SHEDDF2-FL3, LLC v. Penthouse South, LLC
A commercial borrower defaulted under a forbearance and partial settlement agreement that allowed the lender, upon any monetary default, to immediately record escrowed warranty deeds without notice or cure and waived redemption rights. The trial court invalidated that remedy as unconscionable and compelled the lender to accept payoff and reconvey the units. The Third DCA reversed, holding that because the obligors conceded there was no evidence of procedural unconscionability, their unconscionability challenge failed as a matter of law regardless of how oppressive the term appeared.
Key facts
- SHEDDF2-FL3, LLC (lender) and Penthouse South, LLC (borrower) entered into a forbearance and partial settlement agreement that included a remedy allowing the lender to immediately record escrowed warranty deeds upon any monetary default without notice, opportunity to cure, or redemption rights.
- The borrower defaulted on the loan, and the lender sought to enforce the deed-in-escrow remedy; the trial court invalidated the remedy as unconscionable and ordered the lender to accept payoff funds and reconvey the units.
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Why it matters
This is a strong authority for lenders and transactional litigators enforcing negotiated default remedies, including deeds in lieu held in escrow and waivers of redemption rights, against equity-based attacks. It… — full analysis with a trial
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