Clients have recently inquired about recovering previously incurred attorney fees in subsequent foreclosures considering the often-litigious nature of Florida foreclosures. Under Florida law, courts must implement the plain language of contracts when that language is clear and unambiguous. This applies to every provision of the agreement.
This is also true of standard mortgage instruments, such as the following standard provision in a mortgage:
“Borrower’s Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued . . . . Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys’ fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting Lender’s interest in the Property and rights under this Security Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender’s interest in the Property and rights under this Security Instrument, and Borrower’s obligation to pay the sums secured by this Security Instrument, shall continue unchanged.”
When a mortgagor requests a reinstatement quote in cases where a prior foreclosure action was dismissed, the above clause allows the mortgagee to include expenses incurred earlier, including attorney’s fees.
In the Maw case (Fla. 2d DCA 1985), the Florida appellate court held that even if the borrower has successfully avoided a foreclosure judgment in a prior action, the lender is entitled under the mortgage to seek and recover reasonable attorney’s fees. This presumes a default was the basis for the earlier foreclosure action. Subsequent holdings in other Florida appellate courts have held similarly to allow for including and recovering prior incurred mortgagee attorney fees in a refiled action or a new demand letter.
The recent Colombo case (Fla. 4th DCA 2022) reiterates established case law and centers on a mortgagor suit alleging a Florida Consumer Collections Practice Act (FCCPA) violation. The mortgagee’s law firm sent a reinstatement letter that included prior dismissed suit mortgagee attorney fees. Ultimately, the Fourth District Court of Appeal determined the mortgagee’s law firm representative did not violate the FCCPA.