Court: District Court of Appeal of Florida; January 29, 2019; Florida; State Appellate Court
Nationstar Mortgage LLC appealed a trial court's summary judgment favoring LHF Hudson, LLC, which raised statute of limitations and estoppel defenses against Nationstar's foreclosure claim. The original borrower, Teudis Herrera, executed a note of $252,000 secured by a mortgage on a condominium in Miami-Dade County on May 26, 2006. Herrera stopped payments in January 2008, leading Nationstar to file its first foreclosure action on May 14, 2008, which was dismissed without prejudice in February 2013. Hudson purchased the condominium at a foreclosure auction in January 2014 for $66,794.60 and invested an additional $80,276.60 in improvements. Nationstar filed a new foreclosure action on August 11, 2015, alleging Hudson defaulted by not making payments since January 2008. Hudson contended that the statute of limitations barred the action since it expired in May 2013 and argued that the Florida Supreme Court's decision in Bartram v. U.S. Bank should not retroactively apply. Hudson also claimed estoppel, stating it relied on the statute of limitations in purchasing the property and that enforcing the mortgage was inequitable. The trial court granted Hudson's motion for summary judgment on these defenses. On appeal, Nationstar argued that the trial court erred in applying the statute of limitations and in its interpretation of the Bartram decision. The appellate court found merit in Nationstar's arguments and reversed the trial court's judgment, remanding for further proceedings.
In Bartram, the Florida Supreme Court established that the statute of limitations restarts with each new default on a mortgage, allowing the mortgagee the option to accelerate all sums due. It clarified that a mortgagee is not barred from filing a foreclosure action based on a separate default, even if a prior action was dismissed. This conclusion builds on the court's earlier decision in Singleton v. Greymar Associates, which indicated that separate foreclosure actions based on different defaults are not precluded by res judicata, even if the mortgagee previously accelerated payments in another suit. The court emphasized that the equitable nature of foreclosure justifies a flexible application of res judicata to permit challenges to multiple defaults. The reasoning from Singleton also applies to the statute of limitations context, reaffirming that subsequent defaults allow for new foreclosure actions as long as they occur within the relevant time frame. Relevant cases such as Nationstar Mortg. LLC v. Brown and Evergrene Partners, Inc. v. Citibank, N.A. support this interpretation, stating that a dismissal of a previous foreclosure action does not prevent subsequent actions based on new defaults. The dismissal of a foreclosure based on one default does not bar future actions for later defaults.
Hudson contends that, after the statute of limitations expired on the initial foreclosure action, Nationstar could not initiate a second foreclosure action for a subsequent default, as the prior action had been dismissed and the note and mortgage were accelerated. Hudson claims that the legal interpretations established in Singleton, Bartram, and Beauvais represent a significant shift in the law regarding the statute of limitations for foreclosure actions, which should not retroactively apply to revive Nationstar's "extinguished claim." The court rejects Hudson's argument, affirming that the Florida Supreme Court disapproved of Hudson's interpretation of the law as articulated in Stadler v. Cherry Hill Developers, Inc. The court clarifies that, according to Singleton, multiple defaults after the dismissal of a foreclosure action create new causes of action, regardless of the dismissal's nature. The court emphasizes that this interpretation aligns with established practices in the Florida mortgage industry. Consequently, the court concludes that the trial court erred in granting summary judgment on Hudson's statute of limitations defense since some missed payments occurred within the five-year filing period following the dismissal of Nationstar's first action. Additionally, the court finds that the trial court incorrectly granted summary judgment on Hudson's estoppel defense.
Equitable estoppel is grounded in principles of fairness and justice, arising when one party places another in a disadvantageous legal position. To establish a claim of estoppel, the claimant must demonstrate that: (1) the opposing party made a representation about a material fact that contradicts a later position; (2) the claimant relied on that representation; and (3) the claimant suffered a detriment due to their reliance. In this case, Nationstar did not misrepresent the status of the note and mortgage following the dismissal of its foreclosure complaint, nor did it mislead Hudson regarding its claims. Hudson's misunderstanding of Florida law concerning the statute of limitations in foreclosure actions does not support a claim for estoppel, as mistakes of law are not valid grounds for estoppel. Consequently, the trial court's decision to grant summary judgment in favor of Hudson on both the statute of limitations and estoppel defenses was erroneous. The case is reversed and remanded for further proceedings.
