STOP FORECLOSURE FRAUD

Archive | STOP FORECLOSURE FRAUD

TFH 4/22 | Foreclosure Workshop #56: HSBC Bank v. Moore — Determining What Is Required In Court To Prove the  Legal Right To Foreclose in Your State

TFH 4/22 | Foreclosure Workshop #56: HSBC Bank v. Moore — Determining What Is Required In Court To Prove the Legal Right To Foreclose in Your State

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII

LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)

ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET

.

Sunday – April 22, 2018

.

 ———————
Foreclosure Workshop #56: HSBC Bank v. Moore — Determining What Is Required In Court To Prove the Legal Right To Foreclose in Your State

 

 

—————————-

There has probably been no more contested and confusing issue in American law in recent years than who has the right to foreclosure on real property in the United States.

While homeowners, for instance, continue to rely on traditional defenses, such as the lack of a loan general ledger, the lack of requisite TILA notices of the right to rescind, the lack of an adequate default notice, and the expiration of the statute of limitations, for instance, all of which have themselves generated an enormous amount of contested litigation, including appeals, they are now all being dwarfed in comparison to the present dispute in the case law over who has “standing” to foreclose and whether the requirement of standing is jurisdictionally sufficient to support later collateral attack.

After reviewing hundreds of recent “standing” appeals in dozens of State and Federal jurisdictions, it is clear that there is presently no consensus in the United States as to what needs to be proven to establish the right to foreclosure on real property.

The law of standing to foreclose reportedly started to be litigated in the nineteenth century in two famous cases, Carpenter v. Longan, decided in the U.S. Supreme Court in 1872, holding that the Mortgage followed the Note, and Merritt v. Bartholick, decided in the N.Y. Court of Appeals in 1867, holding that an attempted transfer of the Mortgage without the Note was void unless a contrary intent to transfer the Note also be proven.

Meanwhile, recording laws in the States emphasizing proof of Mortgage ownership and lien priorities, as well as the adoption of the UCC with its confusing and contradictory language relating to its applicability to secured promissory notes, created unresolved tension between the traditional Carpenter/Merritt view and the confusion and differing judicial interpretations regarding who had the right to foreclose and what proof of that right is required.

That confusion was further complicated by the fact that State laws provide for the foreclosure of mortgages and deeds of trust without mentioning promissory notes.

Then, with the advent of securitization, much of the contested foreclosure case law has now shifted to the issue of who has standing, which is the topic for today’s show, where we will try to answer some of the most disputed issues in foreclosure defense, such as:

1. Does a foreclosing plaintiff have to prove ownership and/or possession of the underlying mortgage and/or note?

2. How can that ownership and/or possession be proven?

3. Who are the real parties in interest and/or the indispensable parties who need to be named and served in a foreclosure action when a securitized Mortgage loan is involved?

4. Does the Mortgage follow the Note or does the Note follow the Mortgage or both when a securitized Mortgage Loan is involved?

In examining these fundamental standing questions, we will examine for insight a recent decision of the Hawaii Intermediate Court of Appeals in HSBC v. Moore, decided April 20, 2018, the opinion in which will be posted on the past broadcast section of our website www.foreclosurehour.com following our live broadcast of today’s show.

We will also suggest a means by which State courts can eliminate such expensive confusion while being fair to both lenders and borrowers alike, as well as eliminate the present unnecessary burden on our courts.

Gary Dubin

Please go to our website, www.foreclosurehour.com, and join your fellow homeowners in the Homeowners SuperPac today.

A Membership Application is posted there waiting for your support.

 

 

.
Host: Gary Dubin Co-Host: John Waihee

.

CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

The Foreclosure Hour is a public service of the Dubin Law Offices

Past Broadcasts

EVERY SUNDAY
3:00 PM HAWAII 
6:00 PM PACIFIC
9:00 PM EASTERN
ON KHVH-AM
(830 ON THE DIAL)
AND ON
iHEART RADIO

The Foreclosure Hour 12

 

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

HSBC Bank USA v. Moore | Hawaii ICA – Dubin Law Offices annihilates HSBC in this awesome order- “Qualified Witness” FAIL! “Assignment of Mortgage” FAIL! “Possession of Note” FAIL! “Allonge to Note” FAIL! — VACATED AND REMANDED

HSBC Bank USA v. Moore | Hawaii ICA – Dubin Law Offices annihilates HSBC in this awesome order- “Qualified Witness” FAIL! “Assignment of Mortgage” FAIL! “Possession of Note” FAIL! “Allonge to Note” FAIL! — VACATED AND REMANDED

CAAP-17-0000478mop by DinSFLA on Scribd

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

Wells Fargo nears $1 billion settlement for loan abuses

Wells Fargo nears $1 billion settlement for loan abuses

Reuters-

Wells Fargo & Co (WFC.N) is close to settling a record fine of $1 billion imposed by two U.S. regulators for its risk management business, a source familiar with the matter told Reuters on Thursday.

Last week, the U.S. Consumer Financial Protection Bureau (CFPB) and the Office of the Comptroller of the Currency (OCC) proposed Wells Fargo to pay the penalty to resolve probes into auto insurance and mortgage lending abuses at the third largest U.S. bank.

Wells Fargo declined to comment.

[REUTERS]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD1 Comment

Foreclosure starts rise as moratoria in Texas and Florida end

Foreclosure starts rise as moratoria in Texas and Florida end

National Mortgage News-

March’s increase in foreclosure starts was a direct result of the end of the moratorium for borrowers affected by Hurricanes Harvey and Irma, Black Knight said.

There were 52,100 foreclosure starts in March, up 11.56% over February’s 46,700. Florida and Texas were responsible for two-thirds of that increase, Black Knight said in its monthly first look report.

Compared to last March, foreclosure starts were down 13.6%.

On the good news side, serious delinquencies attributable to Hurricanes Harvey and Irma declined by 19,500 loans.

[NATIONAL MORTGAGE NEWS]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

Wells Fargo fired whistleblower for complaints about incentives to mislead: lawsuit

Wells Fargo fired whistleblower for complaints about incentives to mislead: lawsuit

East Bay Times-

The former head of beleaguered San Francisco-based bank Wells Fargo’s foreign exchange group claims he was fired weeks before he was to tell federal regulators about incentives that encouraged employees to “make false and misleading representations to customers, to engage in abusive sales practices, and to enrich themselves at the expense of clients.”

That’s according to the legal firm representing him in a lawsuit filed Thursday in San Francisco County Superior Court.

Wells Fargo declined to comment.

Simon Fowles alleges that he was terminated after years of making complaints to his managers and high-level executives about goings-on in the foreign exchange sales department. He had told bank management he planned to tell the U.S. Office of Controller of the Currency about the incentives, and was sacked “just weeks before” he was scheduled to talk to the regulators, his law firm said.

[EAST BAY TIMES]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD1 Comment

HSBC BANK USA, NATIONAL ASSOCIATION v. BUSET | Florida’s Third District Court of Appeal Rejects Trial Court’s Findings on Borrowers’ Defenses, Including “Unclean Hands,” and Reverses Involuntary Dismissal in Foreclosure Action

HSBC BANK USA, NATIONAL ASSOCIATION v. BUSET | Florida’s Third District Court of Appeal Rejects Trial Court’s Findings on Borrowers’ Defenses, Including “Unclean Hands,” and Reverses Involuntary Dismissal in Foreclosure Action

Lexology-

A unanimous three-judge panel for Florida’s Third District Court of Appeal recently issued an opinion that will have a significant impact on the scope of certain defenses that are routinely asserted by defense counsel in foreclosure litigation.

The case, HSBC Bank USA, National Association v. Buset, No. 3D16-1383, 2018 WL 735265 (Fla. 3d DCA Feb. 7, 2018) (“Buset”), stems from a foreclosure action initiated in October 2012 by HSBC Bank USA, National Association, as Trustee For Freemont Home Loan Trust 2005-B, Mortgaged-Backed Certificates, Series 2005-B (the “Trustee”) against Margaret Buset and Joseph T. Buset (collectively, the “Borrowers”).

The Borrowers admitted their default under the Note and Mortgage and the Trustee demonstrated its right of enforcement from the action’s inception, attaching a copy of the Note, specially indorsed to it, to the Complaint and later filing the original Note in the same condition with the trial court. Hoping to, nonetheless, avoid foreclosure, Borrowers aggressively defended the action based on multiple defenses asserting, among other things, unclean hands, and lack of standing.

[LEXOLOGY]

HSBC Bank USA, National Association, etc., Appellant,
v.
Joseph T. Buset, etc., et al., Appellees.

Case No. 3D16-1383.
District Court of Appeal of Florida, Third District.

Opinion filed February 7, 2018.
An Appeal from the Circuit Court for Miami-Dade County, Lower Tribunal No. 12-38811, Beatrice Butchko, Judge.

Greenberg Traurig, P.A., and Kimberly S. Mello, Jonathan S. Tannen, and Vitaliy Kats (Tampa), for appellant.

Jacobs Keeley, PLLC, and Bruce Jacobs and Court Keeley, for appellee Joseph T. Buset.

Levine Kellogg Lehman Schneider Grossman LLP, and Stephanie Reed Traband and Victor Petrescu, for Federal National Mortgage Association and Federal Home Loan Mortgage Corporation, as amici curiae.

Before LOGUE, LUCK, and LINDSEY, JJ.

LOGUE, Judge.

HSBC Bank USA, National Association appeals a final judgment dismissing its mortgage foreclosure complaint in favor of the Borrowers, Joseph and Margaret Buset. At first blush, this case appears straightforward: the Borrowers stipulated to the note, mortgage, and default. And at the time the complaint was filed, the Bank was the holder of the note with an indorsement in blank that had been modified to a special indorsement to the Bank. At some point, however, the focus of this case shifted from foreclosure to securitization. Relying heavily on expert legal testimony of an out-of-state lawyer who specialized in securitization, the trial court dismissed the foreclosure after the trial. For the reasons described below, we reverse and direct the trial court to enter judgment for the Bank.

FACTS

In October 2012, HSBC Bank as Trustee for Fremont Home Loan Trust 2005-B filed a foreclosure action against the Busets. The complaint alleged that the Bank held the note and mortgage, the Busets had failed to pay, and the Bank had complied with all conditions precedent. Copies of the note and mortgage were attached to the complaint.

The evidence at trial indicated that on February 16, 2005, the Busets borrowed $192,000 from Fremont Investment & Loan (the Originator). The loan was secured by a mortgage on a residential condominium. The mortgage named Mortgage Electronic Registration Systems, Inc. (MERS) as “mortgagee.”

Within a few months, the Originator packaged the note with others for purposes of securitization and sale to investors. In this regard, the Originator entered into a Pooling and Servicing Agreement for the “Fremont Home Loan Trust 2005-B Mortgage Backed Certificates Series 2005-B.” The parties to the Agreement included the Originator, another entity as Depositor, and the Bank as Trustee.

The Pooling and Servicing Agreement required the Originator to sign blank indorsements in the following form: “Pay to the order of _____, without recourse.” The note contains an undated, signed, blank indorsement in exactly that form signed by the Senior Vice President of the Originator. As required by the Agreement, the Note was transferred from the Originator, to the Depositor, to the Bank. In July 2008, the Originator entered into a voluntary liquidation. At an unknown date, the Originator’s blank indorsement was converted to a special indorsement to the Bank as payee. This handwritten change was undated and unsigned.

In 2012, after the Borrowers defaulted on the note, MERS executed a recorded assignment of the mortgage to the Bank which reads “This assignment is from . . . MERS as nominee for Fremont Investment & Loan, . . . its successors and assigns . . . to HSBC Bank.”

Over the course of its history, the loan had three servicers. To prove the amount of the default at trial, the Bank offered the testimony of the current servicer who proffered as business records the payment history, default letters, and payoff printout. These records indicated the Borrowers had stopped making payments by September 1, 2010. The trial court, however, excluded the documents from evidence, concluding that the Bank failed to present a sufficient foundation.

The Borrowers presented one witness, Kathleen Cully, who is admitted to the Bar of New York but not Florida. She is an expert in securitizing income flows for sale to investors, but she acknowledged she was “not an expert in Florida law.” Over the Bank’s objection, Ms. Cully testified to numerous legal opinions, including her opinions that the note at issue was not negotiable; that the Bank lacked standing; and that the Pooling and Servicing Agreement was violated.

After trial, the trial court dismissed the case. Throughout the final judgment, the trial court emphasized that its legal conclusions were based on Cully’s opinions, mentioning Cully by name at least seven times. Regarding Cully’s legal opinions, the final judgment included statements such as the trial court “gives great weight as the trier of fact to the testimony of Defendant’s expert witness, Kathleen Cully,” suggesting Cully’s opinions presented questions of fact subject to credibility determinations rather than legal issues controlled by Florida law. The final judgment holds in relevant part that (1) the note was not a negotiable instrument; (2) the Bank lacked standing; (3) the Bank violated the Pooling and Servicing Agreement; (4) the Servicer’s business records were inadmissible; and (5) the Bank had unclean hands. The Bank timely appealed.

ANALYSIS

(1) The trial court erred by admitting expert testimony on legal issues.

The Bank argues that the trial court committed reversible error by permitting Ms. Cully, the Borrowers’ expert witness, to testify to legal issues. We agree. Even if Cully had an expertise in Florida law, the admission of expert testimony on the legal issues central to the case was an abuse of discretion.

The law is well established that “[a]n expert should not be allowed to testify concerning questions of law.” Edward J. Seibert, A.I.A. Architect & Planner, P.A. v. Bayport Beach & Tennis Club Ass’n, Inc., 573 So. 2d 889, 891 (Fla. 2d DCA 1990). As this court has explained, “opinion that amounts to a conclusion of law cannot be properly received in evidence since the determination of such questions is exclusively within the province of the court.” McKesson Medication Mgmt., LLC v. Slavin, 75 So. 3d 308, 312 n.5 (Fla. 3d DCA 2011) (citations omitted). See also Lee Cty. v. Barnett Banks, Inc., 711 So. 2d 34, 34 (Fla. 2d DCA 1997) (stating that “[e]xpert testimony is not admissible concerning a question of law” because the resolution of legal issues “is a legal determination to be made by the trial judge, with the assistance of counsels’ legal arguments, not by way of `expert opinion'”).

