Judge Dorian K. Damoorgian.
Judge Dorian K. Damoorgian. (Melanie Bell)

New case law clarifies the statute of limitations for foreclosing municipal liens in a case where state statutes pointed to one deadline and rules governing government code enforcement boards provided another.

It emerged from a case involving Riviera Beach’s attempt to collect on a code enforcement lien recorded 12 years earlier against commercial real estate belonging to J & B Motel Corp. The city recorded the lien in 2003 but waited until 2015 to file for foreclosure against J & B Motel Corp., Demolition King Inc. and mortgage lender Wells Fargo Bank N.A.

Defendant J&B Motel moved for dismissal, arguing two sections of Florida law barred the claim after either four or five years.

The defendant won that argument at trial after Palm Beach Circuit Judge Jeffrey Dana Gillen dismissed the lien foreclosure count with prejudice, but a state appellate court reversed and ruled the city had a 20-year window.

Under the law governing municipal code enforcement, a local government can record a certified copy of an order imposing a fine, which becomes a lien against the property for a period no longer than 20 years. That provision supersedes the two J & B Motel cited, which defer to other timelines “prescribed elsewhere in these statutes.”

The “plain language of section 162.10 establishes that a local government has 20 years from the date a code enforcement lien is recorded to file a lawsuit seeking to foreclose or recover a money judgment on the lien,” Judge Dorian K. Damoorgian wrote in a unanimous decision with Fourth DCA Judges Robert Gross and Melanie May. “This specific limitations period governs over any general limitations” within the statute.

The appellate panel reversed in the city’s favor, reviving the foreclosure suit, and rejected J & B Motel’s claim that a settlement agreement between the parties provided grounds for dismissal. The city and real estate owner had entered into an agreement in which Riviera Beach allegedly consented to a conditional release of the lien if J & B Motel demolished the property and demolished ground cover. The real estate owner argued their agreement prevented the foreclosure claim.

“We reject this argument because it was not raised in any fashion below,” Damoorgian wrote.

Christy L. Goddeau and Jennifer H.R. Hunecke of Torcivia, Donlon, Goddeau & Ansay in West Palm Beach represented the city.

Steven M. Singer of the Law Offices of Steven M. Singer and Alan M. Sorota of Feinstein & Sorota in Plantation represented J & B Motel Corp.

This is at least the second time in about three months the Fourth DCA has ruled on foreclosures of municipal liens.

In January, the state appellate court reversed itself on the application of Florida’s lis pendens statute after a rehearing supported by eight amicus briefs from observers interested in the ruling’s impact on the real estate sector.