Mariposa Associates, Ltd. v. Regions Bank
696 F. App'x 438
| 11th Cir. | 2017Background
- Mariposa obtained a $2.8M St. Lucie loan from AmSouth (now Regions) in 2005, secured by a mortgage on a 9.88-acre trailer-park site (St. Lucie Property); the promissory note gave Regions unilateral rights to release or substitute collateral and to sell the loan.
- Regions separately made a $10.4M Miami-Dade loan to entities controlled by Mariposa’s principals, secured by ~46 acres including an 8-acre outparcel (Miami-Dade Property).
- In 2007 the parties executed a Spreader Agreement cross-collateralizing the two loans (each loan secured by first lien on its property and second lien on the other).
- In June 2008 Regions and Mariposa executed a St. Lucie loan amendment (Mariposa Amendment) stating that if borrower sold an 8-acre outparcel of the “Premises” (defined in the loan as the St. Lucie Property), net proceeds would be applied to several uses, including reducing the St. Lucie loan balance; a parallel Miami-Dade Amendment tied proceeds of sale of the Miami-Dade outparcel to the Miami-Dade loan.
- Regions sold the St. Lucie note and its security to a third-party investor in Sept. 2008 and released the Miami-Dade Property as collateral for the St. Lucie Loan; Regions later foreclosed on the Miami-Dade Property, sold it short in 2009, and applied sale proceeds to satisfy the Miami-Dade loan. Mariposa defaulted; the St. Lucie note purchaser obtained judgment against Mariposa.
- Mariposa sued Regions for breach of the Mariposa Amendment, alleging Regions improperly released the Miami-Dade collateral and failed to apply Miami-Dade sale proceeds to the St. Lucie loan. The district court granted summary judgment for Regions; the Eleventh Circuit affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Regions breached the St. Lucie Note by releasing Miami‑Dade collateral before exhausting it | Mariposa: Regions’ release of Miami‑Dade collateral prevented proceeds from applying to the St. Lucie loan and caused Mariposa’s loss | Regions: St. Lucie Note unambiguously gives lender the unilateral right to release/substitute collateral and to sell the loan; no duty to exhaust other collateral | Court: Regions had the contractual unilateral right to release collateral; no breach as a matter of law |
| Whether the Mariposa Amendment required proceeds from sale of the 8‑acre outparcel to be applied to the St. Lucie loan | Mariposa: Amendment required application of outparcel sale proceeds to the St. Lucie loan | Regions: Amendment’s language (and cross-references) shows Premises = St. Lucie Property; Borrower (Mariposa) never sold that Premises; the clause’s "and/or" text does not mandate applying proceeds to principal first | Court: Trigger never occurred because Mariposa never sold the defined Premises (St. Lucie Property); amendment did not obligate Regions to apply Miami‑Dade sale proceeds to St. Lucie loan |
| Whether extrinsic evidence or the Miami‑Dade Amendment should alter contract interpretation | Mariposa: Parties’ intent and contemporaneous Miami‑Dade Amendment show proceeds should have cross-applied | Regions: Contract language is unambiguous; court should not consider extrinsic evidence | Court: Under Florida law, language is unambiguous; extrinsic evidence unnecessary and cannot override plain terms |
| Whether the Mariposa Amendment was enforceable against Regions absent signature by Miami‑Dade borrowers | Mariposa: Amendment created enforceable duties running to Mariposa | Regions: Amendment was in effect a mortgage affecting third‑party mortgagors who did not sign, so unenforceable | Court: Also noted as independent basis—mortgage-like amendment unsigned by mortgagors was unenforceable (district court found this ground), but affirmed mainly on plain-language grounds |
Key Cases Cited
- Ellis v. England, 432 F.3d 1321 (11th Cir.) (standard of review for summary judgment)
- Rose v. M/V "Gulf Stream Falcon", 186 F.3d 1345 (11th Cir.) (plain contract language controls under Florida law)
- Arriaga v. Fla. Pac. Farms, LLC, 305 F.3d 1228 (11th Cir.) (whether contract term is ambiguous is a question of law)
- Harris Corp. v. Giesting & Assocs., Inc., 297 F.3d 1270 (11th Cir.) (de novo review of contract ambiguity)
- Frulla v. CRA Holdings, Inc., 543 F.3d 1247 (11th Cir.) (contract ambiguous only if susceptible to two reasonable interpretations)