Haynes & De Paz –

Last week I had a hearing regarding a Florida foreclosure surplus funds case. These are the facts:

• Foreclosure sale occurred on November 4, 2015.
• Certificate of Title was issued on December 16, 2015.
• The homeowner filed a motion for foreclosure surplus funds on January 6, 2016.
• The United States filed their claim for surplus (via a mortgage lien) on February 18, 2016.

The rules in Florida are very clear for collecting Florida Foreclosure Surplus funds. Florida Statute 45.031 requires any junior lienholder claiming a right to surplus funds to file a claim no later than 60 days from the date of the foreclosure sale. In fact, all case law in Florida prohibits lien holders from collecting the surplus after the 60-day time limit has expired.

In the above mentioned facts, the homeowner made a claim for the funds, while the United States made a claim well after the 60-day deadline.

At an evidentiary hearing, the United States filed a motion and made argument to the court that the United States is not bound by any state statute of limitations. More specifically, the United States stated that due to sovereign immunity, the United States could essentially wait as long as they want to before they claim the surplus funds, and that they would forever be entitled to them. However, sovereign immunity is not a design for the United States to ignore due diligence in civil cases.

[HAYNES & DE PAZ]

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