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QUIET TITLE ACTIONS - STATUTE OF LIMITATIONS BECOMING IRRELEVANT

By
Real Estate Attorney with THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY

A district court of appeal this past week decided that acceleration of a note and mortgage can occur multiple times for different defaults, continuing the decision of sister courts that seems to fly in the face of logical reasoning according to many foreclosure defense attorneys.

In 5D12-3823 U.S. Bank v. Bartramthe 5th District Court of Appeal (one of five second tier appellate courts in the State of Florida), rendered a decision that essentially made the concept of quiet title based upon acceleration of the debt, irrelevant.

THE PROBLEM WITH THE TYPE OF DISMISSAL -

The Bartram case had the bank's foreclosure action dismissed by the trial court judge because the bank failed to appear at a hearing.  The Rule 1.420(b) dismissal is a dismissal that is "involuntary" and made by the judge because a party failed to comply with the rules of court or an order of the judge.  The order here was a hearing on the status of the case.  This dismissal is different than a voluntary dismissal where the bank initiates a dismissal of its own case, or where there is a partial adjudication on the merits of certain facts within the case.  Some courts have come to the same conclusion as the 5th District Court of Appeal in this case, but used the concept that the dismissal failed to adjudicate on the merits whether or not there was an acceleration of the note and mortgage, therefore the dismissal created a "deceleration".

THE CONCEPT OF DECELERATION OF MATURITY -

The acceleration of a mortgage is the event of the bank saying because of a default in the note or mortgage (ie: the payment was missed; or the taxes were not paid; or you transferred the property), ALL of the balance of the note is now due.  This comes together with the "maturity" of the note and mortgage.  The maturity is the stated date upon which all of the unpaid interest and principal is due on the loan.  Typically when acceleration is declared, it "advances" the maturity date because of the demand by the bank.  The court's decision means that this advancement of maturity does not really happen, as the bank can accelerate multiple and successive times for each subsequent default of payment, or other breach of the note or mortgage.

INTRODUCING THE CONCEPT OF CUT-OFF OF CLAIMS -

The court did introduce the concept of the application of the statute of limitations for the sole purpose of the cut-off of claims. In Florida the statute of limitations (often referred to as SOL - which after this decision puts many homeowners with quiet title asperations "SOL" - I'm sure someone will comment on these initials).  This cut-off is that that in Florida the bank cannot go back more than 5 years for unpaid payments.  For example, if a $250,000 balance mortgage goes unpaid for 10 years before a foreclosure suit is filed (or a suit on the promissory note) and the interest is 5%, then only 5 years of interest ($62,500) as opposed to $125,000 in back interest, can be awarded to the bank.

IT AIN'T OVER YET - 

The 5th Disrict Court of Appeal did recognize that it's decision is in conflict with other prior decisions of appellate courts (although it relies for the most part on a Florida Supreme Court decision that supports the concept of deceleration) and asked the Florida Supreme Court to have the last word on how this all works when it said:

Because we believe the issue we resolve is a matter of great public importance, we certify the following question to the Florida Supreme Court:

Does 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, trigger application of the statute of limitations to prevent a subsequent foreclosure action by the mortgagee based on all payment defaults occurring subsequent to dismissal of the first foreclosure suit?

Thus we still have to wait and see for the final final or almost final answer to the quiet title question in Florida is going to be.

© 2014 Richard P Zaretsky, Esq.

Be sure to contact your own attorney for your state laws, and always consult your own attorney on any legal decision you need to make. This article is for information purposes and is not specific advice to any one reader.

Richard Zaretsky, Esq., THE ZARETSKY LAW GROUP P.A. ATTORNEYS AT LAW, 1615 FORUM PLACE, SUITE 3A, WEST PALM BEACH, FLORIDA 33401, PHONE 561 689 6660 -- RPZ99@Florida-Counsel.com

 - FLORIDA BAR BOARD CERTIFIED IN REAL ESTATE LAW –

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Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

Mark - the big question is whether you think you are with a defense and in fact you don't have one.  Statute of Limitations is actually not a defense but a procedural matter of time limits in which to bring a law suit.  Unless your promissory note expired on its face, under current law interpretation, I would doubt that SOL applies in your situation.

