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THIRD DCA REVERSES JUDGMENT | Key Points

  1. The Third DCA recently reversed the lower court’s entry of summary judgment in favor of a non-borrower condominium owner, LHF Hudson (“Hudson”). Nationstar Mortgage LLC v. LHF Hudson, LLC, 3D18-443, 2019 WL 362057, at *1 (Fla. 3d DCA Jan. 30, 2019). Hudson acquired title to the property in January 2014. Prior to that in 2008 the mortgagee, Nationstar, unsuccessfully accelerated its first mortgage lien; Hudson believed the five-year statute of limitations barred any future foreclosures.  Based on this belief Hudson expended more than $80,000 on “rehabilitation and condominium association assessments,” but failed to cure the 2008 payment default on Nationstar’s mortgage.  Nationstar initiated a second foreclosure action in August 2015 naming Hudson as a defendant and alleging default of the note and mortgage based on Hudson’s failure to make the January 2008 payment “and all subsequent payments.”
  2. Hudson argued that Nationstar’s foreclosure was barred by the statute of limitations which expired in 2013, five years after Nationstar first opted to (unsuccessfully) accelerate its lien. In conjunction with that defense, Hudson argued the Florida Supreme Court’s decision in Bartram v. U.S. Bank, N.A., 211 So.3d 1009 (Fla. 2016), which “changed the law” regarding the applicability of the statute of limitations “should not apply retroactively to revive Nationstar’s [foreclosure] claim.” Lastly, Hudson argued Nationstar was “estopped from enforcing the mortgage” since Hudson relied on Nationstar’s failure to initiate foreclosure within five years of when it first accelerated the loan.
  3. The Third DCA rejected Hudson’s arguments and reversed summary judgment finding there was no change in the law. The Court concluded that Florida law consistently held that “the unique nature of the mortgage obligation and the continuing obligations of the parties in that relationship” necessitates that “each subsequent default accruing after the dismissal of an earlier foreclosure action creates a new cause of action…”  Likewise, the Court explained Hudson’s mistaken view of law applying the statute of limitations could not form the basis for an estoppel claim. The Third DCA’s holding in Hudson is another welcome development in a long line of cases which have now firmly established the “limitations” to the statute of limitations in the foreclosure arena. We anticipate future litigation based on the statute of limitation defense will dramatically decrease due to this decision.

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