Lexology-

All indications point to yes; but it is wise to heed the old adage that you should “never count your chickens before they hatch”.

The Florida Supreme Court (FLSC) accepted certiorari earlier this year from its 5th District Court of Appeal and held oral argument last week to resolve a dispute on the statute of limitation issue plaguing the mortgage industry.  The State of Florida is divided into five District Courts of Appeal (DCAs), whose application of law reigns sovereign over their respective districts.  The debate stems between the 3rd DCA, which encompasses the populous county of Miami-Dade as well as neighboring Monroe County, and all other DCAs and federal courts throughout Florida which have spoken on the issue of the impact of the statute of limitations on re-filed foreclosure actions. (Notably only the 2nd DCA and the federal courts of the northern district of Florida have yet to publish an opinion on the issue.)

While it is generally understood that extinguishment of a mortgage only occurs when all sums secured are paid off or the mortgage is foreclosed, the 3rd DCA has held that a mortgagee may not have the right to foreclose on a mortgage if a prior foreclosure action was dismissed and a second action was filed within five years after the filing of the first.  Five years represents the statute of limitation for foreclosure actions in Florida.  Consequently, a lucky borrower might get a free house if a mortgagee has, through oversight or inadvertence, had its prior action dismissed — although there is some debate as to whether the mortgage would still encumber the property for the remaining mortgage term even though the mortgagee can no longer foreclose on it.  Indeed, it might be possible that the right to foreclose a mortgage could be lost even if the mortgagee was not negligent but, instead, had voluntarily dismissed its own action for any reason including, but not limited to, simply abandoning the action to give the borrower some relief.

[LEXOLOGY]

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