Oriental Bank v. Colon Llodrat, Fernando Luis
KLCE202500080
Tribunal De Apelaciones De Pue...Mar 25, 2025Background
- Oriental Bank sought to collect on a mortgage note and execute a residential mortgage against Fernando Luis Colón Llodrat and Jomarys Flores Colón after default on payments.
- The debt originated from a $110,000 mortgage loan executed in November 2010; the note was initially with BBVA and later acquired by Oriental Bank.
- Following default in October 2020, Oriental Bank declared the full balance due and initiated judicial proceedings.
- The matter was referred to mediation, and Jomarys Flores Colón pursued loss mitigation options; mediation failed to reach agreement.
- The lower court ordered the bank to enter into a mortgage modification agreement with Flores Colón, authorizing the court's marshal to sign for Colón Llodrat (who was in default and had not consented).
- Oriental Bank petitioned for certiorari, arguing the lower court erroneously ordered the modification without unanimous consent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the court can order a mortgage modification without all co-borrowers' consent | Colón Llodrat did not consent to the modification; contracts require mutual assent | Flores Colón sought to retain the property through modification and asked for the marshal to sign on Colón's behalf | Court cannot compel a contract modification without full consent; resolution reversed |
| If mediation failure precludes court-ordered modification | No agreement was reached, so no contract exists to enforce | Failure in mediation should not block Flores Colón's chance to modify | No agreement means no basis for compelled modification |
| Validity of authorizing marshal to sign legal instruments for absent/deafaulting borrower | Representation inappropriate absent actual authorization or consent | Marshal’s action justified by practical need to finalize modification | No legal foundation for representation without power of attorney or consent; action invalid |
| Enforceability of modifications in the absence of consent under contract law | Consent is a contractual necessity for validity; lack of it renders a contract void | Practicalities sometimes justify court intervention to preserve property | Principle of consent is non-negotiable; absent that, modification is not enforceable |
Key Cases Cited
- Caribbean Orthopedics v. Medshape et al., 207 DPR 994 (Puerto Rico 2021) (outlining the certiorari standard for reviewing interlocutory orders)
- NHIC et al. v. García Passalacqua et al., 206 DPR 105 (Puerto Rico 2021) (discusses sources of contractual obligation)
- Aponte Valentín et al. v. Pfizer Pharm., LLC, 208 DPR 263 (Puerto Rico 2021) (on requirements for contract formation in Puerto Rico: consent, object, and cause)
- Romero v. S.L.G. Reyes, 164 DPR 721 (Puerto Rico 2005) (stressing consent as essential to contract validity, including mortgage modifications)
- Pérez v. Tribunal de Distrito, 69 DPR 4 (Puerto Rico 1948) (describing the cautious use of certiorari as an extraordinary remedy)