Stopa: Summary Judgment for Borrowers!

Editor’s Note: It’s a real pleasure seeing creativity and innovation come from those who defend homeowners. I’ve always tried to introduce some procedural innovation wherever possible in order to get Judges to take a second look.

And yes, many will think you are nuts. But Stopa wasn’t ready to quit and now he is getting some results. And the results he is getting are right on point. It remains to be seen if any of these cases go up on appeal, but one thing is clear — a series of Judges have entered Orders Granting Stopa’s Motion for Summary Judgement for the homeowner and denying the Motion for Summary Judgment filed by the would-be forecloser.

Stopa proves the old ad age: the best defense is a good offense.

My main point in re-publishing his article is not just the idea that the homeowner can move for summary judgment and win, but that Stopa hit the nail on the head when he writes about lawyers being too timid to try new things.

It all comes down to whether you really want to win cases or if you just want to justify your fee. Your oath and your mission is to advocate as a strongly as possible for your client without concern for the way you think the Judge will perceive you in this hearing or the next.

Blazing the Trail

Posted on October 31st, 2012 by Mark Stopa,

Have you ever made an argument in a foreclosure case, and you think it’s a solid, well-taken argument, but there is no case law directly on point?  It can create a sinking feeling.  “I think I’m right, but how will I ever get a judge to agree with me when there aren’t any appellate court decisions which have ruled this way already?”  The tendency, when presented with such a situation, can be to shy away from the argument.  To back down.  To let someone else try to make the argument first.  “I don’t want to look foolish.”  “I don’t want to be wrong.”  “If this is such a good argument, why aren’t there any cases that have ruled this way already?”

While I understand this feeling, this is absolutely and unequivocally the wrong mindset.

As foreclosure defense lawyers, many of the issues with which we are confronted are novel.  That’s just the nature of the beast.  Just think of it this way – when, prior to now, in the entire history of America, have property values collapsed by half (or more), causing millions of Americans to face foreclosure, essentially all at once?  Obviously, the answer is “never.”  These are unprecedented times, so it should come as no surprise that, in the history of jurisprudence, our court system has never before been confronted with some of the legal issues with which we now deal on a daily basis.  As a result, to defend homeowners the right way, we have no choice but to argue things we may have never argued before – to present arguments to judges they may have never heard before, for which there is no case law.

One such example?  Asking a judge to enter summary judgment for a homeowner in a foreclosure case.

In Florida, I know of no appellate decisions that directly authorize this.  Such case law may exist, for example, if it’s undisputed the homeowner paid the mortgage in full all along, but that’s not what I’m talking about here.  I’m talking about cases where homeowners are behind on their mortgage payments, perhaps significantly behind, and the bank has filed suit for foreclosure, but the homeowner is entitled to prevail on that case anyway.

I introduced this concept a few months ago,via this blog post.  In the ensuing months, I’ve made that same argument many times before Florida judges, often before judges who had never heard it before.

Sometimes, quite candidly, it’s not easy.  A few times, the judge seemed to think I was nuts, at least at first, when I told the court that I wanted summary judgment for my client.  Typically, however, once I get into the argument, and explain why my client should prevail, that initial skepticism is replaced with intrigue at the argument.  Often, in fact, these judges have agreed with my position, entering orders granting summary judgment and dismissing the case.

Invariably, do you know what happens when I go back before that same judge a second time?  Or a third time?  It’s easier.  The judge is familiar with the argument.  The judge understands the legal issues and knows how they apply.  I’m no longer the crazy lawyer asking for a client who hasn’t paid his/her mortgage to prevail, but the lawyer making sound, legitimate arguments that are perfectly consistent with the law.

Do you know what makes all of this a bit easier?  When the judge I’m arguing before sees that other judges have agreed with my argument.  That’s why, whenever I have a hearing on this issue, I bring the Orders I’ve obtained which entered summary judgments for my clients in other cases.  It’s one thing for me to argue something – it’s another for the judge to see that 5, 10, or 15 other, Florida judges have agreed with my argument and dismissed the case as a result.

