An important issue that arises for lenders when pursuing foreclosure actions is determining when the statute of limitations begins to run. Florida Statutes provide that a party has five years to foreclose a mortgage, but determining when the five years begins to run has proven to be a topic of legal debate. Lenders who find themselves potentially beyond the statute of limitations after an unsuccessful first attempt to foreclose may find hope in the recent decision by the Florida Fifth District Court of Appeals in U.S. Bank National Association v. Bartram.
In Bartram, the bank initially brought a foreclosure action in 2006, accelerating the debt. However, the bank did not actively participate in the action, resulting in an involuntary dismissal in 2011. In the meantime, the borrower and his wife divorced, and the borrower was required in the divorce to execute a note and mortgage in favor of his ex-wife. In 2011, the ex-wife filed her own foreclosure action, naming the bank. In her foreclosure, the borrower filed a counterclaim seeking a declaratory judgment against the bank, arguing that the statute of limitations now barred the bank from enforcing its rights under the loan documents. The trial court entered summary judgment for the borrower, rejecting the bank’s argument that it was not barred from bringing a subsequent foreclosure action, and that the five-year statute of limitations did not bar the payments that were missed within the five-year period.