Thank you all for coming. Sorry that you got here late, but we appreciate your being here.
Good morning. Good morning. Eric Levine here on behalf of the appellant, the Bank of New York.
Madeline, may it please the court. I'd like to reserve five minutes for rebuttal, if I may.
Very good.
The final judgment for the defendant should be reversed, and this matter remanded for entry of final judgment at foreclosure.
The trial judge entered judgment for the defendants for one reason only, that the plaintiff failed to prove the defendants had defaulted on their mortgage loan.
However, as I stand before you today, there's no dispute.
In fact, it's freely admitted that the defendants have not tendered a mortgage payment in nine years.
You know, maybe I'm getting cynical in my old age, but when they tell you you haven't made a payment in nine years, I don't see how you're not in default.
Well, let's talk about that for just a moment.
I'm going to head right into the issue.
There are times where an ongoing default that isn't the fault of the borrower could bar the action, at least as then pleaded, right?
I would submit, what do you mean by the fault of the borrower?
Because the borrower is required to tender a payment every month, and if they don't tender a payment, that's only the fault of their own.
And each failure to tender constitutes a new breach.
Absolutely.
So when this case was filed, the breach was based on January, I think it was what, 2016 or 2017?
January 1st, 2017, and all subsequent payments.
It was a continuing state of breach every single month starting January 1st, 2017 all the way through, I believe, January 1st, 2021.
And so then the question became one of tender, whether they had tendered or not.
So the question I want to pose to you is, what refuted the borrower's testimony that she, in fact, had tried to tender and it was refused unless she brought it current, including amounts that apparently were uncertain because of the DITEC issue?
I mean, I think we're all familiar with the facts of the case.
So I'd really like to get to that.
To me, that's one of the hearts of this case.
So I'm going to jump right into it, and I'm going to put it to bed right now.
In 2015, four payments were reversed by the then-servicer of the loan.
The bank witness at the trial testified he could not definitively state why they were reversed, but they were.
He said it's possible it was for insufficient funds, but he couldn't say definitively.
There's no evidence that the reversal was wrong.
It's simply that we didn't know.
And the judge in her findings didn't say it was wrong.
I thought there was some testimony that, in fact, it was wrong.
I don't believe so.
But let's give over that.
Let's assume for the sake of argument that those payments were improper.
It was a mistake.
Wasn't there evidence presented, documentary evidence, that the payments were made?
The payments were tendered.
They were reversed.
We don't know why they were reversed.
And so if they were reversed incorrectly, those amounts were no longer due in owing.
That portion, correct?
No.
Even if they were improperly returned and reversed, you still owe the money.
But that's a ‑‑ I'll concede that.
But that's a breach by the lender to improperly, arguably, improperly reject tendered payments.
I don't know if ‑‑ we don't know specifically why it was reversed.
If we knew why, I could answer that better.
Your client was a plaintiff.
Wasn't it its burden to show how much was owed, when default occurred,
the fact that payments were not properly made and so forth?
And I know you're going to talk about the later payments or the lack of payments.
But the whole situation seemed to develop from those four payments, or reversed payments.
They were reversed.
And eventually the bank said we're not accepting any more payments,
or at least returned one payment in May of 2017,
to say this is insufficient to bring along current.
We're not accepting it.
And what was that rejection of the May 2017 based on in terms of the amount that was owed?
They believed at the time she was several months behind.
That was what the records reflected.
And did the evidence establish that, in fact, she had been several months behind as of May 2017?
The records that we introduced did show that the payments were reversed.
Based on what appears to be the erroneous reversal of the payments.
Not necessarily, but I would submit.
Am I correct in that or not?
You're correct that the records reflect the payments were reversed.
I don't agree that the records reflect that it was erroneous.
But I will submit that I don't think it's relevant.
I don't think it's material.
That fact, whether the payments were correctly reversed.
Before your argument why I don't think it's material, I just want to be clear about.
Why is that material?
Because the bank.
No, I said before you argued why it's not material.
I wanted to ask a question.
So right now I believe Judge Silberman can correct me if I'm incorrect.
You all were just discussing the return of the May payment.
The May 2017 payment.
The Bank of America mailed it back.
That was essentially a one mortgage payment.
That was one payment.
It wasn't clearing a deficit that the bank contends was outstanding.
Correct?
No, it wasn't all of them.
It was just that one May 2017.
Right.
So I'm saying what comprised that purported deficit.
In other words, this is not sufficient to bring you current.
Because there's X amount that you should pay now to bring you current.
What comprises that X amount?
And is it possible that it is due to the 2015 erroneously rejected payments?
It was since January of 2017.
So the rejection of the May 2017 payment, the rationale was you haven't paid since January.
Therefore, you owe us January, February, March, April, and May.
So was it based on an additional deficit that could be attributable to the rejected payments in 2015?
Or was it based on the purported deficiency that was comprised of those 2017 missed payments?
It was certainly mostly comprised because the payments had been reversed.
And she had these four payments.
She was in bankruptcy at the time.
I don't know if that had anything to do with it.
But the four payments were sent back for whatever reason.
I don't agree with the fact that it was definitely.
The four payments when?
