Marchelos v. Adao
Decision Date | 28 April 2021 |
Docket Number | No. 4D18-1873,4D18-1873 |
Citation | 316 So.3d 737 |
Parties | Elias MARCHELOS and Martha Marchelos, Appellants, v. Amilcar J. ADAO, Appellee. |
Court | Florida District Court of Appeals |
Gregory P. Borgognoni of Borgognoni Law, P.L., Coral Gables, and Robert Fast of The Fast Law Firm, Fort Lauderdale, for appellants.
Marc Edward Rosenthal, Paul David Edwards, Casey Ryan Cummings, and Joseph Thomas Dunn of Rosenberg Cummings & Edwards PLLC, Fort Lauderdale, for appellee Amilcar J. Adao.
The borrowers appeal from the circuit court's final order dismissing their counterclaim against the lender for civil usury arising from a 2004 promissory note which the borrowers executed in the lender's favor. The borrowers argue the note's pre-default interest, when combined with the note's post-default interest, yielded an effective interest rate exceeding the maximum interest rate permitted under Florida law. The borrowers’ argument relies upon the lender's indebtedness affidavit, which claimed that, upon the borrowers’ default, the note permitted the lender to compound the interest owed.
We affirm the circuit court's final order. Before providing our reasoning, we first recognize the borrowers correctly argue that the note's terms did not permit the lender to compound the interest owed on the principal. See Morgan v. Mortg. Disc. Co. , 100 Fla. 124, 129 So. 589, 590 (1930) ( ); Cohen v. Jain , 219 So. 3d 100, 100 (Fla. 3d DCA 2017) ().
However, the lender's incorrect interpretation of the note does not alter the note's terms. A mere demand for usurious interest, unjustified by any contractual requirement to pay it, does not render the loan itself usurious. McTigue v. Am. Sav. & Loan Ass'n of Fla. , 344 So. 2d 254, 255 (Fla. 4th DCA 1977). As our supreme court recognized in Home Credit Co. v. Brown , 148 So. 2d 257 (Fla. 1962) :
[C]omputations under the usury law must be based on a determination of the scope of acceleration rights which a note or contract purports to give a lender or holder and not upon the sums actually claimed by [the lender or holder]. This follows necessarily from the principle that the vice of usury is one which inheres in the parties’ agreement itself.
Id. at 260 ; see also McTigue , 344 So. 2d at 256 ().
Here, the note itself was not usurious. The note provided, in pertinent part:
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