Opinion
Case No. 118,048
07-23-2020
PNC BANK, NATIONAL ASSOCIATION, Plaintiff/Appellant, v. UNKNOWN SUCCESSOR TRUSTEES OF the ROBERT C. KECK REVOCABLE LIVING TRUST, DATED FEBRUARY 25, 1998, IF ANY, Defendant/Appellee, John Doe, as Occupant of the Premises, and Jane Doe, as Occupant of the Premises, Defendants.
Blake C. Parrott, BAER, TIMBERLAKE, COULSON & CATES, P.C., Oklahoma City, Oklahoma, for Plaintiff/Appellant Michael W. McCoy, MCCOY LAW OFFICE, Broken Arrow, Oklahoma, for Defendant/Appellee
Blake C. Parrott, BAER, TIMBERLAKE, COULSON & CATES, P.C., Oklahoma City, Oklahoma, for Plaintiff/Appellant
Michael W. McCoy, MCCOY LAW OFFICE, Broken Arrow, Oklahoma, for Defendant/Appellee
OPINION BY KEITH RAPP, JUDGE:
¶1 The plaintiff, PNC Bank, National Association (PNC Bank) appeals an Order Granting Defendant's Motions to Vacate and Dismiss. The caption lists Unknown Successor Trustees of the Robert C. Keck Revocable Living Trust Dated February 25, 1998, if any, as appellant, and John Doe, as occupant of the premises, and Jane Doe, as occupant of the premises, only as defendants. The Record contains an Answer filed by Robert C. Keck, as trustee of the Robert C. Keck Revocable Living Trust Dated February 25, 1998. Therefore, the appellee here will be referred to as "Keck Trust."
BACKGROUND
¶2 On June 15, 2017, PNC Bank filed this action to recover the balance due and in default on a line of credit promissory note (Instrument) and to foreclose a mortgage securing the obligation. The primary ruling at issue in this appeal is the trial court's ruling that the action is barred by the five-year Statute of Limitations provided by 12 O.S. Supp. 2019, § 95(A)(1). In addition, the trial court ruled that the instrument evidencing the debt was not a negotiable instrument, thereby invoking the five-year period.
This statute provides:
A. Civil actions other than for the recovery of real property can only be brought within the following periods, after the cause of action shall have accrued, and not afterwards:
1. Within five (5) years: An action upon any contract, agreement, or promise in writing.
¶3 PNC Bank stated in the petition's affidavit exhibit that it acquired the note and mortgage from the original obligee. Keck Trust incurred the debt on February 25, 1998. PNC Bank stated that the original Instrument was lost and attached a document represented to be a computer record copy.
¶4 The Instrument is styled "Pruprime Plus Home Equity Line of Credit." The credit limit is $72,000.00. The unpaid balance was alleged to be $69,000.00 plus interest. The "promise to pay" provision is to pay the line of credit advances. The Instrument calls for a minimum monthly payment of finance charges of the then current line of credit only for a specified period and thereafter a designated fraction of the amount drawn on the credit line plus finance charges, also on a monthly basis. The Instrument authorizes the holder to declare the entire balance due in full in the event of default. The Instrument also provides that the law of Georgia shall govern.
¶5 The petition alleged the date of default to be October 17, 2010, and that no payments have been made since that time. The petition asked for in rem judgment of foreclosure for the whole amount due.
¶6 On July 11, 2000, Keck Trust executed the mortgage which is the subject of this action. The mortgage recites that it is given to secure a revolving line of credit. The definitions in the mortgage describe the above line of credit Instrument as the secured obligation. The mortgage authorizes the lender to accelerate the balances of the loan in the event of default. The applicable law provision lists federal law and Georgia law as governing, except Oklahoma law applies as to procedural matters related to the enforcement of lender's rights and remedies against the mortgage property.
The parties argued the Oklahoma Statute of Limitations and the trial court applied the Oklahoma Statute of Limitations.
