SANDRA A. FORERO and WILLIAM L. FORERO v. GREEN TREE SERVICING, LLC
CASE NO. 1D16-2151
IN THE DISTRICT COURT OF APPEAL FIRST DISTRICT, STATE OF FLORIDA
July 14, 2017
NOT FINAL UNTIL TIME EXPIRES TO FILE MOTION FOR REHEARING AND DISPOSITION THEREOF IF FILED
An appeal from the Circuit Court for Leon County. John C. Cooper, Judge.
Daniel W. Hartman of Hartman Law Firm, P.A.; Eric S. Haug of Eric S. Haug Law & Consulting, P.A., Tallahassee, for Appellants.
Michael Ruff of the Law Office of Timothy D. Padgett, P.A., Tallahassee, for Appellee.
Sandra and William Forero appeal the final judgment of foreclosure entered in favor of Ditech Financial LLC, as successor by merger to Green Tree Servicing, LLC, which determined $158,459.30 as the amount due and payable to Ditech and ordered the foreclosure of the lien on the real property. Because the foreclosure action was not rendered res judicata by the two previously dismissed foreclosure suits on the same note, and because the statute of limitations in
We review de novo the trial court‘s application of the law to the pleadings, other filings in the record, and the uncontroverted evidence admitted at trial. See Bartram v. U. S. Bank Nat‘l Ass‘n, 211 So. 3d 1009, 1015 (Fla. 2016).
On December 3, 2002, William Forero executed a promissory note in favor of the lender, Bank of America (BOA), for a loan of $171,992.00. The note was secured by a mortgage on residential real property, also executed on December 3, 2002, by Mr. Forero and his wife, Sandra Forero. Based on the Foreros’ failure to pay on “December 1, 2008 and all subsequent payments,” BOA filed suit for foreclosure on February 18, 2010. Bank of America v. Forero, Case No. 2010 CA 000582 (Fla. 2d Cir., Leon Cnty.). BOA voluntarily dismissed this action on December 13, 2011. See
BOA filed a second foreclosure action on February 14, 2013, against the Foreros and based on the same allegation of default for failure to pay on “December 1, 2008 and all subsequent payments.” Bank of America v. Forero, Case No. 2013 CA 000467 (Fla. 2d Cir., Leon Cnty.). BOA voluntarily dismissed this second action on April 4, 2013. Pursuant to
The mortgage was assigned by BOA to Green Tree Servicing, LLC, on September 19, 2013, “together with the note(s) and obligations therein described,” and the Assignment was filed in the public records in Leon County, Florida. By letters dated July 29, 2013, and addressed to both of the Foreros individually, Green Tree notified the Foreros of the default, their options to cure the default, and the acceleration of “all amounts due under the loan agreement” if the default was not cured within 30 days.1
On April 7, 2014, Green Tree filed the third foreclosure action against the Foreros on the same note and mortgage and based on the same allegation of default upon the December 1, 2008, payment “and all subsequent payments.” Green Tree Servicing, LLC v. Forero, Case No. 2014 CA 000921 (Fla. 2d Cir., Leon Cnty.). The copy of the note attached to the complaint in the 2014 case included an undated blank indorsement, making the note payable to bearer and negotiable by transfer of possession alone. See
The Foreros raised several affirmative defenses in their responsive pleading, including res judicata due to the previous adjudication on the merits by operation of
During the pendency of the litigation, Green Tree merged with Ditech Financial, LLC. The plaintiff‘s witness, Mr. Kevorkian, had been an employee of Green Tree, and at the time of trial was employed as a foreclosure and mediation specialist by Ditech. Mr. Kevorkian testified that Ditech was the servicer of the loan in the case. Numerous documents were admitted into evidence at trial, and Mr. Forero testified on his own behalf. Mr. Forero admitted at trial that the monthly payment due December 1, 2008, was not made and no additional payments were made after November 2008.
At the conclusion of the evidence and argument of counsel, the trial court granted foreclosure and determined that the principal balance due was $158,459.30. The court denied any award for interest, late fees, and other sums due to Ditech‘s failure to prove amounts for these items.
