Regions Bank v. The 62' Ocean Sport Fish Hull I.D. No. XY001462J203 et al

Filing 91

ORDER denying 78 Motion for Summary Judgment; granting 84 Motion for Summary Judgment and requiring the parties to submit a joint proposed final judgment by 8/21/2014. Signed by Magistrate Judge John J. O'Sullivan on 8/14/2014. (mkr)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
Case No. 13-20966-CIV-O’SULLIVAN
[CONSENT]
REGIONS BANK,
Plaintiff,
v.
The 62' OCEAN SPORT FISH, Hull I.D.
No. XY0011462J203, its engines, tackle,
rigging, apparel and appurtenances, etc.,
in rem, and CLASS ACTION OF SOUTH
FLORIDA and JOHN H. RUIZ, in personam,
Defendants.
________________________________/
ORDER
THIS MATTER is before the Court on the Defendants’ Motion for Summary
Judgment (DE# 78, 5/5/14) and the Plaintiff’s Motion for Summary Judgment and
Incorporated Memorandum of Law in Support Thereof (DE# 84, 6/2/14). On December
20, 2013, parties filed their Joint Consent to Jurisdiction by a United States Magistrate
Judge (DE# 47, 12/20/13) and this matter was referred to the undersigned by the
Honorable Joan A. Lenard, United States District Judge for the Southern District of
Florida, pursuant to 28 U.S.C. § 636(b), for the final disposition of the case. See Order
Referring Case (DE# 48, 12/20/13).
BACKGROUND
On March 18, 2013, Regions Bank (“plaintiff”) filed a one-count verified
complaint to foreclose on a first preferred ship mortgage pursuant to 46, United States
Code, Section 31301, et seq. See Verified Complaint (DE# 1, 3/18/13).

On May 5, 2014, the defendants filed their motion for summary judgment. See
Defendants’ Motion for Summary Judgment (DE# 78, 5/5/14). The plaintiff filed its
response on May 19, 2014. See Plaintiff’s Response in Opposition to Defendants’
Motion for Summary Judgment and Incorporated Memorandum of Law in Support
Thereof (DE# 83, 5/19/14). No reply was filed.
The plaintiff filed its motion for summary judgment on June 2, 2014. See
Plaintiff’s Motion for Summary Judgment and Incorporated Memorandum of Law in
Support Thereof (DE# 84, 6/2/14). The defendants filed their response on July 1, 2014.
See Defendants’ Response in Opposition to Plaintiff’s Motion for Summary Judgment
(DE# 88, 7/1/14). The plaintiff filed its reply on July 8, 2014. See Plaintiff’s Reply to
Defendants’ Response to Plaintiff’s Motion for Summary Judgment (DE# 89, 7/8/14).
This matter is ripe for consideration.
THE PARTIES’ STATEMENTS OF FACT
Local Rule 56.1(b) states as follows:
(a) Statement of Material Facts. A motion for summary judgment and the
opposition thereto shall be accompanied by a statement of material facts
as to which it is contended that there does not exist a genuine issue to be
tried or there does exist a genuine issue to be tried, respectively. The
statement shall:
(1) Not exceed ten (10) pages in length;
(2) Be supported by specific references to pleadings,
depositions, answers to interrogatories, admissions, and
affidavits on file with the Court; and
(3) Consist of separately numbered paragraphs.
Statements of material facts submitted in opposition to a motion for
summary judgment shall correspond with the order and with the
paragraph numbering scheme used by the movant, but need not
2

repeat the text of the movant’s paragraphs. Additional facts which the
party opposing summary judgment contends are material shall be
numbered and placed at the end of the opposing party’s statement of
material facts; the movant shall use that numbering scheme if those
additional facts are addressed in the reply.
(b) Effect of Failure to Controvert Statement of Undisputed Facts. All
material facts set forth in the movant’s statement filed and supported
as required above will be deemed admitted unless controverted by
the opposing party’s statement, provided that the Court finds that the
movant’s statement is supported by evidence in the record.
S.D. Fla. L.R. 56.1(b) (emphasis added).
In the instant case, both parties moved for summary judgment. The defendants
did not comply with the requirements of Local Rule 56.1. While the defendants filed
their own statement of disputed facts (see Defendants’ Statement of Disputed Facts
(DE# 88-1, 7/1/14)) and the Defendant’s Statement of Undisputed Facts (DE# 78-2,
5/5/14) in support of their summary judgment motion, the defendants did not file a
statement of material facts in opposition to the plaintiff’s summary judgment motion
which corresponded with the paragraph numbering scheme used by the plaintiff as
required by S.D. Fla. L.R. 56.1(a). Therefore, the undersigned will deem admitted those
facts in the plaintiff’s Statement of Material Facts (DE# 84, 6/2/14) which are supported
by the record. S.D. Fla. L.R. 56.1(b). “[E]ven where an opposing party neglects to
submit any alleged material facts in controversy, the court must still satisfy itself that the
evidence on the record supports the uncontroverted material facts that the movant has
proposed.” Hoff v. Steiner Transocean, Ltd., No. 12-22329-CIV, 2014 WL 273075, at
*5 (S.D. Fla. Jan. 24, 2014) (citing Reese v. Herbert, 527 F.3d 1253, 1268-69, 1272
(11th Cir. 2008); United States v. One Piece of Real Prop. Located at 5800 SW 74th
Ave., Miami, Fla., 363 F.3d 1099, 1103 n. 6 (11th Cir. 2004)).
3

