Bank of N.Y. Mellon v. Withum
| Decision Date | 16 November 2016 |
| Docket Number | No. 4D15–1986.,4D15–1986. |
| Citation | 204 So.3d 136 |
| Parties | BANK OF NEW YORK MELLON f/k/a Bank of New York, as Trustee for the Certificateholders CWALT, Inc., Alternative Loan Trust 2006–9T1 Mortgage Pass-through Certificates, Series 2006–9T1, Appellant, v. David G. WITHUM, Jessica A. Withum, Unknown Tenant # 1, and Unknown Tenant # 2, Appellees. |
| Court | Florida District Court of Appeals |
Christopher P. Hahn of Maurice Wutscher LLP, Miami, for appellant/cross-appellee.
Terrence P. O'Connor of Morgan, Carratt and O'Connor, Fort Lauderdale, for appellees/cross-appellants David G. Withum and Jessica A. Withum.
Appellant Bank of New York Mellon ("Bank") appeals the trial court's final order in favor of appellees David and Jessica Withum ("Borrowers"). After a non-jury trial, the trial court entered judgment for Borrowers because Bank failed to satisfy the condition precedent of complying with Paragraph 22 of the mortgage. For the reasons stated herein, we reverse.
After Borrowers' defaulted on their mortgage, Bank sent them a breach letter of acceleration pursuant to Paragraph 22 that included the date by which Borrowers had to cure the outstanding amount before Bank could accelerate the note. Several months later, after Borrowers made a few partial payments, Bank sent them three separate notices of acceptance of partial payment for each payment received, with each stating a different amount needed to cure. All of the partial payment notices referred to the same acceleration date contained in the initial breach letter of acceleration. The partial payment notices also informed Borrowers that Bank would accelerate the note and initiate foreclosure proceedings if Borrowers did not satisfy the total amount due.
There is no dispute that Borrowers' partial payments were less than the total amount needed to bring the loan current. Bank initiated foreclosure proceedings and the case went to trial. At the conclusion of the non-jury trial, the court entered a final order that, in its entirety, stated, The court later denied Bank's motion for rehearing or in the alternative for a new trial. This appeal followed.
A trial court's construction of notes and mortgages are pure questions of law subject to de novo review. Cleveland v. Crown Fin., LLC, 183 So.3d 1206, 1209 (Fla. 1st DCA 2016).
The trial court's judgment was based on its stated assumption that, under Paragraph 22 of Borrowers' mortgage, Bank was required to send a new Paragraph 22 notice each time it accepted a partial payment. Paragraph 22 of the subject mortgage provided, in relevant part:
If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding.
(Emphasis added).
Further, each partial payment notice also contained the following language:
Bank of America, N.A. reserves the right to accept or reject a partial payment of the total amount due without waiving any of its rights herein or otherwise. For example, if less than the full amount that is due is sent to us, we can keep the payment and apply it to the debt but still proceed to foreclosure since the default would not have been cured.
This language is consistent with Paragraph 1 of the mortgage, which provided, in relevant part:
Lender may accept any payment or partial payment insufficient to bring the Loan current, without waiver of any rights hereunder or prejudice to its rights to refuse such payment or partial payments in the future, but Lender is not obligated to apply such payments at the time such payments are accepted.
(Emphasis added).
In entering final judgment for Borrowers, the trial court ruled that Bank did not comply with Paragraph 22 because the various notices received by Borrowers were confusing when considered together and did not adequately inform Borrowers of the necessary steps to cure. We disagree.
"The essential purpose of the requirement that a notice letter ‘specify ... the action required to cure the default’ " is to "ensure[ ] that the borrower is informed of the lender's determination of what the borrower must do to bring the loan out of default." Green Tree Servicing, LLC v. Milam, 177 So.3d 7, 18 (Fla. 2d DCA 2015). "[A] notice of default need only substantially comply with a mortgage's condition precedent." Lopez v. JPMorgan Chase Bank, 187 So.3d 343, 345 (Fla. 4th DCA 2016).
As to the trial court's stated assumption that Bank was required to send a new acceleration notice every time it accepted a partial payment even if the principal amount due was never made current, this court has held that, depending on the mortgage's language, a bank can comply with ...
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