Florida Supreme Court Reverses: Homeowners can recover attorney fees even if they prove lack of standing when they win

see Page v. Deutsche Bank Tr.

Kudos to Nicole R. Moskowitz of Neustein Law Group, P.A., Aventura, Florida, for Petitioner William L. Grimsley and Kimberly Held Israel, Jacksonville, Florida, Daniel Alvarado, Elia Alvarado, South Florida Defense Group, Bowin Law Group, Michael Jay Wrubel, P.A., Jonathan Kline, P.A.

“The certified conflict issue in this case is whether a unilateral attorney’s fee provision in a note and mortgage is made reciprocal to a borrower under section 57.105(7), Florida Statutes (2019), when the borrower prevails in a foreclosure action in which the plaintiff bank established standing to enforce the note and mortgage at the time of trial but not at the time suit was filed. We have jurisdiction. See art. V, § 3(b)(4), Fla. Const.”

The Bank argues in the alternative that even if we do not approve Page, the trial court nevertheless lacked “subject-matter jurisdiction” to award fees. At the heart of the Bank’s argument is the assertion that “standing is a component of subject-matter jurisdiction” and that the trial court “erred by taking any further action” beyond dismissing the case. We reject the Bank’s argument.

The Bank waived its jurisdictional argument by waiting until the appeal of the fee award to first raise the issue.

Subject-matter jurisdiction is universally acknowledged to never be waivable. See, e.g., United States v. Cotton, 16  535 U.S. *16 625, 630 (2002) (“[S]ubject-matter jurisdiction, because it involves a court’s power to hear a case, can never be forfeited or waived.”). But this Court has held that the issue of standing is a waivable defense. See Krivanek v. Take Back Tampa Political Comm., 625 So. 2d 840, 842 (Fla. 1993). And if standing is waivable, then standing is obviously not “a component of subject-matter jurisdiction.” The Bank’s foundational assertion is thus incorrect. See Paulucci v. Gen. Dynamics Corp., 842 So. 2d 797, 801 n.3 (Fla. 2003) (“Jurisdiction is a broad term that includes several concepts, each with its own legal significance.”). And the Bank offers no other explanation for why its argument should be considered timely. [e.s.]

We conclude that the unilateral fee provisions in the contracts at issue are made reciprocal to the prevailing borrowers under section 57.105(7). Accordingly, we quash Page and approve Madl and Harris.

It is so ordered. POLSTON, LABARGA, LAWSON, MUÑIZ, and COURIEL, JJ., concur.
GROSSHANS, J., did not participate. NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED. Application for Review of the Decision of the District Court of Appeal – Certified Direct Conflict of Decisions

In the never-ending quest of the courts to squelch homeowner defenses, some of the courts of appeal decided that the bank argument was valid. The law was, in a word, NUTS.

This Supreme Court case cures part of the nuttiness. If someone brings a baseless claim they cannot escape liability for fees and costs on the basis that the claim is baseless.

Yes, that is the issue — the lack of basis means that the named Plaintiff in foreclosure had no contractual relationship with the Defendant homeowner. So the fee provision of the contract they were seeking to “enforce” could not apply once it was proven they had no right to enforce it. The case, in my opinion, was probably decided with the elements of estoppel in mind,. Once you invoke a contract or statute and you cannot escape the negative consequence when you lose.

One case I had which is still being litigated for the second time is illustrative of the problem. The homeowners were sued in foreclosure. The various lawyers continued to pursue foreclosure from 2008-the date of trial in August 2016.

The defense was that the named plaintiff had no business being in court and no legal standing. All the documents were all fabricated and U.S. Bank as trustee for a fictitious trust never had ownership of the debt, note, or mortgage. They also never had possession of the note but that was supposedly cured by the claim that the note was received by Ocwen  — AFTER the lawsuit began.

Patrick Giunta and I easily won the case, resting at the conclusion of the Plaintiff’s case. We never put on any evidence. The trial judge took or 2 hours to reach a decision and then dictated into the record the findings of fact and conclusions of law, entering Judgment of Involuntary Dismissal against “U.S. Bank as Trustee of SASCO trust etc.”.