Moreover, in issuing this Order on the parties’ cross-motions for summary
judgment, the undersigned will consider those facts contained in the Defendants’
Statement of Disputed Facts (DE# 88-1, 7/1/14) and the Defendant’s Statement of
Undisputed Facts (DE# 78-2, 5/5/14), which are not disputed by the plaintiff and are
otherwise supported by the record, and any additional undisputed facts in the record
which were omitted from the parties’ statements of undisputed facts, but are
nonetheless material to a ruling on the cross-motions for summary judgment.
FACTS
On May 17, 2006, defendant John H. Ruiz executed a promissory note with the
plaintiff in the principle amount of $1,114,231.00 (hereinafter “Promissory Note”). Mr.
Ruiz is the borrower on the Promissory Note and personally liable for all amounts
secured by that instrument.
On the same day, defendant Class Action of South Florida (“Class Action”)
executed a Commercial Security Agreement (“Security Agreement”) with the plaintiff in
the principle amount of $1,114,231.00. See Exhibit A to Verified Complaint (DE# 1-2,
3/18/13). The Security Agreement contained the following relevant provisions:
BORROWER’S WAIVERS AND RESPONSIBILITIES: Except as
otherwise required under this Agreement or by applicable law, (A)
Borrower agrees that Lender need not tell Borrower about any action or
inaction Lender takes in connection with this Agreement; (B) Borrower
assumes the responsibility for being and keeping informed about the
Collateral; and (C) Borrower waives any defenses that may arise because
of any action or inaction of Lender, including without limitation any failure
of Lender to realize upon the Collateral or any delay by Lender in realizing
upon the Collateral; and Borrower agrees to remain liable under the Note
no matter what action Lender takes or fails to take under this Agreement.
***

4

GRANTOR’S WAIVERS: Grantor waives all requirements of presentment,
protest, demand, and notice of dishonor or non-payment to Borrower or
Grantor, or any other party to the indebtedness or the Collateral. . . . No
such act or failure to act shall affect Lender’s rights against Grantor or the
Collateral.
***
DEFAULT. Each of the following shall constitute an Event of Default
under this Agreement:
Payment Default. Borrower fails to make any payment when due
under the indebtedness.
***
Cure Provisions. If any default, other than a default in payment is
curable and if Grantor has not been given a notice of breach of the
same provision of this Agreement within the preceding twelve (12)
months, it may be cured if Grantor, after receiving written notice
from Lender demanding cure of such default; (1) cures the default
within fifteen (15) days; or (2) if the cure requires more than (15)
days, immediately initiates steps which Lender deems in Lender’s
sole discretion to be sufficient to cure the default and thereafter
continues and completes all reasonable and necessary steps
sufficient to produce compliance as soon as reasonably practical.
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs
under this Agreement, at any time theretoafter, Lender shall have all rights
of a secured party under the Florida Uniform Commercial Code. In
addition and without limitation, Lender may exercise any one or more of
the following rights and remedies.
Accelerate Indebtedness. Lender may declare the entire
indebtedness, including any prepayment penalty which Borrower
would be required to pay, immediately due and payable, without
notice of any kind to Borrower or Grantor.
***
MISCELLANEOUS PROVISIONS. The following miscellaneous provision
are a part of this Agreement:
***

5

Governing Law. This agreement will be governed by the
federal law applicable to lender and, to the extent not
preempted by federal law, the laws of the State of Florida
without regard to its conflicts of law provisions. The
agreement has been accepted by Lender in the State of
Florida.
***
No Waiver by Lender: Lender shall not be deemed to have waived
any rights under this Agreement unless such waiver is given in
writing and signed by Lender. No delay or omission on the part of
Lender in exercising any right shall operate as a waiver of such
right or any other right. A waiver by Lender of a provision of this
Agreement shall not prejudice or constitute a waiver of Lender’s
right otherwise to demand strict compliance with that provision or
any other provision of this Agreement. No prior waiver by Lender,
nor any course of dealing between Lender and Grantor, shall
constitute a waiver of any of Lender’s rights or of any of Grantor’s
obligations as to any future transactions. Whenever the consent of
Lender is required under this Agreement, the granting of such
consent by Lender in any instance shall not constitute continuing
consent to subsequent instances where such consent is required
and in all cases such consent may be granted or withheld in the
sole discretion of Lender.
***
DEFINITIONS. The following capitalized words and terms shall have the
following meaning when used in this Agreement. Unless specifically stated
to the contrary, all references to dollar amounts shall mean amounts in
lawful money of the United States of America. Words and terms used in
singular shall include the plural, and the plural shall include the singular,
as the context may require. Words and terms not otherwise defined in this
Agreement shall have the meanings attributed to such terms in the
Uniform Commercial Code:
***
Default. The word “Default” means the Default set forth in
this Agreement in the section titled “Default”.
***
Event of Default. The words “Event of Default” mean any of
6