(2) The note was a negotiable instrument under Florida law.

(a) In General

The trial court concluded that the note was non-negotiable for three different reasons. First, the final judgment states “[t]he Court applies Ms. Cully’s reasoned analysis as it relates to the note and mortgage for the subject loan and to Article 3 of Florida’s Uniform Commercial Code.” Ms. Cully opined that a promissory note secured by a mortgage was a secured interest under Article 9 and not a negotiable instrument under Article 3.

For over a century, however, the Florida Supreme Court has held such notes are negotiable instruments. Downing v. The First Nat’l Bank of Lake City, 81 So. 2d 486, 488 (Fla. 1955) (quoting Scott v. Taylor, 63 Fla. 612 (1912)) (a note and mortgage “are governed by the rules relating to negotiable paper”). And every District Court of Appeal in Florida has affirmed this principle.[1] Even if, as the trial court noted in the final order, “no Florida appellate court has yet to consider Ms. Cully’s analysis,” the trial court erred by failing to follow controlling precedent. Pardo v. State, 596 So. 2d 665, 666 (Fla. 1992) (noting that “in the absence of interdistrict conflict, district court decisions bind all Florida trial courts”).

(b) Negotiability was not destroyed by the note’s reference to the mortgage.

The second reason the trial court concluded that the note was not a negotiable instrument was Cully’s testimony that the note’s negotiability was destroyed because it referred to the mortgage which purportedly contained provisions limiting transferability. The final judgment’s analysis in this regard was expressly rejected in OneWest Bank, FSB v. Nunez, 193 So. 3d 13, 15 (Fla. 4th DCA 2016).

Although a note’s negotiability may be destroyed if the note expressly incorporates a mortgage that contains terms that would limit transferability, Holly Hill Acres, Ltd. v Charter Bank of Gainesville, 314 So. 2d 209 (Fla. 2d DCA 1975), the Nunez court clarified that this principle applies only if the note expressly incorporates the terms of the mortgage: it does not apply when the note merely references the mortgage. As the Fourth District explained,

there is a difference between a mere reference to a note being secured by a mortgage and stating that “the terms of said mortgage are by this reference made a part hereof.” The former merely referred to a separate agreement, while the latter rendered the note “subject to” the mortgage, and therefore, non-negotiable.

Nunez, 193 So. 3d at 16. This distinction is recognized by Florida’s Uniform Commercial Code. § 673.1061, Fla. Stat. (“A reference to another writing does not of itself make the promise or order conditional.”).

The distinction identified by the Nunez court applies here. While the note at issue in this case mentions the mortgage (“In addition to the protections given the Note Holder under this Note, a Mortgage . . . protects the Note Holder from possible losses. . . .”), it does not expressly incorporate the mortgage like the note in Holly Hill (“The terms of said mortgage are by this reference made a part hereof.”). For this reason, it does not matter whether the terms of the mortgage would prevent negotiability if they were incorporated into the note because the terms of the mortgage were not incorporated into the note.

(c) Negotiability was not destroyed by the definition of “Note Holder.”

The trial court’s third reason for concluding that the note was not a negotiable instrument was Cully’s testimony that the note’s negotiability was destroyed by its definition of “Note Holder.” The note defined “Note Holder” as “anyone who takes this Note by transfer and who is entitled to receive payments under this Note.” The final judgment reasoned that this language showed the parties intended “to contract out of the UCC definition of holder, so as to limit the right to enforce only to those who proved ownership.” But this reasoning was expressly rejected in Horvath v. Bank of New York, N.A., 641 F.3d 617, 622 (4th Cir. 2011).

In Horvath, the Fourth Circuit refused to interpret identical language, which defined “Noteholder” as “anyone who takes this Note by transfer and who is entitled to receive payments under this Note,” as indicating an intent to destroy the note’s negotiability. Id. at 622. To the contrary, the circuit court of appeals held the language meant “precisely the opposite.” Id. It held that a note with this language was a negotiable instrument. Like the appellate court in Horvath, after carefully studying this provision of the note at issue here, we cannot find any intent in this language to limit the transferability of the note in a manner that indicates an intent by the parties to destroy its negotiability.

(3) The Bank had standing to foreclose.

Again following Ms. Cully’s testimony, the trial court concluded the Bank did not have standing because the lack of “a complete chain of endorsements on the face of the note” created a “fatal break in the chain of title.” This statement misapprehends the nature of negotiable instruments.

Because a foreclosure case is an action to enforce a negotiable instrument, standing in a foreclosure case is not based upon ownership of the note; it is based instead on whether the plaintiff is a “person entitled to enforce.” § 673.3011. The term “person entitled to enforce” is a technical, defined term in all versions of the Uniform Commercial Code, including Florida’s. Id. An entity may qualify as a “person entitled to enforce” for several reasons, but the most common reason is that the entity is “the holder of the instrument.” Id. In a case where the plaintiff is asserting standing based upon its status as a “person entitled to enforce” because it is the holder of the instrument, proof of who owns the note is not necessary or even relevant to the issue of standing. Id. (“A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.”).[2]

Proof of who owns the note, such as a chain of title, may be relevant to a dispute where a person claims his or her ownership interest trumps the interest of the holder, but the borrower cannot make this argument on its own; instead, the person making that claim must be “joined in the action and personally assert[] the claim against the person entitled to enforce the instrument.” § 673.3051(3). Even then, ownership is not relevant to standing so much as the question of who is the ultimate beneficial owner of the proceeds of the foreclosure, an issue not normally or necessarily part of a foreclosure case. In this regard, trial courts presiding over foreclosure cases are well served to keep in mind the following “oft-overlooked point”:

Article 3 is sufficiently flexible to allow a single identified person to be both the “person entitled to enforce” the note, and an agent for all those who may have ownership interests in a note. This point reflects the view that so long as the maker’s obligation is discharged by payment, the maker should be indifferent as to whether the “person entitled to enforce” the note satisfies his or her obligations, under the law of agency, to the ultimate owners of the note.

Veal v. Am. Home Mortg. Serv., Inc., 450 B.R. 897, 912 (B.A.P. 9th Cir. 2011).

Accordingly, because a plaintiff asserting standing based on its status as a holder of the note does not have to prove ownership, a plaintiff does not normally ave to establish a “chain of indorsements” or a “chain of title.” Summerlin Asset Mgmt. v Tr. v. Jackson, No. 9:14-CV-81302, 2015 WL 4065372, at *2 (S.D. Fla. July 2, 2015) (“Although Plaintiff has set forth a valid chain of assignments, the negotiation of the blank-indorsed note by transfer of possession alone makes Plaintiff the `holder’ of the note entitled to enforce it.”); Baroni v. Bank of New York Mellon, No. 1:12-BK-10986-MB, 2016 WL 9211660, at *2 (C.D. Cal. Oct. 3, 2016) (“[The Bank] holds a negotiable instrument and has no duty to provide an unbroken chain of title.”); JP Morgan Chase Bank, N.A. v. Murray, 63 A.3d 1258, 1266 (2013) (“We conclude that the Note secured by the Mortgage in the instant case is a negotiable instrument. . . . As such, we find [the Borrower’s] challenges to the chain of possession by which [the Bank] came to hold the Note immaterial to its enforceability by [the Bank].”).

Turning to the facts of this case, because the Bank asserted standing based on its status as a holder of the note, it was error for the trial court to allow the focus of the pre-trial proceedings and the trial itself to shift from the relevant issue of whether the Bank is a “person entitled to enforce” to the irrelevant issue of whether the Bank is the owner of the note. The note here contained a blank indorsement by the Originator in exactly the form required by the Pooling and Servicing Agreement (“Pay to the order of ______, without recourse”). Once this blank indorsement was made on the note, the note became bearer paper, fully negotiable by simple transfer, like a signed check made out to cash or a signed check with the payee left blank. See, e.g., § 673.2011 (“If an instrument is payable to bearer, it may be negotiated by transfer of possession alone.”). Negotiability by simple transfer is one of the defining characteristic of this type of commercial paper. It reflects one major difference between a negotiable instrument and, for example, a deed to land.

Any holder then became fully entitled to fill in the blank and name a specific payee, as happened here. See § 673.2051(3) (“The holder may convert a blank indorsement that consists only of a signature into a special indorsement by writing, above the signature of the indorser, words identifying the person to whom the instrument is made payable.”). See generally Grand Lodge, Knights of Pythias of Fla., v. State Bank of Fla., 84 So. 528, 534 (1920) (“[A] holder for value of negotiable paper otherwise perfect has the right to fill in the name of the payee.”).

Under the law of negotiable instruments, therefore, the Bank had standing because it was the holder of a note originally indorsed in blank and then specially indorsed to the Bank. See, e.g., US Bank Nat’l Ass’n v. Laird, 200 So. 3d 176, 177 (Fla. 5th DCA 2016) (concluding the Bank demonstrated it had standing when it “attached to its complaint a copy of the note and a copy of an allonge which contained a specific indorsement” to the Bank, and the Bank “later filed with the court the original note and allonge in the same condition”); Wells Fargo Bank, N.A. v. Morcom, 125 So. 3d 320, 322 (Fla. 5th DCA 2013) (“In the present case, the original note Appellant attached was endorsed in blank with Appellant’s name stamped in the blank endorsement field, which, paired with section 673.3011(1), established that Appellant was the holder entitled to enforce the instrument.”); McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170, 173 (Fla. 4th DCA 2012) (noting a holder has standing of a note that either bears “a special endorsement in favor of the plaintiff or a blank endorsement”).

(4) The purported violations of the Pooling and Servicing Agreement did not destroy standing.

The trial court further concluded that the Bank lacked standing because of violations of the Pooling and Servicing Agreement. For example, relying upon Cully’s testimony, the trial court found the Bank lacked standing because the “endorsement is contrary to the unequivocal terms of the PSA . . . which required all intervening endorsements be affixed to the face of the note because there was ample room for endorsements on the face of the note.” This analysis missed the mark. The Borrowers are not parties to and are not third-party beneficiaries of the Pooling and Servicing Agreement. Indeed, the interests of the defaulting borrowers are adverse to the interests of the parties to the Agreement. Jepson v. Bank of New York Mellon, 816 F.3d 942, 946 (7th Cir. 2016).

Because the Borrowers are not parties or third-party beneficiaries to the Pooling and Servicing Agreement, they cannot raise purported violations of the Agreement to defend against foreclosure: “borrowers cannot defeat a foreclosure plaintiff’s standing by relying upon trust documents to which the borrower is not a party.” Citibank, N.A. v. Olsak, 208 So. 3d 227, 230 (Fla. 3d DCA 2016); see also Castillo v. Deutsche Bank Nat’l Tr. Co., 89 So. 3d 1069 (Fla. 3d DCA 2012) (“Because the appellant is neither a party to nor a third-party beneficiary of the trust, we find the appellant lacks standing to raise this issue and affirm the final judgment of foreclosure in favor of the appellee, as the holder of the original note and mortgage.”); Jepson, 816 F.3d at 946 (“a mortgagor whose loan is owned by a trust is not an intended beneficiary of a trust, and does not have standing to challenge the trustee’s possession or status as assignee of the note and mortgage based on purported noncompliance with certain provisions of a PSA [Pooling and Servicing Agreement]”) (citations and quotations omitted).

(5) The assignment of the mortgage did not destroy standing.

As mentioned above, in preparation for the foreclosure, on June 25, 2012, MERS assigned the mortgage to the Bank in an assignment that was recorded in the public records on July 16, 2012. The mortgage had named MERS “as nominee for Lender and Lender’s successors and assigns.” And as reflected in the recorded assignment, MERS assigned the mortgage to the Bank “as nominee for Fremont Investment & Loan, . . . its successors and assigns.” The trial court found illegality here, concluding that the assignment should have expressly identified the Depositor and the Bank by name rather referring to them in the expression “Fremont, . . . its successors and assigns.” But there was nothing illegal or improper in the language used.

Moreover, the assignment of the mortgage was superfluous. It was unnecessary because Florida law has always held that the mortgage follows the note. See, e.g., First Nat. Bank of Quincy v. Guyton, 72 So. 460, 460 (Fla. 1916) (noting that “when a note secured by mortgage is transferred, the mortgage follows the note as an incident thereto”); US Bank, NA v. Glicken, 228 So. 3d 1194, 1196 (Fla. 5th DCA 2017) (“Indeed, the mortgage follows the note.”). Thus, even if this assignment were void or voidable, which it is not, the Bank, as holder of the note, would have the authority to foreclosure the mortgage.

(6) The Servicer’s business records were admissible.

At trial, the trial court excluded from evidence the payment history, default letters, and payoff printout, concluding that the Bank failed to make a proper foundation. This also was error.

Here, the Bank’s loan analyst provided substantial testimony regarding the records. According to her testimony, she did not create the records, but she was trained on how these records were created and stored. The loan was first serviced by Fremont Investment & Loan, then by Litton Loan Servicing LP, and then Litton was acquired in its entirety by the current loan servicer, Ocwen Loan Servicing, LLC. The payment history, the default letters, and the payoff printout were essential records created in the regular course and scope of the servicers’ business of servicing loans and mortgages, as is standard for this industry. By industry practice, the records of the amounts paid and remaining due are made at or near the time of the payment. The records acquired from the previous servicers were subject to a boarding process although not an audit. In fact, the servicer still has access to the records of the prior servicer it acquired.