¶7 Keck Trust filed an Answer. In the Answer, Keck Trust raised several defenses including that the Instrument evidencing the debt is not a negotiable instrument and enforcement is barred by the Statute of Limitations, but without specifying which limitation period.
¶8 PNC Bank filed a motion for summary judgment. The motion set out the obligation, the mortgage securing the obligation, the default and an account of the amount due and owing. The motion also stated that PNC Bank was entitled to enforce the obligation and mortgage represented by the original Instrument and mortgage.
¶9 Keck Trust responded and moved to dismiss the action. The response denied that PNC Bank was entitled to enforce the obligation. The response then added additional facts in support of the Statute of Limitations defense and motion to dismiss. Some of these additional facts appear in the petition and some do not. PNC Bank then argued that the response was insufficient.
¶10 The trial court granted the summary judgment to PNC Bank. Within thirty days, Keck Trust filed a Motion to Vacate and to Dismiss Case. The arguments in support of the motion reiterated the summary judgment response and emphasized the Statute of Limitations. The trial court held a hearing and called for additional briefing on the Statute of Limitations issue.
¶11 At this juncture, the "additional facts" became undisputed although the parties differed about the legal conclusions to be drawn from the facts. The "additional facts" pertained to the litigation history. This history shows:
1. PNC Bank sued on June 14, 2005, and called the entire obligation due.
2. The 2005 case was dismissed by PNC Bank on January 11, 2006.
3. PNC Bank filed again on August 29, 2006, and called the entire obligation due.
4. The second case was dismissed by PNC Bank on January 4, 2007.
5. PNC Bank filed a third case on November 27, 2007, and called the entire obligation due.
6. The third case was dismissed by PNC Bank on December 6, 2007.
7. PNC filed again on July 15, 2008, and called the entire obligation due.
8. PNC Bank dismissed the fourth case in January of 2010.
9. PNC Bank filed again on January 13, 2012, and called the entire obligation due. The claimed default date was October 17, 2010.
10. PNC Bank dismissed this fifth case on August 17, 2012.
11. PNC filed the present case on June 15, 2017. The petition alleges a default date of October 17, 2010. The petition also alleges acceleration of all sums due.
¶12 The primary argument advanced by Keck Trust is that when PNC Bank accelerated the obligation in its January 13, 2012 action, this established a date for the beginning of the Statute of Limitations and the time to bring a lawsuit expired five years later. Keck Trust argued for the five-year period on the ground that the Instrument evidencing the obligation was not a negotiable instrument because it did not provide for a sum certain. Thus, the six-year period applicable to negotiable instruments would not apply.
¶13 Keck Trust maintained that PNC Bank, having accelerated the obligation, cannot deaccelerate. Keck Trust argued that deacceleration is either barred legally, or, if permitted, requires an affirmative act which was not done, or that the provisions of the note and mortgage prevent deacceleration, or were not followed.
¶14 PNC Bank first disputes the argument that the Instrument is not negotiable. PNC Bank maintains that the $72,000.00 credit line limit satisfied the sum certain requirement. Next, PNC Bank argues the rule that the Statute of Limitations runs as to each individual installment when the obligation is an installment payment obligation. This appears to be an argument for only a partial bar of the claim.
It does not appear that the entire line of credit was drawn by Keck Trust.
¶15 In a supplemental response, PNC Bank argued that the voluntary dismissal of the previous case operated to deaccelerate the acceleration of the installments as pled in the prior case. PNC Bank further maintained that the voluntary dismissal restored the parties to their prior (not accelerated) state.
¶16 The trial court entered a detailed Order Granting Defendant's Motions to Vacate and Dismiss. PNC Bank appeals.
STANDARD OF REVIEW
¶17 Here, the trial court's vacation of the summary judgment was an exercise of its authority to do so pursuant to 12 O.S. Supp. 2019, § 1031.1. This decision is reviewed for abuse of virtually unlimited discretion. "Trial judges enjoy plenary term-time control with ‘a very wide and extended discretion’ that has been described as ‘almost unlimited.’ While the power to entertain a new-trial motion is limited to § 651 grounds, the § 1031.1 term-time power is coextensive with the common law and hence remains unfettered by statutory grounds." Schepp v. Hess , 1989 OK 28, ¶ 9, 770 P.2d 34, 38 (citations omitted).
