Florida Foreclosure Statute of Limitations

June 30, 2015
Thomas Adam
Foreclosures

As we’ve discussed in earlier versions of this Florida foreclosure blog, the law on whether and when a lender can foreclose on the same property more than once is in flux. The Florida Supreme Court is set to hear oral arguments in Bartram v. US Bank on October 7, 2015. The court will decide whether the acceleration of a mortgage note by a lender conclusively and irreversibly begins the running of the Florida foreclosure statute of limitations (deadline for bringing a lawsuit).

In the interim, the broader issue of when lenders can bring multiple foreclosure actions against the same parties for the same property continues to be litigated. A double foreclosure was recently addressed in Whiddon v. GMAC. Unlike Bartram and its conflicting successor, Deutsche Bank v. Beauvais, this one doesn’t involve the Florida foreclosure statute of limitations, but instead relies on a different legal principle: res judicata. (And attorney mistakes)
As with all foreclosure cases, the timeline is important, here are the key dates in Whiddon:

2008 – Whiddons take out $142, 759 30 year mortgage with GMAC.

December 2010 – GMAC alleges the Whiddons are in default because they’ve stopped making payments and brings a foreclosure action. GMAC alleges the Whiddons failed to make the payment that was due June 1, 2010 or any payment thereafter.

July 2012 – Case is dismissed with prejudice (meaning it cannot be filed again) because GMAC had not moved the case forward (prosecuted it) and failed to respond to an order to show cause or appear at a hearing to oppose the proposed dismissal.

March 2013 – GMAC returns and files a new foreclosure action against the Whiddons alleging that the Whiddons defaulted “by failing to pay the payment due on June 1, 2010, and all subsequent payments.” (Note that this is the same date alleged in the first foreclosure action)

The Whiddons, unsurprisingly fought the second lawsuit requesting that the court dismiss it on the grounds of res judicata. Res judicata is latin for “judged matter.” It’s a legal principle that prohibits parties from re-litigating the same claims twice. The analogy isn’t perfect but it is similar to double jeopardy for civil cases. It helps ensure that after a judgment is entered, parties can have a sense of finality and not worry about the claim coming up again.
The trial court in Taylor County, Florida was persuaded by the Whiddon’s argument and ordered GMAC the opportunity to “show cause” (i.e. give the court a valid reason) why the case shouldn’t be dismissed. GMAC did not show cause. Instead, it instead voluntarily dismissed the case without prejudice.
The court found that GMAC had not complied with its order and took strong action against GMAC striking its dismissal, ordering the cancellation of the Whiddon’s mortgage, and prohibiting GMAC from filing any other suits based on the mortgage note without the court’s permission. Ouch. GMAC asked the court if it could refile the suit with different dates because the June date was simply a mistake by its attorney. The court refused. Double Ouch.
The among other justifications, the trial court articulated sympathy for the Whiddons who “been subjected to four years of litigation and the concomitant expense and attorneys’ fees of defending against multiple [improvidently filed] foreclosure actions” because of GMAC who had failed to comply with court procedures or rules.
Unfortunately, on appeal, the First District Court of Appeal (1^st DCA) did not issue as favorable of a decision for the Whiddons. The First DCA did uphold the dismissal of on res judicata grounds but reversed all of the trial court’s other orders. The reversal was on the grounds that the trial court failed to adequately explain the facts that supported its decision to dismiss the case with prejudice and order the mortgage cancelled. It is unclear what the 1^st DCA would have decided if the lower court had provided the requisite factual findings.
Whether you are facing a second foreclosure action or an initial one, the Jacksonville foreclosure attorneys at Adam Law Group can help you with the Florida Foreclosure Statute of Limitations.