Supreme Court of Florida

____________

No. SC19-1920

____________

WVMF FUNDING, AS SUCCESSOR TO ONEWEST BANK, FSB,

Petitioner,

vs.

LUISA PALMERO, et al.,

Respondents.

June 24, 2021

LAWSON, J.

The decision on review presents the legal questions of whether, 

in a foreclosure action, the terms of the mortgage and note must be 

construed together and, if so, in the event of a conflict between the 

two documents, which prevails. We answered both of these

questions long ago, holding that the mortgage must be read

alongside the note it secures and that the note prevails in the event 

of a conflict. See Graham v. Fitts, 43 So. 512, 513-14 (Fla. 1907) 

(requiring joint construction of note and mortgage in foreclosure 

actions); Hotel Mgmt. Co. v. Krickl, 158 So. 118, 119 (Fla. 1934) 
- 2 -

(setting forth the “general rule” for foreclosure actions that “if there 

is a conflict between the terms of a note and mortgage, the note 

should prevail”). Because the Third District Court of Appeal in 

OneWest Bank, FSB v. Palmero, 283 So. 3d 346 (Fla. 3d DCA 2019),

failed to follow our precedent and instead looked solely at the 

location of a signature on a mortgage to hold that the term 

“Borrower” means something different than both the mortgage and 

the note define it to mean, we granted review based on express and 

direct conflict with our decisions in Graham and Krickl, see art. V, § 

3(b)(3), Fla. Const., and now quash the Third District’s decision. 

BACKGROUND

Roberto Palmero and his wife, Respondent Luisa Palmero, 

initially applied as co-borrowers for a loan that was to be secured 

by a reverse mortgage on their primary residence and homestead. 

See Palmero, 283 So. 3d at 347. Several months later, however, the

Palmeros changed course, and Mr. Palmero applied for the same 

type of loan, only this time, as the sole borrower. See id.1

1. “[B]ecause Mr. Palmero was the only borrower under the 

terms of the loan agreement, he qualified for—and received—a 

higher amount than would have been paid had Mrs. Palmero been a 
- 3 -

Five documents relate to Mr. Palmero’s loan: (1) a residential 

loan application; (2) a home equity conversion loan agreement; (3)

an adjustable rate note; (4) a non-borrower spouse ownership 

interest certification; and (5) a reverse mortgage. See id. at 347-48; 

see also id. at 356-57 (Emas, C.J., dissenting). 

The first three documents, all signed on the same date,

identified Mr. Palmero as the sole borrower and were signed only by 

him. Id. at 347. Of these three documents, the note is of primary 

importance, and it defines “Borrower” as “each person signing at 

the end of this Note.” Id. at 357 (Emas, C.J., dissenting). Mr. 

Palmero is the only person whose signature appears at the end of 

the note. Id. (Emas, C.J., dissenting).

Both Mr. and Mrs. Palmero signed the fourth document, the

non-borrower spouse ownership interest certification. Id. at 348. 

Although the date on the certification is illegible, like the three 

documents signed solely by Mr. Palmero, the certification identified 

Mr. Palmero as the borrower. Id. at 357 (Emas, C.J., dissenting). 

co-borrower.” Palmero, 283 So. 3d at 357 n.14 (Emas, C.J., 

dissenting).
- 4 -

The certificate also identified Mrs. Palmero as the “Non-Borrower 

Spouse.” Id. at 348.

Finally, to secure the note, Mr. and Mrs. Palmero both 

executed the fifth document, the reverse mortgage. Id. at 347. The 

mortgage bears the same date as the note, and it expressly refers to 

the note, including defining the mortgage as a “Security 

Instrument” given to “secure[] to Lender . . . the repayment of the 

debt evidenced by the Note.” Consistent with the other documents, 

the mortgage defined the “Borrower” as “Roberto Palmero, a married 

man.” Id. at 348. The signature block of the mortgage provided 

that “BY SIGNING BELOW, Borrower accepts and agrees to the 

terms contained in this Security Instrument and in any rider(s) 

executed by Borrower and recorded with it.” Id. at 357 (Emas, C.J., 

dissenting). Both Mr. and Mrs. Palmero signed their names on lines 

beneath this sentence that were preprinted with their names and 

the word “Borrower.” Id. at 348.

