On July 5, 2018, the Florida Supreme Court issued an opinion, Dyck-O'Neal, Inc. v. Lanham, ____ So.3d ____, 2018 WL 3301567 (Fla. 2018), Case No. SC17-975, holding that a lender may pursue an independent action at law for a deficiency judgment when a foreclosure court expressly reserved jurisdiction in its final judgment to handle a deficiency claim but has not actually decided the merits of the claim.

In Lanham, the borrower's property was foreclosed by the lender and the foreclosure judgment expressly reserved jurisdiction to rule on any future deficiency claim. The judgment was then assigned to Dyck-O'Neal. However, Dyck-O'Neal filed a separate action at law seeking a deficiency judgment against the borrower. The trial court granted the borrower's motion for summary judgment against Dyck-O'Neal based on the validity of the assignment of judgment. Dyck-O'Neal appealed to the First District Court of Appeals, which quashed the trial court's decision, basing its conclusion solely on the trial court's lack of subject-matter jurisdiction over the deficiency action based on Florida Statute §702.06 as the foreclosure action had previously reserved jurisdiction to handle any claim for deficiency. This holding conflicted with the other four (4) district courts of appeals in Florida.

The Florida Supreme Court quashed the First District Court of Appeals' opinion in Lanham based on its interpretation of Florida Statute §702.06, which states:

“In all suits for the foreclosure of mortgages heretofore or hereafter executed the entry of a deficiency decree for any portion of a deficiency, should one exist, shall be within the sound discretion of the court .... The complainant shall also have the right to sue at common law to recover such deficiency, unless the court in the foreclosure action has granted or denied a claim for a deficiency judgment.”

(Emphasis added). The Florida Supreme Court held that the statute plainly allows the lender “the right to sue at common law to recover such deficiency, unless the court in the foreclosure action has granted or denied a claim for a deficiency judgment.” The First District Court of Appeals' decision was based on an interpretation of an older version of Florida Statute §702.06 in Higgins v. Dyck-O'Neal, 201 So.3d 157 (Fla. 1st DCA 2016). The older version of the Statute did not have the “granted or denied” language in it.

Thus, the Florida Supreme Court held that Florida Statute §702.06 allows a lender to pursue an independent action at law for a deficiency judgment when a foreclosure judgment expressly reserved jurisdiction in its final judgment to handle a deficiency claim if the foreclosure case has not actually decided the merits of the deficiency claim.

The Lanham opinion is not final until the time to file a motion for rehearing has expired or the motion for rehearing has been disposed of by the court.