This testimony provided a sufficient foundation to admit the records. Deutsche Bank Nat’l Tr. Co. v. de Brito, No. 3D16-1466, 2017 WL 5163048, at *2 (Fla. 3d DCA Nov. 8, 2017) (reversing the trial court’s exclusion of similar evidence based on virtually identical testimony laying the foundation of the business records)._Indeed, “[w]here a business takes custody of another business’s records and integrates them within its own records” the trustworthiness requirement of the records will be met in “most instances . . . by providing evidence of a business relationship or contractual obligation between the parties that ensures a substantial incentive for accuracy.” Bank of New York v. Calloway, 157 So. 3d 1064, 1071-72 (Fla. 4th DCA 2015).

Significantly, the Borrowers did not present any evidence challenging the accuracy of the records. Indeed, they stipulated before trial that they had no ability to testify even to the payments they had made on the note. See WAMCO XXVIII, Ltd. v. Integrated Elec. Env’ts, Inc., 903 So. 2d 230, 233 (Fla. 2d DCA 2005) (“The [opponents to admission of the business records] did not demonstrate, and nothing in the record establishes, that the loan information WAMCO received from Bank of America was suspect or untrustworthy or that the balances that WAMCO claimed as due were incorrect.”).

(7) The Bank did not have unclean hands justifying dismissal.

Finally, the trial court dismissed the case because it concluded the Bank was acting with unclean hands by trying to defraud the court. For example, the final judgment states “[t]his court finds the AOM [assignment of mortgage] in 2012 does not document a transaction that occurred in 2005, as [the Bank] suggests” (emphasis added). It is not exactly clear what the trial court intended by this language. Taken literally, the final order seems to indicate the Bank endeavored to fraudulently induce the trial court into believing the 2012 assignment occurred in 2005.

Our careful review of the record, however, revealed nothing that supports this contention. Indeed, it was the Bank that offered the assignment of mortgage into evidence; the assignment is dated on its face as June 25, 2012; the copy of the assignment offered by the Bank into evidence indicates on its face it was recorded in the public records on July 16, 2012; and the Bank’s witness consistently testified the assignment was executed in 2012. We surmise that the trial court’s real concern was that the form of the assignment was insufficient because it referred to the Originator’s “successors and assigns” but failed to expressly name them. We rejected this argument in our discussion above.

CONCLUSION

Accordingly, the final order is reversed. This case is remanded with instructions that the trial court enter an appropriate final judgment of foreclosure.

Reversed and remanded.

Not final until disposition of timely filed motion for rehearing.

[1] See, e.g., Fed. Nat’l Mortgage Ass’n v. McFadyen, 194 So. 3d 418, 419 (Fla. 3d DCA 2016)(“Promissory notes are, by definition, negotiable instruments. . . .”); Seffar v. Residential Credit Sols., Inc., 160 So. 3d 122, 125 (Fla. 4th DCA 2015) (recognizing a promissory note as a negotiable instrument); Stone v. BankUnited, 115 So. 3d 411, 413 (Fla. 2d DCA 2013) (recognizing promissory note as negotiable instrument); Mazine v. M & I Bank, 67 So. 3d 1129 (Fla. 1st DCA 2011) (recognizing the promissory note as a negotiable instrument); Perry v. Fairbanks Capital Corp., 888 So. 2d 725, 727 (Fla. 5th DCA 2004) (noting that “[a] promissory note is clearly a negotiable instrument within the definition of section 673.1041(1)”).

[2] Although adopted after the filing of the complaint in this case, section 702.015, Florida Statutes (2017), Florida Rule of Civil Procedure 1.115 and Forms 1.944(a) and (b), have established pleading requirements and certifications related to a plaintiff’s status as a person entitled to enforce.

 

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD1 Comment

Foreclosure hangover: How the 2008 crisis created a new class of renter

Foreclosure hangover: How the 2008 crisis created a new class of renter

The Mercury News-

For decades, the single-family house surrounded by a white picket fence has symbolized the American dream of home ownership.

But these days those picture-perfect homes increasingly are occupied by renters, not owners — a new trend with roots in the foreclosure crisis 10 years earlier, according to a recent study by UC Berkeley’s Terner Center for Housing Innovation.

Tenants renting single-family homes make up the fastest growing segment of the U.S. housing market, but they are vastly overlooked, unable to benefit from some protections enjoyed by tenants living in apartments, the Terner Center researchers found. It’s an issue in the Bay Area — where high home prices and a shortage of houses for sale have locked many renters out of ownership.

[THE MERCURY NEWS]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

Deutsche Bank National Trust Co. v. Wuensch | WI Supreme Court Upholds Foreclosure Judgment, Bank “Possessed” the Note

Deutsche Bank National Trust Co. v. Wuensch | WI Supreme Court Upholds Foreclosure Judgment, Bank “Possessed” the Note

WisBar News-

The Wisconsin Supreme Court has ruled (5-2) that an attorney’s presentment of an original note secured by a mortgage in court was enough to establish that the bank was entitled to judgment of foreclosure based on “possession” of the note.

That is, in Deutsche Bank National Trust Co. v. Wuensch, 2018 WI 35 (April 17, 2018), the majority ruled that “presentment of a party’s attorney of an original, wet-ink note endorsed in blank is admissible evidence and enforceable against the borrower without further proof that the holder had possession at the time the foreclosure action was filed.”

The majority’s decision reversed the appeals court, which had ruled that an attorney’s “possession” of a purported original note, endorsed in blank, was not sufficient to prove the attorney’s client “possessed” the note for purposes of a foreclosure action.

[WISBAR NEWS]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD1 Comment

Wells Fargo says it faces a $1 billion penalty for its mortgage and auto business misdeeds

Wells Fargo says it faces a $1 billion penalty for its mortgage and auto business misdeeds

Pittsburgh-Post Gazette-

Wells Fargo said Friday that it faces a potential $1 billion in fines to resolve government investigations into the megabank’s behavior in the auto and mortgage markets.

The bank has acknowledged that it charged thousands of customers for auto insurance they didn’t need, driving some to default on their loans and lose their cars through repossession. The bank has also said it will refund customers who were charged improper fees to lock in an interest rate for a Wells Fargo mortgage.

Both matters have been under investigation for months by two federal regulators, the Consumer Financial Protection Bureau and the Office of the Comptroller of the Currency. Those regulators are offering to resolve the matter for a combined $1 billion, the bank said. Such a large civil penalty would be the latest hit to Wells Fargo’s effort to rebuild its image after more than a year of scandal.

[PITTSBURGH POST GAZETTE]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD2 Comments

TFH 4/15/18 | What Every Homeowner Needs To Know To Survive Foreclosure About the Hidden Distinction Between Structure Versus Function in Legal Analysis — Plus Announcing a New Partnership Between the National Consumer Law Center Publications and The Foreclosure Hour

TFH 4/15/18 | What Every Homeowner Needs To Know To Survive Foreclosure About the Hidden Distinction Between Structure Versus Function in Legal Analysis — Plus Announcing a New Partnership Between the National Consumer Law Center Publications and The Foreclosure Hour

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII

LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)

ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET

.

Sunday – April 15, 2018

.

 ———————
What Every Homeowner Needs To Know To Survive Foreclosure About the Hidden Distinction Between Structure Versus Function in Legal Analysis — Plus Announcing a New Partnership Between the National Consumer Law Center Publications and The Foreclosure Hour

 

—————————-

First, we are pleased to announce that The Foreclosure Hour has entered into a partnership with the National Consumer Law Center Publications to provide our listeners with a significant purchase discount, to be announced on our show, on all of their invaluable publications which we will discuss in depth this Sunday.

The publications of the National Consumer Law Center are indispensable to consumer defense in many areas, particularly foreclosure defense, of help to lawyers and pro se parties alike.

Listeners unfamiliar with its publications will be amazed to learn about all of its detailed research and will receive on today’s show a special promotional discount code.

Having its publications in your hands is equivalent to having an army of especially competent research attorneys on your personal staff working for you who instantly provide at very minimal cost a clearly readable and understandable up-to-date summary of foreclosure related statutory and case law in all American jurisdictions, including form pleadings and form discovery requests as well as litigation strategies throughout.

Second, we will discuss Part Two in our series on the Rule Ritual by exploring what really controls and triggers changes not only in foreclosure laws, but in laws throughout the American legal system, the difference between structure and function in legal reasoning, enabling you to better understand and be more successfully arguing and handling case precedent in court in individual cases.

On most of our shows we concentrate on reviewing specific cases and specific foreclosure related issues, but today we pause to switch our attention to more basic research.

Understanding the difference between structure and function in legal reasoning will surprise you by unlocking for our listeners secrets that even most lawyers are consciously unaware of.

Gary Dubin

Please go to our website, www.foreclosurehour.com, and join your fellow homeowners in the Homeowners SuperPac today.

A Membership Application is posted there waiting for your support.

 

 

.
Host: Gary Dubin Co-Host: John Waihee

.

CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

The Foreclosure Hour is a public service of the Dubin Law Offices

Past Broadcasts

EVERY SUNDAY
3:00 PM HAWAII 
6:00 PM PACIFIC
9:00 PM EASTERN
ON KHVH-AM
(830 ON THE DIAL)
AND ON
iHEART RADIO

The Foreclosure Hour 12

 

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

Senate Passes Bill To Deregulate Banks With Democrats’ Help

Senate Passes Bill To Deregulate Banks With Democrats’ Help

Small banks, big banks and even credit monitoring companies like Equifax score with this legislation.

HUFFPO-

The Senate on Wednesday passed a bill so friendly to banks that even a Republican worried it goes too far.

By a vote of 67-to-31, the Senate passed the Economic Growth, Regulatory Relief, and Consumer Protection Act, which is aimed at reducing the regulatory burden on struggling community banks ? even though most such banks are thriving. Supporters also argued that the bill would make it easier for Americans to buy a home by increasing their access to capital.

The measure would also exempt 25 of America’s biggest banks from regulations created in response to the financial crisis that contributed to the Great Recession a decade ago. The Congressional Budget Office warned that the risk of another financial crisis “would be slightly greater under the legislation.”

[HUFFINGTONPOST]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

Wells Fargo could face another record fine

Wells Fargo could face another record fine

CBS NEWS-

Wells Fargo (WFC) is in talks with the Consumer Financial Protection Bureau regarding penalties running into the hundreds millions of dollars, or possibly higher, for mortgage-lending and auto-insurance abuses, according to reporting from Reuters. The San Francisco bank’s troubles are long-running, likely to continue — and certain to be a hot topic when Mick Mulvaney, the CFPB’s acting director, testifies before the House Financial Services Committee on Wednesday and the Senate Banking Committee on Thursday.

Reuters cited three sources with knowledge of the plans in reporting that Mulvaney may be pushing for a record fine as high as $1 billion. The penalty would be the first by the CFPB under Mulvaney, tapped by President Donald Trump in November to head the consumer watchdog for finance.

Chances are good that Wells Fargo’s woes won’t disappear even if a record fine is levied. That’s because “the bank remains the ideal target for those on the far right and far left who believe the biggest banks are too large to manage,” Jaret Seiberg, an analyst with Cowen Washington Research group, wrote in a client note. “Even large fines do not put issues to rest. If anything, the size of the penalty is likely to result in even more political pressure on the bank.”

[CBS NEWS]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

Atlas Consumer Law Secures $3,582,000 jury verdict obtained by Monette Saccameno, a resident of Cook County Illinois, and against Ocwen Loan Servicing LLC, a national mortgage loan servicer

Atlas Consumer Law Secures $3,582,000 jury verdict obtained by Monette Saccameno, a resident of Cook County Illinois, and against Ocwen Loan Servicing LLC, a national mortgage loan servicer

(MENAFN Editorial) LOMBARD, Ill., April 11, 2018 /PRNewswire/ –Monette Saccameno secured a jury verdict against Ocwen Loan Servicing LLC (Ocwen), a national mortgage loan servicer for its breach of contract, breach of fiduciary duty, violations of the Real Estate Settlement Procedures Act (RESPA), violations of the Fair Debt Collection Practices Act (FDCPA), and violations of the unfairness and deception provisions of the Illinois Consumer Fraud and Deceptive Business Practices Act. All of Saccameno’s claims dealt with Ocwen’s misconduct in handling and servicing the mortgage loan on Saccameno’s home in Cook County, Illinois, where Saccameno has resided for the last 16 years. Ocwen is headquartered in West Palm Beach, Florida.

Saccameno encountered financial troubles and defaulted on the loan in late 2008. In early 2009, U.S. Bank attempted to foreclose on the property. In December 2009, Saccameno filed a Chapter 13 bankruptcy in order to stop a foreclosure and to catch up on the mortgage arrears on her residence. The plan of reorganization was confirmed by the court on February 17, 2010 and Saccameno began to make both her contractual mortgage payments along with her Chapter 13 plan payments. Saccameno’s mortgage loan was serviced by Litton Loan Servicing for US Bank until US Bank transferred the servicing rights to Ocwen in July 2011. Saccameno made all of her plan payments through the Chapter 13 trustee and made every single mortgage payment directly to Litton Loan Servicing (US Bank) and subsequently to Ocwen once Ocwen took over servicing rights.

Once Ocwen took over the servicing of the note, it began to assess fees and expenses on the account even though Saccameno made every single contractual payment to both Ocwen and the bankruptcy trustee pursuant to her confirmed plan. On June 27, 2013 after Saccameno made her final Chapter 13 plan payment, the trustee issued a Notice of Payment of Final Mortgage Cure to which Ocwen neither objected nor replied thereby deeming the mortgage contractually current. A discharge was entered in the bankruptcy case on June 27, 2013.