the events of defaults set forth in this Agreement in the
default section of this Agreement.
Security Agreement (DE# 1-2 at 1-5, 3/18/13).
Also on May 17, 2006, Mr. Ruiz, individually as guarantor, and Class Action, as
mortgagor, executed a First Preferred Ship’s Mortgage (“Mortgage”) in the amount of
$1,114,231.00. See Exhibit B to Verified Complaint (DE# 1-3, 3/18/13). The Mortgage
contained the following relevant provisions:
3.
MULTIPLE MORTGAGORS: Each person who signs this Mortgage
as Mortgagor will be responsible for the full amount of the Debt and
everything required of Mortgagor, unless specifically stated otherwise
below. You may sue one Mortgagor without joining or notifying and coMortgagor. You do not have to notify one Mortgagor that another has
defaulted under this Mortgage. You may give more Mortgagor extensions
to pay or change or release his responsibility without releasing any coMortgagor or treating a co-Mortgagor in the same way. Each person who
signs this Mortgage as an Other Owner makes all of the title warranties
but none of the other promises.
***
7.
GOVERNING LAW: The parties have chosen federal law, including
but not limited to 46 U.S.C., Section 30101, 31301, and the sections
following in 46 U.S.C., Section 31301 as amended to cover all of the
provisions of this Mortgage. In particular, 46 U.S.C. 31322 (b) covers the
interest provisions of the Note and this Mortgage. If there are gaps in
federal law as to non-interest provisions, and only to such extent, the law
of the State of FLORIDA shall govern this transaction.
***
24.
DEFAULT, ACCELERATION AND REPOSSESSION: (A)
DEFAULT: I will be in default if: . . . (b) I do not make any payment when
due . . . (B) ENTIRE BALANCE DUE: (1) Interest Before Judgment. If I
am in default, you may require that the unpaid balance of the Amount
Financed be paid in full with accrued interest, but no prepayment credit is
required because interest is not computed in advance for the term of the
debt unless the Note provides for such a penalty. (2) Post Judgment
Interest. In the case of a judgment, interest on the unpaid balance of the
judgment will be payable at the applicable judicial judgment rate, or if
7

permitted by law, at the Loan Rate(s) in effect under the Note from time to
time. (C) REPOSSESSION: You have the right to repossess the Boat
without Court Order, if I default, under the note or this Mortgage.
Otherwise, you have the right to foreclose in federal court under the
maritime laws of the United States. You may demand that I assemble on
the boat all equipment covered by the Mortgage.
***
29.
NO WAIVER OF RIGHTS: You may delay in enforcing any of your
rights without losing any of them.
***
32.
TIME IS OF THE ESSENCE: Time is of the essence. This means
that all payments which are required must be made on the day due.
Except as provided in Section 25 above, there are no grace periods
provided in this Mortgage. If I require additional time to make a payment, I
understand that I must obtain authorization or approval for making a late
payment in writing in advance.
***
35.
AMENDMENTS: Any change in the terms of this Mortgage must be
made in writing and signed by you, and me, or my attorney-in- [illegible].
First Preferred Ship’s Mortgage (DE# 1-3 at 2-3, 3/18/13).
From May 17, 2006 through July 31, 2013, account holder “Class Action c/o
John H. Ruiz P.A.” was assessed late charges a total of 61 times. On January 17, 2013,
the plaintiff sent a letter to defendant John H. Ruiz stating in part:
We have sent you numerous notices regarding past-due payments but
our efforts to date have been unsuccessful in bringing your account
current. Since we have given you every reasonable opportunity to bring
your account current, we regret to notify you that this letter must serve as
our final 72-hour demand for voluntary payment.
This deadline will take into account the normal postal delivery time
required for us to receive your payment. Please call us right away at the
number below to confirm receipt of this letter.
Thank you for your prompt attention to this important matter.
8

January 17, 2013 Letter (DE# 88 at 9, 7/1/14). The letter further indicated that the total
amount due was $14,965.16. Also on January 17, 2013, the plaintiff issued a
“Consumer Loan Notice of Payment Due” indicating that the total amount due by
February 1, 2013 was $22,792.10 and that the “past due amount” was $14,365.16.1
On January 2, 2013,2 defendant Ruiz issued Check # 1083 in the amount of
$7,826.94 to the plaintiff. See Check # 1083 (DE# 88 at 10, 7/1/14). On January 25,
2013, defendant Ruiz issued Check # 1153 in the amount of $7,826.94 to the plaintiff.
See Check # 1153 (DE# 88 at 12, 7/1/14). The plaintiff accepted both payments and
applied them to the “Class Action c/o John H. Ruiz P.A.” account. See Account History
(DE# 84-1 at 10, 6/2/14). The plaintiff did not provide any further notice of default or any

1

“A district court may consider hearsay in ruling on a summary judgment motion
where that statement could be ‘reduced to admissible evidence at trial.’” Hetherington v.
Wal-Mart, Inc., 511 F. App’x 909, 911 (11th Cir. 2013) (per curiam) (quoting Macuba v.
DeBoer, 193 F.3d 1316, 1323 (11th Cir.1999)). “The most obvious way that hearsay
testimony can be reduced to admissible form is to have the hearsay declarant testify
directly to the matter at trial.” Jones v. UPS Ground Freight, 683 F. 3d 1283, 1294 (11th
Cir. 2012) (citation omitted). The undersigned finds that both the account history and
the January 17, 2013 letters from the plaintiff could be reduced to admissible evidence
if needed at trial. Moreover, the party opposing summary judgment does not need to
submit evidence in an admissible form to create an issue of material fact. Church of
Scientology Flag Serv. Org., Inc., v. City of Clearwater, 2 F.3d 1514, 1530 (11th Cir.
1993) (“Even if [newspaper articles] would have been inadmissible at trial . . . such
materials were appropriately submitted by the non-moving party in opposition to the
motion for summary judgment”) (citing Celotex Corp. v. Catrett, 477 U.S. 317, 319, 324
(1986)).
2

