Quoting with double space drops out of box

There is a rather irritating bug I keep running into and can't seem to track it down. When ever I use either the "quote" module or just the BB code for quote if the context I'm using has any blank lines aka double spaced any text after the blank line drops completely out of the quote box, example -

If I quote

The quick brown fox jumped over the lazy dogs.
The Rain in Spain falls quickly on the Plain.

This is fine, but if it has for example an empty line like this-

The quick brown fox jumped over the lazy dogs.

The Rain in Spain falls quickly on the Plain

I get this -

The quick brown fox jumped over the lazy dogs.

The Rain in Spain falls quickly on the Plain

Everything after the first blank/empty line is outside of the quote box. Now this doesn't seem to effect "blockquotes" since "blockquotes" removes empty/blank lines. But with either the BB Code or Quotes module it borks it all up. I'm at a loss here and it's a major pain in the @...... especially with a community site with heavy use of forums.

Thanks