The four payments were reversed in August of 2015.
No, no, no.
I'm talking about, okay.
Sorry.
You just said the rationale for rejecting the 2017 May payment was that it was insufficient because the arrears were more than just one mortgage payment.
Correct.
What were the arrears?
January through, I guess, May.
It was five months.
Because in January through April, you applied those payments or previous payments way back to the 2015.
And so everything slid backwards.
The oldest default.
It gets applied to the oldest default.
Okay.
So that's why.
Okay.
Thank you.
But let me push through the issue and tell you why it's irrelevant whether those payments were correctly or incorrectly reversed.
Can you stop saying those payments and just tell me which payments you're talking about?
Sorry.
The four payments in August of 2015 were reversed.
You're going to tell us why those are irrelevant.
Good.
Okay.
They're not relevant because, one, obviously, that's not a basis to never tender a mortgage payment ever again,
which is basically what's happened since May of 17.
But I want to bring your attention to November of 2020.
But I need to ask a clarification based on what Judge Gard asked and what you answered.
The payments that were reversed, set those aside for a moment.
Okay.
So January 2017 through April 2017, did the borrower make payments?
I believe the borrower tendered payments that got applied to they had been behind.
Well, okay.
That's the part I want to clarify.
How were they behind if those payments were applied to a retroactive debt?
It's not a retroactive debt.
Payments are applied to the oldest payment then due.
So which were those?
So January probably got applied to January of 17.
Payment probably got applied to, let's say, September of 2016.
Was there a failure to pay in September 2016?
Well, there's been a running default.
So that goes back to the original four that were reversed.
Could be.
Well, whose responsibility is to know?
And whose responsibility is there to present evidence establishing the sequence?
Because you're now telling me, well, they were reversed, and maybe they weren't correctly reversed.
Maybe they were correctly reversed.
But we're declaring a default based on those uncertain reversals.
And, by the way, when she starts making further payments, we're going to apply them to those even though we're not sure if they were properly reversed or not.
Is that what I'm understanding the argument is?
I don't believe I'd phrase it exactly that way.
I know you wouldn't because you don't want to concede that, but that's what I'm hearing.
I'm just telling you exactly what the records show.
Those payments were reversed, and any payments she made after that that were accepted and applied applied to the oldest.
Well, let me ask a follow-up to this.
The Notice of Acceleration goes out.
What was the basis of accelerating the loan?
Was it those four unpaid payments from a few years earlier?
The Notice of Default that went out in November 2020 was based – and it's not an acceleration.
It was a Notice of Default.
Acceleration is encouraged if the complaint is filed.
That was based on all unpaid payments from, I guess, January of 2017 through November of 2020.
So you're circling back now to what I started with, which is she testified she tried to make additional payments, and they were rejected.
Now, I concede her testimony isn't a paradigm of clarity, but there is some testimony to that effect.
Did the bank present evidence refuting her claim that she tendered additional payments?
Well, she admitted that she didn't tender any payments after May of 2017, so I believe the bank – there was nothing to refute.
Okay.
I think opposing counsel might have a statement on that, or maybe I've misremembered what I read in the transcript.
But let's talk about, then, if we can move to the tender issue.
Did your client raise as an avoidance to the affirmative defense that she was required to make payment into the registry of the court and tender ongoing payments?
No, Your Honor, because she didn't plead tender and refusal as an affirmative defense.
She pled –
So affirmative defense number two, defendants assert that the bad action – or I think I might have typed this incorrectly – of the plaintiff has caused the loan to be in default.
Plaintiff states the defendants have not made a payment since January of 2017.
This is false.
Defendants made all payments until plaintiffs stopped taking payments.
Plaintiff's own actions of not accepting payments caused any default, bars plaintiff from foreclosing on the property.
Now, I will say that that last portion about bars plaintiff from foreclosing, I'm not sure I would agree with.
But that seems to me to be a defense.
So why, if you're arguing on appeal, which I think may be the first time it was raised, that she had to tender money into the registry of the court, was that ever argued to the trial court?
Yes, it was argued in our motion for rehearing.
Okay, but it wasn't argued before the entry of judgment in her favor or in their favor.
No, but I'm also going to point the court out to the actual answer.
Second affirmative defense is unclean hands.
It's not a tender and refusal defense.
It's an unclean hands defense.
And we didn't need to plead that in avoidance of a defense that wasn't fled.
I understand she said, well, you refused.
So if I'm satisfied that that was enough to assert an affirmative defense that any default was caused by your client's action, did you have to avoid that defense?
No, I would not.
I would say we would not need to avoid it because under the case law we saw in the brief, as part of your proving your affirmative defense,
you have to put it into the court registry.
It's not the burden of the defendant to force you, or the plaintiff to force you.
Isn't it the burden of the bank to bring to the trial court's attention that there has been no tender?
I would say, and we did in our motion for rehearing, but that was the first time I would submit that we realized.
So it wasn't brought up as an avoidance or a reply to the affirmative defense.
And it wasn't brought up at the hearing or at the trial on the default.
No, it was not.
Because we were going at that time based on an unclean hands defense, not a tender refusal defense.