Almost immediately after discharge, Ocwen began collecting the paid pre-petition arrears. Plaintiff provided documents to Ocwen in order to correct the errors. As it turns out, the bankruptcy was improperly coded in Ocwen’s mortgage servicing computer system as “dismissed” and not as “discharged”. Saccameno attempted to correct the errors through multiple written requests. Ocwen refused to correct the errors despite multiple requests by her bankruptcy attorney and her personal attorney. In fact, the foreclosure that was filed prior to Saccameno’s bankruptcy in December 2009 continued even after Saccameno’s mortgage loan was deemed current by the Bankruptcy Court. As a result, Saccameno suffered from emotional distress, depression, mental anguish, anxiety and incurred medical expenses and loss of employment and other damages that were incurred during the nearly three and a half year ordeal.

The eight (8) day federal trial concluded on April 11, 2018 in Chicago, Illinois at the Everett McKinley Dirksen United States Court House. The jury, after deliberating for approximately 7 hours, determined that Ocwen breached its contract, violated RESPA for failing to adequately respond to Saccameno’s Qualified Written Request, violated the FDCPA and committed both unfair and deceptive acts in violation of the Illinois Consumer Fraud Act. Monette Saccameno was awarded $500,000.00 in compensatory damages, $70,000.00 in non-economic damages, $12,000.00 in economic damages and $3,000,000.00 in punitive damages. Nicholas Heath Wooten, Esq., Ross Michael Zambon, Esq., and Mohammed Omar Badwan, Esq. led the litigation team on behalf of Saccameno.

The outcome of this trial should come as good news to all consumers who have struggled with aggressive mortgage servicing tactics throughout the ongoing financial crisis. The litigation team was meticulous and methodical in its litigation approach, and was able to obtain a punitive damages award for Saccameno and against Ocwen – an award that is meant to punish and deter future misconduct – under the Illinois Consumer Fraud Act.

Leading Attorneys in Consumer Law:

Ahmad Sulaiman, Esq. is the managing partner of Atlas Consumer Law, a division of Sulaiman Law Group, Ltd. and is also a highly regarded graduate of Gardner’s Consumer Litigation and Bankruptcy Boot Camps. Ahmad is recognized as a thought leader in foreclosure defense, consumer and commercial bankruptcy, and consumer law by his peers. He was designated as a Super Lawyer Rising Star from 2010 through 2018 and is also considered a Leading Lawyer.

Nicholas Heath Wooten, Esq. is the managing partner of Nick Wooten, LLC and is nationally known for his work in mortgage servicing and foreclosure defense litigation. Nick’s courtroom work and writings led to his recognition as a national thought leader on issues of securitization with respect to foreclosure and bankruptcy.

Ross Michael Zambon is the managing partner of Zambon Law, Ltd. and is highly regarded by his peers and adversaries for his litigation work on behalf of consumers. He has been designated as a Super Lawyer Rising Star from 2010 through 2017.

Mohammed O. Badwan, Esq. of Atlas Consumer Law, a division of Sulaiman Law Group, Ltd. is well known for his work in consumer law. He is the Director of Litigation for Atlas Consumer Law and has been designated as a Super Lawyer Rising Star by his peers.

About Atlas Consumer Law, a division of Sulaiman Law Group, Ltd.

Atlas Consumer Law, a division of Sulaiman Law Group Ltd., is a national consumer litigation firm in Lombard, Illinois that focuses on consumer litigation matters regarding the FDCPA, TCPA, FCRA, RESPA and other consumer fraud statutes. ( http://www.atlasconsumerlaw.com )View original content: http://www.prnewswire.com/news-releases/atlas-consumer-law-secures-3-582-000-jury-verdict-obtained-by-monette-saccameno-a-resident-of-cook-county-illinois-and-against-ocwen-loan-servicing-llc-a-national-mortgage-loan-servicer-300628541.html

SOURCE Atlas Consumer Law

MENAFN1104201800701241ID1096724233

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

Spencer v. DITECH FINANCIAL, LLC | FL 2DCA- Because EverHome failed to show that it satisfied the condition precedent of giving notice prior to acceleration, we must reverse and remand for the trial court to enter an order of involuntary dismissal.

Spencer v. DITECH FINANCIAL, LLC | FL 2DCA- Because EverHome failed to show that it satisfied the condition precedent of giving notice prior to acceleration, we must reverse and remand for the trial court to enter an order of involuntary dismissal.

 

ISAIAH L. SPENCER and SHATIKA L. SPENCER, Appellants,
v.
DITECH FINANCIAL, LLC; CITIBANK, NATIONAL ASSOCIATION successor by merger to CitiBank, FSB; CITY OF TAMPA, FLORIDA; RIVERWALK AT WATERSIDE ISLAND TOWNHOMES HOMEOWNERS ASSOCIATION, INC.; WATERSIDE COMMUNITY ASSOCIATION, INC., Appellees.

Case No. 2D16-4817.
District Court of Appeal of Florida, Second District.
Opinion filed April 4, 2018.
Appeal from the Circuit Court for Hillsborough County; Sandra Taylor, Senior Judge.

Mark P. Stopa of Stopa Law Firm, LLC, Tampa; and Latasha Scott of Lord Scott, PLLC, Tampa, for Appellants.

Jonathan L. Blackmore and John D. Cusick of Phelan, Hallinan, Diamond & Jones, PLLC, Fort Lauderdale, for Appellee Ditech Financial, LLC.

No appearance for remaining Appellees.

KHOUZAM, Judge.

Isaiah and Shatika Spencer appeal the final judgment of foreclosure entered against them and in favor of EverHome Mortgage Company following a bench trial. Ditech Financial, LLC, was later substituted as party plaintiff for EverHome. We reverse and remand for the trial court to enter an order of involuntary dismissal because EverHome, Ditech’s predecessor in interest, failed to establish as a condition precedent to filing suit that the Spencers were given notice of default as required by paragraph 22 of the mortgage.

The Spencers executed the note and mortgage on March 28, 2003. Federal National Mortgage Association was the lender. Paragraph 22 of the mortgage provided that prior to acceleration, the lender must give the borrower notice and an opportunity to cure the default. Paragraph 15 provided that any such notice must be written and “shall be deemed to have been given to Borrower when mailed by first class mail or when actually delivered to Borrower’s notice address if sent by other means.”

In 2010, EverHome filed a foreclosure complaint against the Spencers. EverHome alleged that it was the servicer of the loan and the holder of the note. EverHome also alleged generally that all conditions precedent to the acceleration of the note and mortgage and the filing of the foreclosure suit had been fulfilled. The Spencers filed an answer denying that the conditions precedent had been met and an affirmative defense alleging that EverHome had failed to give them notice and an opportunity to cure as required.

At trial, EverHome admitted a default letter from EverHome to Mr. Spencer through the testimony of Ms. Knight, an employee of Ditech. Ms. Knight testified to the general industry standards and practices followed by servicers such as Ditech and EverHome to advise borrowers that their loans are in default. She identified the default letter addressed to Mr. Spencer and described the process by which the letter was generated and kept in the ordinary course of business.

In addition to the default letter itself, Ms. Knight’s testimony was the only evidence that EverHome provided to show that the letter had been sent to the Spencers. Throughout Ms. Knight’s testimony, Spencer repeatedly objected based on hearsay, arguing that Ms. Knight lacked personal knowledge to testify about EverHome’s routine business practices because she was not an employee of EverHome. The court overruled Spencer’s objections, and Ms. Knight testified that pursuant to EverHome’s procedure and policy, once a letter is generated it is mailed. But she explained that her knowledge of these procedures and policies was based on “training.” And when pressed, she admitted that this “training” consisted of informally discussing EverHome’s policies and procedures with coworkers who currently worked for Ditech but had previously worked for EverHome.

Specifically, Ms. Knight testified as follows: “I have spoken with EverHome employees who are prior employees of EverHome, as we are instructed to by our supervisor as part of training because we are not going to travel every day to Jacksonville to sit down with someone when we have questions.” Ms. Knight admitted that no such discussions about this loan or any other loan had taken place prior to 2014, when the service transfer occurred—years after the default letter, dated June 17, 2010, had been generated by EverHome. She further admitted that she had never worked for EverHome, had never sent default letters on behalf of EverHome, and had not read EverHome’s written policies and procedures from June 2010. Ms. Knight admitted that she was not personally involved in sending the default letter at issue in this case and that she did not have any documents other than the letter itself to show that the letter was sent.

This evidence was insufficient to show that the default letter was actually sent. “The fact that a document is drafted is insufficient in itself to establish that it was mailed.” Allen v. Wilmington Tr., N.A., 216 So. 3d 685, 687-88 (Fla. 2d DCA 2017); see also Edmonds v. U.S. Bank Nat’l Ass’n, 215 So. 3d 628, 630 (Fla. 2d DCA 2017) (citing Allen with approval). Rather, “mailing must be proven by producing additional evidence such as proof of regular business practices, an affidavit swearing that the letter was mailed, or a return receipt.” Allen, 216 So. 3d at 688.

Testimony regarding a company’s routine business practices may establish a rebuttable presumption that the default letter was mailed. Id. (citing § 90.406, Fla. Stat. (2014)). But the witness must have personal knowledge of the company’s general mailing practice—meaning that the witness must be employed by the entity drafting the letters and must have firsthand knowledge of the company’s routine practice for mailing letters. See id.; Edmonds, 215 So. 3d at 630; see also CitiMortgage, Inc. v. Hoskinson, 200 So. 3d 191, 192 (Fla. 5th DCA 2016) (holding that there was sufficient evidence to establish mailing based on routine business practices where witness testified that she had personally observed coworkers generate breach letters and deliver them to the mail room to be collected by the postal service). Here, Ms. Knight admitted that she was never employed by EverHome and did not have firsthand knowledge of EverHome’s mailing practices as of the date the default letter was generated. Therefore, her testimony was insufficient to establish that the default letter was mailed.

Ditech relies on JPMorgan Chase Bank National Ass’n v. Pierre, 215 So. 3d 633 (Fla. 4th DCA 2017), and Bank of America, N.A. v. Delgado, 166 So. 3d 857 (Fla. 3d DCA 2015), to suggest that Ms. Knight’s testimony was sufficient to establish mailing. These cases do not apply here because they addressed the sufficiency of evidence demonstrating an entity’s boarding process to establish the admissibility of documents like default letters under the business records exception to the hearsay rule, as opposed to the sufficiency of evidence demonstrating an entity’s routine business practices to establish that a default letter was mailed. See Allen, 216 So. 3d at 687Pierre, 215 So. 3d at 637-39Delgado, 166 So. 3d at 859. It is true that in establishing admissibility under the business records exception, there is no requirement that the foundational witness be employed by the business whose records are at issue at the time the records were made. See Delgado, 166 So. 3d at 860. And basic familiarity with the previous servicer or lender’s practices for generating, storing, and sending a default notice in the normal course of business is all that is required to establish the admissibility of a default notice under the business records exception. See Pierre, 215 So. 3d at 638-39 (citing Wells Fargo Bank, N.A. v. Balkissoon, 183 So. 3d 1272, 1277 (Fla. 4th DCA 2016)). But the admissibility of the default letter is not at issue in the instant case.

Because EverHome failed to show that it satisfied the condition precedent of giving notice prior to acceleration, we must reverse and remand for the trial court to enter an order of involuntary dismissal.

Reversed and remanded with instructions.

ROTHSTEIN-YOUAKIM, J., Concurs.

SALARIO, J., Concurs specially.

SALARIO, Judge, Specially concurring.

The Spencers argue in this appeal that the evidence was insufficient to sustain the judgment. They correctly point out that EverHome’s sole trial witness, Ms. Knight, lacked any personal knowledge of EverHome’s routine practice concerning the mailing of paragraph 22 letters and that without her testimony the evidence was insufficient as a matter of law to support a finding that such a letter was mailed to them. I agree with the reasoning of and the result reached by the majority, including the instruction that the trial court enter an order of involuntary dismissal instead of hold a new trial on remand, because I think as the majority does that both are compelled by our decisions in Edmonds, 215 So. 3d at 631, and Allen, 216 So. 3d at 688. See also Knight v. GTE Fed. Credit Union, 43 Fla. L. Weekly D348 (Fla. 2d DCA Feb. 14, 2018). I write to express my growing unease with what we are saying in foreclosure cases about proceedings on remand when the plaintiff as appellee in our court has failed to prove at trial an element of or condition precedent to bringing the foreclosure action.

Outside the foreclosure context, our court routinely follows the general rule that a party that fails to meet its burden of proof in the trial court does not, when we reverse a judgment in its favor, get a second bite at the apple by way of a new trial or hearing on remand. See, e.g., Asset Mgmt. Holdings, LLC v. Assets Recovery Ctr. Invs., LLC, 43 Fla. L. Weekly D458 (Fla. 2d DCA Feb. 23, 2018); Airsman v. Airsman, 179 So. 3d 342, 345 (Fla. 2d DCA 2015)Carlough v. Nationwide Mut. Fire Ins. Co., 609 So. 2d 770, 771-72 (Fla. 2d DCA 1992) (citing In re Forfeiture of 1987 Chevrolet Corvette, 571 So. 2d 594, 596 (Fla. 2d DCA 1990)). This is as it should be: The interests of the parties and the judicial system in finality and in avoiding drawn-out, expensive, piecemeal litigation require that the parties and the courts regard the trial as the brass ring and not as the first step of an odyssey to an eventual result many proceedings away. See Carlough, 609 So. 2d at 772; Morton’s of Chi., Inc. v. Lira, 48 So. 3d 76, 79-80 (Fla. 1st DCA 2010). Thus, although we have departed from the rule when a party that won in the trial court was denied a fair opportunity to present its full case during the first trial, see Elder v. Farulla, 768 So. 2d 1152, 1155 (Fla. 2d DCA 2000), the default position is that there is no new trial when a party fails to prove its case and we reverse a judgment in its favor on appeal. My own inclination is that the interests served by the rule demand that a party present compelling equitable circumstances to justify a departure from this default position. See Morton’s of Chi., 48 So. 3d at 80. And I am inclined to adhere to that standard in circumstances where, as here, the party’s proof was rendered insufficient by our determination on appeal that the only evidence it offered to prove a controlling point on which it bore the burden of proof was not admissible.