The date on Check # 1083 is “1/2/2012." See Check # 1083 (DE# 88 at 10,
7/1/14). In its reply, the plaintiff admitted to paragraph 4 of the defendant’s response
which states: “On January 2, 2013, [the d]efendants . . . tendered a check to the
[p]laintiff in the amount of $7,826.94 which was cashed by the [p]laintiff.” See
Defendants’ Response in Opposition to Plaintiff’s Motion for Summary Judgment (DE#
88 at 2, 7/1/14); Plaintiff’s Reply to Defendants’ Response to Plaintiff’s Motion for
Summary Judgment (DE# 89 at 2, 7/8/14). Thus, for summary judgment purposes, the
undersigned will accept the date of Check # 1083 as January 2, 2013.
9

notice that it would seek to foreclose on the mortgage.3
On February 11, 2013, the defendants were again assessed a $100.00 late
charge for failing to make a timely payment on the “Class Action c/o John H. Ruiz P.A.”
account. See Account History (DE# 84-1 at 10, 6/2/14). On March 1, 2013, the
defendants made a $7,826.94 payment. The defendants made no further payments on
the account and from March 11, 2013 through July 11, 2013 they were assessed $100
monthly late charges. The plaintiff filed the instant Verified Complaint (DE# 1) on March
18, 2013.
STANDARD OF REVIEW
The Court, in reviewing a motion for summary judgment, is guided by the
standard set forth in Federal Rule of Civil Procedure 56(a), which states, in relevant
part, as follows:
A party may move for summary judgment, identifying each claim or
defense--or the part of each claim or defense--on which summary
judgment is sought. The court shall grant summary judgment if the movant
shows that there is no genuine dispute as to any material fact and the
movant is entitled to judgment as a matter of law.
Fed. R. Civ. P. 56 (a).
The moving party bears the burden of meeting this exacting standard. Celotex
Corp. v. Catrett, 477 U.S. 317, 322-323 (1986); Adickes v. S.H. Kress & Co., 398 U.S.
3

The defendants have filed the Affidavit of John H. Ruiz (DE# 78-1, 5/5/14) in
support of their own motion for summary judgment and in opposition to the plaintiff’s
motion for summary judgment. The affidavit attests, in part, that Mr. Ruiz “was
negotiating with the bank as to a modification and the bank officers [he] spoke with
assured [him] that no formal action would be taken during this negotiation.” Affidavit of
John H. Ruiz (DE# 78-1 at ¶5, 5/5/14). The affidavit further attests that “[Mr. Ruiz] relied
on the representations of the bank officers.” Id. at ¶7. Even accepting these factual
attestations as undisputed, they are insufficient to preclude summary judgment for the
plaintiff for the reasons discussed below.
10

144, 157 (1970). That is, "[t]he moving party bears 'the initial responsibility of informing
the . . . court of the basis for its motion, and identifying those portions of the 'pleadings,
depositions, answers to interrogatories, and admissions on file, together with the
affidavits, if any, which it believes demonstrate the absence of a genuine issue of
material fact.'" United States v. Four Parcels of Real Property, 941 F.2d 1428, 1437
(11th Cir. 1991) (quoting Celotex, 477 U.S. at 323).
In assessing whether the moving party has satisfied this burden, the Court is
required to view the evidence and all factual inferences arising therefrom in the light
most favorable to the non-moving party. Batey v. Stone, 24 F.3d 1330, 1333 (11th Cir.
1994). “When evaluating cross-motions for summary judgment, the Court analyzes
each individual motion on its own merits and thus views the facts on each motion in the
light most favorable to the respective nonmovant.” Adega v. State Farm Fire & Cas. Ins.
Co., No. 07-20696, 2009 WL 3387689, at *3 (S.D. Fla. Oct.16, 2009). Summary
judgment is appropriate when there is no dispute as to any material fact and only
questions of law remain. Reich v. John Alden Life Ins. Co., 126 F.3d 1 (1st Cir. 1997).
If the record presents factual issues, the court must deny the motion and proceed to
trial. Adickes, 398 U.S. at 157; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255
(1986).
Despite these presumptions in favor of the non-moving party, the Court must be
mindful of the purpose of Rule 56 which is to eliminate the needless delay and expense
to the parties and to the court occasioned by an unnecessary trial. Celotex, 477 U.S. at
322-323. Consequently, the non-moving party cannot merely rest upon his bare
assertions, conclusory allegations, surmises or conjectures. Id. As the Supreme Court
11

noted in Celotex:
[T]he plain language of Rule 56( c) mandates the entry of summary
judgment . . . against the party who fails to make a showing sufficient to
establish the existence of an element essential to the party's case, and on
which the party will bear the burden of proof at trial. In such a situation,
there can be "no genuine issue as to any material fact," since a complete
failure of proof concerning an essential element of the non-moving party's
case necessarily renders all other facts immaterial.
Id. at 322-323. Thus, the mere existence of a scintilla of evidence in support of the nonmoving party's position is insufficient. There must be evidence on which the jury could
reasonably find for the non-movant. Anderson, 477 U.S. at 251; Matsuchita Elec. Indus.
Co. v. Zenith Radio Corp., 475 U.S. 574, 586-87 (1986).
ANALYSIS
A.