In the grand scheme of things, my “success” here is limited.  I know that this argument isn’t being made everywhere in Florida.  I know there are many capable judges who have yet to hear the argument.  I can’t argue this for everyone.

It’s time to get the word out, folks.

Below are several of the Orders I’ve obtained upon making these arguments.  By posting these Orders, I am not suggesting that the same result will happen in any particular case.  That said, it’s certainly possible, and I have to think the chances for any particular homeowner will improve if/when the judge sees that numerous other, Florida judges have agreed with this argument.  Hence, that’s the point here – to blaze a trail.  To help everyone (including judges unfamiliar with the argument) realize this argument has worked, and can work in the future.  Everyone in foreclosure-world should be aware of these arguments.

Order Granting Summary Judgment – Judge Carven Angel (Hernando County)

Order Granting Summary Judgment – Judge Amy Williams (Pinellas County)

Order Granting Summary Judgment – Judge Pamela Campbell (Pinellas County)

Order Granting Summary Judgment – Judge John Schaefer (Pinellas County)

Order Granting Summary Judgment – Judge Amy Williams (Pinellas County)

Order Granting Summary Judgment – Judge W. Douglas Baird (Pinellas County)

Order Granting Summary Judgment – Judge Robert Foster (Hillsborough County)

Order Granting Summary Judgment – Judge Donald Evans (Hillsborough County)

Order Granting Summary Judgment – Judge Michele Sisco (Hillsborough County)

Order Granting Summary Judgment – Judge Frank Gomez (Hillsborough County)

Order Granting Summary Judgment – Judge James Barton (Hillsborough County)

Order Granting Summary Judgment – Judge J. Rogers Padgett (Hillsborough County)

Order Granting Summary Judgment – Judge Robert Foster (Hillsborough County)

Order Granting Summary Judgment – Judge James Barton (Hillsborough County)

Order Granting Summary Judgment – Judge Donald Evans (Hillsborough County)

Order Granting Summary Judgment – Judge Donald Evans (Hillsborough County)

Order Granting Summary Judgment – Judge George Shahood (St. Lucie County)

Order Granting Summary Judgment – Judge Thomas Kirkland (Orange County)

Order Granting Summary Judgment – Judge Lynn Tepper (Pasco County)

For those of you counting, that’s 14 different Florida judges who have entered summary judgment for a homeowner in a foreclosure case.  (Undoubtedly there may be more of which I’m not aware.)

So take these arguments.  Use them and apply them, as appropriate.  Keep fighting.  And, more than anything, realize that there are virtually always defenses that homeowners can utilize, even those facing foreclosure.

Fagan: Defeats Wells Fargo on Judicial Notice

Editor’s Comment: Following up with the offensive strategy and the concept of attacking every weak point in the pretender lender’s strategies, Fagan went after Wells Fargo on the seemingly innocuous motion for the Judge to take Judicial notice of several documents.

Besides the obvious fact that Judicial notice is narrowly construed to allow the FACT that a document was RECORDED (and not as proof of the matters asserted in such documents), Fagan took the offensive and essentially argued that Wells was trying to win a non-judicial foreclosure (in court, which is an oxymoron) using proof that could not be accepted in a judicial foreclosure.

His argument and his citations are right on point. The moral of this story is that if you keep the faith and realize that this entire foreclosure mess is just one part of the securitization scam, then you arrive at the inescapable conclusion that the homeowners should win, not just delay the foreclosures. Once you know you should win, it is easier to take the offensive and start thinking about the cases in a different way.

The question is not just “how do I protect my client” but also how do I win this case.”

Read the documents below and you’ll see how Fagan artfully slices up the Wells Motion for Judicial Notice and how the Court concluded correctly that Wells can’t get away with violating the rules of evidence simply by slipping documents in through the back door.