Apr 30, 2014 09:46 PM
Anonymous
Mark
What defenses remain ? ... if dismissals "with" prejudice and statute of limitations are no longer defenses or procedural matters ... what defenses remain that are solid ?
Apr 30, 2014 09:54 PM
#5
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

The key issue still in conflict is the "maturity" of the loan.  When a loan has an acceleration clause and that clause is invoked, there is a strong school of law and thought that the invoking of that clause brings the loan to maturity and thus there cannot be subsequent defaults of regular payment - otherwise the lender can only be suing for the missed payment - not the entire balance of the loan.  When that is resolved by the Supreme Court we will know if there is any meat left to the borrowers to eliminate the promissory note and perhaps the mortgage.

May 01, 2014 12:11 PM
Anonymous
david
Richard I was just introduced to your blog by Max Gardner. It seems that the 5th DCA commented that the complaint stated they demanded all the payments owed. How can you now have any payments when you are claiming enforcement for all the payments. I would think there would have to be some cure before you could claim new default dates. Omission of error, modification, reinstatement, some type of settlement. I look forward to meeting you soon.
May 16, 2014 03:07 AM
#7
Anonymous
Angelina

I'm sorry but I can't make sense of this decision. The lender can pick the date to use as default? The borrower isn't allowed the luxury of picking and choosing which payment to make. If they file 6 years after the first missed payment does that mean the prior missed were not in default or not paying taxes or insurance before that date not defaults? As I see it, its just another bending of the law so banks win.
I didn't choose to not pay my mortgage. After divorce immediatly called Countrywide asking for a mod as I couldn't meet the high payments alone, told to miss 3 to qualify. I've filled out numerous mod apps for Bank of America, (one denied though it arrived on due date, it was a Sat., no one in office so not entered until Mon, considered late) sent financials every 3 months for years, to be shuffled around, pay attorneys what could have gone to the mortgage. Credit ruined, unable to get further advances on business line of credit needed to pay hidden bills from ex, the bank refused to refinance its loan and my heloc on their balloon, I lost a successful business. 22g a year forced placed insurance added to mortgage for 4 years and taxes, my home isnt worth half what's owed. In my opinion the banks themself ARE responsible. They ruined my credit because they didn't know what they were doing. I would have qualified for a mod until forced to give up my income unable to find financing because of what the foreclosure filing did to my credit.. I now CAN'T make the payment I could have much less one on what they say is the balamce now. With so much owed I wouldn't want to refi, if I could.

Aug 08, 2014 09:51 PM
#8
Anonymous
Mark

So if the SOL gets in their way ... they will simply pick a new default date ... does that mean they will not be able to collect on the monies owed under the previous default ? ... but only the monies due from the date of the "new" default ?

Aug 08, 2014 10:40 PM
#9
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

Mark -

Yes you got it right.  They can only go back 5 years to collect and anything older than that is not collectable under the promissory note nor the mortgage.  But they can keep on defaulting the borrower on anything / event less than 5 years old.

Aug 09, 2014 04:46 AM
Anonymous
Mark

So maybe it's time to negotiate a modification ?

The Supreme Court could go either way on the SOL ruling ... there is no guarantee for the Lender.

As you have pointed out ... the Supreme Court would be reversing themselves.

So would a Lender entertain a significant modification now ... rather than risk unfavorable decision by the Supreme Court soon ?

Dismissal "with" prejudice ... no appeal ... SOL has run ... subsequent foreclosure voluntarily dismissed ... Supreme Court question pending.

If you are the Lender ... do you accept a significant modification request now ?

Aug 09, 2014 05:44 AM
#11
Anonymous
Larry

Richard,
How does a bankruptcy affect this SOL issue? If there was a discharge 6 years ago, then the last default would have been at the date of the discharge, right? So, since the debt was discharged (but the lien remained against the property), wouldn't the SOL begin to run as of the date of the discharge of the BK and there would be no subsequent defaults because the debt had been discharges?

Aug 17, 2014 09:19 AM
#12
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

Unless the Supreme Court changes the case law interpretation of the SOL statute application, BK is irrelevant to SOL.

Aug 17, 2014 12:52 PM
Anonymous
beth nielsen

I just prevailed in a lawsuit against MERS. It was an involuntary dismissal with prejudice and the bank can't come after me again. The case was going on for 6 years. I won due them assigning the note so many times and with robo signers and they lost the paperwork the last hearing the judge got angry with them and dismissed it. Am I able to get quiet title now. I was told I have to wait until the maturity date of the loan which is 15 years. I want to fix my credit and maybe in the future sell the home. Can I file now for quiet title and what will that do for me.