Something different, however, seems to be happening in foreclosure cases. We have been determining whether to grant a new trial according to considerations that either appear alien to those that underlie the general rule or that are not clearly tied to a legal principle we can apply across cases (or both). For example, in cases where we reverse a judgment of foreclosure because a plaintiff failed to adduce legally sufficient evidence proving the amount of the defendant’s indebtedness—an element of its claim for foreclosure[1]—our most recent cases hold that a new trial is proper where a plaintiff has introduced “some evidence” of that amount, either admissible or inadmissible, and that involuntary dismissal is required when it has “failed to offer any evidence” of that amount. Paeth v. U.S. Bank Nat’l Ass’n, 220 So. 3d 1273, 1275 (Fla. 2d DCA 2017) (emphasis in original) (holding that plaintiff was entitled to a new trial on the amount of indebtedness where it introduced some evidence of the amount, but the evidence was legally insufficient); see also Evans v. HSBC Bank, USA, Nat’l Ass’n, 223 So. 3d 1059, 1063-64 (Fla. 2d DCA 2017) (characterizing amount of indebtedness as “damages” and remanding for new trial where plaintiff presented “some” evidence of indebtedness, but the evidence was not admissible). The cases do not, however, explain whether or how this some-evidence-no-evidence test relates to the general rule against allowing new trials when a plaintiff fails to meet its burden of proof, the policies underlying that rule, or any compelling equity that would justify making an exception to it in a particular case. Nor do they explicitly state any principle that limits that test to a foreclosure plaintiff’s proof of the amount of indebtedness—as distinguished from, say, standing, default, or compliance with paragraph 22—or, indeed, that limits the test to foreclosure cases at all.

In other decisions, our consideration of whether to remand for a dismissal or a new trial when a foreclosure plaintiff has failed to prove its case appears to have hinged on whether the trial court erroneously admitted some evidence offered by the plaintiff. See, e.g., Heller v. Bank of Am., N.A., 209 So. 3d 641, 645 (Fla. 2d DCA 2017) (remanding for new trial where trial court erroneously admitted a copy of a note to prove its contents in violation of the best evidence rule); Sas v. Fed. Nat’l Mortg. Ass’n, 112 So. 3d 778, 780 (Fla. 2d DCA 2013) (remanding for new trial where proof of amount due was based on inadmissible evidence the trial court erroneously admitted). These are cases where, as here, had the inadmissible evidence not been admitted, the remaining evidence (if any) would have been insufficient to permit a judgment in the plaintiff’s favor.[2] Although we have not explicitly stated what considerations drive the result in those circumstances, allowing a new trial where the trial court has erroneously admitted some of the plaintiff’s evidence and the remaining evidence is insufficient might be linked to the notion that the plaintiff was denied a fair opportunity to present its case— i.e., that the trial court’s erroneous admission of some of the plaintiff’s evidence induced the plaintiff not to present other evidence that would have been admissible and that would have proved the same point.

But if that is the basis for these decisions, we have not said so. Nor have we explained why there should be a categorical distinction between pure sufficiency problems and admissibility problems that lead to sufficiency problems. On the contrary, other cases seem to suggest that determining whether a new trial is necessary in a case involving an admissibility issue that creates a sufficiency problem requires a fact-specific inquiry rather than a categorical rule. See, e.g., Mathis v. Nationstar Mortg., LLC, 227 So. 3d 189, 193 (Fla. 2d DCA 2017)(remanding for involuntary dismissal where trial court erroneously allowed witness to testify, over objection, to the contents of an allonge in violation of the best evidence rule and the original was not produced); Holt v. Calchas, LLC, 155 So. 3d 499, 507 (Fla. 4th DCA 2015) (remanding for involuntary dismissal where plaintiff’s only evidence that a paragraph 22 letter was sent was hearsay that was erroneously admitted over objection); Burdeshaw v. Bank of N.Y. Mellon, 148 So. 3d 819, 826-27 (Fla. 1st DCA 2014) (reversing foreclosure judgment based on an evidentiary error and remanding for order of involuntary dismissal where remand for new trial was inappropriate under the facts of the case).

This case provides a good example of why a categorical distinction between pure sufficiency and admissibility cases may not make sense. Here, it is hard to imagine that if the trial court had correctly excluded Ms. Knight’s routine practice testimony, EverHome would have been prepared to produce other admissible evidence that the paragraph 22 letter was mailed to the Spencers. It seems obvious that a person without personal knowledge of a party’s routine business practice cannot testify as to that practice or parrot the hearsay statements of others to establish it. See §§ 90.604, .802, Fla Stat. Yet Ms. Knight was the only witness EverHome decided to bring to the trial, and her testimony established that she had no knowledge to impart about the mailing of the paragraph 22 letter apart from her inadmissible testimony concerning routine practice. Had the trial court excluded that evidence, to which the Spencers contemporaneously objected, it seems quite certain that EverHome would simply have failed to prove compliance with paragraph 22. And had the trial court rendered a judgment of foreclosure notwithstanding that failure of proof, we would likely remand for an order of involuntary dismissal under the rule that a plaintiff that fails to prove its case does not get a second bite at the apple on remand. Granting a new trial here simply because the trial court admitted some plainly inadmissible testimony does not seem to protect legitimate reliance on a trial court’s evidentiary ruling; rather, it seems to reward either (or both) a litigant’s insufficient trial preparation or a strategic decision that it might be able to convince a court to admit clearly inadmissible evidence—precisely the kinds of results the general rule against granting a new trial when a party fails to prove its case the first time around is designed to avoid.[3]

In the interest of brevity, I am oversimplifying a bit. There is more to our decisions on the scope of remand in foreclosure cases than this opinion allows. My point, however, is that we are making decisions about when a foreclosure plaintiff gets an involuntary dismissal or a new trial based on considerations that do not bear an obvious relationship to the rule governing the consequences of a party’s failure to meet its burden of proof that we apply in cases other than foreclosures and that we may not be able to limit to the foreclosure context on a principled basis. Someday, for instance, a lawyer is going to ask that we apply the some-evidence-no-evidence rule in a garden variety contract or tort case, a result we may well consider unadvisable. At least on the basis of what our opinions say, “that is a foreclosure rule” may be the only answer we are able to give for not extending it. But that answer is not going to be a credible or persuasive one. Speaking for myself, I would be open to examining these issues in an appropriate case as a full court with the object of settling on a general approach that we can apply on a principled basis across cases.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION AND, IF FILED, DETERMINED.

[1] See Ernest v. Carter, 368 So. 2d 428, 429 (Fla. 2d DCA 1979) (stating that proof of the amount due is necessary to establish entitlement to foreclose); see also Liberty Home Equity Sols., Inc. v. Raulston, 206 So. 3d 58, 60 (Fla. 4th DCA 2016) (stating that proof of the amount due is part of a foreclosure plaintiff’s prima facie case); Bank of Am., N.A. v. Delgado, 166 So. 3d 857, 859 (Fla. 3d DCA 2015)(characterizing the amount of indebtedness as an “element” of the foreclosure plaintiff’s case).

[2] Although it is commonly assumed in the civil context that a new trial is the correct instruction on remand in such cases, I have as yet been unable to locate any decision of ours that so holds. But see Walker v. State, 988 So. 2d 6, 10 (Fla. 2d DCA 2007) (Altenbernd, J., concurring) (stating in a concurring opinion that this has been a general practice in civil cases), quashed on other grounds by State v. Walker, 992 So. 2d 232 (Fla. 2008). As the cases cited in the text demonstrate, there are circumstances in which our court and others have declined to afford a new trial where a foreclosure plaintiff’s only evidence on a point was inadmissible, leaving the balance of the evidence legally insufficient. Such circumstances are distinguishable from the more common circumstance in which a party convinces a trial court to admit inadmissible evidence and the resulting error is harmful, notwithstanding the fact that other admissible evidence produced by that party might be sufficient to sustain a judgment in that party’s favor. In that situation, we direct a new trial not to protect some interest of the party that offered the inadmissible evidence, but because we cannot say that the admission of that evidence did not affect the outcome of the trial. See, e.g., Soto v. McCulley Marine Servs., Inc., 181 So. 3d 1223, 1226 (Fla. 2d DCA 2015)Swanson v. Robles, 128 So. 3d 915, 919-20 (Fla. 2d DCA 2013).

[3] My instinct on this may be wrong. Perhaps there is a solid doctrinal reason for categorically regarding pure sufficiency cases differently from cases involving an admissibility problem, or maybe it is just more desirable to have a categorical rule that grants a new trial to avoid having to engage in this inquiry in every case. My main concern, as explained in the text, is that we are not really stating a legal principle that drives the result in these cases.

 

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD1 Comment

In re Woide | Failla and Taylor are Alive and Well: Eleventh Circuit again Confirms that Debtors Cannot Retain Secured Property Absent Reaffirmation or Redemption

In re Woide | Failla and Taylor are Alive and Well: Eleventh Circuit again Confirms that Debtors Cannot Retain Secured Property Absent Reaffirmation or Redemption

Lexology-

For the third time in less than two years, the Eleventh Circuit Court of Appeals has ruled that a chapter 7 debtor who does not reaffirm the secured debt or redeem the property must surrender the property. In re Woide, No. 17-10776 (11th Cir. Apr. 5, 2018).

In Woide, the debtors filed a chapter 13 bankruptcy petition, and on schedule A, listed their real property and stated: “to be surrendered.” The case was later converted from chapter 13 to 7, and the debtors did not file any statement of intention with respect to the property. After the close of the debtors’ bankruptcy case, the secured creditor initiated a foreclosure proceeding, which the debtors vigorously defended. The debtors also initiated other, separate lawsuits in state and federal court in an attempt to invalidate the note and mortgage, and they attempted to rescind the note and mortgage under the Truth in Lending Act, 15 U.S.C. § 1635. The bankruptcy court entered an order reopening the bankruptcy case and compelling surrender of the real property, specifically prohibiting the debtors from taking “any action to impede, contest, or dispute the validity or enforceability of the note and mortgage . . . including, but not limited to, any action to rescind the note and mortgage pursuant to the Truth in Lending Act, 15 U.S.C. 1635 . . . .”

After the bankruptcy court ordered the debtors to surrender the property, the debtors appealed the bankruptcy court’s order compelling surrender to the district court, and the district court affirmed. In re Woide, 2017 WL 78798, 6:16-cv-1484 (M.D. Fla. Jan. 9, 2017). The debtors then appealed to the Eleventh Circuit. In re Woide, No. 17-10776 (11th Cir. 2017). The primary issue on appeal was whether the debtors, who did not file a statement of intention regarding their property, but represented during the course of their bankruptcy case that they would surrender their house, and who did not otherwise reaffirm the mortgage or redeem the property during the course of their bankruptcy case, were still required to surrender the property.

[LEXOLOGY]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

Radosevich v. BANK OF NEW YORK MELLON | FL 3DCA- We reverse and remand for the trial court to conduct a further hearing, as may be appropriate, to determine whether Radosevich remains entitled to an award of attorney’s fees as the prevailing party

Radosevich v. BANK OF NEW YORK MELLON | FL 3DCA- We reverse and remand for the trial court to conduct a further hearing, as may be appropriate, to determine whether Radosevich remains entitled to an award of attorney’s fees as the prevailing party

 

Katherine Radosevich, Appellant,
v.
The Bank of New York Mellon, Appellee.

Case No. 3D16-1880.
District Court of Appeal of Florida, Third District.
Opinion filed April 4, 2018.
An Appeal from the Circuit Court for Miami-Dade County, Lower Tribunal No. 09-48177, Monica Gordo, Judge.

Legal Save, and Jeffrey H. Papell, for appellant.

McGlinchey Stafford, PLLC, and Karin L. Posser, N. Mark New, II and William L. Grimsley, (Jacksonville), for appellee.

Before EMAS, FERNANDEZ and LUCK, JJ.

EMAS, J.

INTRODUCTION

Katherine Radosevich appeals from the trial court’s order denying her motion for trial-level attorney’s fees as the “prevailing party” in the mortgage foreclosure action below. For the reasons that follow, we reverse and remand for the trial court to conduct a further hearing, as may be appropriate, to determine whether Radosevich remains entitled to an award of attorney’s fees as the prevailing party.

FACTS AND BACKGROUND

On June 25, 2009, the Bank of New York Mellon, etc. (“BONY”) filed a two-count complaint against Radosevich, seeking (1) to foreclose on a note and mortgage; and (2) to reclaim a lost note. Attached to the complaint was a copy of a unendorsed note, naming Countrywide Home Loans, Inc. as the lender. More than a year after the complaint was filed, BONY filed another copy of the original note, which this time contained an undated blank endorsement, along with an assignment dated July 21, 2009, but with an effective date of May 19, 2009.

The case proceeded to non-jury trial on May 7, 2013. The court denied BONY’s request to admit the loan payment history, based upon a determination that BONY’s witness was not credible. After BONY rested its case, counsel for Radosevich[1] moved for involuntary dismissal, arguing there were discrepancies in the copy of the note filed with the complaint and the later-filed copy of the note, and that the mortgage assignment was dated after the complaint was filed. The trial court granted the motion, and entered an order of dismissal. The court later denied BONY’s motion for reconsideration or new trial, and BONY appealed the dismissal order to this court (Case No. 3D13-2280).

In the meantime, Radosevich moved for trial court attorney’s fees and costs as the prevailing party, pursuant to section 57.105(7), Florida Statutes[2] and a prevailing party provision in the note and mortgage. While the appeal of the dismissal order was still pending, an agreed order was entered below on Radosevich’s motion for trial court attorney’s fees and costs, which stated:

1. Defendant’s Amended Motion for Attorney’s Fees and Costs is GRANTED as to entitlement pending the outcome of the appeal.

2. The parties are in agreement that no hearing regarding the amount of attorney’s fees shall be heard until the appeal has been resolved.

