In my August post, I discussed two cases.  In the Failla case, the Eleventh Circuit affirmed the District Court’s opinion that “once the debtor decides to ‘surrender’ secured property… [w]hile the debtor need not physically deliver the property to the secured party, the debtor is precluded from taking any action which would interfere with the secured creditor’s ability to obtain legal title to, and possession of, the property through legal means.”  Thereafter, the S.D. Bankruptcy Court held, in the Kurzban case, that “the Eleventh Circuit did not rule that a debtor’s decision to surrender lasted in perpetuity“.

As of October 1, 2018, a new statute which expands on the spirit of both the Failla and Kurzban cases will apply to all foreclosure cases filed on or after October 1, 2018.  Specifically, Senate Bill No. 220 was signed into law by Florida Governor Rick Scott this month and will become effective as Section 702.12, Florida Statutes.

Section 702.12 will streamline the foreclosure process for mortgage lenders where bankrupt borrowers have filed an intention to surrender the lender’s property, not withdrawn that intention, and the Bankruptcy Court has entered a final order either granting the bankruptcy debtor(s) a discharge, or confirming a repayment plan that provides for surrender of the property.  If these circumstances are present, the statute provides mortgage lenders with a rebuttable presumption that the borrower has waived any defenses to foreclosure.  The statute further provides that the court shall take judicial notice of Bankruptcy Court orders upon the request of lender.

While Section 702.12 is a positive new law for mortgage lenders, the advice in my August post, still applies – Do NOT sit on your rights!   Section 702.12(3), similar to the ruling in Kurzban, provides that the borrower is not precluded from raising a defense based on the mortgage lender’s action or inaction subsequent to the filing of the bankruptcy document which evidenced the borrower’s intention to surrender the mortgaged property to the mortgage lender.

  Heather L. Ries is an attorney with the Financial Restructuring and Bankruptcy Department of the law firm of Fox Rothschild LLP. Heather focuses her practice in matters related to bankruptcy, creditors’ rights, commercial workout and foreclosure disputes, and commercial litigation. You can contact Heather at 561-804-4419 or

Can a foreclosure sale be held when interrelated counterclaims remain pending?  Florida’s Second District Court of Appeal recently addressed this issue in DeLong v. Paradise Lakes Condominium Association, Inc., 2nd DCA Case No. 2D16-547 (Fla. 2nd DCA Feb. 22, 2017).

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In DeLong, a condominium association was granted a summary final judgment of foreclosure.  However, the condominium Owner’s interrelated counterclaims had not been resolved.  Accordingly, the appellate court found that the Association’s summary final judgment was neither final, nor appealable.

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The Second DCA, treating the appeal as a proceeding for writ of certiorari, concluded that the trial court

departed from the essential requirements of law when it authorized the sale of the property prior to the rendition of an appealable final judgment … .

DeLong should serve as a reminder that a foreclosure sale may not proceed until a final appealable order has been entered and all interrelated claims have been resolved.

In late-2016, the Florida Supreme Court finally addressed the application of the statute of limitations in a re-filed mortgage foreclosure action.  In Bartram v. U.S. Bank, N.A., Fl. Sup. Ct. Case No. SC14-1265 (Fla. Nov. 3, 2016), the Court ruled that the statute of limitations does not bar a lender from filing a new foreclosure action after dismissal of a prior foreclosure action, as long as there was a default within the preceding five years.  Now, Florida’s appellate courts are being asked to further refine the scope of Bartram.

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In Desylvester v. The Bank of New York Mellon, Fla. 2nd DCA Case No. 2D15-5053 (Fla. 2nd DCA Feb. 22, 2017), the Second District answered the question of whether a re-filed foreclosure action that relied upon an initial payment default more than five years earlier was time-barred.  Applying Bartram, the Second DCA found that such a claim would not be barred because the allegation of default in the re-filed Complaint stated, not only the initial default date, but also a failure to make

all subsequent payments.

The lender was able to avoid the statute of limitations by alleging that the borrowers were in

a continuing state of default.


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The Court made a point of distinguishing Desylvester from Collazo v. HSBC Bank USA, N.A., 41 Fla. L. Weekly D2315 (Fla. 3d DCA Oct. 13, 2016). Unlike in Desylvester, the lender in Collazo, had tried its case “on the basis of a date of default that was outside of the five-year statute of limitations period.”  The continuing state of default at the time of the re-filed Complaint in Desylvester was the key distinction.


In Desylvester, the Second DCA has made clear that, when re-filing a mortgage foreclosure action based upon an initial default that is more than five years earlier, the lender must allege that the borrower continued to miss subsequent payments and remained in a continuing state of default up to the date that the new Complaint is filed.

Florida’s Second District Court of Appeal recently addressed an interesting question concerning whether Florida’s Consumer Collection Practices Act applies to an action seeking a deficiency decree. In the situation presented, the appellate court answered the question in the negative.

