The Fourth District Court of Appeal ruled against a Wellington homeowner association (HOA). The HOA barreled through a foreclosure sale despite the homeowner’s bankruptcy filing — and then failed to show up in court for the appeal. Scribner Village Homeowners Association Inc. won a final judgment of foreclosure against Marie Alexandre on a lien for unpaid assessments. The judgment set the property for sale, but Alexandre filed for Chapter 11 bankruptcy protection and notified the state court.
That move should have initiated the automatic stay. And, it should have delayed the foreclosure proceedings until the federal court resolved the bankruptcy —but it didn’t. “Despite appellant’s filing, the sale proceeded and the clerk of court issued a certificate of sale to HOA as the highest bidder as well as a certificate of title,” District Judge Dorian Damoorgian wrote in a unanimous decision Wednesday with Judges Melanie May and Jonathan Gerber concurring.
Sale Should Not Have Happened
Public records show the association paid $19,100 for the five-bedroom house in February 2015. Alexandre bought the house for $460,000 about 10 years earlier in April 2005. The HOA then filed for a writ of possession; prompting Alexandre to ask Palm Beach Circuit Court to deny the request and set aside the final foreclosure judgment and certificate of title. The state court rejected her request and ruled in the association’s favor, but the appeals court disagreed.
“The sale should not have proceeded until the stay was lifted,” Damoorgian wrote. “The trial court erred in denying appellant’s motion to set aside the sale and everything that flowed from it.” Scribner Village appeared to have dropped out of the litigation, making no appearance on appeal. “The court got it right,” Alexandre’s attorney, James Jean-Francois of Hollywood, told the Daily Business Review. “It’s time to stand up to the associations because they’re bullying homeowners and not following the law. A lot of HOAs are getting all types of judgments without following the correct protocol.”
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