As with a typical reverse-mortgage loan, certain events would 

trigger acceleration of the debt prior to the repayment date 

identified in the note and mortgage. See generally Estate of Jones v. 

Live Well Fin., Inc., 902 F.3d 1337, 1338-39 (11th Cir. 2018) 
- 5 -

(explaining reverse-mortgage loans). As relevant here, the triggering 

event was Mr. Palmero’s death. See Palmero, 283 So. 3d at 349.

Following Mr. Palmero’s death, when his estate did not repay 

the loan, Petitioner’s predecessor, OneWest Bank, FSB (OneWest),

sought to foreclose the mortgage that secured the loan. Id. 

Respondents, Mrs. Palmero and her two adult children, defended 

against the foreclosure action by arguing that Mrs. Palmero, who 

continued to principally reside in the mortgaged property, was a 

co-borrower under the mortgage. Id. Mrs. Palmero’s status (or not) 

as a co-borrower was critical because both the note and mortgage 

conditioned enforcement of the debt on the following: “A Borrower 

dies and the [mortgaged] Property is not the principal residence of 

at least one surviving Borrower.” Id. at 364 n.23 (Miller, J., 

dissenting).

Following a bench trial, the trial court ruled that Mrs. Palmero

was not a co-borrower. Id. at 350. However, it denied foreclosure 

based on a federal statute that governs the insurability of reverse 

mortgages by the Secretary of the Department of Housing and 

Urban Development. See id. (citing 12 U.S.C. § 1715z-20(j)).
- 6 -

On appeal, the Third District held, on rehearing en banc, that 

the trial court erred by relying on the federal statute to deny 

foreclosure because the statute’s application “was neither raised as 

an affirmative defense . . . nor litigated by the consent of the parties 

at the bench trial.” Id. However, the Third District disagreed with 

the trial court’s factual finding that Mrs. Palmero was not a coborrower, ruling instead that, “as a matter of law,” id. at 350, the 

mortgage unambiguously defined her as a “Borrower.” See id. at 

350-52. Accordingly, the Third District affirmed the trial court’s 

denial of foreclosure based on its conclusion that “OneWest failed to 

establish the occurrence of a condition precedent to its right to 

foreclose, i.e., that the subject property is not the principal 

residence of Mrs. Palmero, a surviving co-borrower under the 

instant reverse mortgage.” Id. at 347. 

In support of its holding, the Third District relied on its prior 

decisions in Smith v. Reverse Mortgage Solutions, Inc., 200 So. 3d 

221 (Fla. 3d DCA 2016), and Edwards v. Reverse Mortgage 

Solutions, Inc., 187 So. 3d 895 (Fla. 3d DCA 2016), where the 

district court had “considered reverse mortgages identical to the 

[Palmeros’] reverse mortgage and determined that, as a matter of 
- 7 -

law, the surviving spouse is a co-borrower.” Palmero, 283 So. 3d at 

353 (emphasis omitted). The Third District looked to these prior 

decisions to construe the loan documents at issue over strong 

dissents arguing that the court should instead apply longstanding 

foreclosure precedent that governs the construction of notes and 

mortgages. See id. at 361 (Emas, C.J., dissenting) (identifying, 

among other failings in the majority’s decision, that it “ignores the 

fact that the contemporaneously executed note contains only Mr. 

Palmero’s name and signature as borrower”); see also id. at 362 

(Miller, J., dissenting) (“[I]n addition to failing to mutually construe 

the contemporaneously executed documents, the majority 

dispenses with a body of well-reasoned, established jurisprudence, 

the controlling provisions of the promissory note, and the express 

terms of the mortgage in determining that the inclusion of Mrs. 

Palmero’s unnotarized signature on the mortgage renders her a 

‘Borrower,’ as a matter of law.”).

We accepted jurisdiction to resolve the express and direct 

conflict between the Third District’s decision and our decisions in 

Graham and Krickl. See art. V, § 3(b)(3), Fla. Const.
- 8 -

ANALYSIS

We review de novo the Third District’s legal conclusion that 

Mrs. Palmero is a co-borrower. See Bank of New York Mellon v. 