¶18 The decision about which Statute of Limitations would apply and the decision to apply the selected Statute of Limitations present issues of law. The relevant facts are not in dispute. "Issues of law are reviewable by a de novo standard. An appellate court claims for itself plenary, independent and non-deferential authority to re-examine a trial court's legal rulings." Neil Acquisition, L.L.C. v. Wingrod Investment Corp. , 1996 OK 125, n.1, 932 P.2d 1100.
ANALYSIS AND REVIEW
a. Choice of Statute of Limitations
¶19 As recognized by the trial court, the choice is between a six-year limitation, 12A O.S.2011, § 3-118(a) , applicable to negotiable instruments, and a five-year limitation applicable to written agreements. 12 O.S. Supp. 2019, § 95(A)(1).
Section 3-118(a) reads:
(a) Except as provided in subsection (e) of this section, an action to enforce the obligation of a party to pay a note payable at a definite time must be commenced within six (6) years after the due date or dates stated in the note or, if a due date is accelerated, within six (6) years after the accelerated due date.
¶20 The statutes define a negotiable instrument and its elements. To qualify as a negotiable instrument, an instrument must strictly comply with the statute. Shepherd Mall State Bank v. Johnson , 1979 OK 135, ¶ 4, 603 P.2d 1115, 1117. One requirement is that the instrument must be to pay a fixed sum of money. Title 12A O.S.2011, § 3-104(a) provides:
a) Except as provided in subsections (c) and (d) of this section, "negotiable instrument" means an unconditional promise or order to pay a fixed amount of money, with or without interest or other charges described in the promise or order.
The Uniform Commercial Code Comments discusses the requirements and states, "Second, the amount of money must be ‘a fixed amount.’ " Commentary provides useful assistance in interpretation of a statute. Wilkerson Motor Co., Inc. v. Johnson , 1978 OK 12, 580 P.2d 505.
¶21 Resolution Trust Corp. v. Oaks Apartments Joint Venture , 966 F.2d 995, 1001-02 (5th Cir. 1992), disposes of the issue. After reviewing the terms of the line of credit Instrument here and citing Resolution Trust Corp. and other authority, the trial court ruled that the Instrument was not a negotiable instrument because according to 12A O.S.2011, § 3-104, a writing is not a negotiable instrument unless it is signed by the maker or drawer; contains an unconditional promise or order to pay a sum certain and no other promise; and is payable on demand or at a definite time. In Resolution Trust Corp. , the instrument called for payment of two million dollars "or so much thereof as may be advanced." Here, Keck Trust was obligated to pay "the line of credit advances."
¶22 The trial court then ruled that the six-year limitation applicable only to negotiable instruments did not apply and the five-year limitation period did apply.
¶23 After independent review of the Instrument and the authority, this Court holds that the Instrument is not a negotiable instrument. The trial court's ruling that the Instrument is not a negotiable instrument and that the five-year Statute of Limitations applies is also affirmed pursuant to Okla.Sup.Ct.R. 1.202(d), 12 O.S.2011, Ch. 15, App. 1.
The trial court's findings of fact, conclusions of law, and decision are adequately and correctly explained in the trial court's Order Granting Defendant's Motions to Vacate and Dismiss.
b. Whether PNC Bank's Claim is Barred
¶24 When a debtor under an installment payment obligation defaults on the installments, the Statute of Limitations begins as to each installment. Oklahoma Brick Corp. v. McCall , 1972 OK 70, 497 P.2d 215. The reason is that the obligation matures to becoming due as to each installment and thus provides the basis for being able to sue in case of default. In other words, prior to an installment becoming due and a default occurring, the creditor could not successfully prosecute a cause of action as to future installments.
