Key Points

  • The Third District affirmed a trial court order that let pre-construction condominium buyers at Wynwood Atriums intervene after a foreclosure judgment only as holders of a junior interest, not as junior lienholders.
  • The buyers' purchase agreements subordinated their contracts to any mortgage on the property and expressly waived any lien or lien rights, legal or equitable.
  • Post-judgment intervention requires the proposed intervenor to show a sufficient interest in the property, and the court held that the buyers' lien waiver defeated that showing.
  • The court reviewed for abuse of discretion and held that it was bound to give effect to the parties' agreement, even if the bargain was harsh.
  • In a footnote, the court noted the buyers later stipulated that they had known of the foreclosure litigation since October 2022, nine months before the stipulated final judgment.

A Florida appeals court on Wednesday held that buyers of pre-construction condominium units at Wynwood Atriums cannot claim lien rights in the lender's foreclosure of the project, because the purchase contracts they signed expressly waived any lien on their units.

The Third District Court of Appeal affirmed a Miami-Dade County circuit court order that let the buyers into the case only as holders of a "junior interest," not as junior lienholders. Judge Gooden wrote the opinion for a panel that also included Judges Logue and Gordo, and no judge wrote separately. The ruling is a win for BD FL Notes LLC, to which the original lender assigned its interest while the foreclosure was pending.

The case turned on one paragraph of the buyers' purchase agreements. Because the buyers gave up any lien when they signed, the court held, they could not show the stake in the property that Florida law requires before a nonparty may join a case after final judgment. "Because the Purchasers expressly waived the lien rights on which their claim to junior lienholder status depends, they failed to establish the property interest necessary to warrant post-judgment intervention," Judge Gooden wrote.

The appellants are 14 contract purchasers, a mix of individuals and companies led by Bloktech Wynwood Atrium LLC. They had agreed to buy units from the developer, 136 NW 126 ST Project LLC, before the building was finished.

To buy the land and build Wynwood Atriums, the developer took out a mortgage with Triumph Capital Partners. The mortgage barred the developer from creating or permitting any other lien or encumbrance on the property "whether senior or junior in lien to this Mortgage," and it allowed the lender to call the loan due if the developer pledged the property to anyone else without written consent.

Each purchase agreement contained a subordination clause, a provision that ranks the buyer's contract rights beneath the lender's mortgage. The buyers agreed that their contracts "are, and shall be, subject and subordinate to the lien of any mortgage heretofore or hereafter made or placed Upon the subject property." The clause went further, with each buyer "hereby expressly waiving and relinquishing any lien or lien rights, legal or equitable, which might otherwise accrue or be available to Purchaser by operation of law or otherwise."

The developer did not complete construction by the mortgage's maturity date, according to the opinion. Triumph Capital extended the deadline but filed for foreclosure in February 2022, and during that litigation it assigned its interest to BD FL Notes.

BD FL Notes then entered an agreement allowing the developer to keep closing on unit sales to pay down the mortgage. When the developer failed to close the agreed number of units, BD FL Notes declared the agreement in default. The trial court entered final judgment of foreclosure on July 6, 2023.

The buyers moved to intervene soon after, meaning they asked to join the lawsuit as parties. They sought to vacate the foreclosure so they could close on their units. Circuit Judge Robert T. Watson held five evidentiary hearings and granted the request in part, "finding that they had a junior interest and adding them as parties to the post-foreclosure judgment."

The buyers appealed that order, which partly granted and partly denied their motion. "The Purchasers assert that the order effectively denied their motion," the panel noted. On appeal, they argued that the trial court should have added them as junior lienholders. The Third District reviewed the order for abuse of discretion.

Judge Gooden began with the standard for joining a case that has already reached judgment. "Post-judgment intervention is permitted only in rare circumstances, when the proposed intervenor demonstrates a sufficient interest in the property," the opinion stated, citing a 1956 Florida Supreme Court decision, Wags Transportation System Inc. v. City of Miami Beach. That court had allowed a nonparty to intervene because "the petition to intervene showed such an interest in the res that the ends of justice require that it be granted."

The buyers could not make that showing, the panel held. "But this argument fails because their purchase agreements expressly disclaim and waive any lien rights," Judge Gooden wrote. Quoting the Third District's September 2026 decision in Summit Aviation Inc. v. MSP Recovery Aviation LLC, the court added: "We are bound to give effect to that agreement."

The panel also cited a 2000 decision of Florida's Fourth District Court of Appeal, Barakat v. Broward County Housing Authority, for the principle that "A fundamental tenet of contract law is that parties are free to contract, even when one side negotiates a harsh bargain." It relied as well on a 1969 Florida Supreme Court decision and two First District rulings in concluding that "the trial court did not abuse its discretion."

In a footnote, the court recorded a fact bearing on the timing of the buyers' motion. "While not raised in their motion to intervene, the Purchasers later stipulated that they were aware of the litigation since October 2022—nine months before the stipulated final judgment of foreclosure," the opinion stated. The panel did not rest its holding on that point.

The buyers were represented by David Michael Vogel of Vogel Law Firm PLLC. BD FL Notes was represented by James J. Webb of Cohn & Dussi LLC.

The affirmance leaves Judge Watson's order in place, with the buyers parties to the post-judgment proceedings as holders of a junior interest but not as lienholders. The appeal arose from a non-final order in the circuit court case, lower tribunal No. 22-11854-CA-01. The opinion states that it is not final until the court disposes of any timely motion for rehearing.