Right To Amend Narrows Over Time

TOORAK

v.

CAPITAL SERVICING COMPANY, LLC

Florida courts grant leave to amend freely, but that policy narrows as trial approaches. In Toorak Capital Partners, LLC v. Capital Servicing Company, LLC, No. 2D2023-1089 (Fla. 2d DCA Nov. 13, 2024), the Second District affirmed a judgment for a borrower and guarantor after the trial court refused the lender leave to amend first requested in opening statement. Along the way, the court corrected a common misreading of who must plead a loan modification.

(a) Facts

• Case: Toorak Capital Partners LLC v. Capital Servicing Company LLC and Traci Shawn Williams, Florida Second District Court of Appeal, Case No. 2D2023-1089, decided November 13, 2024, on appeal from the Circuit Court for Sarasota County (opinion accessible at 2dca.flcourts.gov).
• Parties: Appellant Toorak (lender); Appellees Capital (borrower) and Ms. Williams (guarantor).
• The loan: On June 7, 2019, Toorak made Capital a commercial balloon loan, secured by a mortgage and Ms. Williams’s personal guaranty. The balloon payment went unpaid.
• The suit: Toorak sued on January 5, 2022, on the original note, mortgage, and guaranty, alleging default under the original maturity date only.
• The defense: Capital and Ms. Williams answered that written extension agreements had moved the maturity date, so there was no default when suit was filed. Toorak filed no reply and did not amend before trial.
• Trial: Four extension agreements came into evidence. Toorak conceded three but contended the fourth, dated about three weeks after suit was filed, was never finalized. During opening statement, Toorak asked for leave to amend to conform the pleadings to the evidence. The defense objected and insisted the case be tried on the operative complaint, and the motion was denied.
• Judgment: Relying on Nowlin v. Nationstar Mortgage, LLC, the trial court found four valid modifications, faulted Toorak for failing to plead and prove their terms, found no default, and entered final judgment for the defendants. Toorak appealed.

(b) Issues

• Did the trial court abuse its discretion by denying Toorak leave to amend sought during opening statement?
• Under Nowlin, must a plaintiff suing on the original loan documents plead and prove the terms of modifications the defendant raises as a defense?
• Could Toorak argue on appeal that the defendants defaulted even under the extended terms, a theory it never pled?
• Was the judgment correct despite any error in the trial court’s reasoning?

(c) Holding: Leave to Amend Properly Denied

Affirmed.

• There was no abuse of discretion in denying leave to amend requested in opening statement over the defense’s objection.
• The trial court misread Nowlin. A plaintiff suing on the original contract need not plead the terms of a modification the defendant uses defensively. A modification raised to defeat or reduce liability is an affirmative defense the defendant must plead and prove (Bank of New York Mellon v. Bloedel, 236 So. 3d 1164 (Fla. 2d DCA 2018)). The plaintiff must plead a modification only when it sues to recover under the modified terms.
• The post-extension default theory was not reviewed because it was never pled, heard, or tried below.
• The judgment stood anyway. The defendants pled and proved the extensions, and competent, substantial evidence supported the finding that they were not in default when Toorak sued.

(d) Rationale

• Leave to amend narrows as trial nears. Florida Rule of Civil Procedure 1.190(a) directs that leave of court be given freely when justice so requires, but that liberal policy narrows as a case approaches trial (State Farm Mut. Auto. Ins. Co. v. Baum Chiropractic Clinic, P.A., 323 So. 3d 756 (Fla. 4th DCA 2021)). Courts also have an equally compelling duty to bring litigation to an end (Toscano Condo. Ass’n v. DDA Eng’rs, P.A., 274 So. 3d 487 (Fla. 3d DCA 2019)).
• Toorak had notice. The modification defense appeared in the answer. Toorak could have addressed it in a timely reply under rule 1.100(a) or in an earlier amendment. Because the defense objected and demanded trial on the operative complaint, the new theory was not tried by consent.
• Nowlin was not a pleading case. In Nowlin v. Nationstar Mortgage, LLC, 193 So. 3d 1043 (Fla. 2d DCA 2016), the adequacy of the pleadings was never in question; the case concerned proof of breach of a modification the lender sued on. Toorak had no duty to plead the defendants’ modifications after the fact, and its failure to reply was not fatal to the claim it actually pled.
• Correct result despite the error. Toorak chose to plead and try only a default under the original maturity date. Once the defendants proved the loan had been extended and was not in default when suit was filed, that claim failed, and the Nowlin error did not change the outcome.
• Unpled theories stay unreviewed. An appellate court will not decide an issue that was not presented or tried below (Sierra v. Public Health Trust of Dade County, 661 So. 2d 1296 (Fla. 3d DCA 1995)).

(e) Comments

• Toorak’s procedural laziness feels like the real loser here—waiting until trial to fix the complaint is bold, but the court’s “nope, too late” stance tracks with fairness. The extensions muddied the default question, and Toorak’s half-hearted dispute of the fourth one didn’t help. Solid call by the DCA, though it’s a reminder: plead your case right or don’t bother.

Practice Points on Leave to Amend

• Plead the default you intend to prove. If the borrower claims a modification, decide early whether to dispute it, avoid it in a reply, or allege default under the modified terms.
• Use the reply. Rule 1.100(a) permits a reply to avoid an affirmative defense. Toorak never filed one.
• Seek leave to amend early. A request made in opening statement, over objection, is reviewed only for abuse of discretion and is an uphill climb.
• Know who carries the burden. A defendant raising a modification defensively must plead and prove it; a plaintiff suing on the modified terms must plead them.
• Confirm the default date. Before filing, verify the loan is in default under every extension, not just the original note.

Read the Opinion

Read the full opinion — Second District Court of Appeal (PDF)

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