lien created pursuant to the provisions of this part may be foreclosed on real property which is a homestead under s. 4, Art. X of the State Constitution.

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