MICHAEL M. GRDIC v. H S B C BANK U S A, N. A.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING
MOTION AND, IF FILED, DETERMINED

IN THE DISTRICT COURT OF APPEAL

OF FLORIDA

SECOND DISTRICT

MICHAEL M. GRDIC, )
)
Appellant, )
)
v. ) Case No. 2D17-818
)
HSBC BANK USA, N.A., as trustee, )
in trust for the Registered )
Holders of Ace Securities Corp., )
Home Equity Loan Trust, Series )
2006-NC3, Asset Backed Pass- )
Through Certificates, )
)
Appellee. )
)

Opinion filed March 13, 2019.

Appeal from the Circuit Court for Pinellas
County; Pamela A.M. Campbell, Judge.

Mark P. Stopa of Stopa Law Firm, Tampa
(withdrew after briefing); Latasha Scott of
Lord Scott, PLLC, Tampa (withdrew after
briefing), for Appellant.

Michael Grdic, pro se.

Charles E. Stoecker and William L.
Grimsley of McGlinchey Stafford, Fort
Lauderdale, for Appellee.
LUCAS, Judge.

Michael Grdic appeals a final judgment of foreclosure entered in favor of

HSBC Bank USA, N.A., as Trustee, in Trust for the Registered Holders of ACE

Securities Corp., Home Equity Loan Trust, Series 2006-NC3, Asset Backed Pass-

Through Certificates (HSBC). We affirm the final judgment in all respects. We write to

explain why HSBC was not precluded from obtaining a judgment for the entire unpaid

debt due under Mr. Grdic's mortgage loan, including payment amounts that had accrued

more than five years before HSBC filed its complaint.

In April 2006, Mr. Grdic executed an adjustable rate note and mortgage

over his Clearwater home in favor of Home123 Corporation. Mr. Grdic's note reflected

that he had borrowed the principal sum of $161,250 and agreed to make monthly

payments of principal and interest over a forty-year amortization period. Like most

mortgage loan promissory notes, Mr. Grdic's note permitted the holder to accelerate the

entire unpaid amount and interest in the event of a default. By endorsement and

subsequent transfers, the note eventually became HSBC's.

Mr. Grdic made payments on the note until June of 2008. The next

month, a default letter was sent to him. HSBC filed a complaint for foreclosure in

October of 2009.

For reasons that do not pertain to this appeal, that lawsuit was

involuntarily dismissed without prejudice on August 9, 2012. Mr. Grdic, however, had

made no further payments on the note. On October 2, 2013, Select Portfolio Servicing,

Inc. (SPS), HSBC's servicer, sent Mr. Grdic a new default letter, informing him that he

was now in default in the amount of $105,846.82. That amount included all of his

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missed payments since June of 2008, the date of Mr. Grdic's original default. On

October 16, 2014, HSBC filed the instant foreclosure action against Mr. Grdic.

The case proceeded to trial on January 20, 2017. Throughout the trial,

Mr. Grdic maintained that the statute of limitations, section 95.11(2)(c), Florida Statutes

(2014), barred HSBC's right to foreclose on the defaulted monthly payments that had

accrued more than five years prior to its October 2014 complaint. Relatedly, Mr. Grdic

also argued that the default letter SPS had sent did not substantially comply with

paragraph 22 of his mortgage because the letter overstated the amount Mr. Grdic owed

by including sums which had accrued more than five years earlier. The circuit court

disagreed, denied Mr. Grdic's motion for involuntary dismissal, and entered a final

judgment on January 23, 2017. The circuit court's judgment included the entire unpaid

principal, accrued interest, and other fees and costs. Mr. Grdic now appeals that

judgment.

The issue before us1 is one that can be succinctly stated by posing the

rule Mr. Grdic proposes in his brief. According to Mr. Grdic,

this [c]ourt should rule that any payment defaults occurring
more than five years before a foreclosure lawsuit is filed . . .
should not be included in the amount the lender can recoup.
Instead, any taxes, interest, and monthly payments from
more than five years before suit must be eliminated from any
foreclosure judgment.

1Because this appeal comes to us on review of a trial court's ruling on a
motion for involuntary dismissal, we employ a mixed standard of review. "To the extent
the trial court's final judgment of foreclosure 'is based on factual findings, we will not
reverse unless the trial court abused its discretion; however, any legal conclusions are
subject to de novo review.' " Gonzalez v. Fed. Nat'l Morg. Ass'n, 43 Fla. L. Weekly
D1739, D1740 (Fla. 3d DCA Aug. 1, 2018) (quoting Verneret v. Foreclosure Advisors,
LLC, 45 So. 3d 889, 891 (Fla. 3d DCA 2010)).

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It is a proposal that has been addressed by three of our sister district courts of appeal.