"The term ‘then due’, when applied to a debt, means the date on which payment may be required. The word ‘owing’ naturally implies a ‘legal obligation’ and has been construed to mean ‘absolutely and unconditionally bound to pay.’ " Ingram v. Liberty National Bank and Trust Co. of Oklahoma City , 1975 OK 45, ¶ 11, 533 P.2d 975, 977 (citations omitted).
¶25 However, here, there is a provision in the Instrument and the mortgage authorizing acceleration of all installments in the event of default. PNC Bank does not dispute that when there is an acceleration provision, and it is duly exercised, the applicable Statute of Limitations commences on the date of acceleration and makes the entire obligation then due. See 12A O.S.2011, § 3-118(a), which makes this rule applicable to negotiable instruments.
¶26 The trial court concluded that Oklahoma law is that the Statute of Limitations begins to run as to the entire obligation when the installments are accelerated after default. The trial court cited several cases from other jurisdictions. The citations include EMC Mortgage Corp. v. Patella , 279 A.D.2d 604, 720 N.Y.S.2d 161 (N.Y. App. Div. 2001) ("The law is well settled that, even if a mortgage is payable in installments, once a mortgage debt is accelerated, the entire amount is due and the Statute of Limitations begins to run on the entire debt.") (citations omitted); Imbody v. Fifth Third Bank , 12 N.E.3d 943 (Ind. Ct. App. 2014) (statute generally begins to run only when the creditor exercises its option to accelerate); Sparta State Bank v. Covell , 197 Mich.App. 584, 495 N.W.2d 817 (1992) (acceleration of installments starts the Statute of Limitations). The trial court also referenced an unreported case from the United States Northern District of Oklahoma where that court concluded that acceleration of the installments of an installment note causes the Statute of Limitations to run against the entire obligation. Monroe v. Bank of America Corp. , Case No. 17-CV-248-JED-JFJ, 2018 WL 1525357 (N.D. Okla. 2018).
¶27 In Monroe , Monroe sought a declaratory judgment that an installment note and mortgage were barred by the Statute of Limitations because Bank of America, N.A. (BANA) had accelerated the obligation. On March 10, 2011, BANA filed an action in the Tulsa County District Court to collect the note and accelerate the balance of installments. This lawsuit was dismissed without prejudice on October 17, 2012. The Court rejected a motion to dismiss Monroe's claim. In doing so, the court concluded that an election to accelerate the maturity of a note caused the statute of limitations to begin to run against the whole amount due and payable.
The court did not enter a final judgment because a question existed regarding whether the six-year or five-year statute applied. This question does not exist here.
¶28 The Monroe court also examined early Oklahoma law where, in its syllabi, the Oklahoma Supreme Court stated:
1. A provision in a note and mortgage that, if the mortgagor shall fail to perform any of the conditions therein, such as failure to make due and prompt payment of any installment, or part of the principal or interest, or neglect to pay taxes, the entire principal sum shall become due and payable at the option of the mortgagee, is a legal and valid provision. Such a provision for acceleration is permissive only and not self-executing; it makes the whole debt due and collectible only in case the mortgagee elects to exercise the option.
2. Where the note and mortgage provide for acceleration, the statute of limitation does not begin to run from date of partial default, but only from the maturity of the full principal or of the last installment of the principal, unless the creditor elects to declare the whole amount due.
3. The exercise of an option to accelerate maturity of a note should be in a manner clear and unequivocal so as to leave no doubt as to the holder's intention. Such an intention may be evidenced by declarations, but to be effective the declaration must be followed by an affirmative act towards enforcing the declared intention.
Union Central Life Ins. Co. v. Adams , 1934 OK 693, 169 Okla. 572, 38 P.2d 26, Syl. 1, 2, 3, 38 P.2d 26 (emphasis added).
¶29 However, Union Central Life Ins. Co. came before the Court in 1971 and was overruled, in part. The Monroe court analyzed the subsequent ruling and concluded that Oklahoma law provides that when an acceleration authority in an installment obligation is exercised the entire obligation becomes due and the Statute of Limitations starts when the creditor accelerates the obligation.
