Smathers v. Nationstar Mortgage, LLC

Filing 11

ORDER: Defendant's Motion to Dismiss Plaintiff's Complaint with Prejudice (Doc. 3) is GRANTED. This action is dismissed with prejudice. The Clerk is directed to terminate any pending motions as moot and close this case. Signed by Judge James S. Moody, Jr on 9/16/2014. (LN)

UNITED STATES DISTRICT COURT
MIDDLE DISTRICT OF FLORIDA
OCALA DIVISION

STEPHEN SMATHERS,
Plaintiff,
v.

Case No: 5:14-cv-415-Oc-30PRL

NATIONSTAR MORTGAGE, LLC,
Defendant.
________________________________/

ORDER
THIS CAUSE comes before the Court upon Defendant Nationstar Mortgage, LLC’s
Motion to Dismiss Plaintiff’s Complaint with Prejudice. (Doc. 3). Plaintiff did not file a
response in opposition. Therefore, on August 19, 2014, the Court issued an order to show
cause directing Plaintiff to respond to Defendant’s motion to dismiss within fourteen days.
(Doc. 6). Plaintiff filed no response to either the motion to dismiss or the order to show
cause. The Court, having reviewed the motion and being otherwise fully advised in the
premises, concludes that the motion should be granted and this action dismissed with
prejudice.
BACKGROUND
Plaintiff Stephen Smathers initiated this action against Defendant in the Circuit
Court for the Fifth Judicial Circuit, Lake County, Florida, seeking cancellation of a note
and mortgage and to quiet title to real property described as a “certain parcel of land

situated in the County of Lake, State of Florida, being known and designated as lot 134,
Lake Crescent Hills Subdivision, according to plat thereof as recorded in Plat Book 32,
Page 27-29, Public Records of Lake County, Florida” (the “Subject Property”). (Doc. 2 at
1-2). On July 23, 2014, Defendant removed the action to this Court on the basis of diversity
jurisdiction pursuant to 28 U.S.C. § 1332. (Doc. 1). For the purposes of Defendant’s
motion to dismiss, the Court assumes the following allegations from Plaintiff’s amended
complaint and attached exhibits to be true.
On July 20, 2007, Plaintiff executed a note and mortgage in favor of Countrywide
Home Loan Servicing, L.P. (“Countrywide”) in the amount of $272,200.00 on the Subject
Property, which was subsequently recorded in the Official Records Book 03478, page
2176-2196. (Doc. 2, Ex. A). Pursuant to the terms of the note and mortgage, Plaintiff
agreed to make regular periodic payments and to pay off the note in full on or before August
1, 2037. (Id.). In 2008, after requesting and being denied a modification of his note and
mortgage from Countrywide, Plaintiff did not make the following three payments on his
mortgage. (Id. at 2). As a result, on April 16, 2009, Countrywide informed Plaintiff that
it was accelerating the note and mortgage and later filed a foreclosure action against
Plaintiff.

(Id. at 2-3).

On April 12, 2012, Countrywide voluntarily dismissed the

foreclosure action. (Id. at 3). As of November 14, 2013, Defendant became the holder of
Plaintiff’s note and mortgage. (Id. at 2).
In the present case, Plaintiff contends that Defendant is precluded from enforcing
the note and mortgage because the five-year statute of limitations to enforce the note and
foreclose the mortgage has run and the note and mortgage are no longer valid and
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collectible. (Id. at 4). Accordingly, Plaintiff alleges that Defendant’s mortgage on the
Subject Property constitutes a cloud on Plaintiff’s title, and he seeks to quiet title in his
favor. (Id. at 5). Currently, Defendant seeks dismissal of Plaintiff’s complaint for failure
to state a claim upon which relief can be granted. (Doc. 3).
DISCUSSION
I.

Legal Standard
When reviewing a motion to dismiss, a court must accept all factual allegations

contained in the complaint as true, and view the facts in a light most favorable to the
plaintiff. See Erickson v. Pardus, 551 U.S. 89, 93-94 (2007). However, unlike factual
allegations, conclusions in a pleading “are not entitled to the assumption of truth.” Ashcroft
v. Iqbal, 556 U.S. 662, 679 (2009). On the contrary, legal conclusions “must be supported
by factual allegations.”

Id.

Indeed, “conclusory allegations, unwarranted factual

deductions or legal conclusions masquerading as facts will not prevent dismissal.” Davila
v. Delta Air Lines, Inc., 326 F.3d 1183, 1185 (11th Cir. 2003).
While a “heightened fact pleading of specifics” is not required, “enough facts to
state a claim to relief that is plausible on its face” is necessary. Bell Atl. Corp. v. Twombly,
550 U.S. 544, 570 (2007). Federal Rule of Civil Procedure 12(b)(6) allows a complaint to
be dismissed for failure to state a claim upon which relief can be granted. Fed. R. Civ. P.
12(b)(6).
II.

