Citibank Intern. v. Mercogliano

• Decision Date: 12 February 1991
• Docket Number: Nos. 90-953,90-382,s. 90-953
• Citation: 16 Fla. L. Weekly 470,574 So.2d 1190
• Parties: 16 Fla. L. Weekly 470 CITIBANK INTERNATIONAL, Appellant, v. Diane V. MERCOGLIANO, Appellee.
• Court: Florida District Court of Appeals

Page 1190

574 So.2d 1190

16 Fla. L. Weekly 470

CITIBANK INTERNATIONAL, Appellant, v. Diane V. MERCOGLIANO, Appellee.

Nos. 90-953, 90-382.

District Court of Appeal of Florida,

Third District.

Feb. 12, 1991.

Rehearing Denied March 14, 1991.

Shutts & Bowen, and Pamela J. Reynolds, Miami, for appellant.

Truman A. Skinner, Miami, for appellee.

Before HUBBART, BASKIN and LEVY, JJ.

LEVY, Judge.

Citibank International appeals an adverse summary judgment in its foreclosure action which involved a note and mortgage executed by appellee, Diane V. Mercogliano, as a payback for funds which had been embezzled from Citibank by a friend of Mercogliano. Mercogliano had purchased a home using, in part, embezzled funds in the form of a check made payable directly to the seller for the sum of $70,987.93. The check was a Citibank manager's check, endorsed by one Elmer Figueroa, who was an officer of Citibank and a friend of Mercogliano. The check represented funds which had been embezzled from Citibank by Figueroa.

Citibank eventually traced the funds, and contacted Mercogliano to notify her of the embezzlement and to discuss payback of the funds. Mercogliano executed a promissory note and second mortgage on her property, in favor of Citibank, stating that she felt a moral obligation to pay back the money. In consideration for the note and mortgage, Citibank stopped its investigation regarding the embezzlement as it pertained to Mercogliano and, furthermore, did not pursue any civil legal remedy against her.

Thereafter, Mercogliano defaulted on the note and Citibank filed a foreclosure action. Mercogliano answered and claimed the affirmative defense of lack of consideration. She also counterclaimed for rescission under the Federal Truth in Lending Act and Regulation Z. The trial court entered summary judgment in favor of Mercogliano, both on the foreclosure action and on her counterclaim for rescission, and awarded her attorney's fees and costs pursuant to her claim under the Federal Truth in Lending Act.

Because there was forbearance by Citibank in connection with Mercogliano, we find that the trial court erred in ruling that there was a lack of consideration sufficient to enforce the promissory note and mortgage. It is well settled Florida law that forbearance from pursuing a legal remedy, where the promisee has a bona fide belief that a viable legal right exists, constitutes valid consideration for an agreement which benefits the promisor. Henderson v. Kendrick, 82 Fla. 110, 89 So. 635 (1921); Matey v. Pruitt, 510 So.2d 351 (Fla. 2d DCA 1987), rev. denied, 518 So.2d 1276 (Fla.1987) and 520 So.2d 585 (Fla.1988); Shay v. First Federal of Miami, Inc., 429 So.2d 64 (Fla. 3d DCA 1983); Lea v. Suhl, 417 So.2d 1179 (Fla. 2d DCA 1982); Alpha Electric Supply, Inc. v. Drake Contracting, Inc., 407 So.2d 363 (Fla. 5th DCA 1981); Uwanawich v. Gaudini, 334 So.2d 116 (Fla. 3d DCA 1976), cert. denied, 341 So.2d 1086 (Fla.1976); City of Valparaiso v. Long, 141 So.2d 334 (Fla. 1st DCA 1962). Even if the legal right is of doubtful validity, it can still constitute valid consideration sufficient to support a contract or promise where the promisee has a bona fide belief of a fair chance of success in the lawsuit. Henderson v. Kendrick, 82 Fla. at 110, 89 So. at 635. Furthermore, it is not necessary that the forbearance be promised or mentioned expressly in the language of the agreement. Boymer v. Birmelin, 227 So.2d 358 (Fla. 3d DCA 1969). As this Court stated in Boymer v. Birmelin, 227 So.2d at 362:

It is well recognized that forbearance to enforce a legal right may constitute...