Trust Mortg. LLC v. Residential Credit Solutions Inc. (In re Gonzalez), CASE NO. 15–17653–RAM

• Citation: 544 B.R. 716
• Decision Date: 12 January 2016
• Docket Number: ADV. NO. 15–1453–BKC–RAM,CASE NO. 15–17653–RAM
• Parties: In re: Yodiosmay Gonzalez and Sandra M. Gonzalez, Debtors. Trust Mortgage LLC, Plaintiff, v. Residential Credit Solutions Inc., Defendant.
• Court: United States Bankruptcy Courts. Eleventh Circuit. U.S. Bankruptcy Court — Southern District of Florida

544 B.R. 716

In re: Yodiosmay Gonzalez and Sandra M. Gonzalez, Debtors.

Trust Mortgage LLC, Plaintiff,
v.
Residential Credit Solutions Inc., Defendant.

CASE NO. 15–17653–RAM
ADV. NO. 15–1453–BKC–RAM

United States Bankruptcy Court, S.D. Florida.

Signed January 12, 2016
Filed January 13, 2016

Linda M. Leali, Esq, Miami, FL, for Plaintiff.

James K. McDonough, Tampa, FL, for Defendant.

ORDER GRANTING MOTION TO DISMISS

Robert A. Mark, Judge United States Bankruptcy Court

The complaint and motion to dismiss in this proceeding present an issue of Florida law: If a lender files a foreclosure case that accelerates the borrower's obligations and that case is dismissed without prejudice,

544 B.R. 717

does the statute of limitations bar a later foreclosure action filed more than five(5) years after the loan was first accelerated? For the reasons that follow, this Court adopts the majority view and concludes that the note and mortgage may still be enforced based on a default in payments occurring after the date of the defaults alleged in the original complaint. Moreover, Plaintiff's attempt to extinguish the mortgage lien fails even if the statute of limitations has expired because Florida's applicable statute of repose preserves the lien until five (5) years after the maturity date in the loan documents.

Factual and Procedural Background.

The Plaintiff, Trust Mortgage LLC (the "Plaintiff"), holds a second mortgage on Debtors' property located at 9410 SW 60th Terrace, Miami, FL 33173 (the "Property"). The Defendant, Residential Credit Solutions, Inc. ("Residential"), holds the first mortgage on the Property. On May 28, 2009, the Bank of New York Mellon, the predecessor in interest to Residential, commenced a foreclosure proceeding against the Debtor in state court. The state court foreclosure case was voluntarily dismissed without prejudice on March 22, 2011.

Yodiosmay and Sandra Gonzalez (the "Debtors") filed their chapter 13 petition initiating the above-styled main case on April 28, 2015. In their chapter 13 case, the Debtors seek to strip off the lien securing Plaintiff's second mortgage arguing that the amount they owe to Residential under the first mortgage exceeds the value of the Property.

Plaintiff filed this adversary proceeding seeking a judgment declaring Residential's lien void. If successful, Plaintiff's lien would become the senior mortgage lien and could not be stripped off. Plaintiff's complaint was filed on July 15, 2015 [DE # 1], and amended on August 27, 2015 [DE # 11] (the "Amended Complaint"). Count I of the Amended Complaint seeks a judgment declaring that enforcement of Residential's first mortgage is barred by the five year statute of limitations in Fla. Stat. 95.11(2)(c). Count II of the Amended Complaint alleges that Residential's lien should be declared void under § 506(d) because a foreclosure action would be time-barred.

On September 28, 2015 Residential filed its Motion to Dismiss Plaintiff's Amended Complaint [DE # 16] (the "Motion to Dismiss") and on October 22, 2015, the Plaintiff filed Trust Mortgage's (I) Response to Defendant's Motion to Dismiss and Memorandum of Law and, Alternatively, (II) Motion to Continue the Hearing Date of the Motion to Dismiss [DE # 20] (the "Response"). The Court heard oral argument on the Motion to...