Florida Statutory Requirement for a Notice of Assignment Is Not a Condition Precedent to Foreclosure

By: Alen H. Hsu

Florida’s Second District Court of Appeal (“Second District Court”) recently held that a lender’s failure to provide written notice of assignment of a debt to a borrower as required by Section 559.715, Florida Statutes (2012) (“Section 559.715”), does not bar a foreclosure suit. Brindise v. U.S. Bank Nat. Ass’n, 2D14-3316, 2016 WL 229572, (Fla. 2d DCA 2016). In Brindise, the borrower took out a loan from Countrywide Home Loans, Inc., and the loan was subsequently acquired by U.S. Bank National Association (“U.S. Bank”) via an assignment of the promissory note. Borrower stopped making mortgage payments in 2010, and U.S. Bank instituted a foreclosure action and sought a money judgment for the accelerated principal amounts due on the promissory note, together with any deficiency after sale, interest, and attorney’s fees.

After conclusion of a non-jury trial, U.S. Bank obtained final judgment of foreclosure. Borrower appealed and argued that all foreclosure actions are attempts to collect debt under Florida’s Consumer Collection Practices Act (“FCCPA”), and because of this, Section 559.715, which is part of the FCCPA, is a condition precedent to foreclosure. Borrower further argued that U.S. Bank failed to plead or prove this issue at trial which barred foreclosure.

Section 559.715 states in pertinent part that, “the assignee must give the debtor written notice of such assignment as soon as practical after the assignment is made, but at least 30 days before any action to collect the debt.”

The Second District Court, in interpreting Section 559.715, rejected borrower’s argument for several reasons. First, Section 559.715 does not contain any language that makes a written notice of assignment a condition precedent to a lawsuit. The Second District noted that the legislature knows how to condition the filing of a lawsuit on a prior occurrence; it has done so, for example, in statutes related to libel and slander actions and condominium associations. Second, Section 559.715 was enacted for the purpose of allowing the consolidation of all claims by various creditors against a particular debtor. Section 559.715 does not apply to the mortgage foreclosure context, in which a single note holder seeks to foreclose on a single mortgage and note. Lastly, the FCCPA prohibits egregious debt collection practices and the borrower, in this matter, did not demonstrate how the filing of a foreclosure suit implicates such concerns.

Thus, the Second District Court held that the failure to provide written notice of assignment of a debt under Section 559.715 does not bar a foreclosure. In other words, Section 559.715 does not create a condition precedent to the institution of a foreclosure, regardless of whether a foreclosure action is an attempt to collect a consumer debt under the FCCPA. In light of the number of foreclosure cases pending in Florida, the Second District, however, certified this issue to the Florida Supreme Court as a question of great public importance. Accordingly, lenders and servicers should monitor this decision, which if reversed, could alter the landscape of foreclosure law in Florida.

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