Foreclosure Surplus Trustee Entitled to Service Charges and Fees Payable from the Surplus

In Estate of Enemencia de los Santos v. Nat’l Equity Recovery Servs., Inc., No. 3D15-2723, 2017 WL 363138 (Fla. 5th DCA 2017) the Estate of Enemencia de los Santos appeals an order granting National Equity Recovery Services, Inc. (NERS) fees for its trustee services under Florida Statute 45.034.

During the process of a foreclosure action against a condominium unit owned by Enemencia de los Santos, Ms. De los Santos died. Shortly after, a final judgement was entered in favor of the lender and after the foreclosure sale the trial court appointed NERS to locate the owner of the surplus funds which totaled approximately $19,000. Under the statue NERS has one year from its appointment which took place February 4, 2013 to locate the owner of the surplus funds.

A summary administration was established in probate in which the heirs of the Estate learned about the foreclosure surplus funds before NERS has identified the heirs.  An order for summary administration in which the heirs sought disbursement of the surplus foreclosure funds was obtained September 24, 2013. No notice was provided to NERS of the disbursement hearing.

In January 2014, NERS objected to the disbursement and sought payment from the Estate of its statutory allocated two percent cost advance and its statutory ten percent service charge from the total surplus. The trial court agreed with NERS and ordered the Estate to pay NERS $2,292.44, which amounted to both statutorily allowed collections from the funds. 

The appellate court concluded that “once NERS had been appointed as surplus trusee, the trial court should not have disbursed surplus foreclosure funds to the heirs without notice to the NERS of the disbursement hearing.” “During the hearing the trial court had the authority to determine the surplus trustee’s entitlement to a cost advance and service charge, even though circumstances may have contrived against the surplus trustee obtaining a disbursement order.” ‘Nat’l Equity Recovery Servs., Inc. v. Midfirst Bank, 8 So.3d 406, 408 (Fla. 4th DCA 2009). Although here, NERS did not obtain a disbursement order because they learned about the disbursement to the heirs during the one-year deadline for completing its work.

The Appellate Court reversed the order on appeal and remanded the case to the trial court for an evidentiary hearing that will “allow NERS to establish its right to a two percent cost advantage to demonstrate, based on its performance as the appointed surplus trustee, its entitlement to a service charge.”

NOTICE: THIS OPINION HAS NOT BEEN RELEASED FOR PUBLICATION IN THE PERMANENT LAW REPORTS. UNTIL RELEASED, IT IS SUBJECT TO REVISION OR WITHDRAWAL.

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