The Port St. Joe man who paid a pittance for one of Apalachicola’s most famous historic homes at a foreclosure sale in May won’t be getting it after all.
At a brief hearing Tuesday afternoon before Circuit Judge George S. Reynolds III, attorneys for Capital Bank, and David T. Ethridge, who bid $1,000 in May to emerge as top bidder on the Key House worth more than $800,000, 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.”
After Ethridge had paid $1,000 for the three-story late Victorian gem adjacent to Lafayette Park at the May 16 sale, attorneys for Capital Bank, successor for TIB Bank, quickly 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.
Naples attorney Kelly A. Johnson wrote in her objection that the bank had relied on JMT but that JMT’s representative “had forgotten about the assignment and did not appear for plaintiff at the sale.” Paperwork in the case indicates that JMT was empowered to bid up to $832,000 on the property.
None of the specifics of what had gone wrong were discussed at Tuesday’s hearing. Neither the bank’s attorney’s, Johnson and John Scott, nor Ethridge, nor Collins Mallard, JMT’s director of operations, would comment on the settlement.
The stipulation order specifies that JMT will pay the $35,000 as well as all attorneys’ fees and costs.
Johnson asked that a December foreclosure sale date be moved up, and after a brief recess, Reynolds returned to the bench with an order that the sale would be rescheduled for Thursday, Oct. 31 at 11 a.m. at the county courthouse.
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 Margaret and Alexander 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, supported herself for more than half a century by working as a newspaper reporter, and writing magazine articles. Both she and her sister Bess lived in the house 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, which included Apalach Classic Systems Inc., Gregory Leach, Sally Leach, Advanced Medical Center LLC, and Logical Investments. None of these defendants in the case were represented at the hearing, but Johnson told the judge that she had spoken with their lawyers and none were contesting the stipulation order.
Realtor Pandora Schlitt attended the hearing from the audience and said afterwards that the unusual case may attract greater interest from potential buyers, but that the price for the home would likely be determined by other trends in real estate sales in the downtown historic district.
Whoever eventually obtains the house will have to pay about $34,404 in back taxes, on three separate parcels, said Tax Collector Jimmy Harris.