The court found facts showing there was no basis for the action, that U.S. Bank did not own the note or mortgage or debt, and that the trust could not have owned it either. But the judge correctly stated that the law in that District required involuntary dismissal without prejudice once there was a finding of lack of standing.

If the Plaintiff lacked standing, then the court supposedly lacked jurisdiction to do anything except the ministerial act of dismissing without prejudice.

The law in that district also said that even though the homeowner had spent $200,000 in fees and costs, the recovery of attorney fees only applied to a much shorter period during which the Plaintiff had claimed possession of the note even though they had not shown any authority to enforce it. So recovery of fees only started when and if the foreclosure mill filed the original note with the court.

The judge we had clearly did not like what he was required to do so he made it into a final judgment for the homeowner incorporating all of the findings of fact and conclusions of law before the finding of lack of legal standing.

Under the law of that  District, the recovery of fees was thus either cut off or reduced considerably. This left foreclosure mills with the ability to claim attorney fees if they won and avoid liability for fees if they lost — something expressly prohibited by statute and the rules. Now the Florida Supreme Court, in a very well reasoned and well-written decision (J Canady) has established that lawyers cannot sue in the name of a disinterested party to claim foreclosure, attorney fees, and costs — and upon losing avoid the reciprocal liability.

This frees up homeowners’ access to legal representation to defend against illegal fraudulent foreclosures. Lawyers are far more likely to take foreclosure defense cases. If you are looking for a lawyer to represent you start with contacting the lawyers mentioned in this article.

DID YOU LIKE THIS ARTICLE?

Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.

Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.

Click

*
Neil F Garfield, MBA, JD, 73, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
*

FREE REVIEW: Don’t wait, Act NOW!

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In  the meanwhile you can order any of the following:
*
CLICK HERE ORDER ADMINISTRATIVE STRATEGY, ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
*
CLICK HERE TO ORDER TERA – not necessary if you order PDR PREMIUM.
*
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
*
*
CLICK HERE TO ORDER PRELIMINARY DOCUMENT REVIEW (PDR) (PDR PLUS or BASIC includes 30 minute recorded CONSULT)
*
FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.
*
Please visit www.lendinglies.com for more information.

 

FLA S Ct Reverses Course on Homeowner’s Award of Attorney Fees and Raises Other Issues for Defense of Foreclosures

For those of us that have access to the data, we know that homeowners are winning foreclosure cases all the time. Nobody else knows because as soon as a homeowner wins or gets into a winning position they are offered money for their silence. The situation worsened when Florida and courts in other states turned down the homeowner’s demand for attorney fees after the homeowner had flat out won the case — especially where the case was dismissed for lack of standing.

Here the homeowner once again wins, having advanced several defense narratives. The homeowner applies for recovery of attorney fees and the demand is rejected because the loan contract no longer exists or because the party seeking to use it was shown not to be party to it, at least when suit was commenced. The Florida Supreme Court reversed that decision and rejected others like it.

Recognizing the danger of the erroneous rulings from the trial court and the district courts of appeal, the Court rejected arguments that a dismissal, voluntary or otherwise, based upon lack of standing meant that the loan contract no longer existed. While not completely abandoning the lower courts the Florida Supreme Court has narrowed the issues such that it is again almost always arguable and even inevitable that if the homeowner wins the foreclosure case an award of fees will follow.

fla s ct attny fees 1-4-19 sc17-1387 Glass v Nationwide

see also Follow Up Article to this Article

==============================
Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
==========================

This case opens a can of worms for the banks and servicers and corroborates much of what I have been writing for 12 years.

At issue was the homeowner’s right to prevail on an attorney fees award after winning the case in the trial court. This has previously been denied on the basis that cases dismissed for lack of standing meant that there was not contract. But the Florida Supreme Court says that the fact that just because the party involved had no right to enforce the contract doesn’t mean there was no contract.

The clear implication here is that the court did not want the erroneous rulings of trial courts and appellate district courts to be construed as completely canceling the loan contract. Any other ruling would be inherently ruling on the rights of unidentified third parties who DID have a right to collection of payment from the borrower’s debt and who did have a right to enforcement — without any notice to them because they are undisclosed and unknown.

The Supreme Court ruled that failure to allege or prove standing does not negate the fact that the homeowner is the prevailing party and entitled to fees under F.S. 57.105(7).