But once the trial judge made her ruling and said, oh, you refused her payments, that's kind of why it's not default.
We said, oh, wait a minute.
This is a tender refusal defense that hasn't been pled, and it hasn't been proven.
Because in order to have a tender and refusal – so let's assume we talk about avoidance.
You don't have to avoid an affirmative defense if they don't approve the affirmative defense.
And an affirmative defense of tender and refusal requires tender, requires you actually tender the payments.
And she admits she didn't.
Now, I know Your Honor talked about her testimony, and I want to read – I'll just read to the court some of the quotes I copied out.
Question, this is on page 1644 of the record.
Okay, so you never made any effort to cure the default.
Answer, correct.
I wasn't advised to.
Page 1961 of the record.
Okay, so as we sit here today, you have made no effort to cure your obligation under the contract.
Is that correct?
Answer, correct.
A little below it.
But as we sit here today, you have not made any effort to cure the amount that have been continued to accrue.
Is that correct?
Answer, that is correct.
When Ms. Fernandez tells you that she hasn't cured her default and has made no effort to cure her default, I think we should believe her.
And I want to circle back to why I think these four payments, even if they were mistakenly reversed, is not material.
In November of 2020, the breach letter was sent out.
She owed about $56,000, and there's really no dispute that that number is basically correct.
What does that mean, basically correct?
I'll explain right now.
So she said she only had about $20,000 in her account.
in the bank, she was about $36,000 short
of curing her default and bringing the loan
current November of 2020.
Even if we were to credit her those four payments
about $800, that brings the amount down from 36,000,
sorry, she was from 56 to about 53.
So instead of being $36,000 short, she was $33,000 short.
So either way, it's the same result.
And I like to ask the court, you know,
I know you're not gonna answer that,
the questions go one way, but if we were to,
if this court were to affirm, what happens then?
We'll send another breach letter.
This time, it'll probably be over $100,000.
You know, presumably, we'll credit her the four payments,
say, okay, here are the four payments back.
The number will still probably be over 100,000.
Presumably, she won't cure.
I would love it if she would,
but presumably, she wouldn't cure.
And we'd be right back here, again, saying.
Is that even relevant?
I think it's relevant.
If we think the trial court got it right,
you're not without a remedy.
But it's not our job to say,
well, we're gonna shortcut the process.
I don't, I'm asking the court to shortcut the process.
I'm simply taking.
No, you want us to say that the trial court got it wrong.
I mean, I understand that.
I think the trial court did got it wrong.
If we think the trial court got it right,
the fact that there is a practical solution
that favors the bank doesn't eliminate
the due process that has to apply.
Due process definitely occurred.
If they got noticed, an opportunity to be heard.
If we agree with the trial court, and we affirm,
your suggestion seems to be that we should still reverse,
because you can sue again.
No, no, I'm just pointing out the fact
this is why the trial court was wrong,
because they did not.
Well, couldn't you have raised that?
Couldn't you have raised a credit
to the final judgment figures?
And like in the re-hearing, or elsewhere?
Just, couldn't that, I mean, you're suggesting
that that's gonna be what happens if we send this back,
but I mean, you didn't make that suggestion
to the trial court, right?
We never got to the amount to do.
We never got to how much to do.
The court said we never proved the default.
So, obviously, we could always say,
here's four months of credit in the final judgment.
We could credit any time, but the point I'm trying to make
is the trial court was wrong,
because no payments had been tendered in years.
Many years.
So, even putting aside these four payments
that were improperly reversed,
even conceding they were improperly reversed,
that is not an excuse to not make any payments in 2018.
Mr. Levine, I think we understand
that part of the argument.
Let me just say, I've let you go over,
because I asked more questions than I probably needed to.
So, before you sit down and reserve your five minutes,
if either judge has more.
Otherwise, I'll let you have your five minutes
if you're sitting.
Thank you.
Okay.
Good morning, your honors.
Good morning.
May it please the court.
My name is Alan Borden.
I'm with Debra Lee Fleal Group,
and I represent the Fernandeses.
Mr. Borden, just speak up a little bit, please.
I represent the Fernandeses.
We're here, and they're the homeowners.
The, what the bank here is trying to say is that,
they, under a promissory note,
can unilaterally reject payments,
and then see how long they can wait
until starting a foreclosure,
just to test the financial viability of the homeowner.
But couldn't you, or couldn't they,
have filed a lawsuit for an accounting?
This seems to be like there was an accounting issue
over four payments, right?
Correct.
And instead of just sitting there
and not making payments for years,
couldn't your client have commenced an action
against the bank, or taken more action
than just tendering the one payment?
Yes, they couldn't, so.
And they didn't do it.
I mean, we're here sitting in equity,
and they were asking us to allow a foreclosure,
and it appears there were four payments
that may or may not have been wrongfully reversed.
But the truth is that we're eight years of no payments,
and I don't, I think from the testimony,
your clients don't have a way to actually catch up.
Right, but the equity situation,
and whose burden is it,
I think goes back to the original, right?
So we have a foreclosure that was wrongfully done
the first time, right?
There was an original foreclosure back in 2019.
That got dismissed, and so that has no effect, right?
Right, and so there, it was dismissed voluntarily
by the bank because they didn't realize
until the day before trial that they were missing
accounting by DITEC, those four payments, okay?
That was produced the day before trial,
and they dismissed it.
Then, the bank, knowing that that's their issue,
waited a year or two, and then filed another foreclosure
with the exact same thing.
And during that whole year,
your clients never tendered a payment, right?
So, yes, the unsophisticated borrowers
versus the bank who knows and deals with mortgages
every single day, who made a mistake
on their own accounting, it's whose burden?
But your unsophisticated borrower
was represented by you, right?
In that initial action, correct?
Yes, Your Honor, yes.
So, you could have provided them legal advice,
presumably, so what's not, I mean,
I get that they're a bank and they have lawyers,
but I mean, your client had a lawyer as well
to advise them, right?
Right, and the typical response in this kind of situation
is the bank then adjusts their accounting
and then puts them back to current.
When the foreclosure gets dismissed, it deaccelerates,
so it should go back to regular monthly payments.
They should send regular notices,
but instead, the bank, and what's proven here
is that they've kept those four missed payments
the entire time, they wouldn't have accepted
less than five payments at a time.
So, the note decelerates and your client
doesn't go back to making any payments, right?
Well, because the bank won't accept anything less
than the full amount.
But they didn't even try, right?
They only tried the one time
and had the one payment rejected, right?
That's what the record shows.
The record shows she attempted to make a payment
that was sent back through mail,
and then she went literally to the bank
with another check to try to pay them.
When is this, can I ask a question?
Are you talking about 2015 or 2017?
2017.
Okay, so that, okay, but,
2000, sorry, Judge, go ahead.
No, that's fine, but we're now talking 2021, right?
Right.
And there's no attempt in 2021
after, like in your experience,
you're expecting it to be reset,
but there's no attempt after what you're expecting
to be a reset for another tender, right?
Right, they don't understand what their position is,
correct, I mean, they don't know what the bank's doing,
they're not receiving the notices that would tell them,
okay, just start making your regular payments.
But I think the court was correct in pointing out that-
Say that again, what you just said?
They didn't understand what?
They didn't, they didn't get normal mortgage statements.
You said they didn't understand the notice that said
to restart the-
That they would make normal, regular payments.
What did that notice say?
A regular mortgage statement.
You're saying the bank didn't send that notice?
Right, the mortgage, the bank didn't say that,
here, you're back to normal,
just make your regular mortgage payment.
That wasn't advised to them, they didn't get that.
You said they didn't understand it.
Right, they wouldn't have understood, yeah,
because they don't know what to do.
They wouldn't have understood it if they got it
or they didn't get it.
If a mortgage statement was sent and said,
okay, start paying your regular payment.
What did the mortgage statement say when they received them?
There's none presented, there was never anything sent
to them after the dismissal.
Okay, let's go back to 2015.
So, those, they were returned for insufficient funds.
It's a mystery, right?
It's a mystery still.
Well, I don't believe it's a mystery.
It's a mystery to me.
So, she didn't, they didn't pay.
In other words, I'm a unsophisticated mortgagor,
and one thing I'm aware of though,
is money from my bank for those payments
didn't end up at the bank.
So, I know that I haven't paid anything for those months.
But that's not what happened.
So, what you hear from the testimony of the witness first,
which I think is very important to note,
the date of default changed.
So, in the deposition, he said it was a different date
than when at trial.
And the reason why is because on the deposition,
in the discovery responses and the interrogatories,
they completely omit DITEC, as if it never occurred.
None of those answers were in the discovery,
in the second foreclosure,
even though we had it in the first one,
which means they continue.
Before you go too far down that line,
I wanna go back to what Judge Atkinson just asked you.
When DITEC said these payments are reversed,
did the money go back to your clients?
No.
The money was still with the lender?
Yes.
So, it was a paper reversal.
Correct.
And that's what you see there,
Mr. Greenlee testified to when he was initially asked
what happened.
He says, well, this typically happens
when you're onboarding to a new servicer.
They will do these accounting adjustments to transfer it.
That's what that was.
It wasn't that they sent the money back.
And so-
And I think, if I'm recalling correctly,
the documentary evidence established
that your clients did not, in fact,
get those four payments back.
Correct.
And it's rejected on, the way it normally happens,
it's rejected because it's insufficient funds
or it's too little to pay what's currently due.
Right.
What you see is, and you see it in the accounting,
there's four months of payments,
and then if there was like an insufficient funds,
that would be immediate.
But what happened is four payments,
and then the following month,
they say reversal for some reason
of all four of those payments at the same time.
And your client continued making payments
after the paper reversal.
Did they know about the paper reversal at that time?
They didn't know that they were behind
until the servicer switched to Diatek and right back.
When it came back to Bank of America in April of 2017,
the first notice from Bank of America,
newly on the servicer, said,
oh, now you're four months behind.
What was the date of that?
In April of 2017.
So they had been paying all the way
through January, February, March, and April, 2017.
Yes, and the accounting shows that.
They paid every payment.