Withum, 204 So. 3d 136, 137 (Fla. 4th DCA 2016) (“[C]onstruction 

of notes and mortgages are pure questions of law subject to de novo 

review.”). Because proper application of our precedent establishes 

that she is not, we quash the district court’s decision.2

Over one hundred years ago, we explained why, in foreclosure 

actions, the general rule is that a mortgage should be construed 

together with the note that it secures:

The note and mortgage were executed at the same 

time in one transaction relating to the same subject, and 

the mortgage refers to the note. Therefore they should be 

2. Although the parties and the dissent also raise arguments 

regarding the federal insurability statute, we exercise our discretion 

not to reach them, as they were not properly litigated in the trial 

court and are not controlling of the jurisdictional issue. See Savoie 

v. State, 422 So. 2d 308, 312 (Fla. 1982) (“[A]uthority to consider 

issues other than those upon which jurisdiction is based is 

discretionary with this Court and should be exercised only when 

these other issues have been properly briefed and argued.”); see 

also Estate of Jones, 902 F.3d at 1341-42 (explaining that the “plain 

language” of 12 U.S.C. § 1715z-20(j) “applies only to HUD and 

speaks only to what the Secretary can and cannot do” in terms of 

insuring mortgages and concluding that because the statute “says 

nothing about private contractual obligations one way or the other, 

. . . [it] cannot be read to alter or affect the enforceability of the 

mortgage contract or its terms”).
- 9 -

considered together in determining their meaning and 

effect. By construing them together as parts of one 

contract, the provisions of the principal note as to when 

it shall become due and payable, when taken with the 

provision of the mortgage that it is given to secure the 

payment of the note, with interest, “according to the true 

intent and meaning of said note,” it is clear that the 

provisions of the note control. The note constitutes the 

written evidence of the indebtedness, and the terms of its 

payment are stated therein. The mortgage was given to 

secure the payment “according to the true intent and 

meaning of the note.”

Graham, 43 So. at 513-14 (citations omitted); see also Flinn v. 

Lisenby, 136 So. 599, 601 (Fla. 1931) (“The note and mortgage was 

a single contract and therefore must be read and construed 

together.”). 

We have also long explained that “[t]he general rule is that, if 

there is a conflict between the terms of a note and mortgage, the 

note should prevail. Effect should be given to both however, where 

there is no actual or necessary conflict.” Krickl, 158 So. at 119

(citation omitted).

Here, both the mortgage and the note expressly define Mr.

Palmero as the “Borrower.” It is true that Mrs. Palmero also joined 

in the mortgage—as would have been required for the lender to 

have a valid security interest because the mortgaged property was 
- 10 -

her homestead, see art. X, § 4(c), Fla. Const.—and that she did so 

by signing her name in the “Borrower” signature block. However, 

contrary to the Third District’s holding, the location of Mrs. 

Palmero’s signature on the mortgage did not unambiguously and as 

a matter of law, see Palmero, 283 So. 3d at 352, make her a coborrower under the mortgage. 

The Third District’s holding ignores not only that the mortgage 

expressly defines Mr. Palmero as the “Borrower,” but it also ignores 

that this Court’s foreclosure precedent requires courts to read the 

mortgage together with the note it secures, see Graham, 43 So. at 

513-14, and to look to the note to resolve any conflict, see Krickl, 

158 So. at 119. As Judge Miller cogently explained in her dissent 

below, applying our precedent, the location of Mrs. Palmero’s 

signature on the mortgage

cannot be used to circumvent unambiguous, bargainedfor contractual language. Mr. Palmero was the sole 

defined “Borrower” under both the note and mortgage. 

Moreover, as the note and mortgage must be harmonized 

to effect the intent of the parties, and any purported 

conflicts between the note and mortgage should be 

resolved in favor of the note, . . . Mr. Palmero was the 

sole “Borrower,” and upon his death, the lender was 

entitled to foreclose.

Palmero, 283 So. 3d at 366 (Miller, J., dissenting).
- 11 -

Because the note—which defines Mr. Palmero and only Mr. 

Palmero as the “Borrower”—resolves any conflict created by Mrs. 

