Court: District Court, S.D. Florida; April 7, 2015; Federal District Court
Defendant HSBC Bank USA’s Motion to Dismiss has been granted by the Court, which reviewed the motion and relevant records. This case involves a declaratory action filed under Chapter 86 of the Florida Statutes, seeking to declare a mortgage recorded in Miami-Dade County null and void. The case originated in the Circuit Court and was removed by HSBC based on original jurisdiction under 28 U.S.C. § 1332.
The key facts include that Jose Zelaya executed a mortgage in favor of New Century Mortgage Corporation on September 1, 2006, and defaulted on it on April 1, 2008. HSBC, as the assignee, accelerated the mortgage on October 31, 2008, and initiated a foreclosure action, which was dismissed for failure to prosecute in January 2011. Notably, HSBC did not refile another foreclosure action within the five-year statute of limitations, which LNB argues expired on October 31, 2013. LNB purchased the property in question through a quitclaim deed on March 5, 2014, and seeks to declare the mortgage void.
The legal standard for assessing the Motion to Dismiss follows Federal Rule of Civil Procedure 8(a)(2), which requires a short and plain statement of the claim. In evaluating the motion, the Court must accept the factual allegations as true and construe them favorably towards the plaintiff, while ensuring that sufficient facts are presented to support a plausible claim. Legal conclusions and mere conclusory statements are insufficient for stating a claim, and the complaint must allow reasonable inferences of liability. Dismissal is warranted if factual allegations do not raise the right to relief above a speculative level.
HSBC's Motion to Dismiss argues that LNB's claim for quiet title is invalid due to several reasons: the statute of limitations is a procedural barrier but does not affect the lien's validity, most payment claims under the mortgage are not time-barred, and even if they were, future breaches could give rise to new foreclosure actions within a new five-year limitations period. LNB acknowledges that the relief it seeks—a declaration that the mortgage is null and void—has been rejected in Deutsche Bank Trust Company Americas v. Beauvais. LNB proposes to amend its complaint to seek a declaration that HSBC cannot enforce the payment terms or to stay the action pending the appeal of U.S. Bank National Association v. Bartram. HSBC counters that the action should be dismissed with prejudice, asserting that prior rulings indicate payment terms are not indefinitely time-barred and that LNB lacks standing to challenge the note and mortgage validity. The court agrees with HSBC, noting that Beauvais determines that a mortgage lien does not become void until five years after the maturity date, which is October 1, 2036, in this case, meaning it will not be null and void until after October 1, 2041. Additionally, the court finds that a stay is unwarranted as the Bartram appeal is not directly relevant to this case.
LNB's legal action is barred by Section 95.281(l)(a), which stipulates that the mortgage lien remains valid until after October 1, 2041. This section’s application is not under appeal to the Supreme Court of Florida, meaning its interpretation will not impact the current case. The court declines LNB's request to amend its Complaint to seek a declaration that HSBC cannot enforce the note and mortgage terms, aligning with the precedent set in Beauvais. In Beauvais, it was determined that once a mortgage is accelerated, it cannot be 'decelerated' by an involuntary dismissal without prejudice. Consequently, the debt remains due post-dismissal, and any new foreclosure actions must occur within 5 years of the acceleration to avoid being barred by the statute of limitations. LNB fails to provide supporting authority for its amendment request, and the court notes a conflict between Beauvais and other judicial decisions, including its own prior ruling and those from various Florida courts. The court highlights the futility of LNB's proposed amendment, referencing cases like Lopez v. HSBC Bank, where similar arguments were dismissed, reinforcing that an unsuccessful foreclosure action does not trigger the statute of limitations for the entire mortgage and note. The court supports its position by referencing the Supreme Court of Florida's ruling in Singleton, which allows for multiple foreclosure actions despite previous accelerations, emphasizing the importance of maintaining incentives for timely payments.
The Supreme Court of Florida's opinion referenced Olympia Mortgage Corp. v. Pugh, which established that a voluntary dismissal of a foreclosure action does not result in the acceleration of payment on a note and mortgage. Consequently, a mortgagee can initiate subsequent foreclosure actions even after a prior acceleration attempt is dismissed, as long as the new actions are based on different defaults. This principle was upheld in various cases, including Dorta v. Wilmington Trust National Association, where the court ruled that a mortgagee retains the right to enforce the note and mortgage despite a prior dismissal of a foreclosure action. Similarly, in Torres v. Countrywide Home Loans, the court emphasized that while some claims may be time-barred under the statute of limitations, any payment default occurring within five years can support a new foreclosure or acceleration action. The current legal consensus, apart from one exception, does not support LNB's claim in an amended complaint that prior acceleration and the expiration of a five-year statute of limitations bar all subsequent foreclosure actions due to non-payment. This issue is under appeal in the Supreme Court of Florida, but as it stands, most relevant cases have dismissed such claims. Therefore, the court concluded that amending the complaint would be futile, granting HSBC Bank USA's motion to dismiss and closing the case with prejudice. Additionally, Florida Statute 95.281 specifies that a mortgage lien generally terminates five years after the final maturity of the secured obligation, unless otherwise noted.
