IN THE DISTRICT COURT OF APPEAL
FIRST DISTRICT, STATE OF FLORIDA
SANDRA A. FORERO and NOT FINAL UNTIL TIME EXPIRES TO
WILLIAM L. FORERO, FILE MOTION FOR REHEARING AND
DISPOSITION THEREOF IF FILED
Appellants,
CASE NO. 1D16-2151
v.
GREEN TREE SERVICING,
LLC,
Appellee.
_____________________________/
Opinion filed July 14, 2017.
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.
BILBREY, J.
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 section 95.11(2)(c),
Florida Statutes, did not bar the action due to the inclusion within the allegations of
at least some defaulted installment payments within five years of the date the
complaint was filed, the judgment is affirmed.
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 Fla. R. Civ. P. 1.420(a)(1).
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,
2
Case No. 2013 CA 000467 (Fla. 2d Cir., Leon Cnty.). BOA voluntarily dismissed
this second action on April 4, 2013. Pursuant to rule 1.420(a)(1), Florida Rules of
Civil Procedure, this second voluntary dismissal “operates as an adjudication on
the merits . . . based on or including the same claim.”
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 § 673.2051(2), Fla. Stat.; see also §§
671.201(21), 673.3011, Fla. Stat.
1
The notice of default predating the assignment is not material here.
3
The Foreros raised several affirmative defenses in their responsive pleading,
including res judicata due to the previous adjudication on the merits by operation
of rule 1.420, Florida Rules of Civil Procedure. The Foreros also asserted that the
5-year statute of limitations had expired by the time the third foreclosure complaint
against them was filed. See § 95.11(2)(c), Fla. Stat. (action to foreclose mortgage
must be commenced within 5 years).
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 rule 1.420(a)(1), Florida Rules
4
of Civil Procedure, and by the statute of limitations provided by section
95.11(2)(c), Florida Statutes.2
Under rule 1.420, a second voluntary dismissal of a suit by the plaintiff
“operates as an adjudication on the merits.” This provision is often referred to as
the “two dismissal rule.” See, e.g., Edmondson v. Green, 755 So. 2d 701, 704 (Fla.
4th DCA 1999). However, rule 1.420 itself does not actually preclude subsequent
actions. As explained in Olympia Mortgage Corp. v. Pugh, 774 So. 2d 863, 867
(Fla. 4th DCA 2000):
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
2
The Foreros also challenge Green Tree/Ditech’s proof of standing to enforce the
promissory note and compliance with the notice of default requirements in the note
and mortgage. The record shows no error by the trial court on these issues and we
affirm on these grounds without further comment.
5
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.
* * *
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.
* * *
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.
Id. at 1006-08.
3
We note the opinion in Nolan v. MIA Real Holdings, LLC, 185 So. 3d 1275
(Fla. 4th DCA 2016), where the appellate court reversed the judgment of
foreclosure in the third action on the same note and mortgage. However, the
opinion stated that the third action was upon “the same breach” of the promissory
note without specifying the date or dates of non-payment alleged in the lawsuits
and thus not identifying the particular defaults at issue in the different actions. Id.
at 1276. Nolan does not require dismissal of a subsequent suit where the defaults
at issue in the actions are not identical.
6
In this case and the two previous, dismissed cases, the period of default
alleged is open-ended—“December 1, 2008 and all subsequent payments.” The
actual number of individual monthly payments missed as of the filing date of each
complaint differed due to the passage of time between the 2010 suit, the 2013 suit,
and this 2014 complaint. It was undisputed that the first missed installment
payment, and thus the first default on the note and mortgage, occurred December
1, 2008. It was also undisputed that no payments were made for each month
thereafter. Accordingly, the actual defaults upon which the previous foreclosure
actions were based did not include the additional defaults for the subsequent
months at issue in this third action, even though the same language was used in
each complaint to describe the period of default. Furthermore, the note was
accelerated anew based upon failure of the Foreros to cure the default. Applying
the rationales of Olympia Mortgage Corp. and Singleton, this third foreclosure
action was not barred as res judicata, even in light of rule 1.420(a), because the
open-ended series of defaults included different missed payments at issue in each
suit.
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.
7
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
8
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.
Likewise, this third foreclosure action was not barred by the 5-year statute of
limitations. Under the facts of this case, where it was alleged and established at
trial that no payments had been made on the mortgage since November 2008, each
missed payment constituted a new default. As stated in Bartram, “the statute of
limitations runs from the date of each new default providing the mortgagee the
right . . . to accelerate all sums then due under the note and mortgage.” 211 So. 3d
at 1019; see also Bollettieri Resort Villas Condo. Ass’n v. Bank of New York
Mellon, 198 So. 3d 1140, 1142-43 (Fla. 2d DCA 2016) (holding complaint based
on initial default over five years prior to complaint, but also alleging “no
subsequent payments have been made,” sufficient to state timely cause of action
based on any missed payments since the initial breach), certifying conflict with
9
Hicks v. Wells Fargo Bank, N.A., 178 So. 3d 957 (Fla. 5th DCA 2015). 4
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.
4
The effect of the passage of time, if any, upon the amount recoverable via
foreclosure judgment when the initial default in a continuous series of defaults
occurred more than five years before the filing of the complaint, was not raised by
the parties at trial or on appeal. Accordingly, we do not reach the issue of whether
the equitable concerns that debtors not be unjustly enriched by a plaintiff’s
previously dismissed actions should be balanced on the other hand by the purpose
of the statute of limitations and other doctrines designed to impose consequences
for stale claims and failure to timely and diligently prosecute legal action by the
proper party. See U. S. Bank Nat’l Assoc. v. Bartram, 140 So. 3d 1007, 1013-1014
(Fla. 5th DCA 2014), approved, 211 So. 3d 1009 (Fla. 2016) (discussing federal
cases suggesting that “defaults that are now more than five years old may be
subject to the statute of limitations” while the later defaults were still actionable).
10