AMERICANA ASSOCIATES, LTD, APPELLANT,
v.
WHUD REAL ESTATE LIMITED PARTNERSHIP, ETC., APPELLEE
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Americana Associates raised an economic duress defense in a mortgage foreclosure action, claiming the lender fraudulently misrepresented loan terms and forced it to close under financial duress. The court affirmed the trial court's rejection of the defense, holding that Americana was estopped from raising economic coercion after performing under the loan for eight years and entering into subsequent agreements acknowledging the debt.
Americana was properly estopped from raising the defense of economic coercion or business compulsion because it performed under the loan terms for over eight years, delayed in asserting its claim, and entered into subsequent agreements acknowledging the debt that benefited it by staying acceleration.
[1] A party may be estopped from raising the defense of economic duress or business compulsion when they have performed under the terms of a contract for an extended period a…
[2] Acceptance of benefits under a contract may estop a party from questioning the validity and effect of that contract.
Previewing 2 of 4 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“after a party obtains knowledge that a fraud has been worked upon him, 'a delay in instituting judicial proceedings for relief, generally, will be regarded as a bar to equitable relief'”
Establishes that delay in seeking equitable relief after discovering fraud bars such relief
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Join FLexlaw to unlock all legal intelligenceAmericana Associates alleged that the original mortgagee fraudulently misrepresented the terms of a $25.5 million loan and then changed the terms to A…
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GOSHORN, Judge.
Appellees filed suit to foreclose Appellant’s mortgage. To defeat the foreclosure action, Appellant raised the defense of economic duress, i.e., business compulsion. Specifically, Appellant asserted that Appellees’ predecessor in interest, the original mortgagee, had fraudulently misrepresented the terms by which it would loan Appellant $25.5 million and then, after Appellant had altered its economic situation to enter into the mortgage, the mortgagee changed the terms of the loan to Appellant’s detriment. Appellant argues it closed the loan only because it had no other choice financially. Under these facts, Appellant argued, foreclosure should not proceed. The trial court rejected Appellant’s argument, as do we.1
Assuming that Appellant was forced to close the loan due to economic duress, Appellant’s remedy was to file suit after closing for breach of the terms of the loan commitment agreement. Instead, however, Appellant performed under the terms of the loan for over eight years without raising its claim. Further, it entered into two subsequent agreements which acknowledged the debt, one with the original mortgagee and the other with the Department of Housing and Urban Affairs. These agreements benefited Appellant by staying acceleration contingent upon Appellant’s compliance with the obligations of the agreements. Under these circumstances, we hold that Appellant was properly held estopped from raising the defense of economic coercion or business compulsion. See Farnham v. Blount, 152 Fla. 208, 11 So. 2d 785, 789 (1942) (holding that after a party obtains knowledge that a fraud has been worked upon him, “a delay in instituting judicial proceedings for relief, generally, will be regarded as a bar to equitable relief’); Hendricks v. Stark, 99 Fla. 277, 126 So. 293 (1930) (“It has been repeatedly held that a person by the acceptance of benefits may be estopped from questioning the validity and effect of a contract; and, where one has an election to ratify or disaffirm a conveyance, he can either claim under or against it, but he cannot do both, and, having adopted one course with knowledge of the facts, he cannot afterwards pursue the other.”).
AFFIRMED.
PETERSON and THOMPSON, JJ., concur. . We address only this issue as it disposes of Appellant's remaining arguments on appeal.
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Citator
Cited By
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Americana Assocs., Ltd. v. Whud Real Est. Ltd. P'ship, 846 So. 2d 1194 (Fla. 5th DCA 2003)…enial of its motion for attorney’s fees made pursuant to section 57.105, Florida Statutes (2000). I. Prior Actions This is the second appearance of the parties before this court. The first was in Americana Associates Ltd. v. WHUD Real Estate Ltd., 715 So. 2d 955 (Fla. 5th DCA) (WHUD I), rev. denied 728 So. 2d 200 (Fla.1998), in which this court affirmed a mortgage foreclosure initiated by WHUD. In that appeal, Americana defended by alleging that the original mortgagor1 fraudulently misrepresented the terms…
Authorities Cited
- Hendricks v. Stark, 99 Fla. 277 (Fla. 1930)
- 1. Frank H. Farnham & Henrietta Farnham v. Blount, 152 Fla. 208 (Fla. 1942)