Opinion
No. 76-820.
April 19, 1977. Rehearing Denied May 25, 1977.
Appeal from the Circuit Court, Dade County, Sam I. Silver, J.
Louis Vernell, Miami, for appellants.
George F. Knox, Jr., City Atty. and S.R. Sterbenz, Asst. City Atty., for appellees.
Before PEARSON, HAVERFIELD and HUBBART, JJ.
This interlocutory appeal is from an order of the trial court which denied the motion of the fee owners, who were the defendants in the foreclosure action, to vacate a foreclosure sale. The trial judge set the motion for an evidentiary hearing and upon the conclusion thereof entered his order denying the motion on the following grounds:
"The Court finds that the movant has failed to demonstrate that the Clerk's sale conducted March 22, 1976, should be set aside and not confirmed. It was not made to appear (a) that the conduct of the City of Miami (through its agents and employees), while perhaps not laudatory, had the effect of curtailing or restraining the bidding or free will of the persons attending the sale (because at that point the bidding was confined to Defendant, SANGER, and the City of Miami and Defendant, SANGER, continued to bid), or (b) that in the event a resale was ordered and conducted, it would produce a bid at least equal to the sum bid by ANDREW P. CROUCH."
The salient facts upon which the defendants relied in support of their motion is that the property foreclosed is adjacent to property owned and designated by the City of Miami for the construction of a convention center. At the foreclosure sale, two persons were authorized to bid for the City. The first was Donal Stewart, the property manager and purchasing representative for the City. Stewart bid on the property until his bid reached $111,000. When this bid was bettered, Stewart announced that this was his last bid and then left the sale. The bidding continued and the eventual successful bidder was Andrew Crouch, whose bid was $140,000. Upon the property being sold to him, Mr. Crouch tendered a City of Miami check for the required deposit and revealed that he also was bidding for the City of Miami.
The question before the trial court was whether the City, by the use of two bidders, was guilty of fraud or collusion so as to render the sale illegal. See Arlt v. Buchanan, 190 So.2d 575 (Fla. 1966), and cases cited therein.
Appellant urges that the procedure followed by the City was illegal but we know of no authority which makes it unlawful for a prospective purchaser to authorize two individuals to bid upon property at a foreclosure sale. Appellant has failed to cite authority for this proposition. In view of the trial court's finding, which was based upon a full evidentiary hearing, that the circumstances set forth did not depress or restrain the bidding and our own conclusion, from a review of the record of the evidentiary hearing, that this finding is supported by the record, we are unable to say that as a matter of law the trial court's order denying the owner's motion was error.
Affirmed.
I find the City of Miami's actions in this case highly suspicious to say the very least. Mr. Crouch at no time announced that he was a bidder for the City of Miami at the foreclosure sale. He bid solely in his individual capacity and concealed his true identity. Only Mr. Stewart announced that he was a bidder for the City of Miami.
Moreover, Mr. Crouch began his bidding only when Mr. Stewart announced that he had made his last bid at $110,000 and walked out while the sale was in progress. Mr. Crouch remained in his secret capacity even though he and Mr. Stewart had come to the sale together. To all the actual or potential bidders present, it was clear that the City of Miami had terminated its bidding on this property although it is undisputed that the property in question was in the heart of a proposed City of Miami multi-million dollar convention complex. Shortly thereafter, Mr. Crouch became the high bidder and purchased the property. It was only after the sale was completed and the other bidders were presumably long gone when Mr. Crouch tendered a City of Miami check to purchase the property and revealed his true identity.
The City of Miami offered no explanation to the trial court and offers none on appeal to justify the deception practiced by the City on the officials conducting the sale and on the other bidders. In my judgment, these deceptive acts constitute misconduct which was designed to depress the foreclosure sale price by misleading actual or potential bidders into believing that the City was no longer interested in the property and that therefore the property was not that valuable. Such misconduct would be sufficient to set aside the foreclosure sale had it accomplished its intended purpose by restraining competitive bidding at the sale. See: Arlt v. Buchanan, 190 So.2d 575 (Fla. 1966); Mitchell v. Mason, 75 Fla. 679, 79 So. 163 (1918); Marsh v. Marsh, 72 Fla. 142, 72 So. 638 (1916).
I have, however, carefully reviewed the record and can find no evidence that the City's misconduct in any way depressed the price or restrained the bidding. I am satisfied that the property was sold at a fair market value in line with appraisals made by two competent real estate appraisers. The bidding did continue after Mr. Stewart made his exit from the foreclosure sale, and no actual or potential bidder at the sale testified that he or she would have continued the bidding beyond the $140,000 bid had they known Mr. Crouch's true capacity throughout the sale.
I, therefore, concur in the court's judgment of affirmance, but would make it perfectly clear that the City of Miami engaged in improper conduct at the foreclosure sale which would have been sufficient to set aside this foreclosure sale if the evidence had established that the misconduct depressed the price or restrained the bidding. Absent such evidence, I am constrained to affirm.