The Florida Supreme Court has decided in Bartram v. U.S. Bank National Association, Case No. SC14-1265 (Fla. November 3, 2016) and held that a statute of limitations did not bar foreclosure for missed monthly installment mortgage payments notwithstanding that the mortgage had been previously been accelerated in a prior lawsuit. Specifically, the Court ruled on the following certified question:
DOES ACCELERATION OF PAYMENTS DUE UNDER A RESIDENTIAL NOTE AND MORTGAGE WITH A REINSTATEMENT PROVISION 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 PAYMENT DEFAULTS OCCURRING SUBSEQUENT TO DISMISSAL OF THE FIRST FORECLOSURE SUIT?
In Singleton v. Greymar Associates, 882 So. 2d 1004 (Fla. 2004) the Florida high court had ruled that res judicata did not bar successive suits on the same mortgage notwithstanding the mortgage had been previously accelerated. The borrower had argued in Singleton that a lender was allowed only one acceleration of the note and mortgage, and thus failure to successfully foreclose the mortgage in the first suit barred further foreclosures on res judicata grounds. However, the FLSCT ruled each monthly mortgage installment as a separate obligation, and accordingly each monthly installment owed as beginning the running of a new statute of limitations. In so ruling, the Singleton Court emphasized the equitable nature of mortgage foreclosure actions.
The Bartram reasoning carried forward as the Court restated Singleton’s holding that “acceleration and foreclosure predicated upon subsequent and different defaults present a separate and distinct issue’ than a foreclosure action and acceleration based on the same default at issue in the first foreclosure action.” Borrowers should not be incentivized to stop making payments on future installments just because they were able to defeat foreclosure based on one particular default. The Court then discussed eight post-Singleton cases that extended Singleton’s res judicata analysis to cases involving a statute of limitations defense, and concluded that the underlying reasons support both res judicata and statute of analysis.