It looks to me like we are turning the corner here. Deny and Discover has been getting a lot of traction. Stopa has surprised pretender lenders with summary judgment granted in favor of the borrowers and Fagan, is picking apart Wells Fargo. A fellow I know recently said to me “if you you can make it bleed, you can kill it.” He was referring to foreclosures.


Barry Fagan v WELLS FARGO BANK SC117023 OBjection to Request for Judicial Notice Craig D. Karlan Oct. 23 12


Stopa: Servicer Cannot be Plaintiff in Foreclosure


COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary CLICK HERE TO GET COMBO TITLE AND SECURITIZATION REPORT

SERVICE 520-405-1688

Editor’s Comment: Stopa is right on here. If the servicer is allowed to foreclose, and the auction is conducted, the property sold, what happens to the rest of the obligation that the servicer was not entitled to receive? How do the real creditors collect? How much can the Servicer submit as a credit bid? Why can the servicer submit anything as a credit bid on a transaction in which the servicer was not a party?

If the servicer claims they were a party by virtue of the securitization documents, then they are admitting that the loan origination documents were defective or at least are not the complete evidence of the terms of the loan and the identity of the lender. If they admit that, then their sole claim to agency for a principal is based upon a PSA that requires the manager or trustee of the pool to reject a non-performing loan submitted to the pool after the 90 day cutoff.

If the loan never made it into the pool and it is now obvious that most did not, then the claim of servicing rights arising from the pool documentation don’t apply giving the servicer no rights at all.

Plaintiff as Servicer? I Think Not.

by Mark Stopa

I observed a foreclosure trial today, and one aspect of it in particular really bothered me. The plaintiff prosecuting the case was not the owner of the Note, but merely the servicer. Many judges and, of course, plaintiffs’ attorneys, seem to think this is fine, arguing the servicer can foreclose because it’s the “holder” of the Note, even though, by its own admission, it’s not the owner. In other words, the plaintiff/servicer concedes it does not “own” the Note, i.e. it’s not the plaintiff’s Note, but because it has the Note in its possession, and the Note is indorsed in blank, it can foreclose.

I’ve thought about this argument a lot, read a lot of case law, and see some fatal problems. Frankly, I’m frustrated these problems are largely being ignored and hope that everyone starts arguing and adjudicating this issue appropriately.

First off, taking the plaintiff’s argument to its logical extreme, anyone can steal a Note with a blank indorsement – literally, be a thief – but because he possesses the Note, and the Note is indorsed in blank, he could foreclose simply because he’s the holder. That sounds insane, but once you accept the argument that the plaintiff need only be the “holder,” and that ownership is irrelevant, that’s what you’re allowing – a thief can foreclose. Anyone can foreclose. Come to court with a Note with a blank indorsement, and how you obtained that Note is irrelevant – you can foreclose.

Respectfully, that’s just not the law. It can’t be the law. There’s no way the law can allow or would allow a thief to foreclose. Undoubtedly, this is why Rule 1.944 requires the plaintiff be the “owner and holder.”

I can hear the plaintiffs’ attorneys now. “But many Florida cases say being a holder is sufficient; they don’t have an ownership requirement.” To a limited extent, I suppose that is true, but read those cases. For example, Riggs v. Aurora Loan Services, 36 So. 3d 942 (Fla. 4th DCA 2010), talks at length about whether the plaintiff was the holder, and plaintiffs’ lawyers love to cite Riggs for the proposition that being the “holder” is all that matters. However, the issue of ownership wasn’t a question in Riggs – in that case, the plaintiff showed it was the “owner and holder.” Respectfully, it is totally misguided to take a case where ownership was not in question and use that case for the proposition that ownership is immaterial. It may have been immaterial in that case because ownership wasn’t disputed, but that certainly doesn’t mean ownership is immaterial in all cases.

Consider, again, my thief example. Once you accept that a thief cannot foreclose, you necessarily accept that the plaintiff who forecloses must own the Note.

