Bankruptcy Surrender Estops Foreclosure Challenge Clay County Land Trust v. HSBC Bank USA, NA, Case No. 1D15-2113 (Fla. 1st DCA, June 14, 2017)(not final until time expires to file motion for rehearing and disposition thereof if filed).
This is a new Opinion from the First District Court of Appeal, handed down on June 14, 2017. It addresses the legal effect on a foreclosure proceeding of a defendant filing for bankruptcy and “surrendering” his/her interest in the subject property. Appellant appealed a Final judgment of Foreclosure entered in favor of Plaintiff/Bank. During the pendency of the appeal, the Appellant Land Trust initiated a bankruptcy proceeding, in which the Appellant “surrender[ed] any and all of their interest(s) in the properties.” The Bank, as Appellee, then moved to dismiss the appeal on the basis of this “surrender.” The First District granted the Bank’s motion to dismiss because the surrendering of the property rendered the appeal moot, and the Appellant was then estopped from proceeding with its challenge to the foreclosure judgment. This Opinion reaffirms prior rulings in multiple jurisdictions that if a party surrenders their interest in a property in a bankruptcy proceeding, that party is judicially estopped from challenging the foreclosure of the same property in a separate judicial proceeding, including a post-judgment appellate proceeding.
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