May 23, 2015 05:06 AM
#14
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

Beth - #14

Unfortunately if you are in Florida, the answer is that your information about the 15 years is correct.  Actually a bit worse - it would be 15 years PLUS 5 years for the statute of REPOSE to set in and bar the enforcement of the mortgage.

You should sit down with an attorney familiar with the current status of the law and then sit back and wait for the long awaited Florida Supreme Court decision.

May 26, 2015 01:13 PM
Anonymous
Diane Huband

My lender WRONGLY foreclosed on me in 2006 and they still have NO STANDING
They vol dismissed the 2006 case 7 yrs later ...and then re filed same case in 2013 and once again quickly dismissed minutes before trial this week ! So for 9 yrs my home has been tied up on a robo wrongful foreclosure filing ........is it true that after 2nd voluntary dismissal that they can NOT file again as the 2nd dismissal results in adjusication finally>???

Jun 11, 2015 12:43 AM
#16
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

Diane #16

2nd dismissals do have a place in barring prosecution of a 3rd attempt.  However there are many ways around it, including just suing for a different default date (you have one of those every month).  You need to monitor the case law here in Florida (assuming you are in Florida) to determine the status when you get that 3rd lawsuit.

Jun 11, 2015 10:32 PM
Anonymous
Ashwin

Hi Richard,

Has two prior dismissals on my case. One was voluntary and the second one was after case management conference where the case was dismissed for not bringing the case to resolution. The case was dismissed without leave to amend. The lender filed timely reconsideration in June 2013 and scheduled hearing 21 months later where the Judge denied the motion. This was the initial case filed in 2008. The voluntary dismissal case was filed while the 2008 was still pending. It's over 6.5 years that the initial acceleration occurred and all the cases have been dismissed. Not sure if i should proceed with Quite title claim.

Jun 16, 2015 01:10 AM
#18
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

Not yet #18

The Florida Supreme court is soon going to rule on whether a mortgage note has after accelleration the ability to be defaulted multiple additional times.  Once we have that decision we will know how to deal with your case.

Jun 16, 2015 09:27 PM
Anonymous
Jeff Jones

I recently won my foreclosure case after 6 long years at trial. Judgment for defendant. I would like to file Quiet Title to remove the lien on my home here in Tampa Bay area. I really don't understand why now the Pretender/Lender/Servicer can maintain this lien/cloud on my home after a Judge has decided they didn't have standing in the first place to bring the Foreclosure action. Yes I am aware of the Bartram case pending in the Supreme Court. Any thoughts?

Jun 24, 2015 10:17 AM
#20
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

Until that case is decided and all the dominos fall into place (statute of limitations; acceleration/deceleration; 2 dismissal rule) are decided there isn't much you can do.

Jun 25, 2015 09:47 PM
Anonymous
Lynn Heilmann

Good morning, Richard. Like many others, foreclosure suit filed against me in 2008, dismissed by the Court, with 20 days to refile in August of 2009 due to lost note, etc. Simultaneously, the Plaintiff voluntarily dismissed their suit. Not only did they not refile within the 20 days, I have heard nothing from anybody with regard to the mortgage since then. Now I am wanting to sell the house but, of course, do not have clear title and, what's more, have no idea who the current holder of the note/mortgage may be. The Plaintiff on the original suit listed bank as trustee on behalf of the owners of mortgage pass through certificates series____________. Now what? And if I can't ever sell it, what happens when I die?

Jul 10, 2015 11:51 PM
#22
Richard Zaretsky
THE ZARETSKY LAW GROUP - Board Certified Real Estate Atty and AUTOMATED LAND TITLE COMPANY - West Palm Beach, FL
Florida Real Estate Attorney

Lynn -

You should be discussing this with me by email - rpz@zaretskylaw.com .

In trying to find out who owns your mortgage - you are driving up the wrong street.  Most mortgages are "serviced" by a servicer who often times is not the owner.  Start with who the plaintiff was in the last foreclosure - they are the owner or the owner's represenative. For not having paid the mortgage for 7 years yor balance is probably 150 to 175% of the original balance.  You thus likely will need to do a short sale for a transfer of the property.

As far as quiet title, your fact scenario does not yet show a satute of limitations issue assuming you have a mortgage due date that was more than 3 years from when you got the mortgage (assuming you got the mortgage in 2007). The court dismissal coupled with the voluntary dismissal raises some interesting "decceleration" issues that may be addressed in Florida by the state supreme court this year.

Contact an attorney to heip you navigate this situation.

 

Jul 11, 2015 01:28 AM