The Defendants’ Motion for Summary Judgment (DE# 78)
The defendants argue that they are entitled to summary judgment because: (1)

they were not in default at the time the plaintiff filed the instant action; (2) the plaintiff
failed to comply with a condition precedent – providing the defendants with notice of
default – prior to filing the instant action; (3) the plaintiff accepted payment thereby
waiving its right to foreclose and (4) the plaintiff is estopped from bringing the instant
action based on oral representations made by bank officers. See Defendants’ Motion
for Summary Judgment (DE# 78, 5/5/14). Alternatively, the defendants argue that the
Court should reopen discovery as an alternative to denying their summary judgment
motion. See Defendants’ Response in Opposition to Plaintiff’s Motion for Summary
Judgment (DE# 88 at 3, 7/1/14). For the reasons stated below, the Defendants’ Motion
for Summary Judgment (DE# 78 at 3, 5/5/14) is DENIED.
The defendants have not shown that they are entitled to summary judgment as a
12

matter of law. The affidavit of defendant Ruiz states: “I made two payments totaling the
$14,965.164 and therefore paid the claimed outstanding balance due.” Affidavit of John
H. Ruiz (DE# 78-1 at ¶3, 7/1/14) (footnote added). The “Consumer Loan Notice of
Payment Due” states that the “past due amount” was $14,365.16 and that the total
amount due on February 1, 2013 was $22,792.10. See Consumer Loan Notice of
Payment Due (DE# 88 at 11, 7/1/14). Accepting the defendants’ argument that Check
#s 1083 and 1153 made the account current as of January 25, 2013 (the date of the
second check), the defendants were again assessed a $100 late charge on February
11, 2013 and again on March 11, 2013, before the plaintiff filed its Verified Complaint
on March 18, 2013. See Account History (DE# 84-1 at 10-11, 6/2/14). Thus, even if the
defendants made the loan current on or about January 25, 2013 after the second
check, the defendants were again assessed late charges on February 11, 2013 and
March 11, 2013, before the plaintiff filed the instant action.
The Security Agreement and the Mortgage define default as the failure to make
payments when due. See Security Agreement (DE# 1-2 at 3, 3/18/13); Mortgage (DE#
1-3 at 2, 3/18/13). The Security Agreement states that a “Payment Default” occurs
when the “[b]orrower fails to make any payment when due under the indebtedness.”
Security Agreement (DE# 1-2 at 3, 3/18/13). The Security Agreement defines the term
“borrower” as Mr. Ruiz. Id. at 5. Similarly, the Mortgage states that the mortgagor (Class
Action of South Florida, Inc.) would be in default if it “d[id] not make any payment when

4

There is a $688.72 discrepancy between the total amount of Check #s 1083
and 1153 ($15,653.88) and the amount Mr. Ruiz attests he paid in his affidavit
($14,965.16).
13

due.” Mortgage (DE# 1-3 at 2, 3/18/13). The Mortgage further states:
32.
TIME IS OF THE ESSENCE: Time is of the essence. This means
that all payments which are required must be made on the day due.
Except as provided in Section 25 above, there are no grace periods
provided in this Mortgage. If I require additional time to make a
payment, I understand that I must obtain authorization or approval
for making a late payment in writing in advance.
Id. at 3 (emphasis added). Because the defendants failed to make payments when due
in February and March 2013 and there was no grace period, the defendants were in
default at the time the plaintiff filed its Verified Complaint (DE# 1, 3/18/13).
The defendants further argue that they are entitled to summary judgment in their
favor and that the Court should dismiss the Verified Complaint (DE# 1, 3/18/13)
because the plaintiff failed to comply with a condition precedent prior to filing the instant
action. See Defendants’ Motion for Summary Judgment (DE# 78 at 3, 5/5/14).
Specifically, the defendants maintain that the “[p]laintiff not only failed to comply with
the provisions contained in the Note5 with regard to notice and right to cure, but it also
failed to attach anything to its complaint to support that [the p]laintiff satisfied the
condition precedent to bringing this action.” Id. (footnote added). In his affidavit, Mr.
Ruiz attests that the plaintiff provided no notice to the defendants “of further default or
that [it] sought to foreclose on the mortgage.” Affidavit of John H. Ruiz (DE# 78-1 at ¶4,
7/1/14). However, the defendants have not shown that they were entitled to a notice of
default or a notice of intent to commence foreclosure proceedings.

5

The defendants state that they are quoting the Promissory Note. However, the
language quoted by the defendants in their summary judgment motion is from the “Cure
Provision” in the Security Agreement. Compare Defendants’ Motion for Summary
Judgment (DE# 78 at 3, 5/5/14) with Security Agreement (DE# 1-2 at 3, 3/18/13).
14

The only portion of the agreements between the parties cited by the defendants
in their summary judgment filings in support of a notice requirement is the “Cure
Provisions” in the Security Agreement. This provision states in full:
Cure Provisions. If any default, other than a default in payment is
curable and if Grantor has not been given a notice of breach of the same
provision of this Agreement within the preceding twelve (12) months, it
may be cured if Grantor, after receiving written notice from Lender
demanding cure of such default; (1) cures the default within fifteen (15)
days; or (2) if the cure requires more than (15) days, immediately initiates
steps which Lender deems in Lender’s sole discretion to be sufficient to
cure the default and thereafter continues and completes all reasonable
and necessary steps sufficient to produce compliance as soon as
reasonably practical.
Security Agreement (DE# 1-2 at 3, 3/18/13) (emphasis added). The express terms of
the “Cure Provisions” excludes a “default in payment.” Id. Therefore, the “Cure
Provisions” do not provide the defendants with a contractual right to notice when they
are in default with respect to payment.
The defendants have not cited to any additional paragraphs in the agreements
between the parties which would entitled them to a notice of default. The Security
Agreement provides that:
BORROWER’S WAIVERS AND RESPONSIBILITIES: Except as
otherwise required under this Agreement or by applicable law, (A)
Borrower agrees that Lender need not tell Borrower about any action
or inaction Lender takes in connection with this Agreement; (B)
Borrower assumes the responsibility for being and keeping informed
about the Collateral; and (C) Borrower waives any defenses that may
arise because of any action or inaction of Lender, including without
limitation any failure of Lender to realize upon the Collateral or any delay
by Lender in realizing upon the Collateral; and Borrower agrees to
remain liable under the Note no matter what action Lender takes or
fails to take under this Agreement.
***