Palmero’s signing her name in the “Borrower” signature block of the

mortgage, we need not look beyond (and it was unnecessary for the 

trial court to look beyond) the note and mortgage to the other 

documents that were part of the same transaction to determine, as 

a matter of law, how the parties intended to define the term 

“Borrower.” See generally Sardon Found. v. New Horizons Serv. 

Dogs, Inc., 852 So. 2d 416, 417, 420 (Fla. 5th DCA 2003) 

(explaining that “[t]he primary rule of construction of a mortgage is 

to ascertain the intention of the parties” and that “[w]here other 

instruments are executed contemporaneously with a mortgage and 

are part of the same transaction, the mortgage may be modified by 

these other instruments”).3 We do note, however, that all of the 

3. Similarly, because the proper application of our foreclosure 

precedent resolves any conflict between the mortgage and the note 

as a matter of law, we reject Respondents’ argument that we should 

construe any ambiguity against the lender as the drafter. See 

Emerald Pointe Prop. Owners’ Ass’n v. Com. Constr. Indus., Inc., 978 

So. 2d 873, 878 n.1 (Fla. 4th DCA 2008) (“[T]he rule of adverse 

construction is a ‘secondary rule of interpretation’ or a ‘rule of last 

resort,’ which should not be utilized if the parties’ intent can 

otherwise be conclusively determined.”).
- 12 -

other documents consistently show that the parties intended for Mr. 

Palmero to be the sole “Borrower,” and the record shows that Mr. 

Palmero “qualified for—and received—a higher amount than would 

have been paid had Mrs. Palmero been a co-borrower.” Palmero, 

283 So. 3d at 357 n.14 (Emas, C.J., dissenting).4

Finally, the Respondents argue and the dissent concludes that 

our precedent involves traditional mortgages and therefore should 

not apply to the reverse mortgage at issue here. However, first 

principles—i.e., the reason for the documents at issue—tell us why 

we should read a mortgage together with the note it secures 

regardless of the type of mortgage being foreclosed: “[T]he 

promissory note, not the mortgage, is the operative instrument in a 

mortgage loan transaction, since ‘a mortgage is but an incident to 

the debt, the payment of which it secures, and its ownership follows 

the assignment of the debt.’ ” HSBC Bank USA, N.A. v. Perez, 165 

4. Indeed, although we apply our precedent to resolve the 

issue as a matter of law, as Chief Judge Emas pointed out in his 

dissent below, after having held a bench trial on the issue of 

whether Mrs. Palmero is a co-borrower, the trial court made a 

factual finding, which is supported by competent, substantial 

evidence, that she is not. See Palmero, 283 So. 3d at 356, 360-61 

(Emas, C.J., dissenting).
- 13 -

So. 3d 696, 699 (Fla. 4th DCA 2015) (quoting WM Specialty Mortg., 

LLC v. Salomon, 874 So. 2d 680, 682 (Fla. 4th DCA 2004)); see also

Palmero, 283 So. 3d at 363 (Miller, J., dissenting) (“The note 

represents a promise to pay, while the mortgage merely secures that 

promise in the event of a default.”).

CONCLUSION

Our foreclosure precedent is clear that the mortgage must be 

read together with the note it secures and that, if the terms of the 

two documents conflict, the note prevails. See, e.g., Graham, 43 So. 

at 513-14; Krickl, 158 So. at 119. Applying our precedent to the 

mortgage and note in this foreclosure case, Mr. Palmero was the 

sole borrower as a matter of law. Accordingly, because the Third 

District erred in affirming the trial court’s denial of foreclosure on 

the ground that, as a matter of law, Mrs. Palmero is a surviving coborrower, we quash its decision in Palmero. We also disapprove the 

Third District’s prior decisions in Smith and Edwards to the extent 

they are inconsistent with this opinion.

It is so ordered.
- 14 -

CANADY, C.J., and MUÑIZ, COURIEL, and GROSSHANS, JJ., 

concur.

LABARGA, J., dissents with an opinion, in which POLSTON, J., 

concurs.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION 

AND, IF FILED, DETERMINED.

LABARGA, J., dissenting.

I respectfully disagree with the majority’s conclusion that 

Mr. Palmero was the sole borrower as a matter of law. While I agree 

that, under both Graham and Krickl, the note prevails in the 

conventional mortgage context, there is no authority requiring the

same result in the reverse mortgage context. In relying on Graham

and Krickl, the majority looks to nearly one-hundred-year-old 

precedent which undoubtedly does not consider the intricacies of 

reverse mortgages, nor the incentives for the parties involved. 

