STATUTE OF LIMITATIONS | Key Points
- In Pedersen, the Eleventh Circuit of the United States Court of Appeals recognized and enforced the following Florida precedents regarding the applicability of the statute of limitations to foreclosure actions: (1) In Florida, acceleration of the loan, which triggers the running of the statute of limitations, is marked by the filing of the foreclosure complaint; (2) Dismissal of a foreclosure complaint, whether with or without prejudice, “revokes acceleration” and returns the parties to their “pre-foreclosure complaint status” where the borrower is entitled to make installment payments and the lender has the right to seek acceleration upon default; (3) Once a foreclosure complaint is dismissed, the statute of limitations stops running on the acceleration date; (4) After dismissal, the borrowers continuing or subsequent default gives rise to a new cause of action for foreclosure. Bank of New York Mellon for Nationstar Home Equity Trust 2007-A v. Pederson, 706 Fed.Appx.542 (Fla. 11th 2017).
- One issue the court did not discuss in Pedersen was the applicability of the statute of limitations to the Bank’s claim to reestablish the lost note, “an issue that is apparently one of first impression in Florida.” Peters v. Bank of New York Mellon, 227 So. 3d 175 (Fla 2d DCA 2017). In Peters, although the issue was raised on appeal, the Second DCA found it unnecessary to address the statute of limitations as applied to the Bank’s reestablish count because it found the bank failed to prove it had standing to enforce the lost note. Despite this finding, the court did see fit to include the lower court’s analysis of the issue wherein the court concluded “that the loss or discovery of the lost instrument is not a claim. It’s an event. It’s nothing that gives rise to a claim that would give rise to [a] cause of action…So… there is no need once a lost negotiable instrument is discovered as being lost, that they have to file a cause of action to reestablish that note when that note is not being sought to be enforced.”
- The lower court’s reasoning and ruling on the issue, although of no precedential value, is insightful and provides some guidance on the issue. We anticipate there will be more litigation in the coming years regarding the applicability of the statute of limitations to a claim to reestablish a lost note.