Flagler Center Bldg. Loan Corp. v. Chemical Realty Corp.

• Decision Date: 13 June 1978
• Docket Number: 77-1825 and 77-1826,Nos. 77-1659,s. 77-1659
• Citation: 363 So.2d 344
• Parties: FLAGLER CENTER BUILDING LOAN CORP., a Florida Corporation, Appellant, v. CHEMICAL REALTY CORPORATION, a New York Corporation, et al., Appellee.
• Court: Florida District Court of Appeals

Page 344

363 So.2d 344

FLAGLER CENTER BUILDING LOAN CORP., a Florida Corporation, Appellant, v. CHEMICAL REALTY CORPORATION, a New York Corporation, et al., Appellee.

Nos. 77-1659, 77-1825 and 77-1826.

District Court of Appeal of Florida, Third District.

June 13, 1978.

Rehearing Denied Nov. 3, 1978.

Sibley, Giblin, Levenson & Glaser, Miami Beach, Joseph Pardo, Miami, for appellant.

Gunster, Yoakley, Criser, Stewart & Hersey and Leigh E. Dunston, Palm Beach, Leland E. Stansell, Jr., Miami, for appellee.

Before HAVERFIELD, C. J., and PEARSON and HENDRY, JJ.

PER CURIAM.

These appeals are from a final judgment foreclosing a construction loan mortgage and from two post-judgment orders. The principal issue presented on the appeal from the final judgment is whether the trial court properly found the mortgage in default. On the interlocutory appeals, the question is whether the trial court had jurisdiction to enter the orders after an appeal had been taken from the Final Judgment. Defendant Flagler Center Building Loan Corp. was the borrower and is the appellant here. Plaintiff Chemical Realty Corporation was the lender and is appellee here. Chemical Realty has filed cross-assignments contending that the amount of the debt found due and owing is less than the true amount and that a finding of waiver of the default for failure to meet the completion date for the building is not supported by the record. Other points presented on the appeal and by the cross-assignments must also be decided.

A construction loan and mortgage was entered into between the parties. In December, 1972, Chemical Realty agreed to provide cash for construction up to $6,000,000.00 to build the Flagler Center Building in downtown Miami. At the time the loan was made, Flagler Center had secured a commitment for long term, permanent financing from Barnett Winston Investment Trust for $6,000,000.00.

By the terms of the construction loan mortgage, the completion date was set for November 30, 1974, ¹ and default would occur should this date not be met. The commitment for the long term mortgage required a completion date of December 31, 1974. ² The building was not completed by November 30, 1974. Chemical Realty continued to make advancements of funds under the construction loan agreement during December of 1974. The building was not completed by December 31, 1974. On February 25, 1975, Chemical Realty funded a draw against the $6,000,000.00 construction loan fund. This last funding brought the total amount drawn by Flagler Center to $4,909,909.07. There was, therefore, a difference of $1,090,090.93 between the maximum amount agreed to be advanced for construction and the amount actually advanced by Chemical Realty.

Chemical Realty filed its complaint for foreclosure on May 6, 1975, and claimed defaults of the mortgage and note as follows: (a) that the principal balance together with interest was due by the terms thereof; (b) that Flagler Center had failed to complete the building on or before the November 30, 1974, completion date; (c) that Flagler Center had failed to keep the commitment of the long term lender in full force and effect as covenanted in the building loan agreement.

Thereafter, in July of 1975, the trial court appointed William L. Pallot as receiver for Flagler Center. After three days of trial, the court found that the bank had waived the default. ³ Nevertheless, the trial court found that the mortgage should be foreclosed and proceeded to "balance the equities" by providing for a remission of interest in the loan from February 25, 1975, to the date of the sale, postponement of the foreclosure sale for ninety days and, finally, made a provision for the further extension of the redemption period if Flagler Center could make definite arrangements for refinancing. ⁴

Flagler Center filed its notice of appeal from the final judgment of foreclosure on July 27, 1977. On August 2, 1977, the trial court entered an amended final judgment of foreclosure. The following changes were made: (1) the foreclosure sale date was reset to September 22, 1977; (2) an award of $184,926.69 to the receiver and his attorneys as fees and costs was specified; (3) co-conservators for the property were appointed; (4) a special master for the determination of mechanic's and materialmen's liens was appointed; and (5) the sum of $225,000 for receiver's certificates and interest on these certificates was added to the mortgage debt and held to be necessary in order to protect the building. On August 5, 1977, the trial court entered a supplemental order "reflecting additional debt and new sale date" which specifically provided for the adding of the $225,000 for receiver's certificates to the mortgage debt. On August 22nd, Flagler Center filed a notice of appeal from the amended final judgment. On August 22nd, the defendant also filed its notices of interlocutory appeal from the last mentioned supplemental order. The appeals were consolidated for all appellate purposes.