In Gonzalez v. Federal National Mortgage Ass'n, 43 Fla. L. Weekly D1739,

D1741 (Fla. 3d DCA Aug. 1, 2018), the Third District concluded that Fannie Mae was

not barred from obtaining a final foreclosure judgment that included default amounts

that had accrued outside of the five-year statute of limitations. In so holding, the

Gonzalez court considered the nature of the mortgage debt and what a default on an

installment payment of that debt necessarily entails:

In a typical residential loan, the terms of the note and
mortgage split the entirety of the debt owed by the borrower
into a series of periodic installment payments. If a borrower
defaults, the note holder could choose to seek a judgment
only for that missed installment payment. More typically,
and as occurred here, the note holder can choose to
exercise its contractual right to accelerate the entirety of the
borrower's obligation under the note and mortgage and seek
a judgment on that amount. By exercising its contractual
right to acceleration, the note holder is not seeking to collect
a series of individual past and future installment payments
due to it. Instead, the holder elects to accelerate the entirety
of the obligation owed to it under the terms of the note and
mortgage, such that the entire sum owed—including
principal, interest, advances, costs, and fees—will be
included in the judgment. It is that entire debt—not
individual installments of it—that comes due upon
acceleration and that is sought to be liquidated in a
foreclosure action. Thus, when considering an accelerated
obligation, while the triggering default must occur within the
five year limitations period, the debt that is subject to
judgment and collection is the accelerated debt, i.e., the
entire amount due under the mortgage loan. See Bartram[
v. U.S. Bank, Nat. Ass'n], 211 So. 3d [1009,] 1019 [(Fla.
2016)]. Because Fannie Mae was seeking a judgment on
the accelerated obligation, the trial court properly entered a
Final Judgment of Foreclosure in favor of Fannie Mae in the
full amount of that obligation.

Id. at D1741 (footnote omitted). The Third District affirmed the trial court's judgment for

the entire accelerated debt amount. Id.

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 Two weeks later, the Fourth District issued a decision in which it reached

the same conclusion. In Bank of America, N.A. v. Graybush, 253 So. 3d 1188, 1193

(Fla. 4th DCA 2018), the court aligned itself with the Third District in Gonzalez to hold

that "the Bank was entitled to all sums alleged and proven due under the note and

mortgage—even those sums due more than five years from the date of filing the

complaint." The Graybush court cited with approval to Justice Lawson's concurring

opinion in Bollettieri Resort Villas Condominium Ass'n v. Bank of New York Mellon, 228

So. 3d 72, 73 (Fla. 2017):

Justice Lawson's opinion noted that "[u]nder the terms of
most long-term notes and mortgages . . . the total amount
due under the note does not become due until maturity—
most commonly thirty years after signing." Bollettieri, 228
So. 3d at 74 (Lawson, J., concurring). Given that a long-
term note is just that, a promise to pay a determinate sum by
a determinate date, Justice Lawson concluded that the
failure to pay the entire amount due by the final due date—
i.e., maturity date—is the last element of a foreclosure cause
of action accruing the applicable statute of limitations. Id.

Id. (alteration in original). The Graybush court concluded:

When a note contains an optional acceleration clause,
a lender only runs out of opportunities to foreclose, under the
applicable statute of limitations, after five years of the latest
default, or after five years of the date of maturity of the note.
But, should a lender bring a timely action under either
scenario, it is entitled to all sums due under the note and
mortgage—should the note and mortgage contractually
provide.

Id. at 1195.

Recently, an en banc Fifth District receded from a prior panel opinion so

that it, too, could adopt Justice Lawson's Bolletieri concurring opinion on this issue. See

Grant v. Citizens Bank, N.A., 44 Fla. L. Weekly D95b, D96b (Fla. 5th DCA Dec. 26,

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2018) ("[W]e recede from Velden[ v. Nationstar Mortgage, LLC, 234 So. 3d 850 (Fla. 5th

DCA 2018)] and adopt the view articulated in Justice Lawson's concurring opinion in

Bollettieri regarding the statute of limitations in installment obligation cases.").

We agree with the sound rationale set forth in Grant, Gonzalez, and

Graybush. Like in those cases, Mr. Grdic's note afforded the holder the right to

accelerate the entire unpaid debt in the event of a default. And, like in those cases, Mr.

Grdic remained in a continued state of default from the time of his first missed monthly

payment up until the date when HSBC filed the instant foreclosure action. HSBC was

entitled to seek recovery of the entire amount of Mr. Grdic's unpaid debt because, "with

each subsequent default," HSBC would have "had the right to file a subsequent

foreclosure action—and to seek acceleration of all sums due under the note—so long

as the foreclosure action was based on a subsequent default, and the statute of

limitations had not run on that particular default." Bartram, 211 So. 3d at 1021; cf.

Desylvester v. Bank of N.Y. Mellon ex rel. Holders of Alt. Loan Tr. 2005–62, Mort.

Pass–Through Certificates Series 2005–62, 219 So. 3d 1016, 1020 (Fla. 2d DCA 2017)

(following Bartram and holding that "the dismissal of the Bank's earlier foreclosure

action did not trigger the statute of limitations to bar the Bank's subsequent foreclosure

action based on separate defaults"). Because that is what happened in Mr. Grdic's

case, we affirm the judgment of the circuit court.

Affirmed.

CASANUEVA and KELLY, JJ., Concur.

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