The U.S. District Court for the Middle District of Florida recently confirmed that Florida’s statute of limitations did not bar a mortgagee from filing a new foreclosure action based on non-payment or other kinds of defaults within the past five years, even where the prior foreclosure action was dismissed without prejudice and acceleration of the mortgage occurred more than five years prior to the second foreclosure action.

In so ruling, the Court dismissed an amended complaint for declaratory judgment seeking to invalidate a mortgage.

A copy of the opinion is available at:  Link to Opinion.

A property owner sought a declaratory judgment that Florida’s statute of limitations bars a mortgagee from foreclosing on real property owned by the trust.  The subject property was originally purchased by two borrowers, who later failed to make their mortgage payments.

The mortgagee accelerated the mortgage loan, and filed a foreclosure action.  The borrowers filed for bankruptcy and received a discharge of their debts.  Thereafter, the first foreclosure action was dismissed without prejudice and the mortgage was assigned.

After one of the borrowers died, the remaining borrower quitclaimed her interest in the subject property to a trust’s personal representative.  The mortgagee then took possession of the property and prevented the trust’s personal representative from accessing and occupying it.

The trust’s personal representative filed suit against the mortgagee, relying on Deutsche Bank Trust Co., Americas v. Beauvais, No. 3D14-575, 40 Fla. L. Weekly D 1 (Fla. 3d DCA, Dec. 17, 2014), to argue that the Florida five-year statute of limitations period began to run as to the full amount owed on the mortgage on the date of the first acceleration, and that the mortgagee was therefore barred from foreclosing.

As you may recall, in Beauvais, Florida’s Third District Court of Appeal held that a second foreclosure action was barred by the statute of limitations when filed after a prior foreclosure action was dismissed without prejudice and more than five years after the date of acceleration.

The U.S. District Court for the Middle District of Florida declined to follow Beauvais, holding that the Beauvais decision was “contrary to the overwhelming weight of authority, which holds that ‘even where a mortgagee initiates a foreclosure action and invokes its right of acceleration, if the mortgagee’s foreclosure action is unsuccessful for whatever reason, the mortgagee still has the right to file later foreclosure actions . . . so long as they are based on separate defaults.’ ”

In addition, the Court distinguished Beauvais, which prevents re-filing of a foreclosure action as a result of non-payment defaults only, and not other kinds of defaults.  Here, the trust’s personal representative sought a declaratory judgment that the mortgage could not foreclose for any reason and also sought possession, occupation, and use of the subject property.

Accordingly, the U.S. District Court for the Middle District of Florida dismissed the amended complaint with prejudice.