15

GRANTOR’S WAIVERS: Grantor waives all requirements of presentment,
protest, demand, and notice of dishonor or non-payment to Borrower
or Grantor, or any other party to the indebtedness or the Collateral. . .
. No such act or failure to act shall affect Lender’s rights against
Grantor or the Collateral.
Security Agreement (DE# 1-2 at 1, 3/18/13) (emphasis added). The defendants had no
contractual right to a notice of default. Therefore, the plaintiff was not required to
provide the defendants with notice prior to commencing the instant action or to attach
such a notice to their verified complaint.
Similarly, the plaintiff was not required to provide the defendants with notice
before accelerating the debt:
Accelerate Indebtedness. Lender may declare the entire indebtedness,
including any prepayment penalty which Borrower would be required to
pay, immediately due and payable, without notice of any kind to
Borrower or Grantor.
Security Agreement (DE# 1-2 at 3, 3/18/13) (emphasis added). The Mortgage also
contained an acceleration provision. See Mortgage (DE# 1-3 at 2, 3/18/14) (stating “If I
am in default, you may require that the unpaid balance of the Amount Financed be paid
in full with accrued interest, but no prepayment credit is required because interest is not
computed in advance for the term of the debt unless the Note provides for such a
penalty.”). The Mortgage does not contain a notice provision. Based on a plain reading
of the agreements between the parties, the defendants were not entitled to notice prior
to the plaintiff commencing these foreclosure proceedings. Therefore, the defendants’
argument that the plaintiff has failed to comply with a condition precedent prior to filing
this instant action is unpersuasive.

16

The plaintiff’s acceptance of the January 2013 payments totaling $15,653.886 did
not waive its right to accelerate the debt and bring the instant action because: (1) the
defendants again defaulted on the debt in February and March 2013 and (2) the
Security Agreement and the Mortgage contained anti-waiver provisions. See LRB
Holding Corp. v. Bank of Am., 944 So. 2d 1113, 1114 (Fla. 3d DCA 2006) (per curiam)
(affirming summary judgment for the bank and rejecting “[the borrower]'s . . . argument
that the [b]ank's prior acceptance of [the borrower]'s late fees waived the Bank's right to
enter a default without notice. Although the [b]ank previously accepted [the borrower]'s
late payments, the note specifically provided that the lender may delay or forgo
enforcing its rights or remedies under the note without losing them, and that the [b]ank
could enter a default without providing the borrower notice. It was [the borrower]'s
repeated failure to make timely payments that led to the [b]ank's decision to accelerate
the note.”).
As explained above, the account history shows that the defendants were
assessed late charges 61 times including late charges in February and March 2013 and
were therefore in default at the time the instant action was filed. See supra. The
Security Agreement provides that:
No Waiver by Lender: Lender shall not be deemed to have waived
any rights under this Agreement unless such waiver is given in
writing and signed by Lender. No delay or omission on the part of
Lender in exercising any right shall operate as a waiver of such right or
any other right. A waiver by Lender of a provision of this Agreement shall
not prejudice or constitute a waiver of Lender’s right otherwise to demand
strict compliance with that provision or any other provision of this
Agreement. No prior waiver by Lender, nor any course of dealing between
Lender and Grantor, shall constitute a waiver of any of Lender’s rights or
6

See footnote 4.
17

of any of Grantor’s obligations as to any future transactions. Whenever
the consent of Lender is required under this Agreement, the granting of
such consent by Lender in any instance shall not constitute continuing
consent to subsequent instances where such consent is required and in
all cases such consent may be granted or withheld in the sole discretion
of Lender.
Security Agreement (DE# 1-2 at 4, 3/18/13) (emphasis added). Here, there was no
written waiver by the plaintiff of its right to accelerate the debt. Similarly, the Mortgage
states: “NO WAIVER OF RIGHTS: You may delay in enforcing any of your rights
without losing any of them.” Mortgage (DE# 1-3 at 3, 3/18/14). Therefore, the plaintiff’s
acceptance of the payments totaling $15,653.88 did not preclude it from accelerating
the debt and filing the instant action. See MCA Television Ltd. v. Pub. Interest Corp.,
171 F.3d 1265, 1271 (11th Cir. 1999) (stating that “notwithstanding [the plaintiff]’s
acceptance without protest of [the defendant]’s consistent late payments on the
licensing contracts for four of its shows, [the Court] conclude[d] based on the antiwaiver provision contained in the licensing contracts that, under Florida law, [the
defendant] was in breach of contract when [the plaintiff] declared it as such [on a
certain date].”)
The defendants also argue that they are entitled to equitable estoppel. The
elements of estoppel under Florida law7 are: “1) a representation as to a material fact
that is contrary to a later-asserted position; 2) reliance on that representation; and 3) a
change in position detrimental to the party claiming estoppel, caused by the
7