¶30 In its analysis, the Monroe court stated:
Union Central was later overturned in part by the Oklahoma Supreme Court in Oklahoma Brick Corp. v. McCall , 497 P.2d 215 (Okla. 1972). In McCall , the court provided that, contrary to the statement of law in Union Central , the statute of limitations begins to run on an installment note against each installment on the day following its maturity. Id. at 217. The court noted that the statement of law in Union Central was "not warranted by the facts and not necessary to the decision in the case," since the central issue in Union Central concerned the possible acceleration of a note. Id. at 216. McCall , thus, clarified how the statute of limitations generally applies to installment notes, but it did not disturb the rule that an election to accelerate the maturity of a note causes the statute of limitations to begin to run against the whole amount due.
This interpretation is supported by Bankers Trust Co. of California, N.A. v. Wallis , 280 P.3d 974 (Okla. Civ. App. 2012). In Wallis , two homeowners executed a note and mortgage payable in monthly installments. Id. at 975. The bank initially filed a foreclosure suit on February 29, 2000. Id. This original foreclosure suit was dismissed without prejudice for failure to prosecute, and a new case was filed in May 2005. Id. The trial court in the new case determined that the filing of the initial suit accelerated the due date of the debt. Id. at 977 n.10. On appeal, the Oklahoma Court of Civil Appeals applied the statute of limitations starting from the February 29, 2000, "accelerated due date" to determine that the 2005 case was timely filed. Id. at 976 n.8. Although the note and mortgage had contemplated installments through 2012, see id. at 976, this did not prevent the statute of limitations from beginning to run when the bank elected to accelerate the due date for the entire balance.
Defendant Wilmington's [Savings Bank] argument that the alleged acceleration in 2011 did not cause the statute of limitations to begin to run is contrary to Oklahoma law.
Monroe , 2018 WL 1525357, *3-4. This Court agrees with the analysis and conclusion in Monroe .
¶31 The trial court's ruling that PNC Bank accelerated the installments and made the entire balance due in its January 2012 lawsuit is affirmed pursuant to Okla.Sup.Ct.R. 1.202(d), 12 O.S.2011, Ch. 15, App. 1. The trial court's findings of fact, conclusions of law, and decision are adequately and correctly explained in the trial court's Order Granting Defendant's Motions to Vacate and Dismiss.
¶32 This brings the review to the question of whether PNC Bank can legally deaccelerate, or unwind, its acceleration of the balance due and, if so, what is required and did PNC Bank meet the requirement to deaccelerate. In the absence of a reversal of the acceleration by PNC Bank of this obligation, it is clear that the five-year Statute of Limitations bars PNC Bank's claim.
c. Deacceleration and Did It Occur
¶33 Deacceleration is the undoing of the acceleration. Progressive Acquisition, Inc. v. Lytle , 806 P.2d 239 (Utah Ct. App. 1991). A lender may revoke its election to accelerate the mortgage.
¶34 First, however, the installment contract must authorize the lender to accelerate the entire debt in the event of default. Cahill v. Kilgore , 1960 OK 88, 350 P.2d 928 (acceleration clause in mortgage permits acceleration of installments); see , Harris v. Heron , 1944 OK 219, ¶ 4, 194 Okla. 226, 149 P.2d 94, 94-95 (authorities cited are authority for the rule that payment to be made in installments under contract which gives the payee an option to accelerate the date of payment is for the benefit of payee).
¶35 In all cases involving acceleration there was existing contractual authority for acceleration. In the absence of a contractual right to accelerate, each installment breach is a separate cause of action and a separate start of the Statute of Limitations. Oklahoma Brick Corp. v. McCall , 1972 OK 70, 497 P.2d 215. Thus, acceleration is a fundamental change in the debtor-creditor contractual relationship, so a contract provision is absolutely required. ¶36 Deacceleration is likewise a fundamental change in the debtor-creditor contractual relationship. Acceleration transforms an installment debt into a single payment debt which is due and payable. Deacceleration transforms that single payment debt into an installment obligation and the future payments are no longer due and payable immediately.
