Desylvester v. Bank of N.Y. Mellon

• Citation: 219 So.3d 1016
• Decision Date: 14 June 2017
• Docket Number: Case No. 2D15–5053
• Parties: John DESYLVESTER, Appellant, v. The BANK OF NEW YORK MELLON f/k/a the Bank of New York, as Trustee, ON BEHALF OF the HOLDERS OF the ALTERNATIVE LOAN TRUST 2005–62, MORTGAGE PASS–THROUGH CERTIFICATES SERIES 2005–62; Joy Freeman; Mortgage Electronic Registration Systems, Inc., as Nominee for Esecond Mortgage.com in DBA Dollar Realty Mortgage; Harbour Walk Homeowners' Association, Inc.; The Inlets at Riverdale, Inc.; and Tenant, Appellees.
• Court: Court of Appeal of Florida (US)

219 So.3d 1016

John DESYLVESTER, Appellant,

v.The BANK OF NEW YORK MELLON f/k/a the Bank of New York, as Trustee, ON BEHALF OF the HOLDERS OF the ALTERNATIVE LOAN TRUST 2005–62, MORTGAGE PASS–THROUGH CERTIFICATES SERIES 2005–62; Joy Freeman; Mortgage Electronic Registration Systems, Inc., as Nominee for Esecond Mortgage.com in DBA Dollar Realty Mortgage; Harbour Walk Homeowners' Association, Inc.; The Inlets at Riverdale, Inc.; and Tenant, Appellees.

Case No. 2D15–5053

District Court of Appeal of Florida, Second District.

June 14, 2017

David W. Smith, Law Office of David W. Smith, Sarasota, for Appellant.

Sarah T. Weitz, of Weitz & Schwartz, P.A., Fort Lauderdale, for Appellee, The Bank of New York Mellon.

No appearance by remaining Appellees.

BY ORDER OF THE COURT:

Appellant's motion for rehearing and certification filed March 9, 2017, is granted only to the extent that this court's opinion dated February 22, 2017, is withdrawn and the attached opinion is issued in its place. No further motions for rehearing will be entertained.

I HEREBY CERTIFY THE FOREGOING IS A TRUE COPY OF THE ORIGINAL COURT ORDER.

WALLACE, Judge.

John Desylvester appeals a final judgment of mortgage foreclosure entered against him and Joy Freeman and in favor of The Bank of New York Mellon (the Bank) following a nonjury trial. Although we affirm the judgment, we write to address the issue of the application of the statute of limitations in a subsequent foreclosure action filed after the dismissal of an initial action for the foreclosure of the same note and mortgage.

I. THE FACTS AND THE PROCEDURAL BACKGROUND

On September 20, 2005, Mr. Desylvester and Ms. Freeman executed an adjustable rate note in the amount of $1,500,000 in favor of "Esecond Mortgage.com in [sic] DBA Dollar Realty Mtg." The terms of the note required the borrowers to make monthly payments of principal and interest, beginning on November 1, 2005, and ending on October 1, 2035.

On the same day, Mr. Desylvester and Ms. Freeman executed a standard residential mortgage securing the note with real property located in Sarasota County. The mortgage named "Esecond Mortgage.com in [sic] DBA Dollar Realty Mtg." as the lender and Mortgage Electronic Registration Systems, Inc. (MERS), as the mortgagee as nominee for the lender and the lender's successors and assigns. Both the note and the mortgage contained optional acceleration clauses authorizing acceleration of the principal and interest due on the note to maturity in the event of a default by the borrowers. In addition, the standard form residential mortgage included a reinstatement provision in paragraph 19 titled, "Borrower's Right to Reinstate After Acceleration."¹ The Bank filed the original note with the trial court in the underlying litigation. An allonge was attached to the note. The allonge bore two indorsements. The first indorsement was from the original lender to Countrywide Home Loans, Inc., dba America's Wholesale Lender. The second indorsement from Countrywide was in blank.

The Bank filed two foreclosure actions on the note and mortgage. It filed the first foreclosure action against Mr. Desylvester, Ms. Freeman, and other parties on November 15, 2012. The Bank attached a copy of the note, including the allonge bearing both of the indorsements, and a copy of the mortgage to its complaint. The Bank alleged that the mortgage had been assigned to it under an assignment from MERS dated May 10, 2011, and attached a copy of the assignment. With regard to the default, the Bank alleged that the borrowers had defaulted on their regular monthly payment due on October 1, 2008, "and all subsequent payments." The Bank also accelerated the note by declaring the full amount due under the note to be due and payable. The first action was dismissed for reasons that are unexplained in our record.

Subsequently, on December 9, 2014, the Bank filed a second foreclosure action against the borrowers and others on the same note and mortgage. As it did in the first action, the Bank alleged in its complaint that the borrowers had defaulted on the note and mortgage by failing to make the payment due on October 1, 2008, "and all subsequent payments due thereafter." Once again, the Bank accelerated the unpaid principal and interest to maturity by declaring the full amount to be due and payable.

Mr. Desylvester filed an answer and affirmative defenses to the complaint in the second action for foreclosure. He generally denied the material allegations of the complaint, including the allegation that he had defaulted on the payment due on October 1, 2008, and "all subsequent payments due thereafter." In his second affirmative defense, Mr. Desylvester alleged that the statute of limitations had run with regard to the alleged default in payment on October 1, 2008, because any such default had occurred more than five years before the filing of the second foreclosure complaint. Mr. Desylvester asserted that "[a]ny suit to foreclose based upon an October 1, 2008 default would have had to been filed prior to October 1, 2013, or otherwise be barred forever." Mr. Desylvester concluded that because the second action was filed on December 9, 2014, it was barred by the statute of limitations. In a third affirmative defense, Mr. Desylvester alleged that the Bank did not have standing to foreclose at the inception of the second foreclosure action.

The trial court held a bench trial for the second foreclosure action in September 2015. Jill Dietrich testified on behalf of the Bank. Ms. Dietrich was an employee of Select Portfolio Servicing, Inc. (SPS), the servicer for the loan. She was qualified to testify about SPS's business records for the loan. Ms. Dietrich identified the original note, the mortgage, and the assignment of mortgage, which the trial court received in evidence. Ms. Dietrich also identified a document reflecting the payment history on the note, which showed that the last payment received had been applied to the September 1, 2008, installment; no payments had been received on the note thereafter. The trial court also received this document in evidence.

On October 26, 2015, the trial court entered the final judgment of foreclosure. Mr. Desylvester appealed the final judgment. Ms. Freeman has not joined in the appeal or otherwise appeared in this case.

II. MR. DESYLVESTER'S APPELLATE ARGUMENTS

On appeal, Mr. Desylvester raises three points. First, he argues that the Bank failed to present evidence sufficient to establish the alleged default in payment. Second, Mr. Desylvester contends that the Bank failed to establish its standing to foreclose at the inception of the second action. Third, he argues that the Bank's action is barred by the applicable statute of limitations.

Competent substantial evidence in the record demonstrates that the Bank established the alleged default in payment and its standing to foreclose at the inception of the action. Mr. Desylvester's arguments on these points are without merit and do not warrant further discussion. We turn now to a discussion of Mr. Desylvester's argument concerning the statute of limitations.

III. DISCUSSION

We apply a de novo standard of review to the issue of the application of the statute of limitations to the Bank's action for foreclosure. Nationstar Mortg., LLC v. Sunderman , 201 So.3d 139, 140 (Fla. 3d DCA 2015) ; see also Hamilton v....