FL Caselaw Update: Mortgage Foreclosures

18 October 2007

In the opinion that follows, the 3rd DCA ruled that it was error for the lower court to enter judgment in favor of a homeowner defending a foreclosure action on the premise that the secured note had been orally modified where that homeowner failed to present sufficient evidence of additional consideration for modification of the note.


REVA DAVIDPUR as Personal Representative of the Estate of Alex Kleiman, Appellant, vs. ESTHER COUNNE, Appellee. 3rd District. Case No. 3D06-2035. L.T. Case No. 04-16988. Opinion filed October 17, 2007. An Appeal from the Circuit Court for Miami-Dade County, Scott J. Silverman, Judge. Counsel: Broad and Cassel and Beverly A. Pohl and Gary E. Lehman, for appellant. Dienstag, Blanco & Cox and Mark Dienstag, for appellee.

(Before WELLS and SUAREZ, JJ., and FLETCHER, Senior Judge.)

(SUAREZ, J.) Reva Davidpur, as Personal Representative of the estate of Alex Kleiman, appeals a final judgment in favor of the defendant, Esther Counne, in a foreclosure action. We reverse. Counne defaulted under the note, but failed to present evidence of additional consideration to support her defense that the note had been orally modified to allow her to postpone payments.

In 2003, Esther Counne executed a note and mortgage to refinance two residential properties owned by Counne on Miami Beach. The mortgage provided that Kleiman, the mortgagee, was not obligated to accept a late payment and could institute foreclosure proceedings after notice and demand. The note provided that all amendments or modifications be in writing and provided a right to foreclose with no right of reinstatement or cure. As of May 2, 2004, Counne was in default on her payments under the note and mortgage. Alex Kleiman died, and Davidpur, as Personal Representative of Kleiman’s estate, sued Counne under the acceleration clause of the note for $159,007.00 plus interest, costs and attorney’s fees. At the non-jury trial, Counne testified that on June 25, 2004, she had a conversation with Kleiman wherein he stated she could hold off on the monthly payments and pay him when she sold the property. Three weeks after this conversation, Kleiman had his attorney send a demand letter notifying Counne that he was accelerating the payments under the note. She denies receiving the letter until some time in August. The trial court found that, although non-payment as of June 2004, had been established, Counne was excused from payment because an effective oral modification had been entered into which postponed payment until the property was sold.

Davidpur contends on appeal that there was no effective oral modification because there was insufficient evidence of consideration to support the modification. Counne argues that an oral modification of the contract was permissible and that her reliance on the modification was sufficient consideration.

We agree with the appellant. Under Blair v. Howard, 198 So. 80, 81 (Fla. 1940), a promise to extend the time for payment due under a contract must be founded upon sufficient consideration. “[A] promise to extend the time of a payment becoming due under a contract must be founded upon a sufficient consideration. . . . [I]t is not a sufficient consideration for an agreement to extend the time of payment that the debtor promises to do anything which he is legally bound to do.” Blair, 198 So. at 81. Even if Kleiman had agreed to extend the time for payment, Counne presented no evidence at trial of any additional action she promised to do as consideration for the modification which she was not already bound to do. In light of these facts, Counne failed to prove her affirmative defense that there was a binding oral contract to modify allowing her to postpone payments. Since Counne has not demonstrated sufficient record evidence of equitable consideration or estoppel, other than that which she was obligated to do in the first instance under the contract, we reverse the final judgment in favor of Counne in the foreclosure action. See Blair v. Howard, 198 So. at 80; Larsen v. Allocca, 187 So. 2d 903 (Fla. 3d DCA 1966); see also Cohen v. Mohawk, Inc., 137 So. 2d 222 (Fla. 1962); Card v. Commercial Bank, 119 So. 2d 404 (Fla. 1st DCA 1960).



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Changes to Florida Title Insurance Law

1 October 2007

Chapter 2007-44, Laws of Florida went into effect today. The changes to Florida’s title insurance laws will create a few adjustments to the way title charges are presented on closing statements. The law also repeals the prohibition on the rebate or lowering of the agent’s share of the title insurance premium and will allow title agents to charge less than actual cost for closing services, though agents are not required to engage in such negotiation.

§627.7711, Florida Statutes, provides definitions related to title insurance contracts. The law amends the definitions of “related title services” and “primary title services.”

  • Related title services” are renamed “closing services” and “preparing or obtaining a title search” is removed from the list of services. Closing services will not be considered part of the title insurance premium. Closing services can be rebated or lowered by the title agent.
  • Primary title services” is amended to mean conducting a title search or other search to obtain information necessary to determine insurability and also is amended to state that such services do not include closing services, for which a separate charge is or separate charges are made.
  • Title search” is defined to mean the compiling of title information from official or public records. The definition of “premium” is not amended. The definition continues to mean the charge that is made by a title insurer for a title insurance policy, including the charge for performance of primary title services by a title insurer or title insurance agent or agency, and incurring the risks incident to such policy “premium” does not “include a commission”.

§626.9541(1)(h)3, Florida Statutes, is amended to remove the rebate or abatement of the agent’s share of the premium from the list of activities that constitute unfair methods of competition and unfair or deceptive acts. Charging less that cost for related title services is also removed from the list. The prohibition against otherwise rebating premium remains in law. Additionally also allowed is the rebate or abatement of an attorney’s fee charged for professional services or any other agent charge or fee. However, nothing may be paid directly or indirectly for a referral of title insurance business.

The law also amends §627.7845(3), Florida Statutes, to repeal the requirement that the title insurer or agency must maintain a record of the related title service charges made for issuance of the policy.

The full text of Chapter 2007-44 can be found here


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FL Caselaw Update: Buyer was entitled to return of deposit for Seller’s failure to fulfill conditions to closing

21 September 2007

Bruce Stein, Appellant, v. David Howell, Appellee
4th District, Case No. 4D04-3586, September 19, 2007

Buyer and Seller entered into a contract regarding commercial property. The contract provided that “in the event any condition of this Contract is not met Buyer’s deposit will be returned in accordance with applicable Florida laws and regulations.” A first addendum to the contract provided that the parties would share the cost of an environmental study. A second addendum stated that “the closing is contingent upon a clear Phase I environmental study” and ineffectively attempted to amend the default provisions of the contract with the inclusion of a liquidated damages clause.

Like all good closings, there is a twist. The Phase I showed petroleum contamination. The Buyer refused to close and Seller kept the deposit and the parties ended up in court.

The lower court ruled in favor of Seller and allowed him to keep the deposit as damages for Buyer’s failure to close. The 4th DCA reversed in this case. The reasoning behind the reversal is that because the second addendum specifically made “a clear Phase I environmental study” a condition to closing, Seller did not fulfill all of his closing obligations and Buyer was entitled to a return of his deposit.

It is important to note that while the Seller had no control over the outcome of the environmental study, he was still on the hook for its results because of the language in the addendum. This is yet another reason why 1) you should read every last word before you sign a document, and 2) you should hire an attorney.



Keep the Questions Coming

16 July 2007

Since opening the blog for questions, I have received fifty emails with questions you want answered. Answers will start going up in the next few days.

In the meantime, keep the questions coming. Send your legal queries to treasurecoastlaw@bellsouth.net.


Welcome to Treasure Coast Law!

14 July 2007

The Treasure Coast Law blog was established in July 2007 as a forum in which you can ask questions about the law, the legal system, or legal issues affecting the Treasure Coast.

Before we begin, let’s go over the important stuff:


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