¶37 Therefore, it is mandatory that there must be a deacceleration clause in the instrument evidencing the debt or the instrument evidencing security for the debt. Moreover, this Court notes that here the parties have contractually anticipated that any change or amendment to the contract must be in writing. The parties' contracts here do not have a deacceleration clause.
¶38 Second, the lender deaccelerates by an affirmative act of revocation occurring during the statute of limitations period following the action where acceleration was invoked. Bank of New York Mellon v. Alli , 175 A.D.3d 1472, 109 N.Y.S.3d 398 (N.Y. App. Div. 2019). This includes timely notice of acceleration to the debtor. This notice can be waived in the contract. Cruce v. Eureka Life Ins. Co. of America , 696 S.W.2d 656, 656-57 (Tex. App. 1985) (citations omitted).
Contra Baseline Financial Services v. Madison , 229 Ariz. 543, 278 P.3d 321, 322-23 (Ariz. Ct. App. 2012).
¶39 The Texas appellate courts speak of abandonment of the acceleration of the debt installments.
Once a lender has accelerated the maturity date of the note, the lender can restore the original maturity date—and therefore reset the running of limitations—by abandoning the acceleration as though it had never happened. Abandonment is based on the concept of waiver, which requires the showing of three elements: (1) the party has an existing right; (2) the party has actual knowledge of the right; and (3) the party actually intends to relinquish the right, or engages in intentional conduct inconsistent with the right.
The best means of achieving an abandonment is through written notice of rescission. But that method is not exclusive. Abandonment can also be accomplished through an agreement between the parties or through other joint actions. For example, abandonment is considered complete when the borrower resumes making installment payments after an event of default and the lender accepts those payments without exacting any remedies available to it despite a previously declared acceleration.
Whether a lender has abandoned an acceleration is generally a question of fact. But when the facts are admitted or clearly established, abandonment may sometimes be determined as a matter of law.
Swoboda v. Ocwen Loan Servicing, LLC , 579 S.W.3d 628, 632-33 (Tex. App. 2019) (citations omitted).
¶40 In Andra R Miller Designs, LLC v. U. S. Bank, NA , 244 Ariz. 265, 418 P.3d 1038 (Ariz. Ct. App. 2018), an express notice of deacceleration was required. The bank had recorded a cancellation of a trustee's deed sale. The Court stated that a mere recording of a cancellation of a sale did not operate as a deacceleration. However, the cancellation also contained express notice of deacceleration, so the limitations period did not expire.
The sale cancellation is legally the equivalent of a dismissal of a lawsuit.
¶41 The Appellate Record here shows: (1) There is no specific provision in the Instrument or the mortgage authorizing deacceleration or providing instruction on how to accomplish deacceleration; (2) There is no separate agreement of the parties for deacceleration; (3) The alleged date of default precedes the petition filing date and there is no showing that Keck Trust renewed payments according to the installment provisions; (4) There is a series of lawsuits and dismissals; and, (5) There is no specific, overt act on the part of PNC Bank expressly informing Keck Trust that PNC Bank deaccelerated its acceleration of the Instrument and mortgage. In addition, the Appellate Record does not show any specific prejudice to Keck Trust. ¶42 PNC Bank relies upon its voluntary dismissal as the evidence of its deacceleration and argues also that the voluntary dismissal returned the parties to their status prior to the dismissed lawsuit. The Appellate Record does not show any notice from PNC Bank accompanying or following the dismissals stating that it no longer accelerated the installments.
¶43 PNC Bank cites Deutsche Bank Trust Co. Americas v. Beauvais , 188 So.3d 938 (Fla. Dist. Ct. App. 2016) for the proposition that a voluntary dismissal serves as a deacceleration. However, that is not the precise holding of the Florida court.