The Security Agreement states that: “This agreement will be governed by the
federal law applicable to lender and, to the extent not preempted by federal law, the
laws of the State of Florida without regard to its conflicts of law provisions. . . .” Security
Agreement (DE# 1-2 at 4, 3/18/13). The Mortgage states that: “If there are gaps in
federal law as to non-interest provisions, and only to such extent, the law of the State of
FLORIDA shall govern this transaction.” Mortgage (DE# 1-3 at 1, 3/18/14).
18

representation and reliance thereon.” State Dep’t of Revenue v. Anderson, 403 So. 2d
397, 400 (Fla. 1981) (citing Greenhut Constr. Co. v. Henry A. Knott, Inc., 247 So. 2d
517, 524 (Fla. 1st DCA 1971)).
Mr. Ruiz’ affidavit attests, in part, that he “was negotiating with the bank as to a
modification and the bank officers [he] spoke with assured [him] that no formal action
would be taken during this negotiation.” Affidavit of John H. Ruiz (DE# 78-1 at ¶5,
5/5/14). The affidavit further attests that “[Mr. Ruiz] relied on the representations of the
bank officers.” Id. at ¶7. However, Mr. Ruiz’ affidavit does not attest to “a change in
position detrimental to the [defendants], caused by the representation and reliance
thereon.” Anderson, 403 So. 2d at 400. The defendants have failed to carry their
burden of establishing the third element of an estoppel defense. Thus, even accepting
the factual attestations in Mr. Ruiz’ affidavit as undisputed, they are insufficient to grant
summary judgment on the defendant’s estoppel defense or to preclude summary
judgment in favor of the plaintiff.
Moreover, the defendants cannot show that Mr. Ruiz’ reliance on the oral
statements made by bank officers was justifiable. In Regions Bank v. Old Jupiter, LLC,
No. 10-80188-CIV, 2010 WL 5148467, at *5 (S.D. Fla. Dec. 13, 2010), this Court
granted summary judgment in favor of the bank and rejected an equitable estoppel
defense raised by the borrower and guarantor. The court noted that “an equitable
estoppel defense . . . does not apply when the terms of a written contract contravene
the alleged oral promise.” This Court noted that a party cannot demonstrate justifiable
reliance “where the alleged oral promises are ‘completely inconsistent and
irreconcilable with the express terms of the parties’ written agreement.’” Id. (quoting
19

Eclipse Med., Inc. v. Am. Hydro-Surgical Instruments, Inc., 262 F. Supp. 2d 1334, 1339
(S.D. Fla. 1999) aff’d, 235 F.3d 1344 (11th Cir. 2000)). This Court concluded that:
As a matter of law, the [borrower and guarantor could not] claim that they
justifiably relied on promises to extend the maturity date or to renew the
loan when these statements [we]re flatly inconsistent and irreconcilable
with the express terms of the original note, and the express terms of the
loan extension letter agreement which authorized only a three month
extension of the maturity date. Moreover, there is no evidence of any
conduct by the Bank which could arguably have mislead the borrower or
guarantor into believing that the Bank did not intend to enforce the note
and guaranty.
Id. at 5.
On appeal, the Eleventh Circuit affirmed summary judgment in favor of the bank,
noting that:
where statements are inconsistent with the definite terms of the parties'
written agreement, a party cannot prove justifiable reliance. Advanced
Marketing Systems Corp. v. ZK Yacht Sales, 830 So.2d 924, 928 (Fla. 4th
DCA 2002). As noted above, the statements on which Appellants rely are
inconsistent with the express terms of the Loan Documents. Therefore,
the district court did not err by rejecting Appellants' equitable estoppel
defense.
Regions Bank v. Old Jupiter, LLC, 449 F. App’x 818, 820 (11th Cir. 2011) (per curiam).
Similarly here, the Court finds Mr. Ruiz’ reliance on oral statements made by
bank officers was not justifiable as a matter of law. Both the Security Agreement and
the Mortgage require any modification to be in writing. The Security Agreement states
that: “Lender shall not be deemed to have waived any rights under this Agreement
unless such waiver is given in writing and signed by Lender.” Security Agreement
(DE# 1-2 at 4, 3/18/13) (emphasis added). The Mortgage states that: “Any change in
the terms of this Mortgage must be made in writing and signed by you, and me, or my
attorney-in-[illegible].” Mortgage (DE# 1-3 at 3, 3/18/14). In light of the terms of the
20

