Third District Court of Appeal
                               State of Florida

                          Opinion filed March 30, 2016.
         Not final until disposition of timely filed motion for rehearing.
                               ________________

                                No. 3D15-271
                          Lower Tribunal No. 14-1385
                             ________________

Catalina West Homeowners Association, Inc., and Old Cutler Lakes
            by the Bay Community Association, Inc.,
                                   Appellants,

                                        vs.

                Federal National Mortgage Association,
                                    Appellee.


      An Appeal from the Circuit Court for Miami-Dade County, Jorge E. Cueto,
Judge.

     Paige Law Group, P.A., and Robert E. Paige, for appellants.

      Gladstone Law Group, P.A., and Allen S. Katz, Yacenda Hudson, and Jason
Joseph (Boca Raton), for appellee.


Before SHEPHERD, LAGOA, and EMAS, JJ.

     LAGOA, J.

     Appellants, Catalina West Homeowners Association, Inc. (“Catalina West”)

and Old Cutler Lakes by the Bay Community Association, Inc. (“Old Cutler”)
(collectively, the “Associations”), appeal from a final judgment entered in favor of

appellee, Federal National Mortgage Association (“FNMA”), and the denial of

their motion for rehearing, on FNMA’s action for declaratory and injunctive relief.

We affirm.

I.    FACTUAL AND PROCEDURAL HISTORY

      On December 23, 2005, Adriana Villamizar and her husband Luis Reyes

entered into a mortgage with JPMorgan Chase Bank, N.A., for property located in

a development called Lakes by the Bay. On or about February 6, 2006, FNMA

purchased the loan that was the subject of the mortgage. FNMA filed a mortgage

foreclosure action in 2011, and the Associations were named as defendants. Final

judgment was entered in favor of FNMA on February 6, 2013. On April 2, 2013, a

certificate of title was issued to FNMA.

      On December 19, 2013, the Associations each provided payoff/estoppel

letters to FNMA. In addition to quarterly assessments and late charges, the letters

sought amounts for violation charges, costs, and attorney’s fees.

      FNMA subsequently filed a complaint for declaratory and injunctive relief,

alleging that the amounts set forth in the estoppel letters did not comply with the

“safe harbor” protection provided to first mortgagees in section 720.3085(2)(c),

Florida Statutes (2014).    Specifically, FNMA asserted that the Associations

improperly included attorney’s fees and costs which they were not entitled to



                                           2
collect from FNMA.         FNMA further alleged that the Associations refused to

provide estoppel letters providing FNMA with the safe harbor protection of section

720.3085(2)(c). FNMA alleged that it was in need of a declaration that FNMA

was entitled to the protection of section 720.3085(2)(c), and that the Associations

were not entitled to attorney’s fees, costs, interest, or other charges accruing prior

to the certificate of title being issued.

       The Associations each filed an answer and affirmative defenses.              As

affirmative defenses, the Associations alleged that section 720.3085 required them

to apply any payments received from FNMA first to late charges and interest, and

then to costs and attorney’s fees incurred in collection, and only then to

assessments. The Associations further alleged that they alerted FNMA to sums

necessary to bring FNMA’s account current, and that the Associations “would

have to violate Florida Statutes [section] 720.3085 in order to provide the relief it

requested.”

       FNMA filed a motion for summary judgment, asserting that the

Associations’ demand for attorney’s fees and costs was inconsistent with FNMA’s

entitlement to limited liability under section 720.3085(2)(c).        The trial court

entered final judgment in favor of FNMA. The trial court found that, pursuant to

section 720.3085(2)(c), FNMA’s liability to the Associations “for unpaid

assessments and all other charges, including attorneys’ fees, costs, interest, and late



                                            3
fees incurred prior to April 2, 2013 is limited to . . . [the] 12 past months of

assessments prior to [FNMA] taking title to the property.”           The trial court

concluded that because the safe harbor protection of section 720.3085(2)(c)

applied, the Associations were not entitled to interest, late fees, attorney’s fees,

court costs, collection costs, or other charges incurred.

      The Associations filed a motion for rehearing, arguing that the final

judgment “reads out of existence Florida Statutes §720.3085(3)(b).”             The

Associations asserted that were they to apply the sums FNMA was directed to pay

in the final judgment in the order required by section 720.3085(3)(b), it would not

bring current either Association’s account. The trial court denied the motion for

rehearing and this appeal ensued.1

II.   ANALYSIS

      At issue in this appeal are two subsections of section 720.3085: subsection

(2)(c), the so-called “safe harbor” provision,2 and subsection (3)(b).

