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66 Legal Industry Update State Focus FLORIDA FLORIDA: APPELLATE COURT CLARIFIES STATUTE OF LIMITATIONS FOR MORTGAGE FORECLOSURES By Roger D. Bear; Florida Foreclosure Attorneys, PLLC e past five years in Florida have seen an unprecedented volume of foreclosure actions. e courts have struggled to deal with the cases filed, and some law firms imploded under charges of robo-signing and other alleged improprieties. Many of the cases filed years ago have lingered, and the courts have been dismissing cases if the cases are not being pushed forward. Many of these dismissed cases have due dates of more than five years ago. e question then arises as to whether there is a statute of limitations impediment to filing a new foreclosure action on those dismissed cases carrying a due date of more than five years ago. A Florida appellate court has recently issued a ruling on the statute of limitations governing mortgage foreclosure actions. e case is U.S. Bank National Association v. Bartram 1 . As stated by the court: "e issue we must resolve is whether acceleration of payments due under a note and mortgage in a foreclosure action that was dismissed for failure to appear at a case management conference triggers application of the statute of limitations to prevent a subsequent foreclosure action by the mortgagee based on payment defaults occurring subsequent to dis- missal of the first foreclosure suit." e court concluded that the statute of limita- tions does not bar the subsequent foreclosure action. In arriving at this conclusion, the appellate court relied heavily on the Florida Supreme Court decision in Singleton v. Greymar Associates. 2 e decision held that dismissal with prejudice in a mortgage foreclosure action does not necessarily bar, on res judicata grounds, a subsequent fore- closure action on the same mortgage even if the mortgagee accelerated the note in the first suit. e court in Singleton reasoned that a subsequent, separate default creates a new and in- dependent right to accelerate payment in a second foreclosure action even where the lender triggered acceleration of the debt in the prior, unsuccessful action that had been dismissed with prejudice. e court was clear that, regardless of the fact that acceleration was invoked in the first suit, the doctrine of res judicata does not necessarily bar subsequent foreclosure actions where the later suit alleged defaults other than those sued for in the first suit, because the subsequent and separate alleged default "created a new and independent right in the mortgagee to accelerate payment on the note in a subsequent foreclosure action." Accordingly, the court in Bartram concluded that a foreclosure action for default in payments occurring after the order of dismissal in the first foreclosure action is not barred by the statute of limitations found in section 95.11(2)(c), Florida Stat- utes (which is five years), provided the subsequent foreclosure action on the subsequent defaults is brought within the five-year limitations period. e Bartram court believed the legal issue re- solved is a matter of great public importance, and it certified the following question to the Florida Supreme Court: "Does acceleration of payments due under a note and mortgage in a foreclo- sure 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 all payment defaults occurring subse- quent to dismissal of the first foreclosure suit?" The Florida Supreme Court is not obligated to an- swer or otherwise review the certified question. So unless the Bartram decision is reversed by the Florida Supreme Court, it provides clarity that there is not a statute of limi- tations barrier to prevent a subsequent foreclosure action by the mortgagee based on payment defaults occurring subsequent to dismissal for failure to appear at a case management conference of the first foreclosure suit. 1 U.S. Bank Nat. Ass'n v. Bartram, 2014 WL 1632138 (Apr. 25, 2014). 2 Singleton v. Greymar Associates, 882 So. 2d 1004 (Fla. 2004) ILLINOIS READY SET PAY: ILLINOIS APPEALS COURT IGNITES URGENCY TO PAY ASSESSMENTS By: Jason B. Erlich, Kluever & Platt A purchaser of a condominium unit at a judicial foreclosure sale that fails to timely pay assessments following a judicial sale can be held responsible for all unpaid assessments of a prior owner. So said the Illinois Appellate Court in its recent decision in 1010 Lake Shore Association vs. Deutche Bank National Trust Company1 when the court held an assessment lien was "not fully extinguished following a judicial foreclosure and sale until the purchaser makes a payment of assessments after the sale." In 1010 Lake Shore Association, the plaintiff bank was the successful purchaser of a condomin- ium unit at the judicial foreclosure sale. e bank failed to timely pay assessments due the condo- minium association and the condominium associa- tion filed a collection and eviction action to recover possession of the unit. e action sought judgment for all past due assessments including those of the prior unit owner. e association asserted it was entitled to the unpaid assessments of the prior owner as the bank failed to make a payment to extinguish the association's assessment lien. e court in determining that a payment is required to extinguish an assessment lien exam- ined the first two sentences of Section 9(g)(3) of the Illinois Condominium Property Act. e first sentence states "[t]he purchaser of a condominium unit at a judicial foreclosure sale *** shall have the duty to pay the unit's proportionate share of the common expenses for the unit assessed from and after the first day of the month after the judicial foreclosure sale." More significantly, the second sentence states "[s]uch payment confirms the extinguishment of any lien created pursuant to Paragraph 1 *** of this subsection (g) by virtue of the failure or refusal of a prior unit owner to make a payment of common expenses." e first sentence of Section 9(g)(3) of the Act establishes timeline for payment of assessments by the purchaser at a foreclosure as the first of the month following the judicial foreclosure sale. us, if a foreclosure sale is held on October 31, the responsibility for payment of assessments would commence one day later on November 1. e second sentence of Section 9(g)(3) of the Act and its "pay to extinguish" requirement is sig- nificant as if an assessment payment is not timely made, a condominium association will have the right to demand payment in full of not only the assessments due following the foreclosure sale, but all unpaid assessments of the prior owner including incurred court costs and attorneys' fees. While the Illinois Appellate Court did not specifically address the timing of a post-sale payment, best practices to be adopted to comply with the decision will include the (a) schedul- ing of foreclosure sales to allow time to ascertain payment information and (b) timely payment of assessments when due in accordance with the governing documents of the condominium asso- ciation. To put such practices in place and mitigate the liability risk requires mortgagees and servicers to institute procedures to ascertain the name of the condominium association, assessment due dates, and where payment is to be submitted.

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