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Statutes of Limitation: More from Florida

Posted By USFN, Monday, November 6, 2017
Updated: Monday, October 23, 2017

November 6, 2017

by Roy A. Diaz
SHD Legal Group, P.A.
USFN Member (Florida)

Late last year, the Supreme Court of Florida published its much-anticipated opinion in Bartram v. U.S. Bank, N.A., 211 So. 3d. 1009 (Fla. Nov. 3, 2016). Judges and litigants analyzed every word of the opinion hoping for the Supreme Court to provide much needed clarity to the longstanding issue of the application of the statute of limitations, which has plagued the foreclosure industry in Florida. The outcome was bittersweet, as parties still had questions. Many parties, including judges, disagreed with the interpretation of Bartram. This was not unexpected to some. After all, Bartram was a quiet title action rather than a foreclosure, and the certified question was very specifically tailored to the facts.

The result caused the state’s circuit courts to enter conflicting opinions, which slowly worked their way through the Florida appellate system. The First, Second, Third, and Fourth District Courts of Appeal ruled consistently and allowed lenders to continue their foreclosure actions based on allegations of a continuing state of default, even if the default date pleaded was outside five years. Not so with the Fifth District Court of Appeal (DCA), however.

The Fifth DCA — and the counties controlled by it — continued to follow its pre-Bartram holding in Hicks v. Wells Fargo Bank, N.A., 178 So. 3d. 957 (Fla. 5th DCA 2015), where the court dismissed an action due to the breach date being outside of five years. Thereafter, the Fifth DCA released its decision in Ventures Trust 2013-I-NH v. Johnson, 5D16-1020 (Fla. 5th DCA May 19, 2017), where it followed Hicks and dismissed a complaint solely for alleging a default date outside of five years. It appeared that the Fifth DCA would follow a very narrow reading of Bartram, essentially requiring lenders to dismiss their actions and re-file new actions with an alleged default date within five years. The Fifth DCA would not allow a lender to proceed to trial and limit the amount of damages in the case based on a default date within five years.

These rulings had an immediate effect on the circuit courts. The judges in the counties governed by the Fifth DCA saw an influx of defendants’ summary judgment motions and felt compelled to grant them, following Hicks and Johnson. Lenders were placed in a particularly difficult situation as they asserted contradicting case law from the other DCAs, but continued to lose, leaving an appeal as the only other option. The Supreme Court of Florida already had several statutes of limitation cases pending before it — even after Bartram.

Most notably was Bollettieri v. Resort Villas Condominium Association, Inc. v. Bank of New York Mellon, 198 So. 3d. 1140 (Fla. 2d DCA 2016). In Bollettieri, the Second DCA provided that as long as the foreclosure complaint alleges a continuing state of default, the case would not be dismissed for alleging a default date outside of five years. Lenders would be provided the opportunity to limit the damage amount at trial and the case would survive an involuntary dismissal. Bollettieri was also consistent with the remaining First, Third, and Fourth DCAs.

The Second DCA realized potential conflict with Hicks and certified conflict. Consequently, Bollettieri is now pending with the Supreme Court — perhaps not for too much longer though. The Fifth DCA (remaining the odd one out) rendered a decision in Klebanoff v. Bank of New York Mellon, Case No. 5D16-1637, 42 Fla. L. Weekly D. 1480 (Fla. 5th DCA June 30, 2017). The opinion, written by Justice Evander, cleared the air on the application of Hicks.

In Klebanoff, the Fifth DCA held that Hicks is distinguishable because the parties “stipulated to the facts” regarding the default date, and although the complaint pled a continuing state of default, the parties limited themselves to the later default date as part of the “stipulation.” This controlled the Fifth DCA’s review on appeal and required that it dismiss the action in Hicks, as the lender was seeking amounts outside of five years from the filing of the complaint. The Fifth DCA went further to say that Hicks is consistent with the Third DCA’s ruling in Collazo v. HSBC Bank USA, N.A., 213 So. 3d. 1012 (Fla. 3rd DCA 2016), which also dismissed a case where the plaintiff would not budge from seeking amounts due from a default date outside of five years from the filing of the complaint. The Fifth DCA then elected to follow Bollettieri and (in a footnote) observed that, although Bollettieri certified conflict with Hicks, the Fifth DCA does not believe that they are in conflict. The Fifth DCA affirmed the judgment due to the allegations of a continuing default.

Shortly thereafter, the Supreme Court of Florida issued an order to show cause in Bollettieri (based on Klebanoff), stating there is no conflict between the DCAs. The Supreme Court of Florida then canceled the oral argument set in Bollettieri. The remaining cases with the Supreme Court of Florida, based on statutes of limitation in foreclosures, are stayed pending Bollettieri. Although the Supreme Court has not formally dismissed Bollettieri, the writing appears to be on the wall that lenders will no longer have to wait for a current change in the law.

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