¶44 Deutsche Bank sued and accelerated the obligation in 2007. The Florida court stated that this triggered the statute of limitations. That court further ruled that the dismissal of that action restored the parties to their original position. The second lawsuit involved a subsequent default. The Florida court ruled:
We therefore conclude that dismissal of a foreclosure action accelerating payment on one default does not bar a subsequent foreclosure action on a later default if the subsequent default occurred within five years of the subsequent action.
Id. at 944 (emphasis added).
¶45 The Florida Court of Appeal cases follow from Singleton v. Greymar Associates , 882 So.2d 1004 (Fla. 2004). Singleton involved a second foreclosure action after the first was involuntarily dismissed by the trial court. Under Florida law, an involuntary dismissal constitutes an adjudication on the merits, so the debtor alleged res judicata . The Court ruled that "when a second and separate action for foreclosure is sought for a default that involves a separate period of default from the one alleged in the first action, the case is not necessarily barred by res judicata ." Singleton , 882 So.2d at 1006-07.
¶46 The Florida Supreme Court explained Singleton and subsequent cases in Bartram v. U. S. Bank, N.A. , 211 So.3d 1009 (Fla. 2016). Singleton was a res judicata based decision which ruled that an action on a second and independent default was not barred by the res judicata effect of the involuntary dismissal of the first action.
¶47 However, the Bartram case involved an extension of Singleton to the case where the first action was voluntarily dismissed. The Bartram decision extended Singleton to the involuntary dismissal category but retained the subsequent default element.
The Fifth District properly extended our reasoning in Singleton to the statute of limitations context in a mortgage foreclosure action. Here, the Bank's initial foreclosure action was involuntarily dismissed. Therefore, as we previously explained in Singleton , the dismissal returned the parties back to "the same contractual relationship with the same continuing obligations." Bartram and the Bank's prior contractual relationship gave Bartram the opportunity to continue making his mortgage payments, and gave the Bank the right to exercise its remedy of acceleration through a foreclosure action if Bartram subsequently defaulted on a payment separate from the default upon which the Bank predicated its first foreclosure action. Therefore, the Bank's attempted prior acceleration in a foreclosure action that was involuntarily dismissed did not trigger the statute of limitations to bar future foreclosure actions based on separate defaults .
Bartram , 211 So.3d at 1022 (emphasis added).
¶48 The facts here distinguish the case under review from Bartram , Singleton , and Deutsche Bank Trust Co. Americas . Here, unlike those cases there is no subsequent, independent default by Keck Trust occurring after the dismissal and before the limitations period expired. PNC Bank alleged the default date to be October 17, 2010, a date almost seven years prior to the filing of the present lawsuit on June 15, 2017. In other words, PNC Bank is not claiming that Keck Trust defaulted after PNC Bank's voluntary dismissal and before the Statute of Limitations expired. Based upon their facts and specific rulings, the Florida cases do not provide authority for PNC Bank's argument. The same factual situation exists in PNC Bank's other reference, Bank of New York Mellon Corp. v. Anton , 230 So.3d 502 (Fla. Dist. Ct. App. 2017) (the complaint in the second action alleged that mortgagee also failed to make all subsequent payments after prior dismissal).
¶49 This action by PNC Bank has additional facts. PNC Bank seeks an in rem judgment foreclosing its mortgage. The mortgage document provides that the mortgagee has the right to "declare the entire indebtedness immediately due and payable." The mortgage further provides:
Mortgage, p. 6. Record, Tab 1, Ex. B.
Amendments. What is written in this Mortgage and in the Related Documents is Grantor's entire agreement with Lender concerning the matters covered by this Mortgage. To be effective, any change or amendment to this Mortgage must be in writing and must be signed by whoever will be bound or obligated by the change or amendment.
Mortgage, p. 7. Record, Tab 1, Ex. B.
¶50 Thus, the parties have specifically contracted for acceleration and for any amendments or changes. The parties' contract does not provide authority for deacceleration. PNC Bank's argument here that the voluntary dismissal returns the parties to their prior status fails because the prior status requires deacceleration and there is no contractual authority for deacceleration or affirmative action to deaccelerate.
