In January, the Florida Second District Court of Appeals—addressing an issue of first impression in the Florida district courts of appeal—held that providing written notice of assignment of a note described in Fla. Stat. § 559.715 is not a condition precedent to foreclosure.
In Brindise v. U.S. Bank Nat’l Assoc., the noteholder acquired borrowers’ note by assignment from borrowers’ original lender. Subsequently, borrowers stopped making loan payments, and, in response, the noteholder commenced a judicial foreclosure action. As a defense to the foreclosure action, borrowers alleged the noteholder failed to give them written notice of the assignment in violation of Fla. Stat. § 559.715. They argued such notice was required upon becoming the holder of a note through assignment. Further, they asserted that, because the notice was a condition precedent to filing a foreclosure suit, the noteholder was required to provide the notice at least 30 days prior to filing suit under Florida law. The trial court rejected borrowers’ arguments and entered a final foreclosure judgment in favor of the noteholder. Borrowers appealed.
On appeal, the Court of Appeals upheld the trial court’s decision, holding that the noteholder’s failure to provide written notice under Fla. Stat. § 559.715 did not bar the foreclosure suit or create a condition precedent to institution of a foreclosure action. The Court of Appeals based its decision on several factors. First, it noted the statute does not contain language suggesting notice is a condition precedent to filing a foreclosure suit. Second, it noted the language of the statute only applies to situations where multiple parties have the right to collect a delinquent debt. Since the noteholder established it had the sole right to foreclose by properly alleging and proving it held the note at the time it filed the suit, the statute could not apply. Third, the Court of Appeals found that because administrative enforcement mechanisms exist to enforce Fla. Stat. § 559.715, treating it as a condition precedent to foreclosure is not necessary in order to provide a consumer adequate recourse under the statute. Lastly, it observed that the mortgage contained specific provisions allowing the lender to transfer the note without prior notice and contained a specific procedure by which borrowers received notice of default and acceleration. Consequently, the Court found borrowers were not entitled to the Section 559.715 notice and had otherwise agreed by contract to an alternate notice method.
The opinion, however, was not unanimous. The dissenting opinion argued, among other things, that a foreclosure suit is an “action to collect a debt,” thus requiring an assignee to give written notice of assignment within 30 days of filing a foreclosure suit under Fla. Stat. § 559.715.
Although the decision is a positive first step toward clarifying applicability of Fla. Stat. § 559.715 in the foreclosure context, the issue is not yet entirely settled. At the conclusion of its opinion, the Court of Appeals certified the following question to the Florida Supreme Court:
Is the provision of a written notice of assignment under Section 559.715 a condition precedent to the institution of a foreclosure lawsuit by the holder of the note?
Accordingly, final resolution may have to await adjudication by the Florida Supreme Court.