Analysis
By his complaint, Plaintiff first seeks a declaration finding Defendant’s note and

mortgage null and void and an order cancelling the note and mortgage. (Doc. 2 at 4).
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Plaintiff argues that the five-year statute of limitations period under §§ 95.11(2), 95.281,
Florida Statutes, began to run on April 16, 2009, when Countrywide gave notice of
acceleration of the note and mortgage. (Doc. 2 at 4). Therefore, according to Plaintiff, the
period for enforcing the note and mortgage expired as of April 15, 2014.
Section 95.281(1)(a), Florida Statutes, provides that a mortgage lien terminates five
years from the date of its maturity, “if the final maturity of an obligation secured by a
mortgage is ascertainable from the record.” Because the note in this case has a maturity
date of August 1, 2037, under section 95.281(1)(a), Defendant’s mortgage lien would
terminate on August 1, 2042. (Doc. 2, Ex. A). Furthermore, section 95.11(2)(c), Florida
Statutes, provides a five-year limitation period to foreclose on a mortgage. The limitations
period established under § 95.11(2)(c) does not affect the life of the lien or extinguish the
debt secured by the lien; rather, the life of the lien is established pursuant to § 95.281(1).
See Houck Corp. v. New River, Ltd., 900 So. 2d 601, 603 (Fla. 2d DCA 2005).
Under Florida law, when a creditor exercises its right to accelerate the amount due
and owing under a note, the statute of limitations begins to run for the creditor to enforce
the note. See Greene v. Bursey, 733 So. 2d 1111, 1114-15 (Fla. 4th DCA 1999) (“Where
the installment contract contains an optional acceleration clause, the statute of limitations
may commence running earlier on payments not yet due if the holder exercises his [or her]
right to accelerate the total debt because of a default.”). This general rule does not apply,
however, “when the note is secured by a mortgage on . . . [a] property and the party
exercising the right to accelerate brings a cause of action to enforce the note or foreclose
on the mortgage which is dismissed for any reason.” Torres v. Countrywide Home Loans,
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Inc., No. 14-20759-CIV, 2014 WL 3742141, at *3 (S.D. Fla. July 29, 2014) (citing Romero
v. SunTrust Mortg., Inc., No. 1:13-cv-24491, 2014 WL 1623703, at *3 (S.D. Fla. Apr. 22,
2014); Olympia Mortg. Corp. v. Pugh, 774 So. 2d 863, 865 (Fla. 4th DCA 2000); U.S.
Bank Nat’l Ass’n v. Bartram, No. 5D12-3823, 2014 WL 1632138 (Fla. 5th DCA Apr. 25,
2014)). In Singleton v. Greymar Associates, the Florida Supreme Court held that, “[w]hile
it is true that a foreclosure action and an acceleration of the balance due based upon the
same default may bar a subsequent action on that default, an acceleration and foreclosure
predicated upon subsequent and different defaults present a separate and distinct issue.”
882 So. 2d 1004, 1006 (Fla. 2004) (emphasis added); see also Olympia Mortg. Corp., 774
So. 2d at 865 (stating that a voluntary dismissal of a foreclosure action essentially equates
to a decision not to accelerate payment on a note and mortgage at that time).
The parties do not dispute that Countrywide exercised acceleration under the note
on April 16, 2009, and later initiated a foreclosure action against Plaintiff on April 29,
2009. (Docs. 2, 3). Thus, any claims Countrywide, and now Defendant, may have had as
to Plaintiff’s default on the payments at issue in that case would likely be subject to the
applicable five-year statute of limitations. Nevertheless, the April 2009 foreclosure action
was voluntarily dismissed; therefore, the acceleration did not act as a bar to future actions
to enforce the note and mortgage, and any subsequent defaults within the past five years
would create a new basis for acceleration of the note or foreclosure of the mortgage. See
Singleton, 882 So. 2d at 1006. As such, the note and mortgage are valid and enforceable,
and Plaintiff has failed to state a claim upon which relief could be granted. See Dorta v.
Wilmington Trust Nat’l Ass’n, No. 5:13-cv-185-Oc-10PRL, 2014 WL 1152917, at *6
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(M.D. Fla. Mar. 24, 2014) (holding that a note and mortgage remained valid despite
mortgagee’s decision to accelerate the note based on prior default where enforcement was
abandoned); Kaan v. Wells Fargo Bank, N.A., 981 F. Supp. 2d 1271, 1274 (S.D. Fla. 2013)
(same).
Plaintiff also brings a claim to quiet title to the Subject Property. Under Florida
law, to state a claim to quiet title, a plaintiff must allege both plausible facts showing
plaintiff’s title to the subject property and that a cloud exists. Stark v. Frayer, 67 So. 2d
237, 239 (Fla. 1953). Moreover, a plaintiff must also allege facts establishing that the claim
is invalid. Id. (“Not only must the matter which constitutes the alleged cloud be shown,
but facts must be alleged which give the claim apparent validity as well as those which
show its invalidity.”); see also Sliptchuik v. ING Bank, No. 6:13-cv-460-Orl-28GJK, 2013
WL 4596951, at *2 (M.D. Fla. Aug. 28, 2013).
Plaintiff has alleged sufficient facts establishing his title to the Subject Property.
(Doc. 2). At issue is whether Plaintiff has sufficiently alleged that Defendant’s mortgage
constitutes a cloud on Plaintiff’s title. In this regard, Plaintiff alleges that Defendant’s note
and mortgage constitute a cloud on Plaintiff’s title to the Subject Property because the note
and mortgage are null and void as the limitations period has expired. Contrary to Plaintiff’s
contention, however, and as discussed more thoroughly above, Defendant’s note and
mortgage remain valid and enforceable. Therefore, Plaintiff has failed to state a claim upon
which relief may be granted.

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CONCLUSION
Accordingly, it is therefore ORDERED AND ADJUDGED that:
1.

Defendant’s Motion to Dismiss Plaintiff’s Complaint with Prejudice (Doc.
3) is GRANTED.

2.

This action is dismissed with prejudice.

3.

The Clerk of Court is directed to terminate any pending motions as moot and
close this case.

DONE AND ORDERED at Tampa, Florida on this 16th day of September, 2014.

Copies furnished to:
Counsel/Parties of Record
S:\OCALA\14-415 Smathers et al. v. Nathionstar Mortg.MTD.docx

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