It appears to me that the Florida Supreme Court Bartram decision raises far more questions and conflicts than we had before the decision despite the conflict of the DCA opinions. Bartram conflicts with prior decisions of the same court, and of most other courts when it relates to the application of res judicata, statute of limitations and Rooker Feldman — EXCEPT in foreclosure litigation. This is obvious to all practitioners — lawyers and judges. It is impossible to explain to clients and it thus undermines confidence in our judicial system.
In my opinion, Florida courts will gradually retreat from Bartram by “distinguishing” one fact or another from the Bartram case. By that time hundreds of thousands of homeowners may be forced out of their homes by people with no justification, right or excuse to do so once, much less multiple times.
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- The decision eviscerates actions legally taken under the presumed loan contract. Thus the Court decided that the decision to declare a default and accelerate the the balance due under the loan are actions that can be reversed, and are reversed when the foreclosure was involuntarily dismissed. The bad precedent this sets is obvious. Pretender lenders (or any other Plaintiff) can look to Bartram as support for taking a pot luck shot at getting a foreclosure judgment and sale, followed by eviction. If they fail they can try again.
- The decision is inconsistent in the same respect, stating that the “final adjudication in a foreclosure proceeding merely bars a second action relegating the same default.” It does not say that the judgment for the homeowner raises any other res judicata issues. And it ignores the fact that there can’t be any subsequent defaults if (a) the balance was accelerated and (b) no further payments were accepted, or even could have been accepted. The receipt and acceptance of the payments vitiates the default.
- Yet the court quotes from the Singleton case with approval that “the mortgagor would have no incentive to make future payments.” This presumes that if a homeowner did tender payments, they would have to be accepted, thus vitiating the claim of default and the notice thereof. Is the Bertram Court stating that subsequent payments MUST be accepted? If so, they are requiring the alleged holder of the note to start over again with each payment thus received. This leads to some interesting possibilities such as the tender of payment every other month. The absurdity is obvious and there is little doubt that courts would, at the very least, be confused when confronting such a scenario.
- Lastly the Bartam Court came to the conclusion that a dismissal without prejudice combined with the contractual provision allowing reinstatement by only paying the past due payments (in spite of the acceleration) means that the acceleration becomes final only when a final judgment is entered.
The application of Bertram thus turns into a mystery. If a Final Judgment is entered with judgment for the homeowner the trial judge can leave open the possibility of another bite of the apple simply by saying “without prejudice.” To see why this is wrong consider this example: homeowner sues the alleged servicer for violation of laws regarding the behavior of debt collectors, servicers etc. The Judge enters a Final Judgment against the homeowner dismissing his claim without prejudice. Despite the fact that there was a trial, the homeowner is given a free pass to avoid res judicata as he files the same suit or one adding claims that could have been included in his first attempt.
Filed under: foreclosure |