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Coconut Grove Acquisition, LLC v. S&C Venture

Florida Court of Appeals, Third District

February 21, 2018

Coconut Grove Acquisition, LLC, etc., Appellant,
S&C Venture, etc., et al., Appellees.

         Not final until disposition of timely filed motion for rehearing.

         An Appeal from the Circuit Court for Miami-Dade County, Lower Tribunal No. 12-31154, Samantha Ruiz-Cohen, Judge.

          Akerman LLP, and Kristen M. Fiore (Tallahassee), Michael O. Mena, and Alexandra M. Mora, for appellant.

          Legon Fodiman, P.A., and Todd R. Legon and William F. Rhodes, for appellees.

          Before ROTHENBERG, C.J., and EMAS and LUCK, JJ.

          ROTHENBERG, C.J.

         Coconut Grove Acquisition, LLC ("CGA") appeals from a final judgment entered in favor of S&C Venture, etc., ("S&C"), among others, who were the defendants below in this breach of promissory note and foreclosure action. Because we find that the law and the record fully support the trial court's rulings, we affirm.


         S&C owns commercial property in Miami-Dade County. In September 2007, S&C executed a balloon payment promissory note ("the Note") for more than $7.9 million, secured by a mortgage on its commercial property, to Mercantil CommerceBank, N.A., f/k/a CommerceBank, N.A. ("Mercantil"). The loan provided for a maturity date of August 20, 2012, and included an option of extending the maturity date by five years, until August 20, 2017, if certain requirements were met. S&C maintained an operating account at Mercantil, from which Mercantil withdrew S&C's monthly mortgage payments.

         In 2010, after S&C defaulted on the Note, Mercantil and S&C entered into a forbearance agreement, which reaffirmed the original obligations in the loan documents except as specifically modified in the forbearance agreement. Mercantil agreed to forbear on any legal action until the maturity date of the loan so long as, among other things, S&C did not default again. It is undisputed that S&C never missed a payment to Mercantil under the forbearance agreement.

         The confusion that spawned this litigation commenced in November 2011, when Mercantil sold the loan to Stabilis Fund II, LLC ("Stabilis"). Although it no longer held the Note and was no longer in privity with S&C, Mercantil sent S&C a letter ("goodbye letter") on November 14, 2011, via overnight mail, informing S&C that Mercantil had sold the mortgage to Stabilis and directing S&C to submit its payments to Stabilis at the address provided in the letter. This letter also informed S&C that the monthly payments would no longer be deducted from the Mercantil operating account and provided a phone number to call if S&C had any questions. Despite these instructions, S&C continued to deposit sufficient funds to cover its monthly payment obligations into the operating account at Mercantil rather than sending the payments directly to Stabilis.

         It was not until December 2011 that S&C received a letter ("hello letter") from Stabilis's loan servicer, which provided specific payment instructions. The hello letter informed S&C that it would receive a billing statement two weeks prior to a payment due date. However, rather than receiving the promised billing statement, S&C received a default notice from Stabilis on January 11, 2012, informing S&C that the entire loan balance was immediately due and owing because of existing defaults. In the ensuing months, while the parties attempted to resolve their disputes, S&C sent Stabilis all monthly payment due under the terms of the loan documents, and Stabilis accepted each payment, with the qualification that it was not waiving any preexisting default.

         On July 19, 2012, S&C attempted to exercise its right to extend the maturity date of the loan from August 20, 2012 to August 20, 2017, pursuant to the terms of the loan documents and the forbearance agreement. To that end, S&C tendered the required extension fee to Stabilis. Stabilis rejected the tender and informed S&C on August 24, 2012, that the maturity date would not be extended because S&C's loan was in default.

         Thereafter, Stabilis filed a two-count complaint against S&C for breaching the Note and for foreclosure on the collateral property. Stabilis argued, among other things, that S&C failed to make its monthly payments in November and December 2011. S&C responded that Stabilis and its agents were responsible for any delay in payments because they caused the confusion that resulted in the delay. S&C also counterclaimed, seeking a declaratory judgment finding ...

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