Lopez and Sardinas v. Jpmorgan Chase Bank
207 So. 3d 294
Fla. Dist. Ct. App.2016Background
- In 2006 Chase Bank loaned Borrowers $214,139.85 secured by a mortgage on their Miami condominium; payments defaulted beginning May 1, 2009.
- On October 10, 2012 Chase sent a breach/acceleration notice under paragraph 22 that allowed 35 days to cure (until Nov. 14, 2012).
- Chase filed a foreclosure complaint on October 30, 2012 — before the 30+ day cure period in paragraph 22 had run.
- Chase’s complaint pled only foreclosure (no separate count for money damages on the promissory note); Chase later assigned the loan to Bayview and Bayview was substituted as plaintiff.
- The trial court found Chase/Bayview failed to comply with paragraph 22 (a condition precedent), dismissed the foreclosure claim without prejudice, but nonetheless entered a final money judgment for Bayview on the note for the fully accelerated amount ($294,685.09).
- The Third District reversed: because the lender failed to satisfy the mortgage’s notice condition precedent, the foreclosure action (and the unpled alternate money judgment) must be dismissed with prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a lender may obtain a money judgment on the note after the trial court finds the lender failed to comply with the mortgage notice condition precedent to foreclosure | Bayview argued the trial court could still recover past-due installments / money damages despite noncompliance with paragraph 22 | Borrowers argued noncompliance with the mortgage’s notice provision precludes foreclosure and any acceleration-based recovery; unpled note damages cannot be adjudicated | Court held the trial court erred: factual finding of noncompliance required dismissal of the foreclosure case and precluded entry of the unpled money judgment |
| Whether the lender can challenge the trial court’s finding of noncompliance on appeal without filing a cross-appeal | Bayview argued it may contest the trial court’s finding now | Borrowers noted Bayview did not file a cross-appeal to challenge the adverse factual finding | Court held Bayview cannot raise that challenge because it failed to file a cross-appeal; the finding stands for purposes of this appeal |
| Whether dismissal should be with prejudice and whether the lender is barred from later foreclosure on a new default | Bayview implicitly argued dismissal without final prejudice was appropriate and did not bar future actions | Borrowers argued the noncompliance required dismissal that precludes the adjudicated relief | Court directed reversal and remand for involuntary dismissal with prejudice; concurrence notes lender may still pursue a new foreclosure on a subsequent, separate default per controlling law |
Key Cases Cited
- Miller v. Bank of N.Y. Mellon, 189 So.3d 359 (Fla. 4th DCA 2016) (trial court’s finding of lender noncompliance with mortgage notice required complete dismissal)
- Holt v. Calchas, LLC, 155 So.3d 499 (Fla. 4th DCA 2015) (lender’s failure to prove compliance with mortgage notice provision warrants dismissal of entire case)
- Webb Gen. Contracting, Inc. v. PDM Hydrostorage, Inc., 397 So.2d 1058 (Fla. 3d DCA 1981) (cross-appeal required to challenge favorable trial-court rulings that do not fully benefit appellee)
- Deutsche Bank Trust Co. Americas v. Beauvais, 188 So.3d 938 (Fla. 3d DCA 2016) (lender not necessarily barred from subsequent foreclosure based on a later default)
- Bank of N.Y. Mellon v. Reyes, 126 So.3d 304 (Fla. 3d DCA 2013) (trial court should not adjudicate unpled claim for breach of promissory note)