APPELLATE DISTRICT REVERSES FORECLOSURE | KEY POINTS

1. Last month the newly created Sixth DCA reversed a final judgment of foreclosure entered in favor of the lender, NCP Bayou 2, LLC (“NCP”), finding the foreclosure was barred by the five-year statute of limitations codified at § 95.11(2)(C), Florida Stats Ann. (West). Maki v. NCP Bayou 2, LLC, No. 6D23-643, 2023 WL 4037628 (Fla. 6th DCA June 16, 2023). Prior to foreclosing, NCP had opted to accelerate the amounts due on the Makis’ HELOC note but chose not to foreclose the mortgage which secured the HELOC. After NCP obtained a money judgment the Makis still failed to satisfy the judgment, so NCP sought to foreclose the mortgage which secured the money judgment. The trial court granted judgment in favor of NCP foreclosing the mortgage, but the Sixth DCA reversed the judgment.

2. The Sixth DCA reasoned that the lender’s exercise of the optional acceleration clause triggered the five-year limitations period and prevented NCP from foreclosing its mortgage despite NCP’s argument that the mortgage secured the money judgment, not the note that merged into the January 2017 judgment. The Court elaborated that there was “simply no legal authority for the proposition” that the money judgment entered in January 2017 extended the statute of limitations period for foreclosing the mortgage.

3. NCP moved for rehearing of the reversal of its foreclosure judgment and relied heavily on Klondike, Inc. v. Blair, 211 So. 2d 41, 42 (Fla. 4th DCA 1968) to support its argument. NCP argued that the Sixth DCA “overlooked or misapprehended” the holding in Klondike which supported NCP’s position that the January 2017 money judgment created a “new and different obligation” which was not barred by § 95.11(2)(c) and which new debt was secured by the mortgage. The motion for rehearing remains pending so Maki is not yet binding precedent. We will continue to keep you apprised of key developments in this matter.