With its decision up on re-hearing, Florida’s Third District Court of Appeal may be rethinking its decision in Deutsche Bank Trust Co. Americas v. Beauvais, No. 3D14-575, 2014 WL 7156961 (Fla. 3d DCA Dec. 17, 2014). In Beauvais, the court held that only a dismissal with prejudice will allow a cause of action for mortgage foreclosure to accrue after a failed foreclosure effort is dismissed. The effect of the decision was to render numerous foreclosures time-barred where a prior dismissal had been taken voluntarily, or otherwise without prejudice. The Third DCA acknowledged its decision in Beauvais expressly conflicted with a decision of the Fourth DCA in Evergrene Partners, Inc. v. Citibank, N.A., 143 So.3d 954, 956 (Fla. 4th DCA 2014) and certified the conflict for the Florida Supreme Court.
Since its release, Beauvais has garnered many critics and few supporters amongst judges called to pick between the two divergent strains of thought. Every federal judge in Florida to review the issue has rejected Beauvais in favor of the competing cases. See LNB-017-13, LLC v. HSBC Bank USA, No. 1:14-CV-24800-UU, 2015 WL 1546150 (S.D. Fla. Apr. 7, 2015); Summerlin Asset Mgmt. v Trust v. Jackson, No. 9:14-CV-81302, 2015 WL 4065372, at *1 (S.D. Fla. July 2, 2015); Stern v. Bank of Am. Corp., No. 2:15-CV-153-FTM-29CM, 2015 WL 3991058 (M.D. Fla. June 30, 2015). These cases favor the view that a dismissal, be it with or without prejudice, permits new causes of action for foreclosure to accrue after the prior case is dismissed.
Now another District Court of Appeal in Florida has weighed in. In Nationstar Mortgage, LLC v. Germaine R. Brown, 40 Fla. L. Weekly D1958a, 1D14-4381 (Fla. 1st DCA Aug. 24, 2015), Florida’s First District Court of Appeal rejectedBeauvais in favor of the majority rule. In holding that a second foreclosure action was not time-barred, the First District Court of Appeal observed that:
The dismissal in this case was without prejudice, so much the more preserving appellant’s right to file a new foreclosure action based on appellees’ breaches subsequent to the February 2007 breach asserted as the procedural trigger of the earlier foreclosure action. We find that appellant’s assertion of the right to accelerate was not irrevocably “exercised” within the meaning of cases defining accrual for foreclosure actions, when the right was merely asserted and then dismissed without prejudice. As a matter of law, appellant’s 2012 foreclosure action, based on breaches that occurred after the breach that triggered the first complaint, was not barred by the statute of limitations.
Id. (citations omitted).
And in rejecting Beauvais observed that:
We are aware that the Third District has reached a contrary conclusion in Deutsche Bank Trust Co. Americas v. Beauvais, 40 Fla. L. Weekly D1, 2014 WL 7156961 (Fla. 3d DCA Dec. 17, 2014) (Case No. 3D14-575). A federal district court has refused to follow Beauvais, noting that it is “contrary to the overwhelming weight of authority.” The court in Beauvaisacknowledges that its conclusion is contrary to the weight of authority on the questions presented. 2014 WL 7156961, at *8-9. That court’s docket shows that the court has set the case for rehearing en banc; it remains to be seen whether the merits disposition will change.
Id. (quoting Stern, 2015 WL 3991058 at *2-3).
At present, Beauvais remains an outlier in an area of the law which is in a state of flux. It remains to be seen if Florida’s Third District Court of Appeal will revise or retract its opinion in Beauvais based upon the rehearing granted in that case. Regardless of how the Third District rules on rehearing, the Florida Supreme Court will also weigh in in the pending appeal of U.S. Bank Nat. Ass’n v. Bartram, 140 So. 3d 1007, 1014 (Fla. 5th DCA), review granted, 160 So. 3d 892 (Fla. 2014). Whether or not that ruling will shed any light on the split of authority between the Third District Court of Appeal and her sister courts remains to be seen. What is clear is that there is certainly more to come on this issue. Practitioners need to make sure they stay on top of the case law in this constantly changing area, lest they be caught flat footed by the changes that seem to be coming every few weeks on this issue.