Again, I can hear the plaintiffs’ lawyers. “But a servicer can foreclose because the servicer is the holder and has a servicing agreement with the owner, so it’s foreclosing with the consent of the owner of the Note.” This was the argument being espoused at the trial I observed today – the servicer doesn’t own the Note, but is foreclosing with the consent of the owner.

This argument may sound unique or complicated, but it’s one the Florida courts have adjudicated for many years in a number of contexts – that of principal and agent. Here, the plaintiff is saying that it, the servicer, is acting as the agent of the owner, the principal, by prosecuting the foreclosure case. This is the dynamic we see in thousands of foreclosure cases – the servicer alleges it can prosecute the case for the owner under a theory of agency.

In my view, this begs the question of when can an agent bind the principal? Let’s say that again:

Under what circumstances can an agent bind a principal?

There are zero Florida cases that discuss this concept in the context of foreclosure cases, so let’s look to case law in other contexts.

In Fla. State Oriental Med. Ass’n v. Slepin, the First District ruled an attorney was not entitled to collect attorneys’ fees incurred representing a corporation because the attorney (the alleged agent) did not have the authority to act on behalf of the corporation (the alleged principal). 971 So. 2d 141 (Fla. 1st DCA 2007). The attorney said he was acting on the corporation’s behalf, and he purported to act on its behalf, but the First District ruled he wasn’t, in fact, an agent and didn’t have the authority to bind the corporation. In so ruling, the court explained:

A finding of actual authority would require evidence that a principal acknowledged an agent’s power, that the agent accepted the responsibility of representing the principal, and that the principal retained control over the agent’s actions.

Similarly, the Florida Supreme Court has explained:

Essential to the existence of an actual agency relationship is (1) acknowledgment by the principal that the agent will act for him, (2) the agent’s acceptance of the undertaking, and (3) control by the principal over the actions of the agent.

Villazon v. Prudential Health Care Plan, 843 So. 2d 842 (Fla. 2003).
Let’s read those requirements closely, and break them down, one by one.

1. The principal acknowledged the agent’s power.

2. The agent accepted the responsibility of representing the principal.

3. The principal retained control over the agent’s actions.

In the trial I observed today, the plaintiff/servicer admitted it did not even know who the owner of the Note was. Think about that for a minute. The servicer was supposed to be acting on behalf of the owner, with the owner’s consent, but it didn’t even know who the owner was. On these facts, how on earth could the servicer possibly prove the owner/principal “acknowledged the agent’s power”? Clearly, it couldn’t, and it didn’t. The servicer couldn’t even identify the owner, much less prove the owner authorized the servicer’s actions.

This argument is so simple it’s ridiculous.

“I have authority to foreclose.”

“Who gave you authority?”

“I don’t know, but I have authority.”

I can just see my kids making this argument to me and my wife.

“I have permission to stay up until 10:00. That’s my new bedtime.”

“Who gave you that permission?”

“I don’t know, but it’s allowed.”

These arguments don’t even begin to make sense, but that’s what the servicer was arguing today. “I don’t know who gave me authority, but I have authority.”

As I see it, to prove the requisite authority, the servicer must either (a) introduce a servicing agreement into evidence; or (b) provide testimony from the owner as to the servicer’s authority. Without one of those two things, I just don’t see how the servicer can possibly show the owner of the note authorized the servicer to foreclose. Do you disagree? You tell me … without a servicing agreement or testimony from the owner as to the servicer’s authority, how can the servicer prove the owner “acknowledged the servicer’s power”? Once you conclude there is no such answer, then you necessarily agree that a servicer cannot foreclose without such proof.

Similarly, in the trial I observed, the plaintiff/servicer failed to show the owner of the Note “retained control over the agent’s actions.” After all, how could the servicer possibly show the owner of the Note “retained control over the servicer’s actions” when the servicer couldn’t even identify the owner? Clearly, the servicer was acting as its own boss here, answering to nobody.