Mr. Levine is saying, well,
the reason the claimed default is January
is because I'm not really sure
because the money was already with the bank,
but it seems that the argument is,
well, the money was applied to 2015 or 16, whatever it was.
I think Judge Gard got it right.
It slides back, right?
So they get a payment,
whatever payment you're making,
they're applying it to the last payment.
So if they didn't count those four payments in 2015,
every single payment after that would be four months time.
But the bank actually had the money
for those four payments.
That's correct.
So there was no reason to slide back.
That's right.
And so when...
So the notice of default saying you're in default
for January, 2017,
that based on the evidence that seems to be in the record,
that was an incorrect assertion of a default
as to those dates.
That's correct.
Then we fast forward to May
and there's a tender, it is rejected.
And then your clients don't make any more payments.
Am I recalling, and I know I said this in my questioning,
am I recalling correctly that your client said,
I did try to make payment after that one was rejected?
Right.
That's when they went physically visited the bank.
And Mr. Levine's pointing out,
well, that's not so clear because then she says,
well, I didn't make any more payments,
but that didn't seem to contradict her saying I tried.
Right.
She attempted two different times
to go to the bank physically saying,
here, I want your payment.
And they would say, no.
Since I'm the slowest kid in the class,
I'm gonna continue asking questions.
And much of the chagrin of all included here,
but so why do we keep calling the May payment a tender
if the contention is she was just paying regularly?
Because the bank called it.
The contention by the defendants
are that they paid January, February, March, April, and May.
Yes.
But May, we're characterizing that as a tender.
Why?
Only because the bank said that they were behind that one.
So what happened to January, February, March, April payments?
They're paid and accepted.
Okay.
And the May payment was first accepted by, it was set.
It was accepted.
I'm assuming it was cashed.
And then a check was issued by the bank saying,
no, this isn't enough.
Correct.
So the tender then, what I'm talking about is
she then went testified.
I went to the bank a couple of times
and tried to get them to take that money.
Correct.
And then that has implications too
on the acceleration notice
because part of the contract does say
that you have to accurately tell how much you're behind.
And so you can compare two, right?
In April of 2017, or in May of 2017,
when they sent that acceleration notice,
they said you're four payments behind.
Okay.
Now fast forward a few years later on the-
They're four payments behind, but they have the money.
The bank has the money.
Yeah, they have the money.
But then in November, 2020, after years of all this,
they send the exact same date.
You're behind from that date,
which means they still are not counting those four payments
and every other subsequent payment.
So it's still incorrect.
When you say the exact same date, you mean January, 2017?
Say that again?
When you say the exact same date.
Yes, January 17th.
So they're still focusing the acceleration letter
or the notice of default,
all have the incorrect date of default.
The amount is incorrect, but see, they're relying-
Here's a problem that I think you need to address.
So the bank's notice letter says January, 2017
and all subsequent payments.
Isn't that a defense not to the right to foreclose,
but as to the amount-
that's due and owing, because we know she didn't make payments
after May of 2017.
And that one was rejected.
Rightly or wrongly, it was rejected.
But she doesn't make June, July, August.
And I think your position is, well,
they've already said they're not taking any more payments
because she owes all this other money.
But isn't that a defense as to the amount owed as opposed
to thwarting or dismissing the foreclosure action?
No, I think that would be where, in equity,
they shouldn't have the right to foreclose.
If they're rejecting payments and miscalculating
the accounting, then they should be limited
as to what their remedies are.
So any time there's an accounting issue or accounting
problem, a court shouldn't allow a foreclosure to happen.
It should allow 3, 4, 5, 6, 7, 8, 9 years of non-payment?
No, it's not.
Because this is what this boils down to, right?
This was an accounting issue.
Yes.
And I'm not saying right or wrong,
but there was an accounting issue.
And then, because there was this accounting issue,
your client stopped paying.
Now, maybe the bank should have taken action more quickly,
and they didn't.
But that's where we are.
But why should a foreclosure be stopped
when there's years of non-payment
over this four payments accounting issue?
Because you have to weigh what the position both
of these parties are in, right?
So if the bank makes a mistake and then forecloses.
But your client signed a contract
saying she would make monthly payments.
And in effect, you're saying we should forgive that obligation.
No, not at all.
No one's here saying the debt isn't owed.
The bank will get their money.
It's just when will they get their money, right?
Do they get it immediately now we're foreclosing?
Or do they fix the client's credit
because they've been reporting negative for nine years?
So to allow them the opportunity to refinance.
Why would they get their money?
Why are you so sure they'll get their money?
The order said that they didn't prove breach.
No, no, like the total amount.
They didn't prove breach.
Right, but what I'm saying is that they didn't.
Not letting them foreclose is not
the same as the bank won't get their money.
If tomorrow the Fernandez's sell,
the bank will get their money.
If the Fernandez's went and refinanced,
if their credit was good enough, but not because of the bank,
then they could get their money.
There are a lot of options for the Fernandez's,
if not for the fact that the bank has been repeatedly
telling everybody that they're behind for nine years,
based on the things that they're wrongful accounting.
But they are behind for nine years.
They're just the distinction is whether there's
four months of payments, right?
And so, yeah.
So it's not that the bank's been wrongfully reporting them
behind, right?
