Florida 2nd DCA Holds 559.715 Does NOT Apply to Deficiency Judgment

The 2nd DCA recently held that 559.715 Florida Statutes, which requires a creditor to send debtor a notice of assignment of a consumer debt 30 days before filing an action, did not apply to foreclosure deficiency actions.

Borrower defaulted on her mortgage loan and the property was foreclosed upon and sold at a foreclosure sale.  The judgment was then assigned to a debt collector, who filed a complaint against the borrower seeking a deficiency judgment.

Borrower raised as an affirmative defense the plaintiff debt collector’s alleged failure to comply with a supposed condition precedent under FCCPA section 559.715.

Borrower argued that she received notice of the assignment only 13 days before the deficiency action was filed instead of 30 days as supposedly required.   The trial court agreed and ruled in her favor, and lender/creditor appealed.

Citing its recent ruling in Aluia v. Dyck-O’Neal, the court explained that “[a] deficiency suit is not a ‘legal action on’ the note; it is an action on the final judgment of foreclosure.  The final judgment of foreclosure is not ‘an obligation … of a consumer to pay money,’ nor does it arise from a business dealing or consensual obligation. The final judgment of foreclosure is a judgment in rem or quasi in rem which arises from the foreclosure proceeding.”

The Court of Appeal agreed with the debt collector’s argument that section 559.715 does not apply to deficiency actions.

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