Daily Development for Thursday, January 26, 2006
by: Patrick A. Randolph, Jr.
Elmer F. Pierson Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
MORTGAGES; FORECLOSURE; RES JUDICATA: Where mortgagee brings judicial foreclosure action naming original mortgagor as defendant, but neglecting to name the current owner of the property as well, the foreclosure action is void, and consequently res judicata does not bar mortgagee from bringing a second action naming both original mortgage (for purposes of obtaining a deficiency) and current owner as defendants.
English v. Bankers Trust Co. of California, 895 So. 2d 1120 (Fla. 2005)
Lender was not aware that mortgagor had transferred the property, and carried judicial foreclosure action through to final judgment and setting of a foreclosure sale before it realized that it had not named the current owner of the property as a defendant.
Regrouping, Lender initiated a new foreclosure action, naming both the original mortgagor and the current owner (and a third party - who’s function was never disclosed) as parties defendant.
The mortgagor protested that although the first action was void, and did not establish a deficiency claim against her, it nevertheless was sufficient to permit her to raise a res judicata claim to bar the second action against her. Not so, answered the court - void is void. Since the first action meant nothing, a second action could be brought. It differentiated a second foreclosure action that might be brought to foreclose away an omitted junior lienholder. Apparently, in such cases, Florida law has not permitted the naming of another party defendant who had not been named in the first foreclosure of the fee interest.
The court held, however, that in the finding of any deficiency from the second sale, defendant mortgagor could be found liable for interest accrued on the debt only to the date of the first attempted foreclosure, and neither accrued interest nor prejudgment interest may be claimed after that date.
Comment: The cases cited by the court in support of its denial of interest appear to depend upon the mortgagee’s having control of the property following the first foreclosure. Obviously that did not happen here. Thus, although perhaps the mortgagee deserves to be spanked for its lack of diligence, the editor could not find a clear rationale for the decision on this point.
Items reported here and in the ABA publications
are for general information purposes only and
should not be relied upon in the course of
representation or in the forming of decisions in
legal matters. The same is true of all
commentary provided by contributors to the DIRT
list. Accuracy of data and opinions expressed
are the sole responsibility of the DIRT editor
and are in no sense the publication of the ABA.
Parties posting messages to DIRT are posting to
source that is readily accessible by members of
the general public, and should take that fact
into account in evaluating confidentiality
DIRT is an internet discussion group for serious
real estate professionals. Message volume varies,
but commonly runs 5 15 messages per work day.
Daily Developments are posted every work day.
subscribe, send the message
subscribe Dirt [your name]
To cancel your subscription, send the message
signoff DIRT to the address:
for information on other commands, send the
Help to the listserv address.
DIRT has an alternate, more extensive coverage that includes
commercial and general real estate matters but also focuses specifically upon
residential real estate matters. Because real estate brokers generally find
this service more valuable, it is named “BrokerDIRT.” But residential
specialist attorneys, title insurers, lenders and others interested in the
residential market will want to subscribe to this alternative list. If you
subscribe to BrokerDIRT, it is not necessary also to subscribe to DIRT, as
BrokerDIRT carries all DIRT traffic in addition to the residential discussions.
To subscribe to BrokerDIRT, send the message
subscribe BrokerDIRT [your name]
To cancel your subscription to BrokerDIRT, send the
signoff BrokerDIRT to the address:
DIRT is a service of the American Bar
Section on Real Property, Probate & Trust Law and
the University of Missouri, Kansas City, School
of Law. Daily Developments are copyrighted by
Patrick A. Randolph, Jr., Professor of Law, UMKC
School of Law, but Professor Randolph grants
permission for copying or distribution of Daily
Developments for educational purposes, including
professional continuing education, provided that
no charge is imposed for such distribution and
that appropriate credit is given to Professor
Randolph, DIRT, and its sponsors.
DIRT has a WebPage at:
To be removed from this mailing list, please go to
or send an email message to the address firstname.lastname@example.org,
with the text SIGNOFF BROKERDIRT in the body of the message. Problems
or questions should be directed to email@example.com.