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50 Legal Industry Update State Focus FLORIDA The Continuing Saga of the SOL: A House for Free? Is the Statute of Limitations an issue in every State? By Matthew Morton, Curtis Wilson, and Jane Bond, McCalla Raymer Pierce, LLC Due to the number of foreclosure cases since the housing crisis and the delays in many judicial states, the statute of limitations (SOL) has come to the forefront more frequently in the judicial states. Florida and New York have more foreclosure-related SOL case laws than any other states. However, the issue has been raised in some non-judicial states, including Washington and Nevada. While this discussion focuses on the application of the statute of limitations in Florida courts, it should be noted the case law and policies being decided, especially those of the Florida Supreme Court will have, and have had, a national effect. Every state has its own version of the statute of limitations, and as the foreclosure crisis affected every state to some extent over the past decade, the question of how the statute of limita- tions effects mortgage transactions is one of national importance. In looking at Singleton v. Greymar1 alone, which has been cited in 26 separate state ap- pellate and Supreme Court cases outside of Florida, as well as in 25 federal matters, the decisions made by Florida as to its application of statute of limitations has affected and will continue to effect how other states look at the enforcement of mortgages. CAN A FORECLOSURE CASE BE RE-FILED? e statute of limitations, as codified in Florida Statute 95.11(2)(c) sets a five-year limitation on a lender's right to foreclose a mortgage. But the questions remain: When does this five-year period begin to accrue? What happens if a case is dismissed and re-filed after five years from the filing of the initial complaint? What if the default date is older than five years? In 2004, the Florida Supreme Court attempted to answer some of the questions the vague statute created. While the Su- preme Court did not specify what event starts the running of the five-year statute of limitations, it held, in the case of Singleton v. Greymar, the stat- ute of limitations would not bar a second foreclo- sure action, which is based on a subsequent default from one previously sued upon. e Singleton case has been exceedingly beneficial, but the holding of the court gave no specific instructions on how or when a new action can be filed. Further, it did not describe what the intended impact of the statute of limitations should be on a foreclosure case in Florida. As such, this remains a highly contested area of foreclosure law, which is subject to several differing appellate interpretations. HAS THE BARTRAM CASE BEEN DECIDED? A case currently pending in the Florida Supreme Court, Bartram v. U.S. Bank National Association2, may provide more clarity to the application of the statute of limitations. e oral argument was held November 4, 2015. Almost a year has passed with no decision. Until we have the published decision, each of Florida's five District Courts of Appeal (DCAs) have develop- ing case law which is applied in their respective geographical regions. In each of these appellate regions, the courts attempt to pinpoint the date from which the five-year statute of limitations in Florida begins to run. In a majority of the districts, the acceleration of the loan by the filing of the complaint is the catalyzing event; however, some of the districts also focus attention on the default date upon which the foreclosure is based. Having no specific direction, the interpretations of the statute have varied, leading to inconsistencies between the DCAs. DOES THE DEFAULT DATE MATTER? Florida's First DCA3, representing the northern panhandle of Florida, has specified that a new foreclosure may be filed on any default date occurring after the default date previously pled in the original foreclosure, and the default date does not have to be within five years of the filing of the foreclosure complaint. While differing in applica- tion, but similar in effect, the Second and ird5 DCAs, representing western Florida and the very southern counties of Florida, respectively, have held the acceleration of a debt, if the complaint specifies the lender is accelerating all subsequent payments, does not allow for application of the statute of limitations. is is because the plaintiff has demonstrated his or her intent to foreclose on any and all missed payments; therefore, one of the missed payments will be within the statute of limitations and will not bar the foreclosure. In any of these districts, it is clear the statute of limitations is not considered a bar to a subsequent foreclosure. In contrast, Florida's Fourth DCA6, repre- senting the majority of southeastern Florida, and the Fifth DCA7, in central and northeastern Flor- ida, have been more conservative in their applica- tion of the statute of limitations. e case law in these districts focuses on the dates of default pled in the complaint, and require the default date to be within five years of the filing of the complaint. As many of these loans have defaults well over five years old, this approach requires the lender to advance or move up the default date to be within five years of the filing of the complaint, leaving several aged default dates as non-foreclosable. is application can create difficulty in the lender's processes, and also begs the question of whether or not the lender can recover the amounts due for the underlying payments on the non-foreclosable default dates. CAN THE LENDER COLLECT THE FULL AMOUNT OF THE DEBT? While there is a plethora of case law being published in the Florida DCAs regarding the proper application of the statute of limitations, there are only a few available cases describing the monetary effects. In the First District, the case law explicitly holds the lender is entitled to recover the entirety of the debt owed, whether or not they have advanced the default date forward or lost their rights to foreclose on previous unpaid defaults8. e Second District had an opportunity to rule on the monetary issue and, without com- ment in their order, allowed the lender to recover the full amount of the debt. is theory was directly contradicted by case law published by the ird DCA, which originally held the lender must waive, in its judgment, any amounts due for defaults which occurred prior to five years of the filing of the complaint9. However, the rehearing which was published on October 13, 2016, reversed the decision; and there is no longer any ird District case regard- ing the monetary effects of the statute of limita- tions. e issue is important as it directly affects the way servicers maintain loan records, and it may have an impact in the application of federal and state regulations such as the Fair Debt Collec- tions Practices Act (FDCPA) and the Consumer Finance Protection Bureau (CFPB). Specifically, will the underlying debt of the stale default dates be considered debt no longer due or will advancing the due date and waiving the underlying payments be considered forgiveness of debt? e Florida U.S. Middle District has a pend- ing FDCPA Class Action case raising the issue of a breach letter requesting amounts allegedly barred by the statute of limitations which a "least sophisticated consumer" might find misleading10. e case will be closely watched for the interpreta- tion of the court as to any FDCPA violation. So far, the Florida courts have not ruled on this issue, which will have significant ramifications under the FDCPA and in compliance with the CFPB. All involved in the area of debt collection are anx- iously awaiting the Florida federal and state courts for additional guidance on how to properly defend any attempt to obtain a free house by running the statute of limitations. Singleton v. Greymar Associates, 882 So. 2d 1004 (Fla. 2004) 2 U.S. Bank National Association v. Bartram, 5D12-3823 (Fla. 5th DCA 2014) 3 Nationstar Mortgage, LLC v. Brown, 175 So. 3d 833 (Fla. 1st DCA 2015) 4 Bollettieri Resort Villas Condo v Bank of New York Mellon, No. 2D15-3186, 2016 WL 4494792 (Fla.2d DCA 2016) 5 Deutsche Bank Trust Co. Americas v. Beauvais, 188 So. 3d 938, 940 (Fla. 3d Dist. Ct. App. 2016) 6 Solonenko v. Georgia Notes 18, LLC, 182 So. 3d 876, 877 (Fla. 4th DCA 2016) 7 Hicks v. Wells Fargo Bank, N.A., 178 So. 3d 957, 959 (Fla. 5th DCA 2015) 8 Nationstar Mortgage, LLC v. Brown, 175 So. 3d 833 (Fla. 1st DCA 2015) 9 Collazo v HSBC Bank USA, N.A., 3D14-2208 (Fla. 3d DCA 2016) 10 Steven Sanchez, v Rushmore Loan Management Services, LLC, 2016 WL 3126515 (Fla. 2016)

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