A Florida appeals court has handed The Bank of New York Mellon a significant legal victory, reversing a trial judge's dismissal of a foreclosure action against Michael and Dianna Fernandez. In an opinion dated November 4, 2026, the Second District Court of Appeal in case 2D2025-1819 ruled that the couple’s failure to make payments from June 2017 onward constituted a default, regardless of the bank's earlier accounting errors. The court sent the case back to the lower court for recalculation of the debt, specifically instructing it to strip out the four reversed payments and related interest from the final tally.
The dispute traces back to a $160,000 mortgage signed in 2007, which underwent a modification after the Fernandezes filed for Chapter 13 bankruptcy in 2012. Bank of America, serving as the loan servicer for BNY Mellon, reversed four payments made between January and April 2015 without providing a clear explanation. At trial, the bank’s representative admitted they could only speculate on why the transactions were reversed. Dianna Fernandez testified that she made the payments and never received the money back, yet the couple continued paying monthly until May 2017, when the bank finally rejected a payment as insufficient.
The trial judge initially sided with the Fernandezes, finding that the bank failed to prove a valid default due to the unexplained reversals and its refusal to accept subsequent payments. However, the appellate majority disagreed, stating that an accounting dispute does not automatically excuse borrowers from their ongoing obligation to pay. The court rejected the defense of 'unclean hands,' finding no evidence of fraud or dishonest conduct that would legally bar the bank from foreclosing.
The ruling highlights a rigid application of Florida’s default laws, where each missed installment is treated as a separate default. The Fernandezes did not deposit the unpaid amounts with the court, a step the judges noted as critical in demonstrating good faith. This technicality, combined with the lack of formal tender, sealed the couple's fate in the appellate decision.
The case now returns to the trial court for a precise recalculation of the outstanding balance. Once the four disputed payments and pre-June 2017 interest are removed, the court will determine the final amount owed. If the Fernandezes cannot satisfy this adjusted balance, the foreclosure process will move forward toward a sale.