180 So. 3d 1190
Fla. Dist. Ct. App.2015Background
- GMAC (later Ocwen) filed foreclosure against Jean Delvar in 2008; Delvar alleged bank promised a loan modification that would stop foreclosure if he made specified payments.
- Delvar testified he paid $6,200 once and $2,000 monthly thereafter per the bank’s oral promise; bank testimony indicated a written modification was offered but never signed and that some 2008 payments were made under a forbearance and later refunded.
- At bench trial the court found an enforceable oral modification and entered judgment reforming the note and mortgage to require $2,000 monthly payments beginning March 1, 2014, and declared the original note/mortgage unenforceable.
- Ocwen moved to vacate, arguing the mortgage and any modification were subject to Florida’s Statute of Frauds (§725.01) and therefore required a written, signed modification.
- The trial court acknowledged the mortgage was within the Statute of Frauds but concluded a “special circumstance” (reliance/payments) made the oral modification enforceable; the Fourth District reversed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an oral modification of a mortgage that by its terms cannot be performed within one year is enforceable | Delvar: bank promised modification; he relied by making payments => modification enforceable | Ocwen: mortgage is within Florida Statute of Frauds (§725.01); any modification must be in writing and signed | Reversed: modification unenforceable under §725.01 because mortgage cannot be performed within one year and modification was not written and signed |
| Whether promissory estoppel can salvage an oral modification barred by the Statute of Frauds | Delvar: reliance on bank’s promise made enforcement equitable | Ocwen: promissory estoppel cannot be used to circumvent the Statute of Frauds | Reversed: court may not apply promissory estoppel to evade §725.01; judicial estoppel cannot override the statute |
Key Cases Cited
- DK Arena, Inc. v. EB Acquisitions I, LLC, 112 So. 3d 85 (Fla. 4th DCA 2013) (Statute of Frauds bars unwritten modifications; promissory estoppel cannot defeat statute)
- Lundstrom Realty Advisors, Inc. v. Schickedanz Bros.-Riviera Ltd., 856 So. 2d 1117 (Fla. 4th DCA 2003) (statute applies when neither party’s performance was intended to be complete within one year)
- Tanenbaum v. Biscayne Osteopathic Hosp., Inc., 190 So. 2d 777 (Fla. 1966) (promissory estoppel may not be used to circumvent the Statute of Frauds)
- Yates v. Ball, 181 So. 341 (Fla. 1937) (intent and surrounding circumstances determine whether contract falls within the one-year provision)
- Steinberg v. Kearns, 907 So. 2d 691 (Fla. 4th DCA 2005) (statute of frauds does not apply where one side can fully perform within one year)
Disposition: Reversed and remanded for further proceedings consistent with opinion.