320 So.3d 904
Fla. Dist. Ct. App.2021Background:
- Reverse Mortgage Funding, LLC filed foreclosure after the borrower’s husband died, asserting the reverse mortgage became due and payable.
- The mortgage and note were nonrecourse: Borrower Orquidea Castellanos had no personal liability; Paragraph 20 of the mortgage allowed Lender to collect attorneys’ fees if Lender enforced the mortgage.
- The trial court granted summary judgment for Castellanos (relying on Smith and Palmero) and she prevailed in the foreclosure defense.
- Castellanos moved for prevailing-party fees under Fla. Stat. § 57.105(7) (reciprocity). The trial court denied fees relying on Suchman (which held nonrecourse loans bar reciprocity).
- On appeal the Third District reversed, holding that Page (and related Florida Supreme Court authority) control and § 57.105(7) makes unilateral fee clauses reciprocal even for nonrecourse loans; remanded to determine entitlement and amount of fees.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether § 57.105(7) reciprocity applies when the contract provides unilateral fees to lender on a nonrecourse loan | Lender: nonrecourse loan means borrower could never be personally liable for lender's fees, so reciprocity cannot authorize borrower to recover fees | Castellanos: statute makes unilateral fee provisions reciprocal regardless of nonrecourse language; statute addresses ability to recover, not obligation to pay | Court: § 57.105(7) applies; borrower entitled to prevailing-party fees; reversed trial court |
| Whether Suchman remains controlling authority on nonrecourse + reciprocity | Lender: Suchman bars reciprocity where loan is nonrecourse | Castellanos: Page and Ham implicitly overrule Suchman’s bar on reciprocity | Court: To extent Suchman held nonrecourse precludes § 57.105(7) reciprocity, it has been implicitly overruled by Page |
| Whether the mortgage’s fee clause satisfies the statute’s contractual-condition for reciprocity | Lender: clause does not permit Lender to recover fees from borrower personally, so reciprocity should not apply | Castellanos: Paragraph 20 clearly grants lender attorneys’ fees when enforcing the mortgage, satisfying the statute’s first condition | Court: Paragraph 20 satisfies the statutory requirement; first condition met per Page |
Key Cases Cited
- Page v. Deutsche Bank Tr. Co. Ams., 308 So. 3d 953 (Fla. 2020) (construing § 57.105(7) and holding unilateral fee clauses become reciprocal when borrower prevails)
- Ham v. Portfolio Recovery Assocs., LLC, 308 So. 3d 942 (Fla. 2020) (applies § 57.105(7) principles in debtor-creditor context)
- Suchman Corp. Park, Inc. v. Greenstein, 600 So. 2d 532 (Fla. 3d DCA 1992) (held nonrecourse loans precluded reciprocal fee awards under predecessor statute)
- Levy v. Levy, 307 So. 3d 71 (Fla. 3d DCA 2020) (describing § 57.105(7) as making prevailing-party fee provisions reciprocal)
- Smith v. Reverse Mortg. Sol., Inc., 200 So. 3d 221 (Fla. 3d DCA 2016) (treating surviving spouse who signed mortgage as a borrower)
- Heim v. Kirkland, 356 So. 2d 850 (Fla. 4th DCA 1978) (discusses effect of "no personal liability" clauses in mortgage context)