"We must also remember that foreclosure is an equitable remedy and there may be some tension between a court's authority to adjudicate the equities and the legal doctrine of res judicata. The ends of justice require that the doctrine of res judicata not be applied so strictly so as to prevent mortgagees from being able to challenge multiple defaults on a mortgage. See deCancino v. Eastern Airlines, Inc., 283 So. 2d 97, 98 (Fla. 1973) (“[T]he doctrine [of res judicata] will not be invoked where it will work an injustice . . . .”). We can find no valid basis for barring mortgagees from challenging subsequent defaults on a mortgage and note solely because they did not prevail in a previous attempted foreclosure based upon a separate alleged default.
"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. Thus, we approve the Fourth District’s decision in Singleton, and disapprove of the Second District’s holding in Stadler. "
"Because we believe the issue we resolve is a matter of great public importance, we certify the following question to the Florida Supreme Court:
"Does acceleration of payments due under a note and mortgage in a foreclosure action that was dismissed pursuant to rule 1.420(b), Florida Rules of Civil Procedure, trigger application of the statute of limitations to prevent a subsequent foreclosure action by the mortgagee based on all payment defaults occurring subsequent to dismissal of the first foreclosure suit?"-----------------------------
We might guess that Florida Supremes will agree with Florida's 5th DCA. I can think of two reasons for the Supremes to opine that the right to collect payments extends without time limit until the borrower has paid.
- Common sense and equity dictate that note holders have the right to repayment of the debt, and so a rightful plaintiff may sue for every breach of the note until the court awards the foreclosure.
- The US and Florida Constitutions, in Article I Section 10, provide that "no state shall pass any law impairing the obligation of contracts." The 5-year statute of limitations on foreclosures constitutes just such a proscribed law, impairing the obligation to repay the loan defined in the note and mortgage, collectively a contract. To the extent that rules of court operate like laws, the constitutions proscribe rules like res judicata to the extent they impair the obligation of contracts.
I wonder when a lender will propound argument 2 above to a foreclosure court upon hearing an argument that the Statute of Limitations has expired. That pretty much shoots equity in the foot. After all, the Legislature set the limit during a time when foreclosure didn't jam the courts for years.
On the other hand, maybe the courts will opine that all contracts get made in the climate of existing laws, and that those laws may impair contracts with impunity. It all depends on what the words impair, obligation, and contracts mean. Go here to learn what the US Supreme Court has opined about them: