New Paragraph 22 Issue: Rehearing as an Amicus

Posted on November 11th, 2014 by Mark Stopa

Last week, Florida's Fourth DCA issued a decision on paragraph 22 that came completely out of left
field. In Holt v. Calchas, LLC, Case No. 4D13-2101 (Fla. 4th DCA 2014), the court ruled that a
defective paragraph 22 letter does not give rise to dismissal, as the letter is a condition precedent to
acceleration but not foreclosure. As a result, per the Fourth District, even if a paragraph 22 letter
is defective, the bank can still foreclose on unpaid installment payments. Oddly, the Fourth
District made this ruling sua sponte, without briefing from the parties, and without a single legal
citation. Here's the paragraph of the decision that everyone in the industry (plaintiffs' lawyers, the
defense bar, and a few judges with whom I've spoken) finds so odd:
We do not agree with Holt that insufficient evidence of compliance with paragraph twenty-two
justifies dismissal of the entire case. Paragraph twenty-two requires notice to allow the bank to
accelerate the balance due on the notice. Failure to comply with paragraph twenty-two does not
affect the bank's entitlement to foreclose on past due installments. If the trial court had ruled
properly, it should have entered a judgment of foreclosure only for the amount past due on the note
at the time of trial, and not the full accelerated balance of principal.
I've argued the paragraph 22 issue probably 1,000 times at this point. Never once has a bank
lawyer even tried to assert this position. Never once has a judge so ruled. Perhaps more
tellingly, several published decisions characterize paragraph 22 not just as a condition precedent to
acceleration, but a condition precedent to foreclosure - including two decisions from the Fourth
DCA. See Samaroo v. Wells Fargo Bank, 137 So. 3d 1127 (Fla. 5th DCA 2014); Dominko v. Wells
Fargo Bank, 102 So. 3d 696 (Fla. 4th DCA 2012); Zervas v. Wells Fargo Bank, 93 So. 3d 453 (Fla. 2d
DCA 2012); Laurencio v. Deutsche Bank Nat'l Trust Co., 65 So. 3d 1190 (Fla. 2d DCA 2011);
Konsulian v. Busey Bank, N.A., 61 So. 3d 1283 (Fla. 2d DCA 2011) (repeatedly characterizing the
paragraph 22 notice as a "condition precedent to foreclosure"); Frost v. Regions Bank, 15 So. 3d 905
(Fla. 4th DCA 2009).
Under the circumstances, and even though I was not involved in the Holt case in any way, I felt
compelled to file this Motion for Rehearing as Amicus.
Predicting what an appellate court will do is always tough, particularly in a case I'm not involved
in. That said, I'm hopeful this opinion will be revised on rehearing. Paragraph 22 is a condition
precedent to foreclosure, and the anomaly that is Holt should be fixed.
Mark Stopa
www.stayinmyhome.com
Posted in Main | No Comments
http://www.stayinmyhome.com/new-paragraph-22-issue-rehearing-amicus/
http://www.usa.gov/Citizen/Topics/Family/Homeowners/Foreclosure.shtml