As if we need any other proof that banks are special…and that special rules are made to apply for (not against) banks, today Florida’s Supreme Court released their much anticipated decision in US Bank v. Bartram.
Now if you really wanted to have fun, you could look back through my posts and see where I knew from the very beginning that there was no way in hell the Florida Supreme Court was ever going to tell the banking community that they would not be able to collect on billions of dollars in loans…no matter what twisted logic or reasoning they had to use to come to that decision. Hence the title of this post, “Duh?”
But…there are many, many interesting points about this decision that demand close inspection, consideration and incorporation into foreclosure defenses…..key among these considerations is..
HOW MUCH INTEREST AND FEES AND BACK PAYMENTS ARE BANKS ENTITLED TO COLLECT?
That and other questions will be developed over years to come…but we’re incorporating these considerations into our pleadings even now….But in answer to the larger question…The Florida Supreme Court stated the question as follows (and following the excellent briefs submitted for the banks) :
The issue before the Court involves the application of the five-year statute of limitations to “[a]n action to foreclose a mortgage” pursuant to section 95.11(2)(c), Florida Statutes (2012).1 The Fifth District Court of Appeal relied on this Court’s reasoning in Singleton v. Greymar Associates, 882 So. 2d 1004 (Fla. 2004), rejecting that the statute of limitations had expired. Because of the importance of this issue to both lenders and borrowers, the Fifth District certified to this Court a question of great public importance, which we have rephrased to acknowledge that the note in this case is a standard residential mortgage, which included a contractual right to reinstate:
DOES ACCELERATION OF PAYMENTS DUE UNDER A RESIDENTIAL NOTE AND MORTGAGE WITH A REINSTATEMENT PROVISION IN A FORECLOSURE ACTION THAT WAS DISMISSED PURSUANT TO RULE 1.420(B), FLORIDA RULES OF CIVIL PROCEDURE, TRIGGER APPLICATION OF THE STATUTE OF LIMITATIONS TO PREVENT A SUBSEQUENT FORECLOSURE ACTION BY THE MORTGAGEE BASED ON PAYMENT DEFAULTS OCCURRING SUBSEQUENT TO DISMISSAL OF THE FIRST FORECLOSURE SUIT?
(*Our holding is consistent with the views of the excellent amici briefs submitted by the Real Property Probate & Law Section of The Florida Bar, The Business Law Section of The Florida Bar, and the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation at the request of the Third District in Deutsche Bank Trust Co. Americas v. Beauvais)
And the Answer is:
The Fifth District properly extended our reasoning in Singleton to the statute of limitations context in a mortgage foreclosure action. Here, the Bank’s initial foreclosure action was involuntarily dismissed. Therefore, as we previously explained in Singleton, the dismissal returned the parties back to “the same contractual relationship with the same continuing obligations.” 882 So. 2d at 1007. Bartram and the Bank’s prior contractual relationship gave Bartram the opportunity to continue making his mortgage payments, and gave the Bank the right to exercise its remedy of acceleration through a foreclosure action if Bartram subsequently defaulted on a payment separate from the default upon which the Bank predicated its first foreclosure action. Therefore, the Bank’s attempted prior acceleration in a foreclosure action that was involuntarily dismissed did not trigger the statute of limitations to bar future foreclosure actions based on separate defaults.
Accordingly, we approve the Fifth District’s decision in Bartram and answer the rephrased certified question in the negative.