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In Dyck O’Neal, Inc. v. Kami Ward, Fla. 2d DCA Case No. 2D15-2989 (Fla. 2nd DCA Jan. 27, 2017), the 2nd DCA was presented with the issue of whether compliance with Fla. Stat. § 559.715, a provision of Florida’s Consumer Collection Practices Act (“FCCPA”) that requires written notice of assignment of a consumer debt at least 30 days before any action to collect that debt, is required in a deficiency action following a foreclosure judgment. Specifically, after a final judgment of foreclosure was entered against Ms. Ward and the property was sold at auction for $100, the judgment was assigned to Dyck O’Neal, Inc., which then filed a deficiency action against Ms. Ward. Ms. Ward defended by arguing that she had not received notice of the assignment at least 30 days before the deficiency action was filed. The trial court agreed and granted summary judgment in her favor.

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The appellate court reversed, finding that FCCPA (Fla. Stat. §§ 559.55 – 559.785) did not apply because a deficiency action is not an action to collect a consumer debt on a note, but rather an action to obtain a monetary judgment on a foreclosure judgment.

Because a deficiency action is not an action to collect consumer debt, section 559.715’s [notice] requirement … does not apply.

The Second District’s opinion provides guidance to lenders as to the applicability of FCCPA to deficiency actions and precludes the assertion of this defense in such cases.


A trial court may not rely on a legal opinion offered by a party’s expert witness.  Florida’s Third District recently reversed dismissal of a mortgage foreclosure action based on this rule in Citibank, N.A., v. Martin and Jitka Olsak, 3rd DCA Case No. 3D15-1032 (Nov. 30, 2016).

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In Olsak, the borrowers called as a witness at trial a mortgage foreclosure fraud investigator and securitization officer, who was not a lawyer.  He testified that, in his opinion the plaintiff, which was a trust, was not allowed to acquire a promissory note that had been endorsed in blank and that the endorsement on the Olsaks’ note violated certain IRS provisions.  Relying on this opinion, the trial court entered judgment for the borrowers, finding that the plaintiff trust had not acquired an interest in the note or mortgage and, thus, did not have standing to foreclose.

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The appellate court reversed because “even witnesses qualified as experts, generally are precluded from providing testimony in the form of legal conclusions.” It follows that opinion testimony about legal conclusions are inadmissible, so it is reversible error for a trial court to rely on expert opinions to decide questions or law.  Finding that the borrowers’ expert witness offered only legal opinions, not facts, and that the trial court based its rulings on that testimony, reversal was required.  It probably didn’t help that the appellate court found the expert’s testimony to be “often of dubious relevance” and of “questionable probative value.”

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Olsak is a good reminder that, regardless of whether or not expert opinions may be relevant, those opinions are not admissible if they are simply legal conclusions.


That look you get when you realize you just bought property at a foreclosure sale that is still subject to liens …

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Foreclosure plaintiffs should take note of the Fourth District Court of Appeal’s recent decision in James Ober v. Town of Lauderdale-By-The-Sea, 4th DCA Case No. 4D14-4597 (Fla. 4th DCA Aug. 24, 2016).  In that case, the Court held that the recording of a lis pendens can “discharge liens that exist or arise prior to the judgment of foreclosure,” but that liens that accrue between entry of the foreclosure judgment and the date of the foreclosure sale are not affected.

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In Ober, after a final judgment of foreclosure had been entered in a prior mortgage foreclosure action, but before the foreclosure sale had been conducted, a municipality recorded a series of liens on the subject real property.  After the property was sold at foreclosure sale, the purchaser sought to quiet title and the municipality sought to foreclose its liens.

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In analyzing the claims, the Fourth District Court of Appeal noted that the relevant statute, Fla. Stat. §48.23, does not provide an end date for a lis pendens.  After considering related statutory provisions and cases that discussed the continuing validity of a lis pendens in other contexts, the Court concluded that a lis pendens terminates “along with the action” or 30 days after the final judgment is entered (assuming an appeal is not timely filed).  Accordingly, the Court rejected the quiet title claim and allowed enforcement of the municipal liens that were recorded and based upon conduct that occurred after the date of the foreclosure judgment.  Foreclosure plaintiffs and those purchasing at foreclosure sales must remember to consider any liens that are recorded after foreclosure judgment has been entered.

David Greene is a commercial litigation partner in Fox Rothschild’s West Palm Beach office.  His practice focuses primarily on banking litigation, real estate litigation, title insurance litigation, and construction litigation. You can reach David at 561-804-4441 or

The United States Court of Appeals for the Ninth Circuit, in a recent unpublished opinion in Casault v. One West Bank, FSB, et al., U.S.C.A. 9th Cir. Case No. 14-55494 (Aug. 4, 2016), affirmed the dismissal of the borrowers’class action complaint against various banks, servicers and trustees.  The borrowers in Casault claimed that they relied upon offers to modify loans that were allegedly contained in advertisements, websites and mailings, as well as actions taken after they started the loan modification process, and attempted to assert claims for fraud and improper foreclosure under California law.

