       DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
                             FOURTH DISTRICT

                         MICHAEL STEINBERG,
                              Appellant,

                                     v.

                       WELLS FARGO BANK, N.A.,
                              Appellee.

                              No. 4D14-1200

                            [October 21, 2015]

  Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm
Beach County; Edward H. Fine, Judge; L.T. Case No. 50-2010-CA-016912-
AW.

   Bruce Botsford of Bruce Botsford, P.A., Fort Lauderdale, for appellant.

   David A. Greene and Anthony M. Stella of Fox Rothschild, LLP, West
Palm Beach, for appellee.

GROSS, J.

    We affirm the final judgment of foreclosure and write to address one
issue—whether the deferred interest provision of a note and mortgage
triggered the tax imposed by section 201.08(2), Florida Statutes (2010).
We hold that the deferred interest provision fell under an exception to the
general rule of taxability, so that no tax was due on the deferred interest
added to the principal amount owed by the borrower and the mortgage
and note were enforceable.
   A bank loaned appellant $640,000. The adjustable rate note contained
a “deferred interest” provision providing that if a payment was insufficient
to pay the total amount of accrued interest from the previous month, any
unpaid interest would be added to the principal and would accrue interest
at the same rate as the principal. The note also included a “dragnet
clause,” which required that the unpaid balance caused by this accrual of
deferred interest never exceed 125% of the original loan amount. At the
time the complaint was filed, appellant’s deferred interest resulted in a
principal amount owed of $647,079.04. The bank had paid documentary
stamp taxes only on the original principal of $640,000.
   Steinberg argues that his deferred interest amounted to a “future
advance” within the meaning of section 201.08(1)(a), Florida Statutes
(2010), which would have required the payment of a documentary stamp
tax. We reject this argument because the advances here did not trigger
the obligation to pay a tax.
   Section 201.08 concerns, among other things, the documentary stamp
tax owed on promissory notes and mortgages. Subsection (1)(b) requires
a tax be paid on mortgages filed or recorded in Florida. Where there is
both a mortgage and a note, the tax must be paid “at the time of
recordation.” Id. If the mortgage or security interest “secures future
advances,” the tax on the initial debt is paid at the time of recordation and
the tax on any future advances is paid at the time the advance is made.
Id. Where no tax has been paid on a “future advance,” the underlying
mortgage or note is not “enforceable in any court of this state as to any
such advance unless and until the tax due” on each advance has been
paid. Id.; see Glenn Wright Homes (Delray) LLC v. Lowy, 18 So. 3d 693,
696 (Fla. 4th DCA 2009).
   Steinberg reasons that section 201.08(1)(b) should be read in
conjunction with section 697.04(1)(b), Florida Statutes (2010), entitled
“Future advances may be secured.” Steinberg points to language in
section 697.04(1)(b), which states: “any increase in the principal balance
as a result of negative amortization or deferred interest shall be secured
by the mortgage.” Reading sections 201.08(1)(b) and 697.04(1)(b) together,
Steinberg concludes “that any increase in the principal balance as a result
of negative amortization is secured by the mortgage” and is a form of
taxable future advance. The problem with this argument is that nothing
in section 697.04 expands or contracts the concept of a taxable future
advance set forth in section 201.08(1)(b). See also Wane v. Loan Corp.,
552 F. App’x 908 (11th Cir. 2014). Section 697.04 primarily concerns the
securing of future advances under a mortgage; it is not a taxation statute.
   Section 201.08(1)(b) creates an exception to the general rule of
taxability of future advances:
      Notwithstanding the aforestated general rule, any increase in
      the amount of original indebtedness caused by interest
      accruing under an adjustable rate note or mortgage having an
      initial interest rate adjustment interval of not less than 6
      months shall be taxable as a future advance only to the
      extent such increase is a computable sum certain when
      the document is executed.
(Emphasis added).


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   As a result of this statutory exception, section 201.08(1) did not
prohibit the bank’s enforcement of the note and mortgage. Appellant had
a “pick-a-payment” mortgage that allowed four payment options each
month–ranging from payment of the full amount of principal and interest
to a payment of less than the amount of interest due for that particular
month, thereby implicating the deferred interest provision of the note. At
the time the mortgage and note were executed, there was no way to know
which payment option appellant would choose each month. Therefore, the
extent of any deferred interest amount was not a “computable sum certain
when the document[s were] executed,” such that any deferred interest
added to the principal amount was not a taxable “future advance” within
the meaning of subsection 201.08(1)(b).
   Accordingly, the bank did not owe any taxes under section 201.08(1)(b),
so its note and mortgage were enforceable.
   Affirmed.

STEVENSON and TAYLOR, JJ., concur.

                           *         *       *

   Not final until disposition of timely filed motion for rehearing.




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