Manhattan Palms sued, arguing the clerk’s indexing mistake caused it to buy encumbered property and lose both money and surplus funds. The lawsuit claimed the clerk had a duty to buyers and creditors searching property records — not just to the public at large.
The clerk countered with sovereign immunity. Under Florida law, clerks must keep a public index of recorded documents, but the court said that duty benefits everyone, not a specific class of people like auction buyers. The trial court initially allowed the case to proceed. But on July 23, 2025, the appellate court reversed that decision and ordered the case dismissed with prejudice.
The ruling also certified a conflict with an older case, First American Title Insurance Co. v. Dixon, where another Florida appellate court found clerks could owe a duty to bona fide purchasers in similar circumstances. That conflict opens the door for possible review by the Florida Supreme Court.
For mortgage professionals, the takeaway is clear: relying only on name-based searches isn’t enough. Legal description searches and thorough due diligence are critical, especially in distressed sales and tax deed purchases where clerical errors can surface years later. The court’s decision means clerks won’t bear liability — the burden is squarely on buyers, brokers, and title professionals to catch indexing mistakes before they cost serious money.
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