Under Florida law, the involuntary dismissal without prejudice of an initial foreclosure action did not “decelerate” lender’s acceleration of the debt in the initial action and the statute of limitations continued to run, barring a second action brought after the expiration of the statute of limitations. Deutsche Bank Trust Co. Ams. v. Beauvais, No. 3D14-575, 2014 WL 7156961 (Fla. Ct. App. Dec. 17, 2014).
After a borrower defaulted on a mortgage loan, the lender filed an initial foreclosure action and in its complaint expressly exercised its contractual right to accelerate the maturity of the loan. Nearly three years after the filing of the action, the lender failed to appear at a case management conference, and the initial foreclosure action was involuntarily dismissed without prejudice. The lender did not appeal the dismissal order and took no further action with regard to its loan acceleration. Over five years after the filing of the initial action, the lender initiated a second foreclosure action. The borrower moved for summary judgment, arguing that the second action was barred by the five year statute of limitations period since the second action was filed more than five years after the lender’s acceleration of the debt. The court noted that when a mortgage contains an optional acceleration clause, the statute of limitations commences when the lender accelerates. The lender argued, however, that the involuntary dismissal of the initial foreclosure action served to “decelerate” the loan, effectively reinstating the installment nature of the loan repayment such that a subsequent default by the borrower could be considered a new cause of action, triggering a new limitations period. The court rejected this argument and held that once the lender accelerated the debt in the initial foreclosure action, in the absence of a contractual reinstatement of the installment terms of the loan or an adjudication on the merits that the borrower was not in default, the statute continued to run, and the involuntary dismissal without prejudice did not “decelerate” the loan. Accordingly, the statute of limitations had commenced to run after the initial foreclosure action and barred the second action. The court did reverse the lower court’s holding that the mortgage lien itself was null and void based on the running of the statute of limitations. A separate statutory provision provided for the duration of a mortgage lien, and in this case the time period extended beyond the period of the statute of limitations. The mortgage lien here would remain valid until March 1, 2041, five years after the original loan maturity date as reflected in the recorded mortgage.