Following the completion of briefing in the appeal of the dismissal order, BONY filed a notice of voluntary dismissal, which was recognized by this court.[3]Thereafter, this court, in an unelaborated order, denied Radosevich’s motion for appellate fees and costs.

Back in the trial court, Radosevich sought a hearing to determine the reasonable amount of trial-level attorney’s fees she should be awarded, pursuant to the court’s earlier order granting entitlement. BONY objected, and the trial court held a non-evidentiary hearing on the issue. At the hearing, BONY argued that Radosevich’s entitlement to fees and costs had not yet been established because the trial court’s prior order granted entitlement “pending the outcome of the appeal,” and, because the appeal had been voluntarily dismissed due to a short sale, neither party was a “prevailing party” entitled to an award of fees and costs.

The trial court denied Radosevich’s entitlement to fees and costs, determining that “the clear and unambiguous language in the Entitlement Order . . . requires the Court to consider and make a determination as to the outcome of the Appeal,” and thus, under the case of Kelly v. BankUnited FSB, 159 So. 3d 403 (Fla. 4th DCA 2015), “the outcome of the Appeal was a voluntary dismissal of the Appeal by Plaintiff after the closing of a short sale,” and “Papell is not entitled to an award of trial court attorney’s fees and costs.” This appeal followed.

ANALYSIS

We generally review an order on a motion for attorney’s fees for an abuse of discretion. Lopez v. Dep’t of Rev., 201 So. 3d 119 (Fla. 3d DCA 2015). However, “[w]here entitlement rests on the interpretation of a statute or contract, our review is de novo.” Raza v. Deutsche Bank Nat. Trust Co., 100 So. 3d 121, 123 (Fla. 2d DCA 2012). See also, Kelly, 159 So. 3d at 405.

Radosevich argues on appeal that the trial court erred in determining she was not the prevailing party in the trial court because she did prevail below and nothing that happened on appeal, including BONY’s voluntary dismissal of its appeal, altered her status as prevailing party below.[4]

In Moritz v. Hoyt Enterprises, Inc., 604 So. 2d 807, 810 (Fla. 1992), the Florida Supreme Court held that “the fairest test to determine who is the prevailing party is to allow the trial judge to determine from the record which party has in fact prevailed on the significant issues tried before the court.”

In the case before us, the trial court, relying on Kelly, 159 So. 3d at 407,determined that Radosevich was not entitled to an award of fees and costs because, despite its voluntary dismissal of the appeal, “[BONY] received considerable proceeds in exchange for the satisfaction of the underlying mortgage and note and Radosevich lost her home and received no proceeds from the sale.”

In Kelly, our sister court considered a case which similarly involved a foreclosure, final judgment, an appeal, and a subsequent voluntary dismissal by the bank following a short sale. In that case, the Fourth District held that the trial court did not abuse its discretion in determining that the property owner was not entitled to attorney’s fees under section 57.105(7) because, under the “unique circumstances” of the case, “neither party substantially prevailed.” Id. at 404.

As the trial court acknowledged in its order denying Radosevich’s entitlement, there are some procedural differences between this case and Kelly: for example, in Kelly, unlike here, the bank prevailed below (and obtained a final judgment) in the trial court, and following the short sale, voluntarily dismissed the lower court case (not the appeal); further, in Kelly there was no entitlement order entered by the trial court prior to the bank’s voluntary dismissal. By contrast, in our case, Radosevich was the prevailing party below, and the trial court had already entered an entitlement order while BONY’s appeal of the involuntary dismissal order was pending on appeal.

However, we cannot ignore the point made by BONY that, regardless of Radosevich’s status as the prevailing party below, post-judgment actions or events arguably altered that status, permitting the trial court to determine whether such actions or events require reconsideration of its interlocutory entitlement order and Radosevich’s status as the prevailing party. As the Florida Supreme Court held in Moritz, 604 So. 2d at 810, the party that prevailed for purposes of entitlement to attorney’s fees is “the party prevailing on the significant issues in the litigation.” Thus, where litigation ultimately ends in a proverbial “tie,” with each party prevailing in part and losing in part on the significant issues in the litigation, a trial court may properly determine that neither party has prevailed for purposes of entitlement to attorney’s fees. Loy v. Loy, 904 So. 2d 482, 484 (Fla. 3d DCA 2005). And while we acknowledge the general rule that “when a plaintiff voluntarily dismisses an action, the defendant is the prevailing party,” Thornber v. City of Fort Walton Beach, 568 So. 2d 914, 919 (Fla. 1990), a court may, under appropriate circumstances, look beyond a voluntary dismissal and consider other facts of the litigation in determining whether a party is the prevailing party for purposes of entitlement to attorney’s fees. Padow v. Knollwood Club Ass’n, Inc., 839 So. 2d 744, 745 (Fla. 4th DCA 2003). Courts should “look to the substance of litigation outcomes—not just procedural maneuvers—in determining the issue of which party has prevailed in an action.” Tubbs v. Mechanik Nuccio Hearne & Wester, P.A., 125 So. 3d 1034, 1041 (Fla. 2d DCA 2013). In the instant case, the trial court was permitted to consider whether, upon return of this cause to the trial court following BONY’s voluntary dismissal of its appeal, Radosevich remained the prevailing party at the trial level, such that she was still entitled to an award of attorney’s fees.

Nonetheless, while we hold that the trial court had the authority to reconsider its earlier entitlement order, and to consider whether actions and events occurring during the pendency of the prior appeal affected that earlier determination, the fact remains that the court must make such a determination based upon the record before it, Moritz, 604 So. 2d at 810, and in this case, the record was simply inadequate for the trial court to make such a determination. In reaching its conclusion that Radosevich was no longer a prevailing party, the trial court relied upon the “fact” that a short sale took place on the foreclosed property. However, the trial court took no testimony and received no evidence regarding the existence, terms or effect of a purported short sale. Mere representations and argument of counsel do not constitute evidence. Geralds v. State, 111 So. 3d 778, 795 n.16 (Fla. 2010) (quoting Collins Fruit Co. v. Giglio, 184 So. 2d 447, 449 (Fla. 2d DCA 1966)) (noting “it is axiomatic that the arguments of counsel are not evidence.”); State v. T.A., 528 So. 2d 974 (Fla. 2d DCA 1988).

CONCLUSION

We reverse and remand for the trial court to conduct a further hearing, as may be appropriate, to determine whether Radosevich remains entitled to an award of attorney’s fees as the prevailing party, and for further proceedings consistent with this opinion.

Not final until disposition of timely filed motion for rehearing.

[1] Radosevich was represented throughout the foreclosure proceedings below, and on appeal, by attorney Jeffrey H. Papell, with whom she had entered into a representation agreement. That agreement provided that Papell’s firm “may seek attorney’s fees from Plaintiff under applicable law should Client prevail or the case is dismissed.” Under the terms of this agreement, Radosevich also confirmed that she had “been told and agree that I cannot waive, settle, resolve, assign or otherwise transfer or dispose of the Firms’ claim for attorney’s fees and costs and that I have assigned and transferred to [the Firm] any right I may have to recover unpaid attorney’s fees and costs.”

[2] Section 57.105(7) provides: “If a contract contains a provision allowing attorney’s fees to a party when he or she is required to take any action to enforce the contract, the court may also allow reasonable attorney’s fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract.” Thus, “[t]he statute makes a unilateral contract clause for attorney’s fees bilateral in effect.” Mihalyi v. LaSalle Bank, N.A., 162 So. 3d 113, 115 (Fla. 4th DCA 2014). It is undisputed in this case that the mortgage contract provided for an award of attorney’s fees to BONY in the event it prevailed in a foreclosure action against Radosevich. Thus, pursuant to section 57.105(7), Radosevich would also be entitled to her attorney’s fees in the event that she is determined to be the prevailing party.

[3] There are no settlement or other supporting documents in the record before us, and according to Papell, if any such settlement occurred, it was done without any notice to Papell. In its notice of voluntary dismissal, BONY represented that it had approved a short sale of Radosevich’s property.

[4] We disagree with Radosevich that the trial court was without jurisdiction to reconsider its earlier order determining entitlement to fees. The entitlement order was an interlocutory order, determining only entitlement, and not the amount of reasonable fees to be awarded, and thus, the trial court had jurisdiction to reconsider, and alter, its earlier order. See Mills v. Martinez, 909 So. 2d 340 (Fla. 5th DCA 2005).

 

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

EMERALD ESTATES COMMUNITY ASSOCIATION v. US Bank N.A. |  FL 4DCA – . As counsel for Emerald Estates explained at the hearing, Emerald Estates requested these costs and fees because U.S. Bank failed to make the required payments after it purchased the property.

EMERALD ESTATES COMMUNITY ASSOCIATION v. US Bank N.A. | FL 4DCA – . As counsel for Emerald Estates explained at the hearing, Emerald Estates requested these costs and fees because U.S. Bank failed to make the required payments after it purchased the property.

 

EMERALD ESTATES COMMUNITY ASSOCIATION, Appellant,
v.
U.S. BANK NATIONAL ASSOCIATION, Appellee.

No. 4D17-1278.
District Court of Appeal of Florida, Fourth District.
April 4, 2018.
Appeal from the Circuit Court for the Seventeenth Judicial Circuit, Broward County; Carol Lisa Phillips, Judge; L.T. Case No. CACE15000488.

Michael T. Ross of the Law Office of Michael T. Ross, P.A., Hollywood, for appellant.

Alexzander D. Gonano of Gonano & Harrell, Fort Pierce, for appellee.

KLINGENSMITH, J.

At a foreclosure sale in March of 2014, U.S. Bank purchased property governed by Emerald Estates Community Association. Months later, Emerald Estates sent U.S. Bank an estoppel letter claiming that pursuant to section 720.3085(2)(c), Florida Statutes (2016), it was entitled to twelve months of unpaid assessments that accrued prior to the bank taking title, and demanding reimbursement of costs and attorney’s fees for collection efforts associated with unpaid assessments.

After U.S. Bank paid the requested amount under protest, it filed a complaint against Emerald Estates, and asserted that it was only required to pay for twelve months of unpaid assessments that accrued prior to it taking title. U.S. Bank denied responsibility for paying any costs or attorney’s fees for collection efforts associated with unpaid assessments that accrued after it acquired title. The trial court ultimately agreed and entered final summary judgment in favor of U.S. Bank. The court relied on Catalina West Homeowners Ass’n, Inc. v. Federal National Mortgage Ass’n, 188 So. 3d 76 (Fla. 3d DCA 2016), and reasoned that Emerald Estates was not permitted to charge for costs and attorney’s fees “that accrued prior to [U.S. Bank] taking title on March 4, 2014.” (Emphasis added).

We agree that based on section 720.3085(2)(c) Emerald Estates was not entitled to costs and attorney’s fees that accrued prior to U.S. Bank acquiring title. See Catalina W. Homeowners Ass’n, Inc., 188 So. 3d at 81 (holding that the homeowner’s association was not entitled to “interest, late fees, attorney’s fees and costs from FNMA” that were incurred prior to FNMA acquiring title to the property).

However, Emerald Estates was claiming reimbursement for costs and attorney’s fees incurred in collection efforts associated with unpaid assessments accruing after U.S. Bank acquired title. As counsel for Emerald Estates explained at the hearing, Emerald Estates requested these costs and fees because U.S. Bank failed to make the required payments after it purchased the property. U.S. Bank presented no evidence at the hearing regarding when these fees and costs actually accrued.

Thus, because a genuine issue of material fact remained as to whether the requested costs and fees were associated with unpaid assessments accruing before or after U.S. Bank acquired the property, we reverse the entry of summary judgment and remand for further proceedings. See Craven v. TRG-Boynton Beach, Ltd., 925 So. 2d 476, 479-80 (Fla. 4th DCA 2006) (“The law is well settled in Florida that a party moving for summary judgment must show conclusively the absence of any genuine issue of material fact, and the court must draw every possible inference in favor of the party against whom a summary judgment is sought.”).

Reversed and remanded for further proceedings.

WARNER and CIKLIN, JJ., concur.

Not final until disposition of timely filed motion for rehearing.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

TFH 4/8/2018 | Congratulations, You Defeated Plaintiff’s Motion for Summary Judgment, But Do You Know The Ten Things You Need To Do Next?

TFH 4/8/2018 | Congratulations, You Defeated Plaintiff’s Motion for Summary Judgment, But Do You Know The Ten Things You Need To Do Next?

COMING TO YOU LIVE DIRECTLY FROM THE DUBIN LAW OFFICES AT HARBOR COURT, DOWNTOWN HONOLULU, HAWAII

LISTEN TO KHVH-AM (830 ON THE AM RADIO DIAL)

ALSO AVAILABLE ON KHVH-AM ON THE iHEART APP ON THE INTERNET

.

Sunday – April 8, 2018

.

 ———————
Congratulations, You Defeated Plaintiff’s Motion for Summary Judgment, But Do You Know The Ten Things You Need To Do Next?

 

 

 

 

—————————-
Homeowners in growing numbers lately, even pro se, have suddenly been defeating summary judgment in foreclosure proceedings or securing appellate reversals of prior summary judgments remanded for trial.

As our listeners know, there are many foolproof ways of challenging the validity of default notices, general loan ledgers, and ownership of promissory notes at filing inception, which we have addressed on prior shows, one or more usually sufficient to defeat summary judgments once you know how easily it can be done, depending of course always on how knowledgeable your foreclosure Judge is.

Just last week, I had a visit from a homeowner who appearing in court pro se defeated summary judgment in two separate foreclosure cases of his, but admitted being dumbfounded regarding what he needed to do next, anticipating going to trial.

Today’s show addresses that precise question, having defeated summary judgment, what comes next?

Although usually the issues will be the same at trial as they were at the summary judgment hearing, there is one big difference.

In defeating summary judgment, you need show only that there are material issues in genuine dispute.