¶51 After review of the facts of this case and the authorities, this Court holds as follows. The function of the following is to provide a legal foundation and certainty in commercial installment transactions regarding the commencement of the Statute of Limitations when a creditor accelerates an installment obligation and the cessation of the running of the Statute of Limitations when the creditor deaccelerates.
¶52 First, when, as here, the instruments evidencing a debt payable in installments or security for the debt contain a provision authorizing the creditor, in the event of a default, to accelerate the future installments to make the entire debt due, then a creditor may accelerate the debt installments after default. The creditor must conform to any contractual provisions. Unless waived in the contract, the creditor must give the debtor notice of acceleration by means reasonably calculated to inform the debtor of the acceleration.
This Court's ruling does not preclude the parties to debt instruments from amending their agreements at any time to provide for deacceleration.
¶53 Second, in the event that a creditor brings a legal action to recover the debt or foreclose the security and exercises the right to accelerate installments, the Statute of Limitations begins to run as to the entire obligation on the date the creditor exercises that right.
¶54 Third, a creditor may deaccelerate the election to accelerate, provided that the right to deaccelerate is included in the debt instruments or security instruments that authorize acceleration. The creditor must conform to the contractual provisions relating to deacceleration. The creditor must give notice of the deacceleration action to the debtor by means reasonably calculated to inform the debtor of the deacceleration and that the debtor's installment obligation is reinstated. When the creditor has successfully deaccelerated, the parties are returned to their contractual relationship, including the acceleration clause in the event of a subsequent default. This does not preclude the parties from including in their debt instruments provisions and criteria for reinstatement of the debtor's obligation after default.
¶55 Fourth, a mere voluntary dismissal of an action to recover a debt or foreclose security and which action includes acceleration of installments for a debt will not toll the running of the Statute of Limitations. In order to deaccelerate, there must be contractual authority for that action. The creditor must take affirmative action evidencing intent to deaccelerate and give notice to the debtor of deacceleration.
¶56 Here, PNC Bank has not met the criteria to deaccelerate the act of acceleration in the lawsuit filed in January 2012. As found above, the five-year Statute of Limitations applies and it has not been tolled. The action now under review was commenced more than five years later and involves the same default date. The current action is barred by the five-year Statute of Limitations. For the reasons stated above, the trial court did not err.
CONCLUSION
¶57 Here, PNC Bank has sued to foreclose a mortgage securing a line of credit debt instrument payable in installments. More than five years ago, PNC Bank sued on the same obligation for the same default. In that action, PNC Bank exercised its contractual right to accelerate the installments and claim the entire debt to be due. PNC Bank voluntarily dismissed the earlier lawsuit. The trial court ruled that the debt instrument was not a negotiable instrument because it was not a promise to pay a sum certain. This ruling invoked the five-year Statute of Limitations rather than the six-year period applicable to negotiable instruments. The trial court dismissed the present action on the ground that it is barred by the five-year Statute of Limitations.
¶58 The trial court's rulings that the debt instrument is not a negotiable instrument and that the five-year Statute of Limitations is invoked are summarily affirmed pursuant to Okla.Sup.Ct.R. 1.202(d), 12 O.S.2011, Ch. 15, App. 1. The issue then becomes whether PNC Bank deaccelerated by voluntarily dismissing the action PNC Bank had filed more than five years prior to the present action.
¶59 Deacceleration, like acceleration, must be authorized by the debt or security instruments. Here, there is no contractual authority to deaccelerate. Moreover, deacceleration requires an affirmative act and notice to the debtor, neither of which occurred here. The mere act of voluntary dismissal without more does not serve to deaccelerate a creditor's acceleration of the installment by the creditor or toll the Statute of Limitations. This action by PNC Bank is barred by the five-year Statute of Limitations in 12 O.S. Supp. 2019, § 95(A)(1), and the trial court correctly dismissed the action on that ground. The Order Granting Defendant's Motions to Vacate and Dismiss is affirmed.
¶60 AFFIRMED .
BARNES, P.J., and FISCHER, J., concur.