Green Tree Servicing, LLC v. Milam

177 So.3d 7

GREEN TREE SERVICING, LLC, Appellant,

v.Erin C. MILAM and William Brett Milam, Appellees.

No. 2D14–660.

District Court of Appeal of Florida, Second District.

July 29, 2015.

Rehearing Denied Oct. 13, 2015.

Kimberly Hopkins of Shapiro, Fishman & Gaché, LLP, Tampa, for Appellant.

Mark P. Stopa of Stopa Law Firm, Tampa, for Appellees.

SALARIO, Judge.

Green Tree Servicing, LLC, appeals from a final summary judgment entered in favor of borrowers Erin and William Milam in a residential foreclosure action. Green Tree is a mortgage servicer that was substituted as plaintiff in place of National City Mortgage, the Milams' original mortgage lender. The appeal centers on whether, before filing the complaint, National City complied with paragraph twenty-two of the mortgage, which required that it notify the Milams of their default on the note and their rights in connection with that default. The trial court granted the Milams' motion for summary judgment because it found that National City failed to inform them of their right to reinstatement and to contest default and assert defenses in any foreclosure litigation. We disagree, hold that the default notice substantially complied with paragraph twenty-two, and reverse.

I.

A.

On May 16, 2007, the Milams borrowed $318,250 from National City to finance the purchase of a residence in Tampa. That debt was evidenced by a note and secured by a mortgage on the property. Regular payments of principal and interest were due to be received at an address specified in the mortgage on the first of each month, and failure to make payment as required was deemed a default on the note and mortgage. In the event of a default, National City had the right to accelerate payment of all sums due under the note—i.e., to demand immediate payment of the full amount of principal and interest—and foreclose on the mortgage.

Notwithstanding acceleration or foreclosure, the mortgage entitled the Milams to reinstate their mortgage if they fulfilled certain conditions. Those conditions included (1) paying all sums due under the mortgage as if no acceleration had occurred; (2) paying all expenses incurred by National City in enforcing the mortgage; and (3) taking any other actions National City reasonably required to ensure that its rights remain unchanged.

Before National City could accelerate or foreclose, it was required to give thirty days' written notice to the Milams. Paragraph twenty-two of the mortgage states that:

Lender shall give notice to Borrower prior to acceleration following Borrower's breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the Property. The notice shall further inform Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding.

The Milams failed to make their November 1 and December 1, 2008, mortgage payments. On December 10, 2008, National City sent a letter to the Milams demanding that they cure the default within thirty days—by January 9, 2009. It read, in relevant part, as follows:

[I]t is our duty to notify you that you have breached or defaulted in the performance of your obligation under the Note and Mortgage evidencing and securing your loan in the following respect:

* Monthly installment payments have not been made including the payment for November 1, 2008.

The action required to cure the breach or default mentioned above on or before January 09, 2009 is as follows:

* Payment in certified funds of $9,683.75 which includes the 111/2009 [sic] installment and applicable late charges, property inspection and non-sufficient funds fees.

Failure to cure the breach or default by said date, will result in the acceleration of the maturity date of the No [sic], in the declaration that all sums secured by the Deed of Trust are immediately due and payable, and in this matter being referred to our attorney for whatever action is deemed appropriate and necessary. Should a foreclosure commence, with a resultant sale of the property, you may be liable for any deficiency balance, as provided by law.

After acceleration you may still have the right to reinstate by paying all amounts due, as provided in your Note and Mortgage, and all NCM's expenses, including reasonable attorney's fees. You may also have the right to assert, in a foreclosure or other judicial proceeding, the non-existence of default or any other defense you may have to acceleration and foreclosure.

(Emphasis added.) The Milams did not comply.

B.

On February 23, 2009, National City filed a foreclosure complaint in the circuit court. On April 8, 2009, after the Milams failed to appear, the clerk entered a default against them. On December 9, 2009, the mortgage was assigned to Green Tree Servicing, LLC, which was thereafter substituted as the plaintiff.

On October 19, 2010, after receiving notice of a hearing on a motion for final summary judgment filed by Green Tree, the Milams appeared and moved to set aside the clerk's default. Green Tree did not oppose the motion, which the circuit court granted on October 25, 2010. The Milams thereafter filed an answer in which they made a general denial of all allegations of the complaint and asserted eight affirmative defenses, including that National City failed to give proper notice prior to filing the foreclosure suit. Over the next eighteen months, the Milams changed lawyers and litigated, among other things, the parties' mediation rights and obligations, discovery, and a motion for summary judgment and for sanctions asserting discovery misconduct by National City and Green Tree, which the circuit court denied.

On March 25, 2013, the Milams changed lawyers a second time, and their new counsel filed a second answer. This answer contained specific denials of all material allegations of the complaint, including a denial of the complaint's allegation that all conditions precedent to suit had been fulfilled or had occurred. That denial also alleged that National City failed to give notice of the alleged default and an opportunity to cure as required by paragraph twenty-two.

On December 3, 2013, the Milams filed a motion for summary judgment alleging that National City failed to comply with the notice requirements of paragraph twenty-two before filing suit. In particular, they asserted that National City's December 10, 2008, notice letter failed (1) to specify the default; (2) adequately to apprise the Milams of their right to reinstatement; and (3) to state where payment should be sent.

At a hearing on the motion on January 9, 2014, without objection from National City, the Milams added to this list allegations that the notice improperly included the Milams' January 1, 2009, mortgage payment, which was not due at the time notice was sent, in the sum the notice required to be paid and failed to apprise them of their right to assert the nonexistence of a default and other defenses in a foreclosure suit, stating only that they may have that right. The circuit court announced that, while "I think I can live with" most of the defects alleged by the Milams, the failure to apprise the Milams of their rights to reinstatement and to defend foreclosure proceedings was fatal. It entered an order granting the motion and dismissing the complaint without prejudice. This appeal timely followed.

II.

Summary judgment is proper where the movant conclusively demonstrates the absence of any genuine issue of material fact, a matter we review de novo. Laurencio v. Deutsche Bank Nat'l Trust Co., 65 So.3d 1190, 1192 (Fla. 2d DCA 2011). The notice requirement of paragraph twenty-two, a standard mortgage provision, is a condition precedent to be satisfied by the lender prior to filing a foreclosure suit. Konsulian v. Busey Bank, N.A., 61 So.3d 1283, 1285 (Fla. 2d DCA 2011). The question, then, is whether there is any genuine issue as to whether National City's December 10, 2008, letter satisfied that contractual condition such that it was entitled to file a foreclosure action. We turn first to the legal standard governing that question.

In this case, there is no dispute that National City delivered a paragraph twenty-two notice or that the notice provided thirty days to respond. Nor is there a dispute that the letter spoke to each of the five items in paragraph twenty-two: It stated (1) the default (nonpayment); (2) the action required to cure it (payment of $9683.75, which included the past due payments, the next payment, and certain fees and charges); (3) a date certain thirty days out by which the default was required to be cured (January 9, 2009); (4) the fact that failure to cure may result in acceleration and foreclosure; and (5) the Milams' rights to reinstatement and available defenses. The issues presented by the Milams go not to whether the letter spoke to each of paragraph twenty-two's requirements but rather to whether what National City said was sufficient to satisfy them.

The Milams do not assert that they suffered any harm as a result of any deficiency in National City's notice letter, and they acknowledge that some of what they assert "might sound technical." Their position is that precision in...