Initiation of foreclosure proceedings does not rise to the level of "irreparable harm" sufficient to justify a temporary injunction, the Fourth District Court of Appeal ruled.
The ruling came in a case involving a dispute over a $250,000 collateral mortgage, which the borrower claimed its original lender incorrectly assigned to a successor. Plus, the borrower argued, that successor nearly doubled the payoff amount to about $478,500 putting a kink in plans to sell the property to avoid foreclosure. In seeking the injunction, the plaintiff alleged usury and tortious interference in a real estate sale, but the Fourth DCA found otherwise.
"The initiation of foreclosure proceedings does not constitute irreparable harm," Judges Martha Warner, Dorian Damoorgian and Alan Forst ruled in an unsigned decision issued July 19. "The only potential loss is economic, which can be adequately remedied by monetary damages."
The case pitted borrower ARR Investment Inc. against lender Bautista REO U.S. LLC, successor to Doral Bank.
ARR is the holding company of five day cares, according to court records. It borrowed $1.55 million from Doral Bank, secured with a mortgage on two parcels and a collateral mortgage on real estate in Pembroke Pines.
The collateral mortgage secured a $250,000 demand note plus 7.65 percent interest.
ARR refinanced the loan with City National Bank of Florida in 2011, but defaulted, leading City National to file a foreclosure complaint against the Pembroke Pines real estate. To fend off that action, ARR attempted a sale to a third party. A title search revealed Doral Bank had not released the collateral mortgage to City National during the refinance, but had instead assigned it to Bautista, along with the $1.55 million loan.
When ARR requested an accounting of the debt, Bautista put the figure at about $478,500, not $250,000.
ARR filed a four-count complaint against Bautista, alleging violation of Florida mortgage statutes and interference with a contractual relationship. It sought an injunction preventing the lender from interfering with the sale, and an order compelling Bautista to issue an estoppel letter placing the debt at $250,000.
The lower court proceedings played in ARR's favor with a ruling requiring the lender to release the collateral, clearing the way for the sale. It also required ARR to deposit $250,000 into the court registry within two business days of the real estate closing. Without a hearing, the court also denied Bautista's emergency motion to increase the bond or stay the injunction a decision that fizzled on appeal.