Important news from Florida
On May 8, 2015 an opinion from the Fifth District Court of Appeal of Florida, Gorel v. Bank of New York Mellon, 2015 WL 2129505 (Fla. 5th DCA 2015), was released. The Fifth DCA, specifically Brevard County, has been a problematic area of Florida using the Samaroo opinion to suggest that strict compliance is the standard for evaluating compliance with conditions precedent found in a contract. In this appeal, the appellants Adiel Gorel and FLCA Tropical Holdings, LLC, appeal the trial court's final judgment of foreclosure in favor of the Plaintiff at a non-jury trial contending that the Plaintiff lacked standing to bring the foreclosure action and failed to comply with the conditions precedent to foreclosure. The Court agreed that the Plaintiff failed to prove standing and reversed and remanded the case. However, the Court's holding regarding conditions precedent is potentially very helpful and requires additional analysis.
The Appellants argued that the Plaintiff failed to satisfy conditions precedent and specifically argued the default notice did not comply with paragraph 22 of the mortgage in that it did not specify a date not less than thirty days from the date the notice was given to Mr. Gorel, by which the default must be cured. The Default Letter set a cure date of twenty-nine days later, not thirty or more as required by paragraph 22. The Court agreed with the Plaintiff that the defective notice did not prejudice Mr. Gorel, as he made no attempt to cure the default. The Court stated that absent some prejudice, the breach of a condition precedent does not constitute a defense to the enforcement of an otherwise valid contract. The Court cited to Allstate Floridian Ins. Co. v. Farmer, 104 So.3d 1242, 1248-49 (Fla. 5th DCA 2012), in support of its contention. Although this opinion does not specifically state that the standard for compliance with conditions precedent is “substantial” rather than strict compliance, the language of the opinion can be used to prove that substantial compliance with all requirements of paragraph 22 of the mortgage, not just the time to cure requirement, is sufficient to demonstrate compliance.
The opinion will not be final until the time period for a motion for rehearing expires or the motion for rehearing is denied. To date, a Motion for Rehearing has not been filed, but is not due until May 25, 2015 pursuant to Fla. R. App. P. 9.330. We will continue to monitor this case to determine if the opinion becomes final.