On appeal, the Foreros challenge the final judgment of foreclosure on grounds that the action was barred by operation of
The two dismissal rule does not bar a subsequent suit. The two dismissal rule merely states that when the rule applies the dismissal of the second suit operates as an adjudication on the merits. Once there is an adjudication on the merits, it is the doctrine of res judicata which bars subsequent suits on the same cause of action.
In Olympia, the court found a lack of identity between the first and second causes of action because, in addition to the default alleged in the first action, the subsequent missed payments and possible new default resulting from these missed payments at issue in the second action did not yet exist and thus could not have been at issue in the first suit. Id. at 867. Because new facts were at issue regarding the new missed payments, the Fourth District Court of Appeal found an absence of identity of the first and second causes of action, and thus the two-dismissal rule did not render the third suit res judicata so as to bar the third action.3 Id.
The Florida Supreme Court addressed the viability of subsequent foreclosure actions on the same note and mortgage, but with different occurrences of default, in Singleton v. Greymar Associates, 882 So. 2d 1004 (Fla. 2004). There, the Court held:
We agree with the position of the Fourth District that when a second and separate action for foreclosure is sought for a default that involves a separate period of default from the one alleged in the first action, the case is not necessarily barred by res judicata.
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While it is true that a foreclosure action and an acceleration of the balance due based upon the same default may bar a subsequent action on that default, an acceleration and foreclosure predicated upon subsequent and different defaults present a separate and distinct issue.
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We conclude that the doctrine of res judicata does not necessarily bar successive foreclosure suits, regardless of whether or not the mortgagee sought to accelerate payments on the note in the first suit. In this case the subsequent and separate alleged default created a new and independent right in the mortgagee to accelerate payment on the note in a subsequent foreclosure action.
In this case and the two previous, dismissed cases, the period of default alleged is open-ended—“December 1, 2008
The Foreros’ position that this third action was barred as untimely by the statute of limitations must also fail on appeal. The purpose of a statute of limitations “is to protect unwitting defendants from the unexpected enforcement of stale claims brought by plaintiffs who have slept on their rights.” Maynard v. Household Fin. Corp. III, 861 So. 2d 1204, 1207 (Fla. 2d DCA 2003). On the other hand, as recognized in Singleton, the equitable nature of the remedy of foreclosure, the “unique nature of the mortgage obligation,” and the possibility that debtors could be unjustly enriched if allowed to escape repayment due merely to the passage of time and an initial plaintiff‘s inability to prove the initial default must be considered before the right to enforce a promissory note may be cut off. Singleton, 882 So. 2d at 1007-08.
Balancing these purposes, the Florida Supreme Court applied the concept of a series of actionable defaults in Bartram. Summarizing the post-Singleton case law, the Court agreed “with the reasoning of both our appellate courts and the federal district courts that our analysis in Singleton equally applies to the statute of limitations context present in this case.” Bartram, 211 So. 3d at 1019. The Court held, “with each subsequent default, the statute of limitations runs from the date of each new default providing the mortgagee the right, but not the obligation, to accelerate all sums then due under the note and mortgage.” Id.
Applying Singleton to this case, the voluntary dismissals of the two previous foreclosure actions did not bar Ditech‘s subsequent action for foreclosure as res judicata because the causes of action are not identical. The additional payments missed by the time the third action was filed, which were not bases for the previous actions because they had not yet occurred, constitute separate defaults upon which the third foreclosure action may be based. Additionally, acceleration of the note occurred at a different time. Accordingly, even though the same phrase was used to describe the default in each action—“December 1, 2008 and all subsequent payments“—the meaning of the phrase expanded as time progressed and additional payments were missed. At most, the doctrine of res judicata affected Ditech‘s ability to bring suit on the certain installment payments at issue in the second suit prior to the voluntary dismissal. But Singleton makes clear that enforcement of the note via a foreclosure action is not barred by res judicata for the defaults occurring after April 4, 2013, the date the second suit was dismissed.
Because this third foreclosure action upon the same note and mortgage and against the same defendants was not barred as res judicata or by the applicable statute of limitations, the final judgment of foreclosure is AFFIRMED.
LEWIS and WINOKUR, JJ., CONCUR.