The Florida 5th District Court of Appeal recently issued a written opinion in an appeal, Hicks vs. Wells Fargo 5D14-1748, on the issue regarding alleging a default date in a new foreclosure action that was outside of 5 years from the filing of the new lawsuit.
The bank sued to foreclose its note and mortgage in January 2013 alleging that the borrowers failed to make the June 1, 2006 payments and all payments thereafter.
If you remember previous posts on this issue and regarding the Bartram Florida Supreme Court appeal, the statute of limitations on foreclosure actions if 5 years.
The lower court, after holding a trial, entered judgment in favor of the bank and the borrowers appealed.
While the 5th DCA did follow Singleton and Bartram in that it found that the bank could bring a new foreclosure action on the note and mortgage, that the bank had it had to be based upon a default within the 5 years statute of limitations; or 5 years before filing the new lawsuit which 2006 was long after the 5 year “look-back” period.
The 5th DCA found that the trial court erred in granting judgment for the foreclosing bank and reversed with instructions to dismiss the complaint.
The 3rd DCA recently re-heard Deutsche Bank vs. Beauvais en banc which involved the statue limitations in foreclosure cases like the current pending opinion at the Florida Supreme Court; US Bank vs. Bartram.
While these opinions are pending, we should revisit the statute limitations argument. The homeowners’ argument is that once acceleration occurs, either by the date stated in the default letter, or the filing of the complaint, that the bank has five years to foreclose; which is an absolute deadline.
The banks’ argument is that until a final judgment is entered, there is no record evidence that an acceleration occurred. The bank equates this issue with a reinstatement of the loan. Up until the final judgment, a borrower has the right to reinstate the loan. This is only the back amounts due, plus the foreclosure costs and fees, but not the full amount of the loan per the acceleration. The banks’ argument is essentially that if a borrower can pay less than the accelerated amount to reinstate the loan, then acceleration is not effective until a final judgment is entered.
And unfortunately, this argument does make sense; and the high courts seem to be buying it. If a buyer has the right to pay less than the full loan amount per the acceleration, then why should that trigger the statute of limitations of the case is dismissed (voluntarily or by the court) before judgment is entered. What if the acceleration was attempted, but defective? I do understand the argument that you need a final judgment and a finding of fact that there was in fact a valid acceleration of the loan. Otherwise, there may have been attempted acceleration, but not an legally effective acceleration.
Only time will tell how the 3rd DCA and Florida Supreme Court will rule, but I expect them to rule along the lines of the 5th DCA in Bartrum (and nearly every other Florida DCA), that each subsequent missed payment is a new default which the bank can foreclose on.
This used to be a huge problem whereby a tenant or owner would have to go through a formal eviction or unlawful detainer to remove someone from their property who never paid any rent and was not a tenant.
Now, a new statute requires substantially less legal work to get to the same end result; and where the police can remove the person there that the owner/tenant wants out with a simple affidavit (as long as certain conditions are met which you can see listed in the statute below 1-8).
82.045 Remedy for unlawful detention by a transient occupant of residential property.—
(1) As used in this section, the term “transient occupant” means a person whose residency in a dwelling intended for residential use has occurred for a brief length of time, is not pursuant to a lease, and whose occupancy was intended as transient in nature. (a) Factors that establish that a person is a transient occupant include, but are not limited to:
1. The person does not have an ownership interest, financial interest, or leasehold interest in the property entitling him or her to occupancy of the property.
2. The person does not have any property utility subscriptions.
3. The person does not use the property address as an address of record with any governmental agency, including, but not limited to, the Department of Highway Safety and Motor Vehicles or the supervisor of elections.
4. The person does not receive mail at the property.
5. The person pays minimal or no rent for his or her stay at the property.
6. The person does not have a designated space of his or her own, such as a room, at the property.
7. The person has minimal, if any, personal belongings at the property.
8. The person has an apparent permanent residence elsewhere.
(b) Minor contributions made for the purchase of household goods, or minor contributions towards other household expenses, do not establish residency.
(2) A transient occupant unlawfully detains a residential property if the transient occupant remains in occupancy of the residential property after the party entitled to possession of the property has directed the transient occupant to leave.
(3) Any law enforcement officer may, upon receipt of a sworn affidavit of the party entitled to possession that a person who is a transient occupant is unlawfully detaining residential property, direct a transient occupant to surrender possession of residential property. The sworn affidavit must set forth the facts, including the applicable factors listed in paragraph (1)(a), which establish that a transient occupant is unlawfully detaining residential property. (a) A person who fails to comply with the direction of the law enforcement officer to surrender possession or occupancy violates s. 810.08. In any prosecution of a violation of s. 810.08 related to this section, whether the defendant was properly classified as a transient occupant is not an element of the offense, the state is not required to prove that the defendant was in fact a transient occupant, and the defendant’s status as a permanent resident is not an affirmative defense.
(b) A person wrongfully removed pursuant to this subsection has a cause of action for wrongful removal against the person who requested the removal, and may recover injunctive relief and compensatory damages. However, a wrongfully removed person does not have a cause of action against the law enforcement officer or the agency employing the law enforcement officer absent a showing of bad faith by the law enforcement officer.
(4) A party entitled to possession of a dwelling has a cause of action for unlawful detainer against a transient occupant pursuant to s. 82.04. The party entitled to possession is not required to notify the transient occupant before filing the action. If the court finds that the defendant is not a transient occupant but is instead a tenant of residential property governed by part II of chapter 83, the court may not dismiss the action without first allowing the plaintiff to give the transient occupant the notice required by that part and to thereafter amend the complaint to pursue eviction under that part.
http://wfsu.org/gavel2gavel/viewcase.php?eid=2294 Video of the oral arguments from the Florida Supreme Court this morning in Brtram vs. US Bank concerning the Florida foreclosure statute of limitations issue.
As you can see, even a child can tell that the judges are totally against the homeowner’s argument; especially Justice Pariente.
It would appear the writing is on the wall already that the Florida Supreme Court will find that a bank has essentially unlimited time to foreclose, no matter how many times they blundered in the case, the case was dismissed, or how long it’s been since they accelerated the debt; even if after the 5 year statute of limitations for mortgage foreclosure set in the Florida Statutes.
Stay tuned for the opinion, which may take weeks or months to be issued.