Bank of New York Mellon v. Nunez and Valdes
180 So. 3d 160
| Fla. Dist. Ct. App. | 2015Background
- Bank of New York Mellon sued Magaly Nunez and Francisco Valdes for mortgage foreclosure alleging payment default and asserting it satisfied the mortgage’s preconditions to suit.
- Paragraph 22 of the mortgage required the lender to give notice before acceleration specifying (a) the default, (b) action to cure, (c) a cure deadline at least 30 days out, (d) that failure may result in acceleration, foreclosure and sale, and (e) borrowers’ rights to reinstate after acceleration and to assert defenses.
- Defendants moved for involuntary dismissal, arguing the Bank’s Notice of Intent to Accelerate did not strictly comply with paragraph 22 and thus conditions precedent to filing were unmet.
- Bank argued strict compliance was not required and that its notice substantially complied with paragraph 22; it also contended the notice in fact met the paragraph’s requirements.
- Trial court granted dismissal without prejudice; Bank appealed asserting substantial compliance is the appropriate standard and that its notice met that standard.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a lender must strictly or substantially comply with paragraph 22 notice requirements before filing foreclosure | Bank: Substantial compliance suffices (and its notice complied) | Borrowers: Paragraph 22 requires strict compliance; notice failed that test | Court: Substantial compliance is sufficient |
| Whether the Bank’s notice met paragraph 22 | Bank: Notice specified default, cure steps, ≥30‑day deadline, warned of acceleration/foreclosure, and included post‑acceleration rights | Borrowers: Notice failed to strictly comply with all paragraph 22 terms | Court: The Bank’s notice substantially complied with paragraph 22; dismissal reversed and case remanded |
Key Cases Cited
- Konsulian v. Busey Bank, N.A., 61 So. 3d 1283 (Fla. 2d DCA 2011) (mortgage "shall" establishes conditions precedent; interpreted under ordinary contract principles)
- Allstate Floridian Ins. Co. v. Farmer, 104 So. 3d 1242 (Fla. 5th DCA 2012) (courts require at least substantial compliance with conditions precedent)
- Seaside Cmty. Dev. Corp. v. Edwards, 573 So. 2d 142 (Fla. 1st DCA 1991) (recovery for performance requires substantial compliance with condition precedent)
- Samaroo v. Wells Fargo Bank, 137 So. 3d 1127 (Fla. 5th DCA 2014) (notice failed to inform borrower of right to reinstate after acceleration)
- Haberl v. 21st Mortg. Corp., 138 So. 3d 1192 (Fla. 5th DCA 2014) (notice failed to inform borrower of reinstatement right and right to assert defenses)