Citing its own decision in 1989, Katz v Van Der Noord 546 So 2d 1047, the Supreme Court held that even if the contract is rescinded or held to be unenforceable the prevailing party is still entitled to fees under the reciprocity provisions of F.S. 57.105(7).

This upends a basic strategy of the banks and servicers. Up until this decision they were virtually guaranteed an award of fees and costs if they won and immunity to fees if they lost. This reopens the fees issue and may give attorneys a reason to accept foreclosure defense cases — even on contingency or partial contingency.

But the court, perhaps in dicta, also mentions whether the note is negotiable, quoting from the homeowner’s arguments and pleadings.

Up until now the mere existence of the original note and in many cases a copy of the note, was sufficient to regard the note as a negotiable instrument. But the Florida Supreme Court is hinting at something here that the banks and servicers really don’t want to hear, to wit: it takes more that announcing the existence of a note to make it negotiable. This is not so.

Which brings me to my final point: read carefully the day the claimant is introduced and you will probably find that the note and assignment are not facially valid because they require reference to parole or extrinsic evidence. This bars legal presumptions, at least in the absence of a specific reference to the documents supporting the execution of the instrument as a substitution of trustee, an assignment or an endorsement.

The court was more than hinting at the idea that subsequent treatment of the note, which may have been a negotiable instrument at the time of execution (if the “lender” was in fact the lender). The question is whether the note is facially valid, to wit: whether the note specifically names a maker, payee and an unconditional promise to pay. If the originator was not the lender then extrinsic evidence would be required to prove the loan and the debt and the party who would have been appropriately named as payee on the note.

If subsequent indorsements or assignments for a note that WAS negotiable remove certainty from one or more of the elements of a facially valid instruments, then it is no longer a negotiable instrument. And THAT means that the all “reasonable” assumptions and legal preemptions are taken off the table.

The reason is simple. In order to be a negotiable instrument the assignee or successor must have certainty as to the parties and terms of the note. If extrinsic or parole evidence is required to provide that certainty the instrument is not negotiable and thus not entitled to any assumptions or presumptions.

So for example (taken from another case) when a Substitution of Trustee occurs in a nonjudicial state and it is executed by “U.S. Bank National Association, as trustee, in trust for registered Holders of First Franklin Mortgage Loan Trust, Mortgage Loan Asset-Backed Certificates, Series 2007-FF I, by Select Portfolio Servicing, Inc., as attorney-in-fact” then there are several points that require extrinsic or parole evidence, making the note non negotiable or at least arguably so.

In this scenario for an assignee to take a note from a party claiming rights to enforce in this instance one must know

  1. The name of the Trust, and the jurisdiction in which it was organized and is now existing.
  2. The instrument by which US Bank claims to be trustee
  3. Identification of “registered holders”
  4. The identification and content of the certificates
  5. The instrument by which SPS claims to be “attorney in fact”
  6. If you look closely you will also see that there is a question as to whom it is claimed that SPS is representing as attorney in fact. In any event “attorney in fact” means that a power of attorney exists but without specific reference to that power of attorney by date and parties, extrinsic or parole evidence is required meaning that no assumptions or legal presumptions may be made.

In other words the note cannot be accepted by anyone without extrinsic evidence. The fact that documents are apparently accepted by the assignees doesn’t change anything as to the facial validity of the document. Without facial validity there can be no negotiability under Article 3 of the UCC. Without negotiability there can be no assumptions or legal presumptions and thus the claimant must prove every element of its claim without presumptions.

And of course when the homeowner wins an award of attorney fees is now once again probable in addition to court costs.

Remember always: the point is not who can get away with enforcement. The point of the law is assuring that the owner of the debt is the one enforcing the debt and collecting the proceeds of enforcement. Before false claims of securitization this premise was almost universally true. Now it is rarely true that the true owner of the debt is represented.

And the apparent absence of such a party due to manipulation of the debt by intermediaries, does not legally create a vacuum into which anyone with knowledge and access to data may step in and claim rights of enforcement. As stated in California Ivanova decision the law does not allow the borrower’s debt to be owed to anyone whose premise is simply that they claim it.

%d bloggers like this: