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Don’t Think Thrice with Foreclosure Dismissals

Recently, the tables have turned in a case that pitted a property owner against a lender seeking to foreclose and acquire a debt that had previously been sold twice prior.

By invoking the two-dismissal rule under Florida Rule of Civil Procedure 1,420(a)(I), which allows two voluntary dismissals of the same debt, the appellate court made the decision to sink this case and stated the following:

We reverse the final judgment of foreclosure because the action was barred by the “two dismissal” rule of Florida Rule of Civil Procedure 1.420(a)(1). In successive actions, two different plaintiff/note holders sought to foreclose based on the same breach. Each plaintiff filed a voluntary dismissal of its lawsuit. For the purpose of rule 1.420(a)(1), we hold that the two note holders—the original plaintiff and the subsequent assignee of the note—were the same “plaintiff” under the rule, so that the second voluntary dismissal triggered an “adjudication on the merits.”

What is peculiar about this case is that typically, the dismissals follow the plaintiff rather than the note itself. In this case, the Fourth District Court of Appeal considered the procedural context and number of voluntary dismissals that were connected with the note. The case, Charles G. Nolan v. MIA Real Holdings, LLC, was the third foreclosure attempt filed against the plaintiff, after the first suit from Flagstar Bank, and a second from DKR Mortgage.

The first dismissal began with Flagstar, which filed for foreclosure in 2011 after Nolan had reportedly defaulted on the loan. It was after this case was dismissed that the note and mortgage were assigned to DKR Mortgage, which started its own foreclosure case.

Eventually, DKR settled the debt as a trouble mortgage to the current appellee, MIA Real Holdings, LLC. They were to take over the case and take the place of DKR Mortgage, who was in the process of a foreclosure, but they voluntarily dismissed the suit.

This seems to be where MIA fumbled the ball. Voluntarily dismissing the aforementioned suit was considered by the court in the most recent case as the second dismissal, making their third complaint one too many for the Fourth District Court of Appeal to approve. Needless to say, Nolan and his attorneys were celebrating by the end of the case.

The appellate court cited several previous cases, such as Randle-Eastern Ambulance Serv., Inc. v. Vasta, 360 So. 2d 68, 68 (Fla. 1978) to support its decision and aid in their definition of a “notice of dismissal” and the role of an assignor of a note:

[A] notice of dismissal operates as an adjudication on the merits when served by a plaintiff who has once dismissed in any court an action based on or including the same claim.” Fla. R. Civ. P. 1.420(a)(1). Under this rule, “a plaintiff may voluntarily dismiss his or her lawsuit at practically any time . . . without prejudice however to plaintiff’s commencing a wholly new lawsuit against the same defendant if the right to do so has not been exercised before.

Judge Robert Gross of the Fourth District Court of Appeal of Florida concluded by saying “we hold that the two note holders – the original plaintiff and the subsequent assignee of the note – were the same plaintiff under the rule, so that the second voluntary dismissal triggered an adjudication on the ‘merits.’ “

Posted in Arias Bosinger, Foreclosure, Legislation, Real Estate Law
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