EDWARD E. HADDOCK, JR., AS TRUSTEE; ROBERT M. WOODS, JR., AND ALVIN BARASCH, APPELLANTS,
v.
MARVIN G. MARLIN AND CAROLYN S. MARLIN, HIS WIFE; LYLE POWELL AND MYRA POWELL, HIS WIFE, APPELLEES
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In this mortgage foreclosure appeal, the court reversed the trial judge's award of 25% interest from the date of default and after judgment, holding that the high interest rate applies only after acceleration of the note and that post-judgment interest is capped at 12% by statute.
The court held that 25% interest applies only after the mortgagee exercises its option to accelerate the debt, not from the date of default. Additionally, post-judgment interest is limited to 12% by statute unless the written contract provides for a lesser rate, and the note's 10% pre-acceleration interest rate controls, capping post-judgment interest at 12%.
[1] A mortgage note provision allowing for acceleration of the principal and accrued interest upon default does not automatically trigger the highest allowable interest rate…
[2] A judgment entered after October 1, 1981, bears interest at 12% per year unless the underlying contract specifies a lesser rate.
Previewing 2 of 3 headnotes on this case. FLexlaw’s editorially structured points of law — every proposition, pinpointed — are reserved for members.
Join FLexlaw to unlock all legal intelligence“It is rather apparent that until the option to accelerate is exercised then the debt does not bear interest at the highest rate allowable under the law.”
Establishes the controlling legal principle that high interest rates apply only upon exercise of acceleration, not from date of default.
Previewing 1 of 3 key quotes on this case — the court’s exact language, pinpointed for members.
Join FLexlaw to unlock all legal intelligenceAppellants were mortgagors who defaulted on a mortgage note. The note contained a provision allowing the mortgagee to accelerate the entire principal …
The full statement of facts, procedural history, and disposition for this case are member content.
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DAUKSCH,'Judge.
This is an appeal from a judgment in a mortgage foreclosure case. The issues involve interest awarded in the judgment, and attorney’s fees. We reverse as to the interest and affirm as to the fees.
The trial judge awarded 25% interest to the mortgagees to begin from the date of default. Appellants complain that they should be required to pay that high rate only after the note was accelerated. The applicable note provision says:
If default be made in the payment of any of the sums or interest mentioned herein or in said mortgage, or in the performance of any of the agreements contained herein or in said mortgage, then the en-' tire • principal sum and accrued interest shall at the option of the holder hereof become at once due and collectible without notice, time being of the essence; and said principal sum and accrued interest shall both bear interest from such time until paid at the highest rate allowable under the laws of the state of Florida. Failure to exercise this option shall not constitute a waiver of the right to exercise the same in the event of any subsequent default.
It is rather apparent that until the option to accelerate is exercised then the debt does not bear interest at the highest rate allowable under the law. Bratcher v. Wronkowski, 417 So. 2d 1132 (Fla. 5th DCA 1982), petition den., 424 So. 2d 760 (Fla. 1982); Morton v. Ansin, 129 So. 2d 177 (Fla. 3d DCA 1961). Incidentally, the debt was greater than $500,000 so the highest lawful rate according to statute was 25%. § 687.03(1), Fla.Stat. (1981).
The trial judge also awarded interest at the 25% rate after judgment. This is error because the applicable statute provides:
A judgment or decree entered on or after October 1,1981, shall bear interest at the rate of 12% a year unless the judgment or decree is rendered on a written contract or obligation providing for interest at a lesser rate, in which case the judgment or decree bears interest at the rate specified in such written contract or obligation.
§ 55.03(1), Fla.Stat. (1983). The note here provides for 10% interest until acceleration after default and then 25% thereafter, so 12% is the maximum rate allowed by statute, after judgment.
The judgment is reversed as to the interest and affirmed in all other respects and this cause remanded for such further proceedings as are necessary to comply herewith.
REVERSED in part, AFFIRMED in part and REMANDED.
COBB, C.J., and FRANK D. UP-CHURCH, Jr., J., concur.
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THFN Realty Co. v. Kirkman/Conroy Ltd., 546 So. 2d 1158 (Fla. 5th DCA 1989)…ng to pay the 1986 property taxes. The mortgagor appeals, contending that the trial court should have calculated interest at the default rate only from the time the mortgagee exercised its option to accelerate the mortgage, citing Haddock v. Marlin, 458 So. 2d 848 (Fla. 5th DCA 1984) and Bratcher v. Wronkowski, 417 So. 2d 1132 (Fla. 5th DCA 1982), rev. denied, 424 So. 2d 760 (Fla. 1982). This court construed the provision for a default interest rate in Haddock and Bratcher to commence from the date the mortga…
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Eckert Realty Corp. v. Bernhard Eckert, 941 So. 2d 426 (Fla. 4th DCA 2006)…e due and payable at the option of the holder. The note called for default interest to be payable from the “due date.” Thus, a declaration of default was necessary to trigger the obligation to pay interest at the default rate. See Haddock v. Marlin, 458 So. 2d 848 (Fla. 5th [*430] DCA 1984) (where mortgage provided that holder had the option to accelerate upon default, interest at the default rate would be due only from the date of acceleration). Otherwise, the note was not due and could not be calculated at…
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Gen. Storage Corp. v. Fed. Deposit Ins. Corp., 594 So. 2d 875 (Fla. 3d DCA 1992)…le per annum” which is 25% for a loan, as here, in excess of $500,000. Sections 687.02, 687.071, Fla.Stat. (1989). Again, we have considered the contrary arguments of General Storage Corporation, but are not persuaded thereby. See Haddock v. Marlin, 458 So. 2d 848 (Fla. 5th DCA 1984). The final summary judgment under review is affirmed except insofar as it awards $392,155.25 in prejudgment interest at a rate of 12% per annum. As to the award of prejudgment interest only, the final summary judgment under rev…
Authorities Cited
- Emil Morton v. Ansin, 129 So. 2d 177 (Fla. 3d DCA 1961)
- Bratcher v. Wronkowski, 417 So. 2d 1132 (Fla. 5th DCA 1982)