The Fifth District Court of Appeals (“Fifth DCA”) rendered a decision wherein it reversed a judgment for the borrower, Patricia Leigh (“Leigh”), and ordered the lower court to enter judgment for US Bank, the mortgagee. U.S. Bank Trust, N.A., as Trustee for LSF9 Master participation Trust v. Patricia Maria Cozza Leigh. In Leigh, US Bank sent Leigh a demand letter prior to initiating its second foreclosure action against her. The demand letter required Leigh pay $86,865.59 to cure her default which amount included over $10,000 in attorney’s fees and costs from a prior foreclosure. Leigh failed to pay the demanded amount and US Bank filed its foreclosure complaint.
The matter proceeded to trial where Leigh asserted US Bank failed to satisfy conditions precedent because its demand letter “was inaccurate and impermissibly sought…attorney’s fees and expenses” from the prior foreclosure suit and sought installment payments that were more than five years past due. Leigh argued the statute of limitations prohibited US Bank from demanding installment payments that were more than five years past due when the bank sent its demand letter. The lower court agreed with Leigh, entered a judgment in her favor and US Bank appealed.
The Fifth DCA reversed the judgment in favor of Leigh finding the current state of the law allowed a lender to “recover for unpaid installments more than five years past due.” The Court also found that US Bank properly included its attorney’s fees and costs from the prior foreclosure in its demand letter. The Court explained:
Paragraph nineteen of the mortgage provides that in order for Appellee to reinstate the mortgage, she would be required to pay the lender all sums then due and all expenses incurred in enforcing the mortgage, including reasonable attorney’s fees and specified foreclosure litigation expenses. According to the plain language of the mortgage, Appellant was not required to be the prevailing party in the first foreclosure action in order to seek and recover its attorney’s fees and expenses.
The Court remanded the matter for entry of a judgment in favor of US Bank. The Fifth DCA’s award of the bank’s attorney’s fees and costs even those fees resulted from a prior unsuccessful foreclosure is a significantly positive position. Stay tuned! We anticipate future litigation as the other district courts weigh in on the fee issue and we’ll provide updates if Leigh’s anticipated rehearing motion results in an alteration of this ruling.