The District Court of Appeal of the State of Florida, First District, recently reversed the dismissal of a foreclosure action, because the filing date of an amended complaint naming the borrower husband by his full name when he had previously only been named as an “unknown spouse” related back to the filing date of the original complaint for purposes of the statute of limitations.
A copy of the opinion is available at: https://edca.1dca.org/DCADocs/2014/0019/140019_DC13_02262015_120224_i.pdf
A bank acting as trustee for an asset securitization trust filed its foreclosure complaint on January 22, 2008. Approximately 5 months later, the husband and wife borrowers filed their amended answer.
After a lengthy period of inactivity, during which the borrowers notified the court of the delays and the court itself moved to dismiss, the bank moved for judgment on the pleadings in late December of 2009. In March of 2009, the trial court entered partial summary judgment in the bank’s favor, denying the husband’s purported defense based on his homestead interest in the property encumbered by the mortgage.
In April of 2013, the borrowers’ new counsel moved to dismiss the complaint because only a fictitious name was listed for a party defendant. The trial court granted the motion in June of 2013, giving the plaintiff bank leave to amend within 30 days. At the end of June, 2013, the bank filed its amended complaint, to which the borrower wife responded in July of 2013, with no mention of her husband.
The trial was set for October of 2013, but a few days before the borrower husband filed a motion seeking dismissal of the amended complaint based on the statute of limitations, arguing that he had never been properly named as a party defendant prior to the filing of the amended complaint (having been named only as the “unknown spouse”), and the 5-year statute of limitations since the mortgage default expired in September of 2012. The trial court granted the motion and dismissed the foreclosure action against the husband.
On appeal, the First District Court of Appeal analyzed Florida’s rule of civil procedure governing amended complaints, which provides that the amended complaint relates back to the date when the complaint was filed if the claim arose of the same conduct, transaction or occurrence, even where the amendment is filed after the statute of limitations has run, so long as the original complaint provides fair notice of the factual basis of the claim.
It also discussed Florida’s settled common law rule that the addition of a new party should be permitted if the new and former parties share an identity of interest.
The appellate court then turned to the purpose of Florida’s statute of limitations, which it said was to protect defendants from unusually long delays in the filing of lawsuits and from the unexpected enforcement of stale claims.
The Appellate Court noted that the key inquiry in determining whether an amended complaint relates back or is barred by the limitations statute is whether the party in question had notice of the lawsuit before the statute ran, and whether the amendment merely adjusts the status of an existing party or introduces a new defendant. The Court also noted that, where there is no doubt about the identity of the party intended to be named, it is not unfair to allow the plaintiff to correct its pleading, because the defendant suffers no prejudice.
In the case at bar, the Appellate Court held that it made no difference that the defendant husband was substituted in as a defendant, because his legal defenses were not affected by the filing of the amended complaint. The Court held that his interest in the lawsuit is identical whether he was referred to as the unknown spouse of his co-borrower or by his real name. Because the amended complaint did not name a new party, but only clarified an existing party’s name, and, moreover, because the husband identified himself in his amended answer as the spouse of the co-borrower and participated in litigating the case, the Court held that the defendant husband could be heard to complain about lack of notice or surprise.
Because the amended complaint related back to the original filing date, the Appellate Court held that the statute of limitations was not a proper basis for dismissal.
Accordingly, the Court reversed the trial court’s order dismissing the amended complaint as to the husband borrower and remanded for further proceedings.
Ralph T. Wutscher
McGinnis Wutscher LLP
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