U.S. Bank Nat'Lass'N v. Bartram

• Decision Date: 02 June 2014
• Docket Number: No. 5D12–3823.,5D12–3823.
• Citation: 140 So.3d 1007
• Parties: U.S. BANK NATIONAL ASSOCIATION, etc., Appellant, v. Patricia J. BARTRAM etc., et al., Appellee.
• Court: Florida District Court of Appeals

140 So.3d 1007

U.S. BANK NATIONAL ASSOCIATION, etc., Appellant,

v.Patricia J. BARTRAM etc., et al., Appellee.

No. 5D12–3823.

District Court of Appeal of Florida,

Fifth District.

April 25, 2014.

Rehearing and Rehearing En Banc Denied June 2, 2014.

Jeffrey C. Sirolly and Michael D. Starks, of Baker, Donelson, Bearman, Caldwell, & Berkowitz, PC, Orlando, for Appellant.

Michael Alex Wasylik, of Ricardo & Wasylik, PL, Dade City, and Dineen Pashoukos Wasylik, of Dineen Pashoukos Wasylik, P.A., Tampa, and Thomas R. Pycraft, Jr., of Pycraft Legal Services, LLC, St. Augustine, for Appellee, Lewis Brooke Bartram.

T. Geoffrey Heekin, Catherine Remler Michaud, S. Hunter Malin, of Heekin, Malin & Wenzel, P.A., Jacksonville, for Appellee, The Plantation at Ponte Vedra, Inc.

No Appearance for Appellee Patricia J. Bartram.

PER CURIAM.

The appellant, U.S. Bank National Association (the Bank), appeals a summary final judgment rendered in a mortgage foreclosure case that cancels the note and mortgage executed by the appellee, Lewis Bartram (Bartram). The trial court ruled in the summary final judgment that the note and mortgage should be cancelled based on a failed attempt to foreclose the same note and mortgage in a prior foreclosure action filed by the Bank against Bartram. The issue we must resolve is whether acceleration of payments due under a note and mortgage in a foreclosure action that was dismissed pursuant to rule 1.420(b), Florida Rules of Civil Procedure, triggers 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. We conclude that the statute of limitations does not bar the subsequent foreclosure action and therefore reverse the judgment under review.

In 2005, Bartram borrowed $650,000 from the Bank's predecessor. The loan was secured by a mortgage on real property owned by Bartram and his wife, Patricia, in Ponte Vedra Beach. After entering into the note and mortgage, Bartram and his wife divorced. In the divorce, Bartram was required to buy Patricia's interest in the real property and accordingly executed a note (for approximately $156,000) and mortgage to Patricia. Thus, Patricia ended up with a recorded interest in the same real property as the Bank, which had taken assignment of the $650,000 note and mortgage in the intervening period. Additionally, the governing homeowners' association, The Plantation at Ponte Vedra, Inc. (the HOA), placed liens on the property for the nonpayment of various fees. Bartram stopped making payments to the Bank in January 2006 and has not made any payments to Patricia.

In May 2006, the Bank filed a foreclosure suit against Bartram. The Bank alleged it had fulfilled all conditions precedent to acceleration of the note, and it accelerated all payments due. At no time during the pendency of the 2006 case did Bartram ever deny that he had defaulted and neither did he ever challenge the acceleration of the debt.

In April 2011, while the Bank's 2006 case was still pending (the record does not reveal what was occurring in the Bank's foreclosure case for the intervening almost five years), Patricia Bartram filed a separate suit to foreclose her mortgage. She named Bartram, the Bank, and the HOA as defendants.

On May 5, 2011, the trial court dismissed the Bank's 2006 foreclosure case because the Bank failed to appear at a noticed case management conference and because the case was almost five years old, which was four years beyond time standards. The Bank did not appeal the involuntary dismissal rendered pursuant to Florida Rule of Civil Procedure 1.420(b).

A year after Patricia's suit was filed, Bartram filed a crossclaim against the Bank in Patricia's action, seeking declaratory judgment against the Bank. Bartram contended he was unsure of his rights and responsibilities under the note and mortgage and asserted that the Bank no longer had any interest in the real property because of the 2011 involuntary dismissal of its foreclosure action. He argued that because more than five years had passed since he had defaulted on the accelerated note and mortgage, the statute of limitations barred the Bank from now enforcing its rights under the note and mortgage. In a second count, Bartram sought to quiet his title in the real property.

