On December 26, 2018, Florida’s Fifth District Court of Appeal issued an opinion allowing recovery of amounts accrued more than five years prior to the filing of the foreclosure. Although the Court’s decision in William L. Grant v. Citizens Bank, N.A. (Case # 5D17-726) is not final until the deadline to file for rehearing passes, this significant decision will likely remain intact.

In this notable decision, the Fifth District Court of Appeal receded from its previous opinion in Velden v. Nationstar Mortgage, LLC, 234 So. 3d 850 (Fla. 5th DCA 2018), where it held that a lender could not recover damages for defaults that occurred more than five years prior to the filing of the lawsuit.  In doing so, Florida’s Fifth District Court of Appeal is now in line with all of the remaining Appellate Districts in Florida. The general rule now is that the filing of the foreclosure complaint starts the running of the statute of limitations in Florida under an optional acceleration clause contract. Although the foreclosure action must still be based on a missed payment, or default, that occurred within the five-year statute of limitations, the missed payment itself does not start the running of the statute of limitations.

As long as the foreclosure complaint alleges missed subsequent payments (i.e. the borrower has defaulted under the Note and Mortgage by failing to make the payment due January 1, 2018 and all subsequent payments), the statute of limitations is no longer a barrier to foreclosure and recovery of amounts due after the five-year mark.  As the Supreme Court reminds us in Bartram, “with each subsequent default, the statute of limitations runs from the date of each new default providing the mortgagee the right, but not the obligation, to accelerate all sums then due under the note and mortgage.”

Now that all of the Florida District Courts of Appeal are aligned, lenders can begin to process those aged files previously placed on hold due to the uncertainty of the legal landscape.

ALAW is here to help you determine the most effective application of this recent case law.
Stacy H. Mestayer
[email protected]