At a routine foreclosure sale at the county courthouse in May, one of Apalachicola’s most legendary historic homes added to its legend.
The Key House, once owned in the 1930s by famed novelist Alexander Key and his wife Margaret, and now worth in the neighborhood of $1 million, was sold for a mere $1,000 to Port St. Joe real estate investor David T. Ethridge, after representatives of the bank holding the mortgage failed to show up.
But no sooner was the May 16 foreclosure sale complete, attorneys for the bank moved to vacate the sale on the grounds Ethridge’s bid was “clearly an ‘unconscionably inadequate’ price caused solely by the mistake” of the bank’s agent, JMT Management.
Ethridge had paid the $1,000 to the clerk of courts office, but the bank’s motion put a freeze on the sale until it could be heard by Circuit Judge Angela Dempsey. When she was reassigned to Tallahassee, the case was to be heard by Circuit Judge George S. Reynolds III.
Reynolds continued the case until Sept. 24, when Ethridge and the bank would have their day in court to decide the future of the three-story Victorian gem adjacent to Lafayette Park.
The drama was short-lived, though, when after a brief hearing, attorneys for Capital Bank (successor to TIB Bank), and Ethridge himself, agreed on a settlement of $35,000 to vacate the sale.
“This is a fascinating case,” said Reynolds, in accepting the settlement. “I’m glad you all reached agreement. A settlement is always better.”
The bank’s attorney asked that the December 2013 foreclosure sale date be moved up, and after a brief recess, Reynolds ordered a new sale scheduled for Thursday, Oct. 31.
Reynolds’ selection of Halloween for the sale may have been more than a coincidental choice for the veteran judge, especially since the 1894 Queen Anne style home was home to Key, a well-known author and illustrator whose novels include “Island Light,” “The Wrath and the Wind,” and “Night on Witch Mountain,” later made into a Disney movie.
The couple divorced in the 1940s, and Margaret, also an author, lived in the home at Avenue C and 12th street with her sister until they were well into their 90's.
Margaret died in 1996 and directed in her will that upon the sale of her estate, proceeds be given to the Apalachicola Municipal Library board, of which she was a long time member. About $350,000 plus interest resulted from the bequest, after the home was acquired in 1998 by Naples physician Dr. Gregory and Sally Leach.
By Nov. 2012, however, the home had fallen into foreclosure, complicated by the bankruptcy of one of the home’s several owner entities.
At that new Halloween foreclosure sale, the bank as expected got the property for its $350,100 outstanding mortgage, and had to pay only $2,400 for the dock stamps to have the new deed recorded. It also covered the back taxes of slightly more than $47,000 on the house and three other lots.
There was only other step to be made final, and that was getting Ethridge his $1,000 back. After a brief hearing late last year, it was returned to him.