The initial question presented by Flagler Center is whether a trial court can find a waiver of default and, at the same time, foreclose the mortgage as though there were a default. Chemical Realty responds in two ways. First, it urges that the finding of waiver applied only to the claimed default for failure to complete the building by November 30, 1974. Secondly, it urges that the evidence does not support the trial court's finding of a waiver of default in the mortgage. A waiver of a default requires action by the mortgagee which misleads the mortgagor so that the mortgagor acts in a way that he would not have acted if he had known that the mortgagee would require performance under the strict terms of the mortgage agreement. See Kreiss Potassium Phosphate Co. v. Knight, 98 Fla. 1004, 124 So. 751 (1929); New England Mutual Life Insurance Company v. Luxury Home Builders, Inc., 311 So.2d 160 (Fla. 3d DCA 1975); and Harrell v. Lombard, 122 So.2d 625 (Fla. 2d DCA 1960).

The trial judge's finding of fact that there was an estoppel by waiver of the default in the mortgage is a finding of fact which arrives in this court with a presumption of its correctness. Further, for this court to reverse such a finding of fact, there must be a lack of substantial evidence to support the finding. See Chakford v. Strum, 87 So.2d 419 (Fla.1956); Manchester Insurance & Indemnity Co. v. Novack, 284 So.2d 433 (Fla. 3d DCA 1973). This record reviewed in that light supports the finding of the trial judge in that it shows that in reliance upon the representations of Chemical Realty, the defendant, Flagler Center, critically changed its position by giving up the right and opportunity to complete the building by the deadline. From mid-October to mid-November when Chemical Realty knew that the building was not going to be completed on the due date and the permanent commitment was lost, Chemical Realty paid to the defendant $560,732.54, a sum that would reasonably lead the defendant to believe that the loan was continued in full force and effect.

The position of Chemical Realty that the waiver was void because there was no consideration for it, is not in accord with Florida law. In Gilman v. Butzloff, 155 Fla. 888, 22 So.2d 263 (1945), the Supreme Court of Florida found that a waiver without consideration was valid when based upon conduct and when acted upon by the defendant. Cf. New England Mutual Life Insurance Company v. Luxury Home Builders, Inc., 311 So.2d 160 (Fla. 3d DCA 1975).

We hold, therefore, that the court's finding of waiver of default in the mortgage is supported by the evidence and must be affirmed. With regard to the position of Chemical Realty that the waiver concerned only a single default in the completion date, we find nothing in the record to support this position. The waiver concerned the clear right to foreclose at that time, and the evidence supports Flagler Center's position that after having waived default, Chemical Realty sought to foreclose simply because it was unable to secure a modification of the terms of the loan.

Although not made a point on appeal, Flagler Center, as appellant, has urged that the trial judge should have required the mortgagee, Chemical Realty, to pay to the defendant an amount of money equaling the difference between the actual amount advanced and the maximum amount the lender agreed to advance for construction purposes. We find no basis in this record for such a contention inasmuch as the mortgage does not require the payment of the full $6,000,000.00 unless and except it is used in the construction of the building and the formal requirements of the funding of the draw for construction purposes are complied with. The fact that Flagler Center was able to construct the building for an amount of money less than it was estimated by the parties would be required, does not obligate the lender on a construction mortgage to advance monies not required for construction purposes. ( ⁵ )

Flagler Center's second point on appeal urges that it was error for the trial judge to add the commissioner's fees and costs and the commissioner's attorney's fees and costs to the amount required from the defendant to redeem the property, because the record contains a proper stipulation that the plaintiff would pay all costs of a commissioner. Upon the subject of the commissioner's fees and costs, the trial judge made extensive provisions ( ⁶ ) but nowhere in the judgment does he refer to a stipulation concerning commissioner's costs. The question of whether the plaintiff had stipulated to pay the costs of the commissioner was presented to the trial judge by defendant's Motion to Modify Order Appointing Court Commissioner and to Require Plaintiff to Post Bond for Payment of Cost, Fees, and Expenses of Court Commissioner and Court Commissioner's Attorneys. After several hearings, the result of the motion was an Order Reserving Judgment on Motion to Clarify. No further ruling appears...