In April of 2014, one of Florida’s appellate courts handed down a ruling in U.S. Bank v. Bartram that effectively gutted the statute of limitations in foreclosure cases—meaning that even if you beat the bank in court on your foreclosure, they could simply file a new case, no matter how long the first case had been pending, and try, try again—virtually without limit. In a surprise ruling, a different appellate court has reaffirmed the statute of limitations, with an opinion that sharply narrows the application of Bartram: Deutsche Bank v. Beauvais [PDF], 40 Fla. L. Weekly D1 (Fla. 3d DCA Dec. 17, 2014).
The court explained its own ruling here:
The lender’s acceleration of the debt triggered the commencement of the statute of limitations, and because the installment nature of the loan payments was never reinstated following the acceleration, there were no “new” payments due and thus there could be no “new” default following the dismissal without prejudice of the initial action. The filing of the subsequent action, after expiration of the statute of limitations, was therefore barred. We reverse, however, that portion of the order which canceled the note and mortgage and quieted title in favor of the Association.
A couple of important points to note:
1. The party who got the note canceled was not the borrower but the homeowner’s association who was trying to get the bank out of the way so it could own the property free and clear.
2. The court found a significant distinction between this case and Bartram, that the prior trial court in Bartram dismissed with prejudice—meaning it was a final decision in the case—and the prior trial court in Beauvais dismissed without prejudice—meaning it was not a final decision. Ironically, a final dismissal with prejudice allows the bank to try again, but a dismissal without prejudice—if the case was old enough—does not.
3. Despite holding that the statute of limitations had run, the court reversed the trial court’s cancellation of the note and mortgage. It held that the lien was still in effect, even if it couldn’t be enforced. (Essentially, the bank could have its cake, but no one could ever eat it.) This means that as of now, filing a quiet title action on statute of limitations grounds is not supported by law in Florida.
This decision is likely to go to the Florida Supreme Court. But in the meantime, it offers some relief for homeowners who have been locked in battle with their banks for years, since most foreclosure cases, when they are dismissed, they are dismissed without prejudice. If you get that first case dismissed, and it was filed more than five years ago, you may have a solid defense under the Beauvais case that can stop them from ever taking your home in a foreclosure action.
We’re reviewing this case and its importance for all our clients