On April 13, 2016, the Third District Court of Appeal in Deutsche Bank Trust Company Americas v. Beauvais, 2016 WL 1445415 (Fla. 3d DCA 2016), an en banc decision, gave financial institutions an almost unlimited statute of limitations to file Florida foreclosure complaints. According to one prominent South Florida consumer defense attorney, an appeal to the Florida Supreme Court is already underway.
In Beauvais, the plaintiff, Deutsche Bank, appealed from a final summary judgment denying foreclosure of a mortgage securing a $1,440,000.00 promissory note executed in the bank’s favor by the defendant, Harry Beauvais (“Beauvais”), whose last payment was more than five (5) years from the date the foreclosure complaint was filed. Id. *1.
Prior to Deutsche Bank’s foreclosure complaint being filed, the previous loan servicer filed and dismissed a foreclosure complaint, and the condominium association, Aqua Master Association, Inc. (“Aqua”), secured title to the property via a foreclosure complaint over unpaid condominium assessments. Id. Aqua alleged in its answer and affirmative defenses that Deutsche Bank’s foreclosure complaint was barred by the five year (5) year statute of limitations for mortgage foreclosures in §95.11(2)(c), Florida Statutes. Id.
The Third District Court of Appeal quoted Singleton v. Greymar Associates, 882 So. 2d 1004 (Fla. 2004), to support the proposition that ‘“successive foreclosure suits, regardless of whether or not the mortgagee sought to accelerate payments on the note in the first suit,’ were not barred if, as here, the second suit was predicated on a new default because a ‘subsequent and separate alleged default create[s] a new default and independent right in the mortgagee to accelerate payment on the note in a subsequent foreclosure action.”’ Beauvais, 2016 WL 1445415, *2(quoting Singleton, 882 So. 2d at 1008)).
Explained in another way, a mortgage is an installment loan with payments due on a certain day each and every month for an extended period of time. If a financial institution re-accelerates the mortgage and note as a result of a different missed payment, the five (5) year statute of limitations begins all over again in the same way that a partial payment on an unpaid credit card account would re-start the statute of limitations.
While Beauvais applies specifically to foreclosure cases, the opinion might be able to be used to support the proposition that any type of installment loan involving a written instrument could fall under its purview and give financial institutions and/or third parties an almost unlimited statute of limitations depending on the length of the installment loan/written instrument.
If the Florida Supreme Court affirms the Third District Court of Appeal, it is only a matter of time before a financial institution and/or third party uses Beauvais to support the proposition that they can re-accelerate and file suit on what could be considered time-barred debt.
Stay tuned ...
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