Anthony v. Ocwen Loan Servicing, LLC
550 B.R. 577
M.D. Fla.2016Background
- Debtor Anthony owns a Cocoa Beach home secured by a mortgage held by U.S. Bank and serviced by Ocwen.
- U.S. Bank filed a foreclosure complaint in state court in May 2009 asserting acceleration; that case was dismissed without prejudice in 2013.
- Anthony filed Chapter 13 bankruptcy in August 2014 and then filed a proof of claim on behalf of the lenders asserting a $0.00 secured value.
- Anthony objected to the claim and moved under 11 U.S.C. § 506(d) to determine the mortgage was unsecured/void because the underlying debt was time-barred by Florida’s five-year foreclosure statute.
- The Bankruptcy Court held Anthony needed to bring an adversary proceeding (not a contested matter) and, on the merits, found Florida precedent supported enforceability of the note/mortgage despite the earlier dismissal.
- District Court reviewed the legal issues de novo and affirmed the Bankruptcy Court: objection overruled without prejudice and motion denied without prejudice.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Anthony had to file an adversary proceeding (Rule 7001(2)) | Anthony: he attacked the note/claim, so contested-matter procedure was sufficient | Secured creditors: relief sought would invalidate the mortgage; Rule 7001(2) requires adversary when challenging validity/extent of a lien | Court: Required an adversary; Anthony’s filings were substantive attacks on the mortgage, so dismissal for failure to bring an adversary was proper |
| Whether the note/mortgage were unenforceable because foreclosure was time-barred after prior acceleration and dismissal | Anthony: Bank accelerated in 2009; more than 5 years passed; statute of limitations bars enforcement so lien must be void under § 506(d) | Bank: Florida precedent (Singleton line) permits subsequent foreclosure/collection when earlier action was dismissed without prejudice; note remains enforceable | Court: Adopted Singleton line and later DCA rulings; note and mortgage remain enforceable; statute-of-limitations argument rejected |
Key Cases Cited
- In re Englander, 95 F.3d 1028 (11th Cir. 1996) (standard of review: factual findings deferential, legal conclusions de novo)
- Singleton v. Greymar Assocs., 882 So.2d 1004 (Fla. 2004) (an earlier foreclosure/acceleration does not necessarily bar later actions based on subsequent defaults)
- Deutsche Bank Tr. Co. Americas v. Beauvais, 188 So.3d 938 (Fla. 3d DCA 2016) (district court en banc overruling earlier panel and applying Singleton to allow subsequent foreclosure)
- Evergrene Partners, Inc. v. Citibank, N.A., 143 So.3d 954 (Fla. 4th DCA 2014) (applies Singleton to hold statute of limitations does not bar later foreclosure following voluntary dismissal)
- Olympia Mortgage Corp. v. Pugh, 774 So.2d 863 (Fla. 4th DCA 2000) (distinguishes acceleration as to future installments and supports multiple recoveries for different defaults)