       Third District Court of Appeal
                               State of Florida

                         Opinion filed February 21, 2018.
         Not final until disposition of timely filed motion for rehearing.

                               ________________

                                No. 3D17-434
                         Lower Tribunal No. 12-31154
                             ________________


                 Coconut Grove Acquisition, LLC, etc.,
                                    Appellant,

                                        vs.

                         S&C Venture, etc., et al.,
                                    Appellees.



     An Appeal from the Circuit Court for Miami-Dade County, 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.

                                 BACKGROUND

      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.



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      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




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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 that it had

properly extended the maturity date of the loan. In December 2014, Stabilis

assigned the loan to CGA.

      After a non-jury trial in November 2016, the trial court entered a detailed

forty-six-page final judgment in favor of S&C, concluding that: (1) CGA failed to

prove that S&C breached the note; (2) CGA failed to prove that it is entitled to

foreclosure, and it would be inequitable, unjust, and unconscionable to foreclose;



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and (3) S&C is entitled to declaratory judgments finding that S&C is not in default,

the January 2012 notice of default is invalid, S&C’s rights under the loan

documents remain valid and enforceable, and S&C properly exercised its option to

extend the loan’s maturity date to August 20, 2017. Thereafter, the trial court

denied CGA’s motion for rehearing, and this appeal followed.

                                     ANALYSIS

      We review the trial court’s construction and interpretation of notes and

mortgages de novo; however, we review the trial court’s findings of facts to

determine if they are supported by competent substantial evidence. Smith v.

Reverse Mortg. Sols., Inc., 200 So. 3d 221, 224 (Fla. 3d DCA 2016).

      CGA contends on appeal that S&C defaulted because it failed to make its

required monthly payments in November and December 2011 despite receiving the

goodbye letter from Mercantil before either payment was due, a letter which

specifically instructed S&C to pay Stabilis at an address contained therein. We,

however, find that based on the place of payment clause contained in the Note,

S&C was not required to follow the instructions contained in Mercantil’s goodbye

letter, and because S&C continued to deposit sufficient funds to cover its payment

obligations into its account with Mercantil, S&C was not in default of either the

Note or the forbearance agreement.




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      The following findings by the trial court are supported by competent

substantial evidence: (1) in November and December 2011, S&C continued to

make payments into the operating account held at Mercantil; (2) sufficient funds

existed in the operating account to cover all loan payment obligations that came

due during that time; and (3) S&C did not receive the hello letter from Stabilis’s

loan servicer, which was the first letter from Stabilis to include payment

instructions, until after the November and December 2011 payments were due.

      The place of payment clause in the Note, which the forbearance agreement

does not modify, provides:     “This Note is payable at the place designated

hereinabove or at such other place as the payee or holder hereof may hereafter

designate in writing.” (emphasis added). The plain meaning of this provision is

controlling. Bradley v. Sanchez, 943 So. 2d 218, 221 (Fla. 3d DCA 2006) (“Where

there is no facial ambiguity in the portion of the subject contract, the provision

must be afforded its plain meaning.”) (internal quotation and citation omitted).

The Note designated that S&C deposit sufficient funds into the operating account

S&C opened at Mercantil for that purpose. It is undisputed that since the execution

of the forbearance agreement, S&C complied with its contractual obligations by

depositing sufficient funds into the operating account at Mercantil, which was the

place “designated hereinabove,” until another place was designated by “the payee

or holder” of the Note.



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      Although Mercantil attempted to change the place of payment when it sent

its goodbye letter to S&C after it sold the loan to Stabilis, Mercantil was no longer

the payee or holder of the Note, and it therefore had no authority to change the

place of payment. It is neither the fault of S&C nor Mercantil that S&C did not

receive new payment instructions from Stabilis, the then-current payee and/or

holder of the Note, until after the November and December 2011 payments became

due. In fact, if S&C had sent its monthly payments to the address contained in the

“goodbye letter,” these payments would have been in conflict with the binding

place of payment term in the Note. Accordingly, S&C’s decision to continue

depositing sufficient funds into the operating account to cover its monthly payment

obligations was in compliance with its contractual duties.1

      Lastly, we conclude that the trial court did not err by declaring that S&C

properly extended the maturity date of the loan to August 20, 2017. On appeal,

CGA contends that one of the conditions precedent for extending the maturity date

of the loan was not met. Specifically, CGA contends that the forbearance

agreement’s required debt service coverage ratio (“DSCR”), which is a measure of

1 The trial court’s order included several findings related to the discretion the trial
court has to deny foreclosure on equitable grounds. See Amerifirst Fed. Sav. &
Loan Ass’n of Miami v. Century 21 Commodore Plaza, Inc., 416 So. 2d 45, 46
(Fla. 3d DCA 1982) (“It is axiomatic that a court of equity may refuse to foreclose
a mortgage when an acceleration of the due date makes acceleration
unconscionable and foreclosure inequitable and unjust.”). However, we decline to
address such issues because we find that there is no breach from which foreclosure
could follow.

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the ability of net income to service a debt, was not met as of the initial maturity

date, August 20, 2012. The parties contested the measure of the DSCR vigorously

below, and the trial court found that the required DSCR of 1.3:1 was satisfied after

hearing detailed testimony from the parties’ expert witnesses and evaluating the

witnesses’ credibility. The trial court’s finding is supported by competent

substantial evidence, and thus, we will not second guess the trial court on appeal.

Bare Necessities, Inc. v. Estrada, 902 So. 2d 184, 185 (Fla. 3d DCA 2005) (noting

that “when competent, substantial evidence supports a trial court’s ruling, the

appellate court will not ‘second-guess the trial court’”) (citing Bryan v.

Butterworth, 692 So. 2d 878, 881 (Fla. 1997)).

                                 CONCLUSION

      Because there is competent substantial evidence in the record that supports

the trial court’s finding that S&C did not fail to make its monthly payments in

November and December 2011, we find no error in the trial court’s comprehensive

order concluding that S&C did not breach the terms of the forbearance agreement

or other loan documents, CGA failed to prove that it is entitled to foreclose on

S&C’s commercial property, and S&C properly extended the maturity date of the

loan. We also find the remainder of CGA’s arguments to be without merit, and

thus, we decline to address them further. Accordingly, we affirm in all respects.

      Affirmed.



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