But at trial, to prevail, you must convince the Court that it is more likely than not that your version of the facts is correct, what is called the weight of the evidence, not merely that there are facts in dispute.

When pro se litigants go to trial, the biggest mistake they usually make is to lack admissible evidence, treating the trial more like a summary judgment hearing where their burden of proof was much less.

On today’s show we will summarize the ten things you need to do after defeating summary judgment in order to prevail at trial, the knowledge of the research tools you need to prevail, and the obstacles that will face you, as time permits.

First, what you need to know:

1. How to research and retain trial counsel.

2. How to deal with your foreclosure Judge.

3. How to research and deal with your opposing counsel.

4. How to research your foreclosing plaintiff.

5. How to research and use your jurisdiction’s case law.

6. How to research and use your jurisdiction’s evidence rules.

7. How to research and counter opposing counsel’s witnesses.

8. How to research and counter opposing counsel’s exhibits.

9. How to research and settle your case before trial.

10. How to research and settle your case if you lose at trial.

Unfortunately the obstacles in the way of homeowners prevailing at trial are still many:

a. Unless you filed first, you will not get a jury trial.

b. Often the outcome will depend on what your trial budget is.

c. Another limiting factor is how much equity you have in your property worth saving.

d. There are few competent foreclosure defense attorneys nationwide, at best only a handful, if any, in every State.

e. There are few knowledgeable foreclosure judges nationwide, in some States none.

Nevertheless, having defeated summary judgment, if you listen to today’s show you will increase your knowledge of how you can win and win big at trial and save your home, as many others are doing, despite the otherwise formidable obstacles.

Gary Dubin

Please go to our website, www.foreclosurehour.com, and join your fellow homeowners in the Homeowners SuperPac today.

A Membership Application is posted there waiting for your support.

 

 

.
Host: Gary Dubin Co-Host: John Waihee

.

CALL IN AT (808) 521-8383 OR TOLL FREE (888) 565-8383

Have your questions answered on the air.

Submit questions to info@foreclosurehour.com

The Foreclosure Hour is a public service of the Dubin Law Offices

Past Broadcasts

EVERY SUNDAY
3:00 PM HAWAII 
6:00 PM PACIFIC
9:00 PM EASTERN
ON KHVH-AM
(830 ON THE DIAL)
AND ON
iHEART RADIO

The Foreclosure Hour 12

 

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

MERSCORP Holdings Debuts MERS eNote Solutions, Powered by eOriginal

MERSCORP Holdings Debuts MERS eNote Solutions, Powered by eOriginal

ENTER THE HACKERS!!

Them Report-

MERSCORP Holdings, Inc. and eOriginal, Inc.has launched a new solution offering that will enable originators to accelerate entry into the digital mortgage ecosystem. MERS eNote Solutions, part of the MERS eSuite, will enable the creation, execution, registration, and management of the electronic promissory note, or eNote, to mortgage originators across the industry.

“MERSCORP Holdings is proud to provide technology-based solutions that add value to our members’ bottom line,” said Brendon Weiss, MERSCORP Holdings COO. “Our members identified several gaps that need to be addressed to increase eNote adoption, and this new solution fills a significant need for originators seeking to leverage existing vendor relationships.”

[THEM  REPORT]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

STOP THE BEACH RENOURISHMENT, INC. v. FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION ET AL | Supreme Court rejects Florida beach IDIOT owners’ claim

STOP THE BEACH RENOURISHMENT, INC. v. FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION ET AL | Supreme Court rejects Florida beach IDIOT owners’ claim

https://en.wikipedia.org/wiki/Stop_the_Beach_Renourishment_v._Florida_Department_of_Environmental_Protection

 

STOP THE BEACH RENOURISHMENT, INC. V. FLOR-IDA DEPT. OF ENVIRONMENTAL PROTECTION

SUPREME COURT OF THE UNITED STATES

STOP THE BEACH RENOURISHMENT, INC. 

v.

FLORIDA DEPARTMENT OF ENVIRONMENTAL PROTECTION et al.

certiorari to the supreme court of florida

No. 08–1151.?Argued December 2, 2009—Decided June 17, 2010

Florida owns in trust for the public the land permanently submerged beneath navigable waters and the foreshore. The mean high-water line is the ordinary boundary between private beachfront, or littoral property, and state-owned land. Littoral owners have, inter alia, rights to have access to the water, to use the water for certain purposes, to have an unobstructed view of the water, and to receive accretions and relictions (collectively, accretions) to the littoral property. An accretion occurs gradually and imperceptibly, while a sudden change is an avulsion. The littoral owner automatically takes title to dry land added to his property by accretion. With avulsion, however, the seaward boundary of littoral property remains what it was: the mean high-water line before the event. Thus, when an avulsion has added new land, the littoral owner has no right to subsequent accretions, because the property abutting the water belongs to the owner of the seabed (ordinarily the State).

      Florida’s Beach and Shore Preservation Act establishes procedures for depositing sand on eroded beaches (restoration) and maintaining the deposited sand (nourishment). When such a project is undertaken, the State entity that holds title to the seabed sets a fixed “erosion control line” to replace the fluctuating mean high-water line as the boundary between littoral and state property. Once the new line is recorded, the common law ceases to apply. Thereafter, when accretion moves the mean high-water line seaward, the littoral property remains bounded by the permanent erosion-control line.

Respondents the city of Destin and Walton County sought permits to restore 6.9 miles of beach eroded by several hurricanes, adding about 75 feet of dry sand seaward of the mean high-water line (to be denominated the erosion-control line). Petitioner, a nonprofit corporation formed by owners of beachfront property bordering the project (hereinafter Members) brought an unsuccessful administrative challenge. Respondent the Florida Department of Environmental Protection approved the permits, and this suit followed. The State Court of Appeal concluded that the Department’s order had eliminated the Members’ littoral rights (1) to receive accretions to their property and (2) to have their property’s contact with the water remain intact. Concluding that this would be an unconstitutional taking and would require an additional administrative requirement to be met, it set aside the order, remanded the proceeding, and certified to the Florida Supreme Court the question whether the Act unconstitutionally deprived the Members of littoral rights without just compensation. The State Supreme Court answered “no” and quashed the remand, concluding that the Members did not own the property supposedly taken. Petitioner sought rehearing on the ground that the Florida Supreme Court’s decision effected a taking of the Members’ littoral rights contrary to the Fifth and Fourteenth Amendments; rehearing was denied.

Held: The judgment is affirmed.

998 So. 2d 1102, affirmed.

   Justice Scalia delivered the opinion of the Court with respect to Parts I, IV, and V, concluding that the Florida Supreme Court did not take property without just compensation in violation of the Fifth and Fourteenth Amendments. Pp. 24–29.

   (a) Respondents’ arguments that petitioner does not own the property and that the case is not ripe were not raised in the briefs in opposition and thus are deemed waived. Pp. 24–25.

(b) There can be no taking unless petitioner can show that, before the Florida Supreme Court’s decision, littoral property owners had rights to future accretions and to contact with the water superior to the State’s right to fill in its submerged land. That showing cannot be made. Two core Florida property-law principles intersect here. First, the State as owner of the submerged land adjacent to littoral property has the right to fill that land, so long as it does not interfere with the rights of the public and of littoral landowners. Second, if an avulsion exposes land seaward of littoral property that had previously been submerged, that land belongs to the State even if it interrupts the littoral owner’s contact with the water. Prior Florida law suggests that there is no exception to this rule when the State causes the avulsion. Thus, Florida law as it stood before the decision below allowed the State to fill in its own seabed, and the resulting sudden exposure of previously submerged land was treated like an avulsion for ownership purposes. The right to accretions was therefore subordinate to the State’s right to fill. Pp. 25–27.

(c) The decision below is consistent with these principles. Cf. Lucas v. South Carolina Coastal Council505 U. S. 1003, 1028–1029. It did not abolish the Members’ right to future accretions, but merely held that the right was not implicated by the beach-restoration project because of the doctrine of avulsion. Relying on dicta in the Florida Supreme Court’s Sand Keydecision, petitioner contends that the State took the Members’ littoral right to have the boundary always be the mean high-water line. But petitioner’s interpretation of that dictum contradicts the clear law governing avulsion. One cannot say the Florida Supreme Court contravened established property law by rejecting it. Pp. 27–29.

Justice Scalia, joined by The Chief Justice, Justice Thomas, and Justice Alito, concluded in Parts II and III that if a court declares that what was once an established right of private property no longer exists, it has taken that property in violation of the Takings Clause. Pp. 7–24.

(a) Though the classic taking is a transfer of property by eminent domain, the Clause applies to other state actions that achieve the same thing, including those that recharacterize as public property what was previously private property, see Webb’s Fabulous Pharmacies, Inc. v. Beckwith449 U. S. 155, 163–165. The Clause is not addressed to the action of a specific branch or branches. It is concerned simply with the act, not with the governmental actor. This Court’s precedents provide no support for the proposition that takings effected by the judicial branch are entitled to special treatment, and in fact suggest the contrary. See PruneYard Shopping Center v. Robins, 447 U. S. 74Webb’s Fabulous Pharmaciessupra. Pp. 7–20.

(b) For a judicial taking, respondents would add to the normal takings inquiry the requirement that the court’s decision have no “fair and substantial basis.” This test is not obviously appropriate, but it is no different in this context from the requirement that the property owner prove an established property right. Respondents’ additional arguments—that federal courts lack the knowledge of state law required to decide whether a state judicial decision purporting to clarify property rights has instead taken them; that common-law judging should not be deprived of needed flexibility; and that applying the Takings Clause to judicial decisions would force lower federal courts to review final state-court judgments, in violation of the RookerFeldman doctrine, see Rooker v. Fidelity Trust Co.263 U. S. 413, 415–416, District of Columbia Court of Appeals v. Feldman460 U. S. 462, 476—are unpersuasive. And petitioner’s proposed “unpredictability test”—that a judicial taking consists of a decision that “constitutes a sudden change in state law, unpredictable in terms of relevant precedents,” Hughes v. Washington389 U. S. 290, 296 (Stewart, J., concurring)—is misdirected. What counts is not whether there is precedent for the allegedly confiscatory decision, but whether the property right allegedly taken was well established. Pp. 20–24.

Justice Kennedy, joined by Justice Sotomayor, agreed that the Florida Supreme Court did not take property without just compensation, but concluded that this case does not require the Court to determine whether, or when, a judicial decision determining property owners’ rights can violate the Takings Clause. If and when future cases show that the usual principles, including constitutional ones that constrain the judiciary like due process, are inadequate to protect property owners, then the question whether a judicial decision can effect a taking would be properly presented. Pp. 1–10.

Justice Breyer, joined by Justice Ginsburg, agreed that no unconstitutional taking occurred here, but concluded that it is unnecessary to decide more than that to resolve this case. Difficult questions of constitutional law—e.g., whether federal courts may review a state court’s decision to determine if it unconstitutionally takes private property without compensation, and what the proper test is for evaluating whether a state-court property decision enacts an unconstitutional taking—need not be addressed in order to dispose “of the immediate case.” Whitehouse v. Illinois Central R. Co.349 U. S. 366, 373. Such questions are better left for another day. Pp. 1–3.

   Scalia, J., announced the judgment of the Court and delivered the opinion of the Court with respect to Parts I, IV, and V, in which Roberts, C. J., and Kennedy, Thomas, Ginsburg, Breyer, Alito, and Sotomayor, JJ., joined, and an opinion with respect to Parts II and III, in which Roberts, C. J., and Thomas and Alito, JJ., joined. Kennedy, J., filed an opinion concurring in part and concurring in the judgment, in which Sotomayor, J., joined. Breyer, J., filed an opinion concurring in part and concurring in the judgment, in which Ginsburg, J., joined. Stevens, J., took no part in the decision of the case.

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

CONFLICT!! | Beach Front Owner Rick Scott Just Signed a Bill That Could Make Many of Florida’s Beaches Private

CONFLICT!! | Beach Front Owner Rick Scott Just Signed a Bill That Could Make Many of Florida’s Beaches Private

Miami New Times-

The beach is one of the defining facets of Miami that make this city magic. The white sands are Florida’s identity — an oasis that beckons everyone and belongs to no one, not the billionaires in beach chairs or the kids skipping class and sitting on their backpacks in the sand.

But that might change in some places around the Sunshine State. Gov. Rick Scott last month signed HB 631, the Possession of Real Property Bill, which on July 1 will give hotels, condos, and private residences more control over the beachfront they own, all the way to the high-tide line. Critics say the bill will ultimately give private owners more power to kick the public off their piece of paradise.

“I think this bill is ridiculous,” says Philip Levine, the former Miami Beach mayor now running for the Democratic bid for governor. “Why would we want to take away one of the most basic rights of our residents and do something that could hurt our tourism economy? People visit Florida to be able to walk the beach freely and without being accosted whether they are on dry sand or wet sand.”

[MIAMI NEW TIMES]

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

Dysart v. TRUSTMARK NATIONAL BANK, Court of Appeals, 11th Circuit | Trustmark breached the terms of the mortgage by failing to give Dysart proper notice before accelerating the loan

Dysart v. TRUSTMARK NATIONAL BANK, Court of Appeals, 11th Circuit | Trustmark breached the terms of the mortgage by failing to give Dysart proper notice before accelerating the loan

 

NELL C. DYSART, Plaintiff-Appellant,
v.
TRUSTMARK NATIONAL BANK, a corporation, Defendant-Appellee.

No. 15-14690.
United States Court of Appeals, Eleventh Circuit.
March 30, 2018.
Henry T. Morrissette, for Defendant-Appellee.

Andrew J. Sinor, Jr., for Defendant-Appellee.

Appeal from the United States District Court for the Northern District of Alabama, D.C. Docket No. 2:13-cv-02092-KOB.

Before WILLIAM PRYOR, JILL PRYOR and CLEVENGER[*], Circuit Judges.

