Green Tree Servicing, LLC v. Milam
177 So. 3d 7
Fla. Dist. Ct. App.2015Background
- In 2007 the Milams executed a note and mortgage with National City; they missed the November and December 2008 payments.
- National City sent a paragraph 22 pre-acceleration notice on December 10, 2008, giving 30 days to cure and stating a cure amount of $9,683.75 (which included the January 1, 2009 payment and fees) and that borrowers "may" have rights to reinstatement and to assert defenses.
- National City filed foreclosure in February 2009; a clerk's default was entered, later set aside, and Green Tree (assignee) was substituted as plaintiff in 2009.
- The Milams defended and later moved for summary judgment (Dec. 2013), arguing the paragraph 22 notice failed to: specify the default, accurately state cure amount, state where to send payment, and properly inform them of the right to reinstatement and to assert defenses.
- The trial court granted summary judgment for the Milams, finding the notice’s use of "may" as to reinstatement and defenses fatal; Green Tree appealed.
Issues
| Issue | Plaintiff's Argument (Milams) | Defendant's Argument (Green Tree/National City) | Held |
|---|---|---|---|
| Whether paragraph 22 notice must be strictly precise or may be judged by substantial compliance | Notice must strictly comply with mortgage language (e.g., use "right" not "may"); material deviations void suit | Substantial compliance with paragraph 22 is sufficient where deviations are immaterial | Court: Apply substantial compliance; strict compliance not required; evaluate materiality |
| Whether using the word "may" improperly informed borrowers about right to reinstatement | "May" understates an absolute right to reinstate and fails to inform borrowers | Reinstatement is conditional under mortgage, so "may" accurately reflects contingent right | Court: Use of "may" was proper and substantially complied with paragraph 22 (Busquets controlling) |
| Whether using "may" twice left borrowers uninformed of absolute right to assert defenses in foreclosure | Second "may" suggested borrowers lacked an absolute right to assert defenses in court | The notice conveyed that borrowers could contest default and defenses if they had a basis; it served paragraph 22’s purpose | Court: Although second "may" was inartful, letter substantially complied and conveyed needed information; not fatal |
| Whether other alleged defects (unspecified missed payments, inclusion of Jan. payment, no payment address) defeated notice | Letter failed to "specify the default" (not listing each missed payment), incorrectly demanded a not-yet-due Jan. payment, and didn’t state mailing address | Letter identified nonpayment and first missed installment, disclosed inclusion of Jan. payment, provided phone number and mortgage directs where to send payments; these are immaterial or easily ascertainable | Court: These variations were immaterial; letter substantially complied and did not bar foreclosure |
Key Cases Cited
- Laurencio v. Deutsche Bank Nat'l Trust Co., 65 So. 3d 1190 (Fla. 2d DCA) (summary judgment standard)
- Konsulian v. Busey Bank, N.A., 61 So. 3d 1283 (Fla. 2d DCA) (paragraph 22 is condition precedent)
- U.S. Bank Nat'l Ass'n v. Busquets, 135 So. 3d 488 (Fla. 2d DCA) (using "may" for contingent reinstatement right is proper)
- Casa Linda Tile & Marble Installers, Inc. v. Highlands Place 1981 Ltd., 642 So. 2d 766 (Fla. 4th DCA) (definition of substantial performance)
- Singleton v. Greymar Assocs., 882 So. 2d 1004 (Fla. 2004) (res judicata/continuing default discussion)
- Fid. Bank v. Krenisky, 807 A.2d 968 (Conn. App. Ct.) (substantial compliance with notice requirement sufficient)