Section 720.3085(2)(c) states as follows:


1 We review a final summary judgment de novo. Tropical Glass & Constr. Co. v.
Gitlin, 

(Fla. 3d DCA 2009). Additionally, we review a trial court’s
interpretation of a statute, de novo. See State v. Brock, 

(Fla. 4th
DCA 2014).
2In Bay Holdings, Inc. v. 2000 Island Boulevard Condominium Ass’n, 

, 1197 (Fla. 3d DCA 2005), this Court, in addressing the analogous statute
concerning condominium associations, stated that the “safe harbor” provision
“provides a statutory cap on liability of foreclosing mortgagees.”

                                            4
            (c) Notwithstanding anything to the contrary contained in
            this section, the liability of a first mortgagee, or its
            successor or assignee as a subsequent holder of the first
            mortgage who acquires title to a parcel by foreclosure or
            by deed in lieu of foreclosure for the unpaid assessments
            that became due before the mortgagee's acquisition of
            title, shall be the lesser of:

            1. The parcel’s unpaid common expenses and regular
            periodic or special assessments that accrued or came
            due during the 12 months immediately preceding the
            acquisition of title and for which payment in full has not
            been received by the association; or

            2. One percent of the original mortgage debt.

            The limitations on first mortgagee liability provided by
            this paragraph apply only if the first mortgagee filed suit
            against the parcel owner and initially joined the
            association as a defendant in the mortgagee foreclosure
            action. Joinder of the association is not required if, on the
            date the complaint is filed, the association was dissolved
            or did not maintain an office or agent for service of
            process at a location that was known to or reasonably
            discoverable by the mortgagee.

(emphasis added).

Section 720.3085(3)(b) states as follows:

            (3) Assessments and installments on assessments that are
            not paid when due bear interest from the due date until
            paid at the rate provided in the declaration of covenants
            or the bylaws of the association, which rate may not
            exceed the rate allowed by law. If no rate is provided in
            the declaration or bylaws, interest accrues at the rate of
            18 percent per year.

            ....



                                            5
             (b) Any payment received by an association and
             accepted shall be applied first to any interest accrued,
             then to any administrative late fee, then to any costs
             and reasonable attorney fees incurred in collection,
             and then to the delinquent assessment. This paragraph
             applies notwithstanding any restrictive endorsement,
             designation, or instruction placed on or accompanying a
             payment. A late fee is not subject to the provisions of
             chapter 687 and is not a fine.

(emphasis added).

      While the Associations raise several points on appeal, only one merits

discussion. The Associations argue that the final judgment should be “vacated”

because it improperly prohibits them from complying with their statutory duty to

apply payments as required by section 720.3085(3)(b).3

      That FNMA’s liability for “unpaid common expenses and regular periodic

or special assessments” does not include amounts for attorney’s fees, costs, and

interest, however, is evident from the plain language of the statute.            Section

720.3085(2)(b) provides that “[a] parcel owner is jointly and severally liable with

the previous parcel owner for all unpaid assessments that came due up to the time


3 It should be noted that FNMA’s first response on this issue is that not only did the
trial court correctly determine that it was not liable for interest, late fees, attorney’s
fees, and costs, but that this Court should find that it also has no liability for any
past due common expenses and assessments. FNMA’s argument on this point is
based entirely upon each Association’s respective Declaration. This argument
cannot be considered by this Court for two reasons. First, it is undisputed that
FNMA did not raise this argument below nor were the Declarations filed below or
considered by the trial court. Equally important, FNMA did not file a cross-appeal
from the final judgment.

                                            6
of transfer of title.” That liability, however, is limited in section 720.3085(2)(c)—

the safe harbor provision—as it concerns “a first mortgagee . . . who acquires title

to a parcel by foreclosure.”     Paragraph (c) states that “the liability of a first

mortgagee . . . shall be the lesser of” either “unpaid common expenses and regular

periodic or special assessments that accrued or came due during the 12 months

immediately preceding the acquisition of title,” or one percent of the original

mortgage debt. § 720.3085(2)(c)1., 2., Fla. Stat. (emphasis added). The plain

language of paragraph (c) clearly limits the extent of a qualifying first mortgagee’s

liability to the lesser of the two specific options that follow—either “unpaid

common expenses and regular periodic or special assessments” or one percent of

the original mortgage debt. Given the unambiguous language of the statute, we

must conclude that if the Legislature intended to include attorney’s fees, costs,

interest, or other charges as part of the first mortgagee’s liability, it would have

included any one or more of those items in the safe harbor provision. See Thayer

v. State, 

, 817 (Fla. 1976) (“It is, of course, a general principle of

statutory construction that the mention of one thing implies the exclusion of

another; expressio unius est exclusio alterius. Hence, where a statute enumerates

the things on which it is to operate, or forbids certain things, it is ordinarily to be

construed as excluding from its operation all those not expressly mentioned.”); see

also Moonlit Water Apartments, Inc. v. Cauley, 

, 900 (Fla. 1996)



                                          7
(“Under the principle of statutory construction, expressio unius est exclusio

alterius, the mention of one thing implies the exclusion of another.”); cf. Haskins v.