I realize that some of the arguments being espoused by servicers in foreclosure cases seem unique, and there appears to be an absence of case law setting forth these issues. However, once you realize a servicer purports to act on behalf of the owner, and is hence just another fancy word for an agent, it should become clear that basic principles of law regarding agents and principals must apply, as quoted above. This requires proof in foreclosure cases that, many times, is simply not forthcoming.

Mark Stopa Esq.



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Not Just Standing – Standing at Inception
by Mark Stopa

On the heels of two similar decisions just a few weeks ago, Florida’s Fourth District Court of Appeal just issued another ruling which explains the need for a bank to have standing to foreclose, not just in general terms and not just when it moves for summary judgment, but at the inception of the lawsuit. McLean v. J.P. Morgan Chase Bank, issued today out of the Fourth District, does the best job of any foreclosure case I’ve read so far, at least in Florida, of explaining the distinction.

I strongly encourage everyone to read the opinion, but I’ll summarize.

Generally, the issue of whether the bank had standing at the inception of a foreclosure case arises in one of two contexts. The first is where the bank contends it has standing to foreclose based on an Assignment of Mortgage, yet that assignment post-dates the filing of the Complaint. This was the fact pattern in McLean, and the Fourth District makes it clear that such an assignment is insufficient, particularly without proof that the actual transfer of the Note/Mortgage took place prior to the suit being filed. In other words, it’s okay for an assignment to post-date the filing of the Complaint so long as the actual transfer of the Note/Mortgage took place before suit was filed, and the bank must present evidence of that transfer to prevail.

The second and perhaps more common fact pattern is where the bank relies on an indorsement that was executed after the original Complaint was filed. (The indorsements are always undated, so how can you tell if the indorsement post-dates the Complaint? Easy – compare the Note attached to the Complaint, which often has no indorsement, to the ”original” Note filed thereafter, which usually does.) As the McLean court explained, this fact pattern also requires dismissal:

if the evidence shows the Note was indorsed to Chase after the lawsuit was filed, then Chase had no standing at the time the Complaint was filed, in which case the trial court should dismiss the instant lawsuit and Chase must file a new complaint.

In either scenario, i.e. whether the bank’s standing is based on an Assignment of Mortgage or an indorsement, the bank must present evidence that it acquired the requisite standing before it filed suit, failing which a summary judgment of foreclosure would be improper. In other words, even if the homeowner doesn’t know when the indorsement was executed, if the bank can’t/doesn’t prove when it was executed, then it cannot foreclose.

Notice how the court calls for an evidentiary hearing? In my view, the evidence from the homeowner would be simple. I’d have my client testify that the copy of the Note attached to the Complaint that he/she was served with did not have an indorsement. (This is easy – the Complaint is in the court file.) This would put the onus on the bank to prove it obtained the indorsement before filing suit even though the copy of the Note attached to the Complaint did not have that indorsement. In other words, a bank representative would have to testify when the indorsement was obtained, and trust me – that’s easier said than done.

One fascinating part of the opinion is the court’s indication that this issue can be addressed via a motion to dismiss. To illustrate, did you notice how the court kept saying the homeowner raised these arguments via motions to dismiss? Then, perhaps most tellingly, the court held:

where a mortgage foreclosure action is based on an assignment that was executed after the lawsuit was filed, the plaintiff has failed to state a cause of action. In such cases, the proper course of action is for the plaintiff to file a new Complaint.

The term ”failed to state a cause of action” is critical here. This is, quite simply, the clearest indication yet from any Florida appellate court that a plaintiff’s lack of standing at the inception of the case can be brought via a motion to dismiss.

It’s an exciting day for foreclosure defense, folks – and yet another reason to keep fighting your lawsuit.

(By the way, if you check my old blogs, here and here, for example, you’ll see I’ve been arguing “standing at inception” in foreclosure cases for years. It’s terrific to see the arguments I’ve been making for so long are being adopted by Florida’s appellate courts.)

Mark Stopa Esq.


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