They are actually behind.
But they wouldn't be if.
So you have a pattern of when this loan was taken out
of payments continuously.
That changes only when the bank says we don't
take your payments anymore.
OK, I was about to ask a question about that.
What evidence in the record is there
that the bank communicated that we wouldn't
take your payments anymore?
The rejection of the renewed?
I don't expect you to know, but I'm
trying to find out myself while we talk.
Where in the record is that actual May 2017 rejection
letter?
I have my May 11, 2017, Exhibit 7 to some documenter.
We are returning these funds to you for the following reasons.
Funds are less than total amount due.
OK, so from that, you're saying that an unsophisticated
mortgagor will think they will never
accept another mortgage payment here until kingdom come?
No, there is another document.
And it is the letter that came along with that,
I think maybe submitted right before or right after,
from the attorneys of the bank saying,
we understand you tendered this payment.
But it is insufficient because you
are behind four more payments.
And you can only catch up if you pay all four.
OK, so I don't have that in front of me.
But let's presume for the sake of discussion
that you accurately characterized the record,
which I only presume you would.
So from that, that juncture in time,
everybody's in a standoff.
And you're saying that the mortgagors
are entitled to do nothing?
No, they didn't.
And then years later, having done nothing
for multiple years, a circuit court judge
is correct to say that the plaintiff has not
proved a breach of the contract by the, at all, no breach?
But you're skipping the part where the bank forecloses
and then admits that they're the ones who made the mistake
and dismiss the foreclosure.
Why?
What does that have to do with anything?
They dismissed the case.
It's history.
Right, so if they made the mistake,
if they're the reason why all of this happened,
they could have accepted payment.
They could have accepted that May payment.
I mean, the blame is being put on the homeowners for saying,
why don't you make all these payments?
But the bank's not being looked at for,
why didn't they just keep making payments?
And then investigate the four payments
to verify if that's the issue.
The bank's letter or the lawyer's letter
says, you owe four more months.
And therefore, we're not accepting your payment
because you owe that.
And then your client's position is, we paid it.
The bank has the money.
And ultimately, that was established at trial
based on the documents.
And then am I recalling correctly
that the bank's witness still wasn't certain whether or not
the bank, I'm not sure that this was addressed,
was the witness, did the witness acknowledge
that the bank had the money?
No, I don't think they had.
It didn't come out.
I don't think it came out.
Right, it came out.
But the witness was uncertain as to why
the reversal had occurred.
Right.
And then your client's established,
but they have the money.
Right.
And so at the time, the bank's lawyers
say, we're not accepting payment because you
owe this extra money.
Your clients, based on the evidence,
didn't owe that extra money.
Exactly.
And so let's, and I don't want to cut off
either Judge Atkinson or Judge Gard if they have
more questions on this.
But I'd like you to address what I think
is another important issue, which is failure
to tender the money to the registry of the court.
Well, so yes, they didn't tender to the court.
And quite frankly, I'm not aware of anyone
who would know that as a reason.
I don't think you can use that as an excuse.
They're represented by counsel.
Sure.
And I understand you may be following on your sword
that, shoot, I didn't know that.
But, and maybe you did, maybe you didn't.
But that seems to be where you're heading is,
we messed up on that part of it.
So does that then mean the bank's
entitled to a reversal because there was a failure to tender?
Well, the advice was, or what you see in the testimony
is the homeowner saying, we saved up money.
We are saving up money.
Now, they even claimed it was $20,000.
The bank is arguing that that was,
according to the November 2020, when they started the second.
But that's not accurate.
That $20,000 is after the first foreclosure.
She had $20,000.
She saved up all this money, but nowhere to put it.
So she had acted in that way.
But then again, that's where life gets into the situation
where, how do you hold on to that money
if you have no credit, if the bank is telling you
for the entire amount of the first foreclosure?
How much of this is explained in the record as far as no credit,
I had to spend it, and so forth?
Was that addressed in trial?
Yes, it was.
And she testified to that.
And as far as the proof at trial for foreclosure,
was the bank asking for the total amount
after applying the four payments that were rejected,
or was that still uncertain?
They still argued that those four payments were missed.
So they were presenting evidence that you owe,
I don't remember what the number, $50-some-thousand.
And your client's position is, I don't
know that this was articulated to the court,
but my understanding correctly, we
know we haven't paid all the mortgage,
but they're still not crediting us
with those four payments for which they have the money.
Correct.
And I would like to highlight the difference
in the first foreclosure and the second foreclosure,
everything is exactly the same except more time.
So if in the first foreclosure, if we could retroactively,
if we know that those payments were made,
the first foreclosure was rightfully dismissed,
and it was wrong in the amount that they
were trying to collect, and anyone
would have said that the acceleration letter and all
of that was incorrect because of those four payments.
Your position seems to be, the bank
should have sorted this out before they
started the second foreclosure.
Correct.
That's what it comes down to.
I've let you go over, I don't want
to not let Judge Atkinson or Judge Gard
ask any additional questions.
I do have a question.
So you're contending that the record is ironclad clear
that the bank has the money for the 2015 payments?
Yes.
Where?
What supports that in the record?
Their own accounting.
Because the money gets in, right?
But we just talked about, you just talked to Judge Silberman,
and you conceded that they didn't concede that, correct?
Yes, that they didn't concede that, but.
They don't concede that the record establishes
that they have the money?
I believe that.
OK.
Yes, I believe that would be the case.
Go on, but the counsel has an opportunity to respond now.
Yeah.
Mr. Greenlee, though, their witness is so unambiguous,
he doesn't know.
And he even testified when it comes
when he was pressured and asked about the NSF, right?
So let me ask you this.
So if we look at this record, how do we review that?
There is essentially, you're going
to tell me whatever evidence shows in their records
that the bank has the money.
The bank contends that the borrower has the money.
And then that leads to the conclusion
there's been no breach?
As a matter of law?
Well, I think that the trial court found
that the payments were there.
That the bank failed to meet their permission.
What was the order?
Let's see here.
Order on final?
OK.
So this is like post-trial.
This is, OK.
So the court finds in paragraph four
that Ms. Fernandez was credible in her testimony
as to the payments she made on a monthly basis from January
2015 and April 2017.
The January 2015, that's the start
of the four uncertain payments?
No, it was August.
But we wanted to cover as much as possible.
August of which year?
Of 2015.
OK.
So the judge's finding is that she finds Ms. Fernandez
credible that she made the monthly payments from January
2015 until April 2017, which covers the August, the four
that are in question.
Can we review that for, what's our standard of view
for that then?
That if you're.
Well, there was no, there was no.
Never mind, I got it.
But it is in the accounting.
It's backed up by their own accounting.
It says payments came in.
So that's a factual issue for which we owe deference
to the trial court is what you're going to say.
And I know you're aware of the time.
So I don't want to step on the presiding judge's toes
as he tries to manage his courtroom.
Very good.
Well, we've let you go over by five minutes.
So we will turn it back to Mr. Levine.
And if you need a minute or two extra, Mr. Levine,
I won't cut you off.
I would like you, though, to address this very last thing
first, which is, does the bank have the money
for those four payments?
I don't know.
Is there any evidence that the money
was returned to the borrowers?
The only evidence that I cite the court to
is the payment history that shows they were reversed.
I'm sorry, speak up.
Is the payment history that shows it was reversed.
If it was reversed for insufficient funds,
like Mr. Greenley said it might be,
then there's no money to return.
Because we never got the money to begin with.
But your witness doesn't know.
He doesn't know.
I think she did.
So what evidence is there that the bank doesn't
have the money represented by those four payments from 2015?
The only evidence that I said is that the payment
shows it was reversed.
Usually when payments are reversed, they're sent back.
No, we understand usually what may happen, Mr. Levine.
But it's your client's burden as a plaintiff
to present evidence as to the amount of the default
and the basis of the default.
So my question is, how did it establish it
when the witness says, I really don't know what
happened with those four payments?
Very easily.
Because as I said, with a continuing state of default,
even if we give deference to the trial courts
that they were not in default as of January 2017,
or February 2017, or April, even if we give deference
to the trial court for that, they're
still in default for June, July, et cetera.
Then the acceleration would be invalid, wouldn't it?
No, absolutely not.
Why not?
If the payments, as the judge found,
she made the monthly payments in accordance
with the note and mortgage from January 2015 until April 2017.
The notice of default in 2020 goes back to January of 2017.
So that was the basis of the acceleration, right?
That was the notice of default, an opportunity
to cure a pre-suit, yes.
And if the numbers were incorrect,
then the notice of acceleration is void or voidable?
No.
What about the notice of default?
Neither.
Now, this is if you did both.
Why wouldn't the notice of default have been defective?
Because a notice of default under paragraph 22
of the mortgage needs to simply tell you what the default,
you haven't paid, which they haven't,
what you need to do to cure the default to pay.
OK, so stop there for a moment.
The amount that is claimed that you need to cure the default
Included an amount representing or represented by those four checks that we've been talking about all morning
Right, I believe that amount did include that. Yes, and we don't know if in fact
That money was ever rejected or returned in the possession of the borrowers
We don't know but it's not relevant and i'll explain why right now
There's a case called and this is not brief because it wasn't litigated the the amount
The amount of the breach letter is not something that was raised
So i'll tell you just my knowledge of this industry doing this for a while
There's a case called als versus garvin is out of the fourth dca. I don't have a site for you
In that case that exact issue came up
The breach letter had the wrong amount the bank in that case the plaintiff admitted and said
We admit our number is too high
The number in the breach letter is more than the bar actually needed to cure the default the trial court said well
If you can't foreclose you have a bad breach letter the fourth dca reversed
and it said
If you tell them you're in default for not paying
And if you tell them to cure the default you have to pay that substantial compliance the breach letter is sufficient
So in this case, even assuming that fifty six thousand dollars should have been fifty three instead of fifty six
It still told them you're in default for not paying and it still told them what they need to do to cure the default
Now, let's say they had tendered the fifty three
And not the full 56 because they said no no you we you have those payments
A completely different story completely different story after that
This ties into your argument that the acceleration nevertheless is proper because there were no payments after may
2017 that's correct. Is that I I understand we've been talking a lot today about what happened in 2015 up until may of 17
And I I know it's the basis of their default, but ultimately
Ultimately, it's not material. Well, but it can be material because the judge says
The bank stopped accepting payments and there's testimony saying she tried to pay now we get to the tender issue. So
The the trial judge did say payments weren't accepted after may of 2017 and I like to ask you. What does that mean?
