Foreclosure Denied Because of Defects in Mortgage’s Execution

Posted on April 30, 2017

The case of HSBC Bank USA, N.A. v. Frenkel, 208 So. 3d 156 (Fla. 3rd DCA 2017), is one of combined appeals. Nathan Frenkel, successor trustee of the Max and Margaret Frenkel Revocable Living Trust, appealed a final judgement in favor of HSBC Bank USA, N.A., in which the court granted an equitable lien on the real property owned by the Frenkel Trust. Additionally, HSBC Bank appealed an order awarding attorney’s feed to the Frenkel Trust.

Margaret Frenkel executed a mortgage in July of 2005, encumbering a condominium unit located in Miami Beach, Florida securing a $350,000 loan made to Mrs. Frenkel by the HSBC Bank’s predecessor. A clause in the mortgage entitled the lender to attorney’s fees in the event the lender pursued its remedies under the mortgage. However, at all times relevant to this case, the condo unit was owned by the Frenkel Trust, not Mrs. Frenkel.  After the loan documents were executed, but before recordation, someone attempted to remedy this problem by altering the mortgage with handwritten notations.  The notations were to make it appear that Mrs. Frenkel signed the mortgage as trustee for the Frenkel Trust, rather than in her own personal capacity.

When HSBC Bank acquired the note and mortgage in 2008, a year after Mrs. Frenkel’s death, they filed the foreclosure action against Frenkel Trust. HSBC Bank made no claim against Mrs. Frenkel’s estate and did not plead entitlement to an equitable lien on Frenkel Trust’s real property.

The trial court denied HSBC Bank’s foreclosure because of the defect in the mortgage’s execution.  The trial court found that the mortgage to be unenforceable against the Frenkel Trust because it was not actually executed by the Frenkel Trust. However, the trial court did impose an equitable lien for $350,000 on Frenkel Trust’s real property. This required the Bank to bring a separate action to enforce the equitable lien, thus foreclosing on the property. Additionally, the trial court determined that based on section 57.105(7) of the Florida Statutes, the Frankel Trust was entitled to attorney’s fees.

Florida Statute Section 57.105(7) reads in pertinent part that “If a contract contains a provision allowing attorney’s fees to a party when he or she is required to take any action to enforce the contract, the court may also allow reasonable attorney’s fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract. This subsection applies to any contract entered into on or after October 1, 1988”.

“Upon the Bank’s proper confession of error, we reverse that portion of the trial court’s final judgment imposing an equitable lien on Frenkel Trust’s real property. This claim was not raised in the pleadings and it was error to enter judgment for the Bank on an unpled claim”. Marriott Int’l, Inc. v. Am. Bridge Bahamas, Ltd., 193 So.3d 902, 909 (Fla. 3d DCA 2015).

The appellate court reversed the award of attorney’s fees to the Frenkel Trust in the final judgement. The appellate court reasoned that the Frenkel Trust was not a proper party to the mortgage which contained the subject fee provision, therefore, the Frenkel Trust is unable to receive the benefits of section 57.105(7) of the Florida Statutes.

If you or anyone you know is in need of representation in actions involving Guardianship, Probate and/or Trust Disputes, or questions pertaining to such proceedings, please contact The Law Offices of Glenn M. Mednick, P.L., at (954) 315-1154 or

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