Clearwater attorney accused of condo foreclosure trickery fights back

Article Courtesy of The Tampa Bay Times

By Susan Taylor Martin  

Published October 20, 2017


The Clearwater lawyer accused of tricking a bidder into paying $458,100 for a gulf-front condo now plans to contest a judge's order tossing out the sale.

On Monday, attorney Roy C. Skelton's company Deutsche Residential Mortgage filed a notice of appeal with the Second District Court of Appeal in Lakeland.

The action comes two months after Pinellas Circuit Judge Jack St. Arnold vacated the sale of a North Redington Beach condo on which Deutsche held a mortgage because of what the judge called an "unscrupulous" and "conniving" schemed to dupe bidders at a foreclosure auction.

In August during a hearing Sixth Judicial Circuit court Judge Jack St. Arnold at the Pinellas County Courthouse. The judge agreed with Houde's allegation that he was duped by Skelton in thinking he bought a Redington Beach condo for $458,100 out of a foreclosure auction. Now Skelton is fighting back.

"While I respectfully disagreed with the judge's decision,'' Skelton said at the time, "I will respect it and not file an appeal."

The convoluted and controversial saga of Unit 514 in the Ram-Sea II condominiums began two years ago when another of Skelton's companies, Outbidya, Inc., paid $157,8000 for the condo at a homeowners association foreclosure auction. Last year, shortly after Wells Fargo began foreclosing on the first mortgage, Skelton created Deutsche no relation to the giant German bank and took back a second mortgage from Outbidya.

While the Wells Fargo case dragged along, Deutsche obtained a final judgement of foreclosure on its second mortgage and a sale date was set for June. Orlando Realty Group was the winning bidder at $458,100 but owner John Houde later said he didn't realize he was bidding on only a second mortgage and that the bank could still foreclose on the first.

That would have left Houde with no condo and out $458,100. Skelton's company would have reaped a windfall of nearly $400,000 after costs.

At an emergency hearing in August, Houde's lawyers argued that Skelton had created a "very cunning" plan to dupe bidders. The judge essentially agreed and vacated the sale. The deed to the condo was returned to Skelton's company and the money returned to Orlando Realty Group.

Deutsche Residential has not yet detailed its grounds for appeal. But at the hearing, Skelton said Deutsche had followed proper procedures and done nothing wrong. He also got Houde, an experienced investor, to acknowledge that he not read all the documents in the foreclosure case.

Matthew Weidner, one of the attorneys who represented Orlando Realty Group, said he doubted that Deutsche would get anywhere with its appeal.

"We have to respect the appeals process but given the extraordinary nature of this case it is hard to see where the appellate court would countenance or approve of such conduct" by Skelton's company, Weidner said.

While foreclosure proceedings on the first mortgage continue, Skelton is trying to sell the three-bedroom, two bath condo for $625,000. In the meantime, the Ram-Sea II Condominium Association is suing Skelton's Outbidya, Inc. for failing to pay $5,806 in dues and special assessments.

If Outbidya doesn't pay up, the condo could be headed for yet another foreclosure auction.