FLORIDA APPELLATE COURT REVERSES JUDGMENT FOR NEW PROPERTY OWNER FINDING LENDER’S FORECLOSURE NOT BARRED BY LACHES

Florida’s Second DCA found the trial court abused its discretion when it refused to foreclose US Bank’s mortgage based on the new owners’ (non-mortgagors) affirmative defense of laches. U.S. Bank Home Mortg. v. Boivin, 50 Fla. L. Weekly D401 (Fla. 2d DCA February 14, 2025). The Boivins took out a mortgage with US Bank Home Mortgage (US Bank or mortgagee) with a maturity date of July 1, 2036. The mortgagee recorded the mortgage which contained the typical optional acceleration clause and a non-waiver provision in favor of the lender in the event the borrowers defaulted and the lender chose not to accelerate.

The Boivins stopped making mortgage payments in 2008 and the bank initiated foreclosure proceedings in 2009 and in 2011.[i] Both foreclosure actions were dismissed. Thereafter,  the City of Largo foreclosed its code enforcement lien against the Boivins’ property.. Shortly thereafter, the mortgagee filed its third action to foreclose the Boivins’ mortgage.[ii] US Bank’s pre-foreclosure title work did not reveal the Vanderburgs’ ownership of the property, so during the foreclosure proceedings US Bank amended its complaint to add the Vanderburgs as defendants.

The Vanderburgs answered the amended complaint and alleged that the foreclosure was barred by laches because US Bank “slept on its right to foreclose.” The matter proceeded to a bench trial where Mr. Vanderburg argued that US Bank’s delay between the dismissal of the second foreclosure action in 2013 and the filing of the third action in 2020 warranted the application of laches to prevent US Bank from foreclosing its lien. The Vanderburgs reasoned they “expended a large amount of money” on “repairs, insurance, and taxes” so allowing US Bank to foreclose was prejudicial.

The trial court agreed finding US Bank’s delay to be unreasonable and entered judgment in favor of the Vanderburgs.[iii] US Bank appealed and the Second DCA reversed. Firstly, the Court laid out the required elements for laches noting that each of the elements had to be proved with competent substantial evidence. A burden carried by the party relying on the defense. The Court also noted “[t]he passage or lapse of time alone [was] insufficient to support the finding of laches.”[iv] Ultimately, the DCA determined that the Vanderburgs failed to satisfy three of the four required elements of laches. Namely, they failed to show US Bank unduly delayed in filing suit because by the very terms of the mortgage US Bank could initiate suit any time before July 1, 2036, the mortgage’s maturity date.

Secondly, the Vanderburgs had knowledge of US Bank’s recorded mortgage and could have reviewed the non-waiver provisions of the mortgage to learn that institution of foreclosure proceedings was at the option of the lender.[v] Although the Court was sympathetic to the Vanderburgs’ lost investment, the Court again pointed out the Vanderburgs knew about the mortgage and choose to “take the chance that the mortgage would never be foreclosed.”[vi]  The Vanderburgs failed to provide an explanation for why they thought US Bank would not foreclose its lien. The Second DCA reversed the judgment for the Vanderburgs and remanded the matter for further proceedings.

[i] Boivin, at 2. Future references to this case are to this citation until indicated otherwise.

[ii] Boivin, at 3. Future references to this case are to this citation until indicated otherwise.

[iii] Boivin, at 5. Future references to this case are to this citation until indicated otherwise.

[iv] Boivin, at 6.

[v] Boivin, at 9. Future references to this case are to this citation unless indicated otherwise.

[vi] Boivin, at 13. Future references to this case are to this citation.