written agreements between the parties, it was unreasonable as a matter of law for Mr.
Ruiz to rely on any oral representations made by bank officers and there is no record
evidence that the representations made by bank officers were in writing.
In sum, the clear and unambiguous terms of the Security Agreement and the
Mortgage require a writing to modify their terms. The defendants have thus failed to
show that it was reasonable for Mr. Ruiz to rely on the bank officers’ oral promises and
therefore cannot meet an essential element of their estoppel defense.8
Finally, the defendants have not shown entitlement to an additional period of
discovery. In their response to the plaintiff’s motion for summary judgment, the
defendants state:
Nevertheless, Fed. R. Civ. P. 56(c) “mandates the entry of summary
judgment, after adequate time for discovery. In the case at bar, there has
been no discovery undertaken. As a general rule, summary judgment
should not be granted until the party opposing the motion has had an
adequate opportunity to conduct discovery. Reflectone, Inc. v. Farrand
Optical Co., Inc., 862 F.2d 841 ([11th Cir.1989]).
As an alternative to the Court denying Defendants' Motion for Summary
Judgment, Defendants move this Court pursuant to Rule 56(f) to allow
them to undertake discovery in order to obtain relevant facts regarding the
modification of the note and mortgage between the Plaintiff's agent and
the Defendants and the Plaintiff's acceptance and cashing of the interest
payments prior to and subsequent to the filing of this action.
Defendants’ Response in Opposition to Plaintiff’s Motion for Summary Judgment (DE#
88 at 3, 7/1/14). This action was filed on March 18, 2013. The discovery cutoff was May
1, 2014. See Order Setting Pretrial Conference and Trial Date (DE# 63 at 2, 1/29/14).
8

Additionally, although not raised by either party, the defendants’ estoppel
argument would likely be barred by the statute of fraud. “[T]here can be no oral
modification of an agreement which was required to be in writing by the statute of
frauds.” United Omaha Life Ins. Co. v. Nob Hill Assoc., 450 So. 2d 536, 539 (Fla. 3d
DCA 1984) (citation omitted).
21

The defendants had over a year to conduct discovery. Moreover, the defendants raised
the modification and the acceptance of payment arguments as early as April 29, 2013
in a motion to dismiss. See Defendants’ Motion to Dismiss (DE# 22 at 2, 4/29/13)
(stating that “Defendant Ruiz contacted the Plaintiff and was in negotiations for a
modification of the note and mortgage” and that “Defendants seek to dismiss this action
on the grounds that the Plaintiff accepted payments . . . .”). Therefore, the defendants
were well aware of these arguments and had ample opportunity to conduct discovery in
the instant action. The fact that the defendants have chosen not to avail themselves of
the discovery period is not grounds for denying the plaintiff’s summary judgment
motion.
For the reasons stated above, the defendants’ affirmative defenses of failure to
provide a notice of default, waiver and estoppel are inapplicable as a matter of law. The
Defendants’ Motion for Summary Judgment (DE# 78, 5/5/14) is DENIED.
B.

The Plaintiff’s Motion for Summary Judgment (DE# 84)
The plaintiff argues that it is entitled to summary judgment because: (1) the

defendants were in default under the terms of the Security Agreement and the
Mortgage, (2) the plaintiff was permitted to accelerate the defendants’ indebtedness
and foreclosure without notice to the defendants and (3) the Security Agreement and
the Mortgage contained anti-waiver provisions. Plaintiff’s Motion for Summary
Judgment and Incorporated Memorandum of Law in Support Thereof (DE# 84 at 2,
6/2/14).
In the instant case, the parties do not dispute that certain payments were not
timely as established by the multiple late charges assessed to the “Class Action c/o
22

John H. Ruiz P.A.” account. See Account History (DE# 84-1 at 10, 6/2/14). The plaintiff
has submitted an account history showing 61 instances in which late charges were
assessed against this account. Even accepting, arguendo, the defendants’ argument
that the account was current on January 25, 2013 (the date defendant Ruiz issued
Check # 1153), the defendants again failed to make timely payments in February and
March 2013, before the plaintiff filed the instant action. Both the Security Agreement
and the Mortgage define the failure to make a payment when due as a default. See
Security Agreement (DE# 1-2 at 3, 3/18/13); Mortgage (DE# 1-3 at 2, 3/18/13), supra.
Therefore, the undisputed record evidence is that the defendants were in default at the
time the plaintiff commenced the instant action on March 18, 2013.
The plaintiff’s acceptance of the defendants’ January 2013 payments did not
constitute a waiver of the plaintiff’s foreclosure rights. Both the Security Agreement
(DE# 1-2 at 4, 3/18/13) and the Mortgage (DE# 1-3 at 3, 3/18/14) contain anti-waiver
provisions which are enforceable under Florida law. See MCA Television Ltd., 171 F.3d
at 1271 (11th Cir. 1999); LRB Holding Corp., 944 So. 2d at 1114, supra. Moreover, the
defendants were not entitled to a notice of default prior to the plaintiff filing the instant
action. See Security Agreement (DE# 1-2 at 1, 3, 3/18/13). Having already determined
that the estoppel defense lacks merit (see discussion supra), the undersigned
concludes that the plaintiff is entitled to summary judgment in its favor.
CONCLUSION
For the foregoing reasons, it is
ORDERED AND ADJUDGED that the Defendants’ Motion for Summary
Judgment (DE# 78, 5/5/14) is DENIED and that the Plaintiff’s Motion for Summary
23

Judgment and Incorporated Memorandum of Law in Support Thereof (DE# 84, 6/2/14)
is GRANTED for the reasons stated herein. It is further
ORDERED AND ADJUDGED that the trial date and all other pretrial hearings
and deadlines are CANCELLED. It is further
ORDERED AND ADJUDGED that on or before Thursday, August 21, 2014, the
parties shall submit an agreed proposed Final Judgment including damages and all
relevant terms allowing for the sale of the vessel and reservation of jurisdiction to
address any deficiency judgment.
DONE AND ORDERED in Chambers at Miami, Florida this 14th day of August,
2014.
________________________________
JOHN J. O’SULLIVAN
UNITED STATES MAGISTRATE JUDGE
Copies provided to:
All counsel of record

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