In December, the Florida Supreme Court issued its long-awaited decision in Bartram v. U.S. Bank National Association, No. SC14-1265 (Fla. Nov. 3, 2016), resolving a critical outstanding question regarding the applicability of Florida's five-year statute of limitations for breach of contract claims to second or successive mortgage foreclosure actions.
The issue addressed in Bartram was whether, when an initial mortgage foreclosure action has been dismissed, and more than five years have passed since action was filed, the lender is barred by the statute of limitations from filing a new foreclosure action against the borrower. In the wake of the national mortgage foreclosure crisis, borrowers in Florida have frequently argued that, because the loan is "accelerated" when a foreclosure action is filed, resulting in the lender declaring the full amount of the loan due and payable, the five-year statute of limitations should apply to the entire amount of the loan and permanently bar the filing of a new foreclosure action.
Lenders have countered that, because of the installment nature of the debt, in which a new payment becomes due every month, the statute of limitations only applies to events of default occurring within the last five years. Thus, if a foreclosure action has been dismissed, the lender is not precluded by the statute of limitations from filing a new foreclosure action, as long as the missed monthly payment forming the basis of the action falls within the limitations period.Lenders have countered that, because of the installment nature of the debt, in which a new payment becomes due every month, the statute of limitations only applies to events of default occurring within the last five years. Thus, if a foreclosure action has been dismissed, the lender is not precluded by the statute of limitations from filing a new foreclosure action, as long as the missed monthly payment forming the basis of the action falls within the limitations period.