Foreclosure actions are equity actions. See Verzura Construction, Inc. v. Hotel La Petitite Muse, LLC, 50 Fla.L.Weekly D2500a (Fla. 3d DCA 2025).  Can a sale price at a foreclosure auction sale be set aside because the foreclosed party believes the sale price is grossly inadequate? A recent case discusses this question and, as you will see, the argument that the sale price is grossly inadequate is not enough to overturn a sale.

In Verzura Construction, an owner hired a general contractor to renovate its hotel. A dispute arose and the contractor recorded a construction lien, filed a lien foreclosure lawsuit, and obtained a judgment of foreclosure. The contractor purchased the property in the foreclosure sale auction. The foreclosed hotel owner objected and move to set aside the sale arguing its attorneys failed to notify it of the sale and it was deprived of an opportunity to bid at the sale. However, the hotel’s attorney knew about the auction and attended the auction. Nevertheless, the trial court agreed to set aside the sale finding the sale price at the auction was grossly inadequate and the hotel owner was not notified of the sale by its counsel.  The appellate court reversed and, in doing so, discussed the burden of overturning a foreclosure sale under a grossly inadequate sale price argument:

A court ruling on post-sale objections to judicial foreclosure sales must assure that “no wrong has been accomplished in and by the manner in which [the sale] was conducted.”  But an inadequate sale price, even a grossly inadequate one, cannot alone justify setting aside an otherwise proper foreclosure sale.  This is because the amount of the bid is “conclusively presumed to be sufficient consideration for the sale.” So an objecting party must raise an additional factor, like a “mistake, accident, surprise, fraud, misconduct, or irregularity” that impacted the sale and caused the price to be grossly inadequate.  Only then may the sale be set aside. 

Here, the court ruled that the sale price was grossly inadequate. But the only additional factor that the court cited aside from the price was the fact that [the foreclosed owner] was “deprived of an opportunity to bid,” …. And the only reason it concluded that [the foreclosed owner] was “deprived of an opportunity to bid” is because [its] attorneys failed to “inform” it. … [A]s a matter of law: (1) [it] had notice of the sale, and (2) [it] was not “deprived of an opportunity to bid.” The trial court abused its discretion in concluding otherwise.

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Although such notice would end the inquiry, the record here reflects more than constructive notice – [the foreclosed owner’s counsel] attended the sale. And “there is a presumption that an attorney, as an officer of the court, is duly authorized to act for a client whom he professes to represent. In the absence of some pleading questioning the attorney’s acts . . . the presumption is conclusive.” 

Verzura Construction, Inc., supra (internal citations omitted).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.