Bartram filed a motion for summary judgment on his crossclaim, contending that acceleration of the payments in the prior foreclosure action triggered application of the statute of limitations and the Bank was therefore barred from foreclosing its mortgage and attempting to collect the unpaid portion of the note. The Bank argued that although the statute of limitations prevents the Bank from collecting some payments, it did not bar the collection of payments that were missed within the most recent five-year period.

The trial court signed the Summary Final Judgment Against Defendant U.S. Bank on Crossclaim. In the summary judgment, the court quieted title in Bartram, found the Bank had no further ability to enforce its rights under the note and mortgage that were the subject matter of the Bank's dismissed 2006 foreclosure action, and cancelled the note and mortgage. The court released the Bank's lien on the property. On August 7, 2012, the Bank filed a Motion for Rehearing. The court denied rehearing and the Bank appeals.

We begin by noting that there is no question of the Bank's successful acceleration of the entire indebtedness on May 15, 2006. The Bank contends that the dismissal of its foreclosure suit nullified its acceleration of future payments; accordingly,the cause of action on the accelerated payments did not accrue and the statute of limitations did not begin to run on those payments, at least until default occurred on each installment. The Bank relies heavily on Singleton v. Greymar Associates, 882 So.2d 1004 (Fla.2004) (holding that dismissal with prejudice in a mortgage foreclosure action does not necessarily bar, on res judicata grounds, a subsequent foreclosure action on the same mortgage even if the mortgagee accelerated the note in the first suit) to support its position.

The HOA and Bartram, on the other hand, assert that the cause of action for default of future installment payments accrued upon acceleration, thus triggering the statute of limitations clock to run, and because the Bank did not revoke its acceleration at any time after the dismissal, the five-year statute of limitations period eventually expired, barring the Bank from bringing another suit. See Greene v. Bursey, 733 So.2d 1111, 1114–15 (Fla. 4th DCA 1999) (“Ordinarily, the statute of limitations under an installment contract starts to run on the date each payment becomes due. As such, the statute of limitations may run on some installments and not others. Where the installment contract contains an optional acceleration clause, the statute of limitations may commence running earlier on payments not yet due if the holder exercises his right to accelerate the total debt because of a default. In other words, the entire debt does not become due on the mere default of payment; rather, it become due when the creditor takes affirmative action to alert the debtor that he has exercised his option to accelerate.” (citations omitted)); Reed v. Lincoln, 731 So.2d 104 (Fla. 5th DCA 1999) (holding that in the absence of acceleration clause, default did not result in entire remaining debt becoming due immediately and thus remand for a determination as to which monthly installments were barred by the statute of limitations was necessary); Monte v. Tipton, 612 So.2d 714, 716 (Fla. 2d DCA 1993) (“The statute of limitations on a mortgage foreclosure action does not begin to run until the last payment is due unless the mortgage contains an acceleration clause.”; holding that because cause of action did not accrue until the acceleration clause was triggered, the statute of limitations did not bar the suit); Locke v. State Farm Fire & Cas. Co., 509 So.2d 1375 (Fla. 1st DCA 1987) (holding that because lender had not exercised its optional right to accelerate until it filed its foreclosure complaint, the statute of limitations had not yet run); Conner v. Coggins, 349 So.2d 780 (Fla. 1st DCA 1977) (rejecting argument that statute of limitations barred foreclosure action where suit was filed within five years of the maturity date of the final installment; noting there was no acceleration clause). The Bank admits that dicta in the cases states that attempted acceleration of a debt “may” cause the entire debt to become due for purposes of future adjudication of the debt, but points out that all cases cited to the trial court predated Singleton and, furthermore, the root of the holdings in these cases stems from “pure” dicta in Conner.

We agree with the Bank and conclude that Singleton is applicable to the instant case and that the cases cited by Bartram and the HOA pre-date Singleton and, therefore, are not controlling. In Singleton, the mortgagee filed a foreclosure action based on the mortgagor's failure to make payments due from September 1, 1999, to February 1, 2000. In a footnote, the supreme court noted the mortgagor's unchallenged representation that the foreclosure action sought to accelerate the entire indebtedness. This first action was dismissed with prejudice when the mortgagee failed to appear at a case management conference. The mortgagee thereafter filed a second foreclosure action seeking to recover on alleged defaults occurring from April 1, 2000, forward. The circuit court, rejecting the argument that the prior dismissal barred relief in the second action, entered summary judgment in favor of the mortgagee in the second suit. The Fourth District Court in Singleton v. Greymar Associates, 840 So.2d 356 (Fla. 4th DCA 2003), agreed that res judicata did not bar the second suit because the second suit was brought for a new and different...