City of Ft. Lauderdale, 

, 1123 (Fla. 4th DCA 2005) (“A basic

canon of statutory interpretation requires us to ‘presume that [the] legislature says

in a statute what it means and means in a statute what it says there.’” (quoting

Conn. Nat'l Bank v. Germain, 

, 253–54 (1992))).

      The trial court’s construction of the safe harbor provision is not only

consistent with our analysis in Bay Holdings but also with the analogous case of

United States v. Forest Hill Gardens East Condominium Ass’n, 

(S.D. Fla. 2014). In Forest Hill, HUD was the successor and assignee of the

foreclosing first mortgagees on two condominium units situated on land controlled

by a homeowners’ association. The homeowners’ association sought past-due

assessments, interest, and other costs incident to the collection process that accrued

before the banks and HUD took title.          

    The homeowners’

association also sought late fees. 

the safe harbor provision for

foreclosing first mortgagees contained in section 720.3085(2)(c), the court noted

that “the existence of unpaid assessments is the fact which triggers the foreclosing

first mortgagee’s liability to the homeowners’ association.” 

The court

held that the terms “unpaid common expenses” and “regular periodic or special




                                          8
assessments” did not encompass interest, late fees, collection costs, and attorney’s

fees:

              In short, chapter 720’s statutory safe harbor includes only
              those expenses and assessments that the unit owners’
              share collectively, a shared benefit and burden that does
              not include amounts for interest, late fees, attorney’s fees,
              and costs incidental to the collection process.
              Accordingly, the court holds that the HUD has no
              liability to the property owners' association other than the
              common expenses and unpaid assessments that “accrued
              or came due” prior to taking title . . . .

In reaching its conclusion, the court reasoned that “interest, late fees,

attorney’s fees, and collection costs” are individualized charges to induce

compliance, rather than “common expenses” or “regular periodic or special

assessments,” terms which infer a shared expense among all the units of a

homeowners’ association. 

with the analysis set forth in Forest Hill, and affirm the trial

court’s judgment that FNMA’s liability to the Associations under the safe harbor

provision did not include amounts for interest, late fees, attorney’s fees, or costs.

        Finally, the final judgment does not improperly prohibit the Associations

from complying with the statutory application of payments set forth in section

720.3085(3)(b). The final judgment determined the amount due from FNMA to

the Associations, in accordance with the safe harbor provision set forth in section

720.3085(2)(c), and did not address itself to how the Associations were to apply



                                           9
the payment made.      The priority of payment schedule established by section

720.3085(3)(b) cannot create entitlement to any payments other than those

expressly established by section 720.3085(2)(c). To the extent the Associations are

required to itemize payments pursuant to section 720.3085(3)(b), the line item

entries for interest accrued, administrative fees, and attorney fees and costs,

presumably would be zero dollars, as the Associations have not and are not entitled

to receive payments for those items under the safe harbor provision.             The

Associations’ reliance upon St. Croix Lane Trust v. St. Croix at Pelican Marsh

Condominium Ass’n, 

(Fla. 2d DCA 2014), and Ward v. 3900

Condominium Ass’n, 

(Fla. 4th DCA 1996), for the proposition

that they are required to apply payments in accordance with the formula set forth in

subsection (3)(b), adds nothing to their argument. St. Croix and Ward addressed

section 718.116(3), Florida Statutes, the section of the condominium association

statutes that is analogous to section 720.3085(3)(b). Significantly, neither case

concerns the liability of a foreclosing first mortgagee or the safe harbor provision

of the condominium association statutes.

III.   CONCLUSION

       For the reasons set forth above, this Court finds that the trial court did not

err in determining that the Associations are not entitled to interest, late fees,

attorney’s fees and costs from FNMA because the safe harbor protection of section



                                         10
720.3085(2)(c) applies.   Accordingly, the final judgment entered in favor of

FNMA on its claim for declaratory and injunctive relief is affirmed.

      AFFIRMED.




                                        11