Weiman v. McHaffie
| Decision Date | 02 May 1985 |
| Docket Number | No. 65344,65344 |
| Citation | 10 Fla. L. Weekly 253,470 So.2d 682 |
| Parties | 10 Fla. L. Weekly 253 Emil J. WEIMAN and Joyce E. Weiman, his wife, Petitioners, v. Thomas N. McHAFFIE and Jacqueline M. McHaffie, his wife, Respondents. |
| Court | Florida Supreme Court |
Ray D. Helpling of Scruggs and Carmichael, Gainesville, and Kathleen E. Gainsley of Levin, Warfield, Middlebrooks, Mabie, Thomas, Mayes and Mitchell, Pensacola, for petitioners.
H. Reynolds Sampson, Tallahassee, for respondents.
Hume F. Coleman of Holland and Knight, Tallahassee, and Maud Mater, Sr. Vice President and Gen. Counsel and Garrett C. Burke, Associate Gen. Counsel, Washington, D.C., amicus curiae for Federal Home Loan Mortg. Corp.
Nancy E. Swerdlow and Vance E. Salter of Steel, Hector and Davis, Miami, amici curiae for Mortg. Bankers Ass'n of Fla. and Federal Nat. Mortg. Ass'n.
John F. Corrigan of Ulmer, Murchison, Ashby, Taylor and Corrigan, Jacksonville, and James T. Crowley, Mark F. Kennedy and Jeffery A. Key of Thompson, Hine and Flory, Cleveland, Ohio, amicus curiae for Developers Diversified, Ltd.
We review Weiman v. McHaffie, 448 So.2d 1127 (Fla. 1st DCA 1984), because the district court of appeal certified the following question of great public importance:
IS A DUE-ON-SALE CLAUSE IN A FLORIDA MORTGAGE EXECUTED ON SEPTEMBER 8, 1980, TO A PRIVATE LENDER OR SELLER, ENFORCEABLE AS TO AN ATTEMPTED TRANSFER OCCURRING SUBSEQUENT TO OCTOBER 15, 1982, BUT BEFORE OCTOBER 15, 1985, WITHOUT A SHOWING THAT THE MORTGAGEE'S SECURITY WILL BE IMPAIRED BY THE TRANSFER?
Id. at 1129. We have jurisdiction. Art. V, § 3(b)(4), Fla. Const. We answer the certified question in the affirmative and approve in part and quash in part the decision under review.
On September 8, 1980 the McHaffies purchased a home from the Weimans, who took back a purchase money mortgage containing a due-on-sale clause. The McHaffies later attempted to sell the property when a job change forced them to leave the area. After the Weimans repeatedly refused permission for sale of the property subject to the mortgage, the McHaffies sought a declaratory judgment on the enforceability of the due-on-sale clause. The Weimans argued that the due-on-sale clause was enforceable because the Garn-St. Germain Depository Institutions Act, Pub.L. No. 97-320, preempted any existing Florida case law to the contrary. The trial court entered a declaratory judgment for the McHaffies. The district court affirmed the nonenforceability finding, in part, but on different grounds from those articulated by the trial court.
Congress enacted Garn-St. Germain to give all lenders the same due-on-sale clause enforcement power as follows:
(1) Notwithstanding any provision of the constitution or laws (including the judicial decisions) of any State to the contrary, a lender may, subject to subsection (c) of this section, enter into or enforce a contract containing a due-on-sale clause with respect to a real property loan.
12 U.S.C. § 1701j-3(b) (1982). Garn-St. Germain provides a "window period" in 12 U.S.C. § 1701j-3(c) (1982) so that some states could postpone federal preemption of state law restrictions on the enforcement of due-on-sale clauses until October 15, 1985. "Window period" eligibility begins
on the date a State adopted a constitutional provision or statute prohibiting the exercise of due-on-sale clauses, or the date on which the highest court of such State has rendered a decision (or if the highest court has not so decided, the date on which the next highest appellate court has rendered a decision resulting in a final judgment if such decision applies State-wide) prohibiting such exercise.
Id. This "window period" eligibility closed on October 15, 1982, the effective date of Garn-St. Germain. After that date, a state without "window period" status has no right to impose any restrictions on due-on-sale clause enforcement beyond those enumerated in 12 U.S.C. § 1701j-3(d) (1982).
When this mortgage was executed in 1980, Florida case law required that a lender show an impairment of security before enforcing a due-on-sale clause. First Federal Savings & Loan Association v. Lockwood, 385 So.2d 156 (Fla. 2d DCA 1980); Clark v. Lachenmeier, 237 So.2d 583 (Fla. 2d DCA 1970). * Disagreeing with the congressional conference report, the district court found that these decisions made Florida a "window period" state under Garn-St. Germain. Therefore, the court concluded that the federal preemption of state restrictions on the enforcement of due-on-sale clauses by institutional and private lenders will not take effect in Florida until three years after the October 15, 1982 effective date of Garn-St. Germain. The district court remanded for the trial court to determine whether a proposed sale would impair the Weimans' security.
The Weimans and amici curiae contend that the district court erred in finding Florida to be a "window period" state as defined in Garn-St. Germain. They also argue that we should disapprove on public policy grounds those district court decisions requiring a lender to show impairment of security before a due-on-sale clause may be enforced. We disagree with the first point, but agree with the second.
Language in the Garn-St. Germain congressional conference report indicated that Florida would not be a "window period" state because the district court decisions on this issue did not have statewide application. We respect the authority of legislative history in interpreting statutory language. We must, however, reject the conference report's view on the effect of a district court decision on a point of law which stands without a conflicting decision from another district court or from this Court.
The parties entered into this mortgage in 1980. At that time Florida case law required that a lender show impairment of security before foreclosure under a due-on-sale clause would be permitted. Lockwood; Clark. No conflicting district court decisions existed on this point of law. This Court had no jurisdiction to review Lockwood without decisional conflict or some other constitutional basis for review. District court decisions "represent the law of Florida unless and until they are overruled by this Court." Stanfill v. State, 384 So.2d 141, 143 (Fla.1980). Lockwood's restriction of due-on-sale clause...
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