DO NOT PUBLISH

PER CURIAM.

Plaintiff Nell Dysart, proceeding pro se, brought a state law breach of contract claim against Trustmark National Bank, alleging that it breached the terms of her mortgage when it accelerated her loan without providing her with the notice the mortgage required. The district court granted summary judgment to Trustmark. The court determined that Trustmark fulfilled its notice obligations under the mortgage as a matter of law, even though it failed to disclose some of the information required by the mortgage, because Dysart had actual knowledge of the omitted information.

This appeal requires us to consider whether, under Alabama law, a bank breaches the terms of a mortgage when it accelerates the loan—without disclosing to the borrower all the information that the mortgage requires the bank to disclose before acceleration—if the bank can show that the borrower was otherwise aware of the omitted information. We conclude that under these circumstances the bank has breached the terms of the mortgage agreement. Accordingly, we reverse the district court’s grant of summary judgment to Trustmark on Dysart’s breach of contract claim.

I. BACKGROUND

Dysart borrowed money from Trustmark secured by a mortgage on her home. The mortgage, which was based on a form agreement, obligated Dysart to make monthly payments to Trustmark, pay taxes attributable to the property, and keep the property insured, among other things. If Dysart defaulted on any of these obligations, the mortgage permitted Trustmark to accelerate the loan, foreclose on the property, and sell it in a foreclosure sale.

The mortgage dictated the notice that Trustmark had to provide to Dysart before it could accelerate the loan.[1] The notice had to identify:

(a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the [loan]. . . .

Mortgage at ¶ 22 (Doc. 1-1).[2] The mortgage also required Trustmark to “inform Borrower of the right to reinstate after acceleration and the right to bring a court action to assert the non-existence of a default or any other defense of Borrower to acceleration and sale.” Id.

The mortgage provided that if Trustmark accelerated the loan, Dysart could cure the default and return to the original terms of the mortgage. The original terms would be reinstated if Dysart paid all sums that were currently due under the mortgage, cured any default of other covenants or agreements, paid Trustmark’s expenses in enforcing the mortgage including its reasonable attorney’s fees, and took any other action that Trustmark reasonably required.

The parties’ dispute arose after Dysart defaulted on the mortgage by failing to maintain property insurance and pay the property taxes. In a series of several communications, Trustmark notified Dysart of the default, identified the actions that Dysart needed to take to cure the default,[3] and directed that the loan would be accelerated if Dysart failed to cure the default. But there is no evidence that Trustmark communicated to Dysart that she had a right to reinstatement after the loan was accelerated or to bring an action to assert the non-existence of a default or any other borrower’s defense to acceleration and sale. When Dysart failed to cure the default, Trustmark accelerated the loan, foreclosed on the property, and sold it to a third party.

After the home was sold, Dysart, proceeding pro se, brought this lawsuit in state court, suing Trustmark for breach of contract.[4] Dysart alleged that the bank breached the terms of the mortgage by failing to give the required notice before accelerating the loan. Trustmark removed the lawsuit to federal district court on the basis of diversity jurisdiction. Trustmark then moved for summary judgment, arguing that it had not breached the contract because it had satisfied its disclosure obligations before accelerating the loan (1) by substantially complying with those obligations or (2) because Dysart was actually aware of the non-disclosed rights from prior dealings between the parties. The district court granted Trustmark’s summary judgment motion. Although there was no evidence that Trustmark had informed Dysart of her rights to reinstatement or to bring a separate action to assert the non-existence of a default, the court found that Trustmark had fulfilled its obligations because Dysart had actual knowledge of these rights. This is Dysart’s appeal.

II. STANDARD OF REVIEW

We review the district court’s grant of summary judgment de novo. Hamilton v. Southland Christian Sch., Inc., 680 F.3d 1316, 1318 (11th Cir. 2012). Summary judgment is appropriate when there is “no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). A genuine dispute of material fact exists when “the evidence is such that a reasonable jury could return a verdict for the nonmoving party.” Likes v. DHL Express (USA), Inc., 787 F.3d 1096, 1098 (11th Cir. 2015) (internal quotation marks omitted).

III. LEGAL ANALYSIS

Dysart asserts that Trustmark breached the terms of the mortgage by failing to give proper notice before accelerating her loan. She argues that before Trustmark accelerated the loan, it failed to notify her of the right to reinstatement or to bring a court action asserting the non-existence of a default; therefore, it breached the mortgage. Trustmark admits that it failed to notify Dysart of these particular rights, but it contends that there was no breach because Trustmark substantially complied with the notice requirements and because Dysart was aware of the non-disclosed rights from the parties’ prior dealings, when Dysart was in default previously. We agree with Dysart that Trustmark breached the mortgage by failing to provide the requisite notice before accelerating the loan because Alabama law is clear that a bank must strictly comply with a mortgage’s notice and disclosure requirements.[5]

The Alabama Supreme Court has recognized that if a lender fails to give notice that strictly complies with the requirements of the mortgage before accelerating the loan, the borrower has a breach of contract claim against the lender. Jackson v. Wells Fargo Bank, N.A., 90 So.3d 168 (Ala. 2012). In Jackson, after borrowers fell behind on their mortgage payments, they received a notice from their loan servicer informing them that their loan had been accelerated and a foreclosure sale was imminent. Id. at 170. After the foreclosure sale, the homeowners brought a breach of contract claim against the owner and servicer of the loan, seeking damages because the owner and servicer failed to give notice before accelerating the loan. Id. at 171. After the trial court granted summary judgment to the owner and servicer, the Alabama Supreme Court reversed, holding that the defendants breached the mortgage by failing to give the borrowers proper notice of their intent to accelerate the debt, as required under the terms of the mortgage. Id. at 173. The Court, quoting from earlier cases, explained that “strict compliance” with the mortgage’s notice provisions was required. Id. at 173 (quoting Dewberry v. Bank of Standing Rock, 150 So. 463, 469 (Ala. 1933)).

In a recent decision, the Alabama Supreme Court, relying on Jackson, reiterated that a lender must strictly comply with a mortgage’s notice provision before accelerating the loan. See Turner, 2017 WL 3821270. In Turner, after homeowners defaulted on their mortgage, their bank notified them that they were in default, that they had 30 days to cure the default before the bank accelerated the loan, and that they had the rights to reinstate the loan after acceleration and to assert in the foreclosure proceeding the non-existence of the default as a defense to the acceleration and foreclosure. Id. at *2. The bank then accelerated the loan, sold the property at a foreclosure sale, and filed an action to eject the homeowners from the property. Id. In the ejectment action, the homeowners asserted that the bank had failed to give proper notice before acceleration by failing to disclose that the homeowners could bring a separate action to assert the non-existence of the default and that this failure to give notice rendered the foreclosure sale a nullity. Id.at *3. The Alabama Supreme Court agreed, relying on Jackson and holding that substantial compliance was insufficient to satisfy the bank’s notice obligation because Alabama law “requires strict compliance” before a bank may accelerate a loan. Id. Because the bank had not strictly complied with all of the mortgage’s notice requirements, the Court concluded that the mortgage sale was void and the homeowners could not be ejected. Id. at *6.

Jackson and Turner dictate that Trustmark was required to comply strictly with the mortgage’s notice requirements, meaning it had to disclose to Dysart, among other things, that she had a right to reinstatement and to bring a court action asserting the non-existence of a default. Because Trustmark failed to do so, it breached the terms of the mortgage.

Trustmark argues that it was excused from strict compliance with the mortgage’s notice requirement because Dysart had actual knowledge of the information that Trustmark failed to disclose. We acknowledge that neither Jackson nor Turnerdirectly addressed whether proof that a borrower actually knew about her rights excuses a lender from fulfilling its notice obligations under a mortgage because this issue was not raised in either case. But it would be inconsistent with the strict compliance requirement set forth in Turner and Jackson to conclude that because the borrower learned the information in some other way that the lender is relieved from its disclosure obligations such that it did not breach the agreement. We are concerned that permitting a lender to prove that it did not breach the mortgage by relying on proof that the borrower was actually aware of the information that the lender failed to disclose would run counter to a mortgage’s requirement that the lender give specific notice after a default occurs before accelerating the loan. Allowing substitute proof of actual knowledge could, as a practical matter, eliminate a lender’s responsibility to inform the borrower of her rights upon default because the mortgage itself notifies the borrower of these rights.

We also acknowledge Alabama case law holding that if a lender provides proof that it sent proper notice but the borrower denies ever receiving the notice, the court may consider whether the borrower had actual knowledge of the information that the lender was required to disclose. See Redman v. Fed. Home Mtg. Corp.,765 So.2d 630 (Ala. 1999). In Redman, before accelerating the loan on a divorced couple’s home, the lender fulfilled its disclosure obligations by sending, through certified mail, a notice of default to the home’s address. Id. at 634. In an ejectment and wrongful foreclosure action, the ex-wife claimed that the bank failed to provide proper notice of the default because although she lived at the home she never received the notice. Id. The Alabama Supreme Court, after finding that the bank had fulfilled its disclosure obligations, rejected the ex-wife’s argument. Instead, the Court relied on the fact that the ex-wife had actual knowledge of the information that the bank was required to disclose, explaining that she could not “close[] [her] eyes to avoid `discovery’ of the truth that was reasonably apparent.” Id. at 635.

The district court in this case treated Redman as permitting Trustmark to rely on evidence that Dysart received constructive notice in lieu of proving that it had strictly complied with the mortgage’s notice requirements. But nothing in Redmandirectly addressed the question before us in this case—whether a lender breaches a mortgage when it fails to comply with a mortgage’s pre-acceleration disclosure requirements if it can show that the borrower already knew the information that the lender was required to disclose. This issue necessarily was not decided in Redman because it was undisputed that the lender had sent proper notice before accelerating the loan.

We recognize that in a different context the Alabama Supreme Court has adopted a harmless error standard, holding that when a lender fails to provide the public with notice required under an Alabama statute before conducting a foreclosure sale, the borrower may rely on this error to invalidate the foreclosure sale only if the error prejudiced the borrower. See Perry v. Fed. Nat’l Mortg. Assoc., 100 So. 3d 1090 (Ala. Civ. App. 2012). In Perry, after a homeowner defaulted on his mortgage, EverHome Mortgage Company published a notice in a local newspaper that it was the assignee of the mortgage and would be selling the property in a foreclosure sale. Id. at 1092. Alabama law requires that before conducting a foreclosure sale, a lender must give the public notice of the “time, place, and terms” of the sale through a notice published in a local newspaper. Ala. Code § 35-10-13. EverHome failed to comply with the statute’s notice requirement because its description of the terms of the sale was inaccurate: it was not the assignee of the mortgage at the time the notice was published. Instead, EverHome was assigned the mortgage one week later. Id. at 1098. When the purchaser at the foreclosure sale brought an action to eject the homeowner, the homeowner argued that the foreclosure sale was null and void because EverHome’s notice inaccurately identified EverHome as the assignee of the mortgage. See Ala. Code § 35-10-13. The Alabama Court of Civil Appeals rejected the homeowner’s argument, holding that only errors in a required notice that prejudice the borrower will invalidate an otherwise valid foreclosure sale. Perry, 100 So. 3d at 1099.

Although Perry did not require the lender to strictly comply with the statutory requirements governing notice to the public before a foreclosure sale, nothing in the opinion addressed whether this harmless error standard also applies when a lender fails to comply with a mortgage’s notice requirements before accelerating a loan. We conclude that it would be inappropriate to extend the reasoning in Perryfrom the context of a lender failing to comply with statutory public disclosure requirements to that of a lender failing to comply with a mortgage’s disclosure requirements because to do so would be inconsistent with the Alabama Supreme Court’s Turner and Jackson decisions requiring strict compliance with mortgage disclosure obligations. See Turner, 2017 WL 3821270, at *6; Jackson, 90 So.3d at 173.

Finally, we note that although Trustmark breached the terms of the mortgage by failing to give Dysart proper notice before accelerating the loan, if Dysart had independent knowledge of the information that Trustmark was required to disclose, she may have suffered no actual damages. But this would not defeat Dysart’s claim because even without actual damages Alabama law permits the recovery of nominal damages in breach of contract actions. See Knox Kershaw, Inc. v. Kershaw, 552 So. 2d 126, 128 (Ala. 1989) (“It is well settled, however, that once a breach of contract has been established, as it was in this case, the nonbreaching party is entitled to nominal damages even if there was a failure of proof regarding actual damages.”).

IV. CONCLUSION

For the reasons set forth above, we reverse the district court’s grant of summary judgment to Trustmark. We remand for further proceedings consistent with this opinion.

REVERSED AND REMANDED.

[*] Honorable Raymond C. Clevenger III, United States Circuit Judge for the Federal Circuit, sitting by designation.

[1] The mortgage established different notice requirements if Dysart was in default because she sold an interest or transferred her interest in the property without first obtaining Trustmark’s consent. Because Trustmark does not contend that it accelerated the loan on this basis, these requirements are not at issue.

[2] Citations to “Doc. #” refer to numbered docket entries in the district court record in this case.

[3] In the letter identifying the actions Dysart needed to take to cure the default regarding the property taxes, Trustmark gave Dysart seven days to say whether she would cure the default, but it never set a deadline for Dysart to cure the default before it accelerated the loan.

[4] Dysart previously sued Trustmark and others in three separate lawsuits alleging claims arising out of the foreclosure. Additionally, in this lawsuit Dysart originally brought other claims against the bank and its attorneys. The issues before us in this appeal are limited to her breach of contract claim; they do not implicate Dysart’s earlier lawsuits or her other claims in this action.

[5] The parties agree that in this diversity action Alabama law governs the breach of contract claim.

 

© 2010-17 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



Posted in STOP FORECLOSURE FRAUD0 Comments

GARY DUBIN LAW OFFICES FORECLOSURE DEFENSE HAWAII and CALIFORNIA
Advertise your business on StopForeclosureFraud.com

Archives