Deutsche Bank Trust Company Americas, etc. v. Beauvais, et al., No. 3D14-575 (opinion filed April 13, 2016).
In December 2014 the panel decision of the Third District in the case of Beauvais started a national uproar. There, the panel held that acceleration of a mortgage note in an earlier filed foreclosure action commenced running of the statute of limitations. The panel stated that voluntary dismissal of that earlier action did not serve to “de-accelerate” the mortgage note, nor did it otherwise allow for restating a default based on subsequent missed payments. Now, in a 6 to 4 decision the full court has withdrawn the panel opinion. The en banc court held to the concept that each subsequently missed payment is a new default yielding to a new right to accelerate, and that the voluntary dismissal merely placed the parties back in the position they were in prior to acceleration, thus effectively “de-accelerating” the mortgage note.
The majority essentially propounded two reasons for its decision: existing case law on the one hand, and a construction of the contract itself (i.e. the note and mortgage) on the other. Under both analysis, the majority concluded that the voluntary dismissal of an earlier filed action returns the parties to the status quo prior to acceleration. The majority pointed to the reinstatement provision of the national standard Fannie Mae/ Freddie Mac approved mortgage form which allows borrowers to reinstate the mortgage by paying past due payments, along with incurred fees and costs, anytime prior to the entry of judgment. There was no judgment, so voluntary dismissal was deemed equivalent to “de-acceleration”.
The minority criticized the majority for, among other issues, not adhering to long standing precedent that the statute of limitations begins to run from the date the lender exercises its acceleration right. Furthermore, the minority pointed to the acceleration provision of the promissory note which requires payment of “all sum secured” following an acceleration. In response, the majority asserts that their interpretation does justice to the contract, and yet maintains the statute of limitations as unaffected.
Rex Russo has extensive appellate experience. He has appealed administrative action decisions, judgments of Florida's county and circuit courts, Bankruptcy Court judgments, and Federal District Court judgments. Appeals have been taken as far as the Florida Supreme Court and the United States Supreme Court.