Well, he's right
The trial judge is right. No payments were accepted after may of 2017
Let's finish that let's finish let's finish that sentence and subsequent defendants may
2017 payment was returned by the plaintiff and subsequent attempts to pay
Directly at the service or bank of america were not accepted after may 2017
so the judge made a finding that
The ms. Fernandez tried to make payment. They were rejected. That's why I say well
Then we get to this tender issue into the registry of the court
So
the may 2017
The payment that was made in that month regardless of what payment it was was returned. I do agree with that. No one's ever no one's
I've never said otherwise
after may of 17
No payments were tendered. So that's not what the court found and that's not what ms. Fernandez testified
She said she went to the bank to try to pay and the bank said no
I believe that was may of 2017
She went to the bank
Made the payment and that's why bank of america had to mail her back a separate check and bank of america said we're not accepting
any more payments because
You've got to pay this amount. We they've said in accordance with paragraph one of the mortgage
We are only accepting payment that was sufficient to bring the loan current and that's isn't that the crux of it though?
Whether the amount to bring it current
Involves those four payments that were made but the bank says were reversed and whether who had the money
If those were the only defaults we were suing on january
Obviously, we know there's later defaults
But are they defaults if she tried to pay and the bank says we're not taking any more unless you pay this
You have to pay three thousand dollars and she says but I only owe a thousand dollars
I I think then judge subman it really comes down to which I believe the panel's already asked. Um, mr. Borden about is
if the bank
Incorrectly returned that money in 2017. I'll get let's say let's say that was wrong. Does that mean?
They never have to tender another payment ever again
No, it means she still has to tender payment and the judge says she tried but the bank basically made it clear
We're not accepting more payments because you owe more she tendered one that was returned. That's correct
That's not what the judge found and that's not what miss fernandez testified
She said she went to the bank on a couple of occasions to try and pay and the bank said no
how many because there's
Well nine years
Your client cross-examined her didn't they so they could have brought out how little she did or how much she did well we did we
And she's and the bank and I read the quote to the court and the bank was satisfied that she tried
The bank the bank. No, i'm sorry. I said the bank the court was satisfied. I think you understood it
But anyway, we've beat it to death. Can I ask what so going back to the uh,
Uh
Five payments or four payments the 2015 payments, okay
cozy council, unfortunately, I ran out of time
Questioning him, but he was convinced is convinced that the record
That the account the accounting records of the bank
prove
that
the payment
That that the bank kept the money
But my understanding from you is that the records say insufficient funds
The testimony of mr. Greenlee was that he didn't know why they were returned but it could have been sufficient funds
But let's assume what did the record say?
The records simply say payment reversed. They don't say they don't say
They say they have a minus sign
They show the payments being deducted right and the paid through date going back because the payments are being resolved
There's nothing in there about an actual check being mailed back
But let's assume for a second deductance in that. Well, where's the insufficient funds evidence come back the mr. Greenlee
That's not the records that's mr. Greenlee's speculation. He said that he wasn't sure why he speculated that could be one of the reasons
But he did that's not the record say they don't say insufficient
Or it could be that there was a mistake
Maybe maybe not so that's as believable as insufficient funds because he just doesn't know
He didn't know and there was nobody from dye tech that was called as a witness
No, and there was nobody from bank of america
Other than this witness who didn't know there was nobody else called to clarify it
I don't believe and there were no documents that specified
What happened to that money other than the the fernando's saying it wasn't sent back to me
Well, if if the bank still had the money judge and that's called the affirmative defense of payment, which was not pled
But either way i'm trying to bring the court's attention back to I get it
The bank probably could have done a better job with their records, you know
I I don't believe in all the years i've been in this court ever got up and said
Bank records are perfect in every case in every way. I certainly would have a job if they were but
Just because these payments were reversed improperly properly or not. The money was returned or not. It doesn't subtract from the
Ultimate issue of the fact the payment ceased the breach letter went out. Not only did they not cure
They said they didn't have the money to cure the fact
Credit whether these payments were credited or not back to them
Would not have changed the fact they had the inability to occur the default and wouldn't change where we are today
That's why i'm asking this court to reverse and remain for final judgment foreclosure
I have sympathy for the fernandez financial situation like anyone else can
but the contract has been breached and the right to foreclose and right to foreclose has been proven by
By preponderance of the evidence or confidential evidence and that's what we ask the relief in this court. So very good
Mr. Levine, you had the extra time that opposing counsel used so we're in equit equitable disposition here
All right. Thank you very much. Thank you both
You too and uh drive safely or fly safely. However
Right now back well, good luck with that. Hopefully fortunately you're going away from tampa so you shouldn't have a problem
Very good. Well, thank you both
The next case is hartford insurance versus structure sbl and enterprises precision