Nowlin v. Nationstar Mortgage, LLC
193 So. 3d 1043
Fla. Dist. Ct. App.2016Background
- Walter and Valerie Nowlin executed a mortgage and note in 2002; BAC Home Loans Servicing filed foreclosure for alleged default beginning August 1, 2009; Nationstar later substituted as plaintiff.
- In July 2009 BAC sent a loan modification approval letter requiring signed documents returned (via a provided FedEx envelope) and three consecutive cashier's-check payments starting October 1 for the modification to become permanent.
- The Nowlins signed, notarized, and returned the modification documents via the BAC-provided FedEx envelope (shipping receipt showing shipment Aug. 17, delivery Aug. 18, 2009).
- The Nowlins made the three required payments; BAC/Nationstar cashed those checks but later claimed the modification was cancelled and accelerated the loan for the missed August 1 payment.
- At bench trial the Nowlins testified to the modification and produced documentary proof; Nationstar had no record of receiving the modification paperwork but did not dispute the FedEx evidence or that it cashed the three payments.
- The trial court entered a final judgment of foreclosure; the appellate court reversed, finding a valid modification and identifying procedural problems with the final judgment (signed by a judge who did not preside at trial).
Issues
| Issue | Plaintiff's Argument (Nowlins) | Defendant's Argument (Nationstar) | Held |
|---|---|---|---|
| Whether a valid loan modification was formed | Nowlins: BAC offered modification; they accepted by returning signed docs via BAC-provided FedEx and making three payments — forming a binding contract | Nationstar: No record of receiving signed modification documents, so acceptance never occurred; default on original loan remained | Held: Valid modification formed — mailing via authorized FedEx envelope constituted effective acceptance; cashing three payments ratified modification; foreclosure improper |
| Whether foreclosure could proceed absent proving breach of modification | Nowlins: Once modified, lender must allege breach of modification to foreclose | Nationstar: Proceed on original default (August payment) because modification was not completed/received | Held: Because modification was valid and no breach of it was proven, foreclosure could not stand |
| Whether condition-precedent clause in mortgage was satisfied | Nationstar: Claimed compliance with condition precedent justified proceeding (court relied on authority) | Nowlins: Challenged lender compliance with condition precedent | Held: Appellate court affirmed trial court as to condition-precedent issue based on existing DCA authority (no further discussion) |
| Whether the final judgment was properly entered by a judge who did not try the case | Nowlins: Judgment must be reversed if entered by a judge who didn't preside | Nationstar: No explanation in record why a different judge signed | Held: Entry of final judgment by a judge who did not hear the trial is improper; court expressed concern though reversal rested on modification issue; remanded to enter judgment for Nowlins |
Key Cases Cited
- Kendel v. Pontious, 261 So. 2d 167 (Fla. 1972) (acceptance effective upon mailing when offeror authorizes the transmission method)
- Morrison v. Thoelke, 155 So. 2d 889 (Fla. 2d DCA 1963) (acceptance is effective upon mailing where offer conditions acceptance on mailing)
- Kuehlman v. Bank of Am., N.A., 177 So. 3d 1282 (Fla. 5th DCA 2015) (lender must allege and prove breach of loan modification to foreclose)
- Green Tree Servicing, LLC v. Milam, 177 So. 3d 7 (Fla. 2d DCA 2015) (treatment of certain mortgage condition-precedent issues)
- Bank of New York v. Mieses, 187 So. 3d 919 (Fla. 3d DCA 2016) (related authority on mortgage servicing/condition precedent issues)
- Bank of New York Mellon v. Johnson, 185 So. 3d 594 (Fla. 5th DCA 2016) (related authority on mortgage servicing/condition precedent issues)