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The 9th Circuit found that the borrowers had failed to properly allege their claims.  First, the Court determined that it was not reasonable for the borrowers to rely on the loan modification offers, because those offers did not promise or guarantee a loan modification. Second, the Court found that the foreclosures were based upon the borrowers’ failure to pay, not due to reliance upon misrepresentations or omissions that were allegedly made after they started the loan modification process.  Finally, the appellate court outright rejected the borrowers’ argument that the loan servicer had taken over the loans because it had made advances while the loans were delinquent.

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Many recent appellate opinions throughout the country have made it more difficult for lenders to foreclose mortgages and have even awarded damages to borrowers.  The Casault opinion shows that there is, in fact, a limit to this trend.

David Greene is a commercial litigation partner in Fox Rothschild’s West Palm Beach office.  His practice focuses primarily on banking litigation, real estate litigation, title insurance litigation, and construction litigation. You can reach David at 561-804-4441 or

Florida’s appellate courts continue to address the sufficiency of evidence in mortgage foreclosure cases.  This week, the Fourth District Court of Appeal provided guidance to lenders for properly establishing interest as part of their damages claim.

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In Marsden v. BAC Home Loans, L.P., Fla. 4th DCA Case No. 4D14-1623 (Jul. 13, 2016), the trial court had granted final judgment of foreclosure after trial.  During the trial, the lender relied upon the payment history as proof of its damages and presented a witness who testified that the amounts set forth in a proposed final judgment were consistent with the payment history.  However, neither the payment history, nor the testimony of the trial witness, set forth calculation of the amount of interest owed. Moreover, the proposed final judgment was not offered into evidence.

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The Fourth DCA ruled that the lender had failed to prove the amount of interest owed and sent the case back to the trial court enter a final judgment without the interest award.  The Court noted that it would have allowed the trial court to take additional evidence if the lender had offered some evidence of the amount of interest owed.  This case serves as a reminder for lenders to ensure that they offer evidence supporting every element of their damages claim.

David Greene is a commercial litigation partner in Fox Rothschild’s West Palm Beach office.  His practice focuses primarily on banking litigation, real estate litigation, title insurance litigation, and construction litigation. You can reach David at 561-804-4441 or


Standing in foreclosure cases continues to be a hot issue in Florida’s appellate courts. It seems like a week doesn’t go by without an opinion that reminds lenders what they need to do to establish standing to foreclose a mortgage.

This week, Florida’s Fourth District Court of Appeal issued two opinions discussing foreclosure standing. Both resulted in reversal of a foreclosure judgment.

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In the first case, the lender sought to establish standing as a “holder” of the note. The Court found, however, that the lender’s evidence at trial did not establish standing at the time the complaint was filed.  Because the note was not made payable to the lender and did not contain either a special endorsement in favor of the lender or a blank endorsement, standing was not established.  A blank endorsement on the original note that was dated after the complaint was filed and an assignment dated after suit was filed were both found to be insufficient.

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In the second case, the original note was not presented at trial. The Court again found that the plaintiff failed to prove that it was the holder of the note when the complaint was filed.  The plaintiff’s failure to offer evidence as to when the allonge was attached to the note or when the endorsement occurred ultimately doomed the lender’s case.  The absence of proof that the plaintiff had possession of the note when the case was filed also prevented a finding that it was entitled to enforce it as a lost instrument.

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Florida appellate courts continue to take a hard-line view of foreclosure standing. These rulings are a reminder to lenders to “Think about the place where [your note’s] been,” but makes you “Wonder why [they] haven’t before.”

David Greene is a commercial litigation partner in Fox Rothschild’s West Palm Beach office.  His practice focuses primarily on banking litigation, real estate litigation, title insurance litigation, and construction litigation. You can reach David at 561-804-4441 or


In an opinion issued yesterday in Chester A. Brooks, et al. v. Bank of America, et al., Case No. 4D14-3337 (Fla. 4th DCA May 25, 2016), Florida’s Fourth District Court of Appeal made clear that, in order to obtain summary judgment of foreclosure, a lender must prove facts to refute a defense of failure to provide notice of default and opportunity to cure.


In Brooks, the trial court granted summary judgment of foreclosure, even though the borrowers had asserted a legally sufficient affirmative defense of failure to comply with the requirements of paragraph 22 of the mortgage, which required notice of intent to accelerate and an opportunity to cure.  However, because the lender had failed to establish by summary judgment evidence that it had sent the required notice, the appellate court reversed the final judgment.


Brooks should serve as a reminder to lenders that they must submit correspondence that satisfies any notice requirement or state in an affidavit that any required notice was provided. Failure to do so leaves a disputed issue of material fact and precludes entry of summary judgment.

Don't Forget

When a borrower asserts an affirmative defense of failure to satisfy the condition precedent of providing notice and an opportunity to cure, a lender seeking summary judgment of foreclosure must remember to “Say it Ain’t So” …

David Greene is a commercial litigation partner in Fox Rothschild’s West Palm Beach office.  His practice focuses primarily on banking litigation, real estate litigation, title insurance litigation, and construction litigation. You can reach David at 561-804-4441 or