My favorite part of this foreclosure video is around the 7:00 mark where the bank attorney asserts,
Judges in Miami won’t even listen to this argument.
Well, sorry Bankster, but many, many judges here in the western part of the state (including especially the appellate panel here who issued a written opinion) listen very carefully to this argument. (And dismiss cases based upon those defaults.)
US BANK V. JOSE BUSQUETS
U.S. Bank National Association, as Trustee for the GSAMP TRUST 2006-
NCI Mortgage Pass-through Certificates, Series 2006-NCI (the Bank),1 challenges the
trial court’s summary final judgment entered in favor of Jose Busquets in the Bank’s
foreclosure action against Busquets. In the final judgment, the trial court dismissed the
foreclosure action, concluding that the Bank failed to give proper notice before
accelerating the loan as required by the terms of the mortgage.2 The Bank argues that
the trial court erred in finding its notice of acceleration deficient. We agree and reverse.
On October 31, 2005, Busquets borrowed funds from New Century
Mortgage Corporation and executed a promissory note in favor of the lender to
represent his obligation. He also executed a mortgage on his real property in favor of
New Century to secure his obligations on the promissory note.3
The mortgage required that any notice of default and possible foreclosure
proceedings advise “that failure to cure the default on or before the date specified in the
notice may result in acceleration of the sums secured by this Security Instrument,
foreclosure by judicial proceedings[,] and sale of the property.”
Busquets ultimately became delinquent on his loan payments, and on
November 2, 2011, the Bank, through its servicing agent, sent a notice of default to
Busquets.
The Bank then filed its foreclosure complaint.
In response, Busquets filed a motion for summary judgment, arguing that
pursuant to the terms of the mortgage contract, the notice of default was deficient in five
ways. Busquets therefore maintained that the Bank had breached the mortgage
agreement. Busquets argued that the foreclosure action should be dismissed due to
the Bank’s failure to show that all conditions precedent had been accomplished.
The trial court granted summary judgment, finding that the Bank’s notice of
default was deficient in two of the ways alleged by Busquets.4 The Bank now
challenges that ruling.
On appeal, the Bank first argues that the trial court erred in finding that the
notice it provided Busquets was deficient because it only advised Busquets that the
holder of the note could institute foreclosure proceedings if the default was not cured,
whereas the mortgage required that the notice advise of the potential of foreclosure by
way of judicial proceedings. We agree.
The trial court did not address the remaining three deficiencies alleged by
Busquets, and this opinion does not address the respective merits of those claims.
“Under Florida law, contracts are construed in accordance with their plain
language, as bargained for by the parties.” Konsulian v. Busey Bank, N.A., 61 So. 3d
1283, 1285 (Fla. 2d DCA 2010) (applying this principle to the language of a mortgage).
Here, the language of the Bank’s notice meets the notice requirements set forth in the
plain language of the mortgage contract. Busquets clearly was put on notice of the
possibility of a foreclosure proceeding. And the trial court’s concern that the word
“proceeding” was not modified by the word “judicial” is misplaced because in Florida,
the only method for foreclosure is a judicial proceeding. Cf. DeSilva v. First Cmty. Bank
of Am., 42 So. 3d 285, 290 (Fla. 2d DCA 2010) (” ‘[I]n order to protect a borrower’s due
process rights, the courts have determined that a mortgagee can acquire possession
upon a default only through judicial foreclosure.’ ” (quoting Orlando Hyatt Assocs., Ltd.
v. F.D.I.C., 629 So. 2d 975, 977 (Fla. 5th DCA 1993))). See generally §§ 701.02,
702.09, Fla. Stat. (2011).
Furthermore, the language of the Bank’s notice adequately describes the
nature of the proceedings that Busquets might face. The notice states that in the
foreclosure proceeding, the lender may collect attorney’s fees and costs in addition to
the unpaid principal and interest. The notice further advises that in the foreclosure
proceeding, the mortgagee has “the right to assert in court the nonexistence of a default
or any other defense to acceleration and foreclosure.” Thus, the complete paragraph in
the Bank’s notice adequately describes the foreclosure proceeding as a judicial
proceeding, making the notice sufficient under paragraph twenty-two of the mortgage
contract. It was therefore error for the trial court to hold otherwise.
The trial court also found that because the Bank’s notice only advised
Busquets that he “may” have the right to reinstate the mortgage after acceleration, it did
not comply with paragraph twenty-two’s requirement that the notice “further inform
Borrower of the right to reinstate after acceleration.” We disagree.
Paragraph nineteen of the mortgage specifies Busquets’ right to reinstate
after acceleration by stating that “[i]f the Borrower meets certain conditions, [the]
Borrower shall have the right to have the enforcement of this Security Instrument
discontinued.” The paragraph then designates the timing for exercising this right, and it
continues by listing four conditions that must be met to be eligible to secure
reinstatement. In other words, by the plain reading of the terms of the mortgage
contract, the right to reinstatement is at best a qualified right, obtainable only after the
borrower meets the specified conditions precedent. The trial court’s reading of
paragraph twenty-two in isolation might suggest that the notice must advise Busquets of
an absolute right, but such a reading is contrary to the provisions of paragraph nineteen
and would, in effect, misadvise Busquets of his rights by advising him that he had an
absolute right in conflict with the conditional rights provision of the mortgage contract.
Furthermore, the Bank’s notice advised Busquets to review the terms of
his mortgage contract to determine the conditions under which he might be eligible for
reinstatement. Therefore, the trial court erred in finding the language of the notice
deficient in this regard.
Based on these two errors, we reverse the trial court’s final summary
judgment and remand for further proceedings consistent with this opinion.
Reversed and remanded.