Moreover, because Graham and Krickl are not reverse mortgage 

cases, they do not involve the same federal law concerns under 12 

U.S.C. § 1715z-20(j). Accordingly, I do not view this Court’s 

decisions in Graham and Krickl as determinative in the present

case.

The majority correctly states that the note is the operative 

instrument in a loan transaction. Majority op. at 12. However, 
- 15 -

conventional mortgages are distinguishable from reverse mortgages 

because no personal liability is attached to a borrower in a reverse 

mortgage. Accordingly, in a conventional mortgage the note is the 

primary instrument, whereas in a reverse mortgage the mortgage is 

the primary instrument. Because conventional mortgages and 

reverse mortgages are distinguishable, I do not believe that this 

Court should so heavily rely on outdated case law governing 

conventional mortgages.

The Third District has performed a thoughtful legal analysis 

for this same legal issue twice before in Smith and Edwards, 

holding that, as a matter of law, when the surviving spouse signs a 

mortgage as a co-borrower, the spouse will be treated as a borrower 

for purposes of the mortgage. Smith, 200 So. 3d at 228; Edwards, 

187 So. 3d at 897. In the present case, the reverse mortgage was 

signed by both Mr. and Mrs. Palmero, suggesting that Mrs. Palmero 

is a co-borrower.

I do not disagree with the conclusion in Graham, that a 

mortgage should be construed together with the note it secures. 

See Graham, 43 So. at 513-14. However, given the intricacies of 

reverse mortgages which did not exist when Graham was decided, 
- 16 -

this Court should look beyond legal principles used in conventional 

mortgages in a reverse mortgage analysis. Here, for instance, in 

order to ensure that Mrs. Palmero would not invoke a homestead 

claim to the mortgaged property as a defense to foreclosure, her 

signature on the mortgage was necessary. This suggests that the 

parties intended for Mrs. Palmero to sign as a co-borrower to be in 

compliance with the homestead provisions of the Florida 

Constitution. Furthermore, federal law expressly prohibits insuring 

any mortgage that would allow the lender to commence a 

foreclosure on the property while the non-borrowing spouse of the 

borrower remains alive and in possession. 12 U.S.C. § 1715z-20(j) 

(2017). The purpose of this requirement is to protect the spouse 

from foreclosure as long as the spouse resides in the home. See

Edwards, 187 So. 3d at 897. Therefore, if this Court interprets the 

contractual obligations of the parties as consistent with the federal 

regulations governing the contract at the time it was entered into, 

then Mrs. Palmero would be a co-borrower. I do not see any other 

reason for Mrs. Palmero to sign the mortgage if she did not intend 

to be a co-borrower.
- 17 -

Because I believe Mrs. Palmero is a co-borrower under the 

terms of the mortgage and that she should prevail because a 

condition precedent to the lender’s right to foreclose has not 

occurred, I dissent.

POLSTON, J., concurs.

Application for Review of the Decision of the District Court of Appeal 

– Direct Conflict of Decisions

Third District - Case No. 3D14-3114

(Miami-Dade County)

William P. McCaughan of Law Office of William P. McCaughan, Key 

Biscayne, Florida; Joshua H. Threadcraft of Burr & Forman LLP, 

Birmingham, Alabama; and Jonathan B. Morton, Mallory M. 

Cooney, and Joshua C. Carpenter of K & L Gates LLP, Miami, 

Florida,

for Petitioner

Jeffrey M. Hearne and Maxine M. Long of Legal Services of Greater 

Miami, Inc., Miami, Florida; Jacqueline C. Ledón of J. Muir & 

Associates, P.A., Miami, Florida; and Juan M. Carrera of Carrera & 

Amador, P.A., Miami, Florida,

for Respondents

Lynn Drysdale of Jacksonville Area Legal Aid, Inc., Jacksonville, 

Florida; and Julie Nepveu of AARP Foundation, Washington, 

District of Columbia,

for Amici Curiae AARP, AARP Foundation, and Jacksonville 

Area Legal Aid, Inc.