DCA FINDS | Key Points

  1. The Fourth DCA reversed an involuntary dismissal of a Pinellas County, Florida mortgage foreclosure action finding the bank did in fact satisfy conditions precedent contrary to the trial court’s finding otherwise. HSBC Bank USA, N.A. as Tr. for Registered Holders of Renaissance Equity Loan Asset-Backed Certificates, Series 2007-3 v. Leone, 2D17-2851, 2019 WL 1967650, at *1 (Fla. 2d DCA May 3, 2019). Following the dismissal of the bank’s first foreclosure action, the trial court dismissed the bank’s second action finding the bank improperly relied upon the default notice sent to the borrowers prior to the initiation of the first foreclosure. The trial court reasoned a new default notice was required “because the amount due to cure the default would be much higher than the one stated in the prior default notice.”
  2. The bank appealed the order of dismissal and the Fourth DCA reversed finding that the bank’s initial default notice was sufficient to satisfy conditions precedent. The Court cited several provisions of the mortgage to support its conclusion that the plain language of the mortgage created no obligation to redemand after dismissal without prejudice of the bank’s first foreclosure. Notably, the mortgage indicated if the default was not cured after demand the bank could require “immediate payment in full…without further demand and may foreclose…by judicial proceeding.”
  3. The Court, quoting Sill, concluded that requiring a second notice of default “would serve no practical purpose” when a borrower fails to cure the default between receipt of the default notice, dismissal of the first foreclosure without prejudice and the filing of a second foreclosure complaint. This ruling is a welcomed development on the issue of the bank’s contractual requirement to satisfy conditions precedent and should serve to reduce litigation on this heavily contested issue.

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