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Fourth Circuit Provides Relief to Chapter 13 Debtors for Some Underwater Mortgages

Fourth Circuit Provides Relief to Chapter 13 Debtors for Some Underwater Mortgages

Lexology-

In a victory for Chapter 13 debtors, the United States Court of Appeals for the Fourth Circuit recently issued a major decision that changes the way bankruptcy courts in North Carolina will deal with certain home mortgages in Chapter 13.

For over 22 years, bankruptcy courts in North Carolina prohibited Chapter 13 debtors from modifying the amount of a claim secured by a principal residence. But in Hurlburt v. Black, the Fourth Circuit reversed itself and held that the Bankruptcy Code allows a debtor to modify some home mortgage claims. Now, debtors with underwater, “short-term” mortgages will only be required to pay the value of their home and can discharge the balance as an unsecured claim.

In 2004, Larry Hurlbert bought his home from Juliet Black for $136,000. He paid $5,000 at closing and financed the balance with Black, signing a promissory note and deed of trust. The note had a 10-year term, requiring payment of $131,000 in principal plus 6% interest in 119 monthly, interest-only installments of $785.41, and a final balloon payment in May 2014. When the loan matured, Hulbert did not pay the balance, Black started foreclosure, and Hulbert filed for bankruptcy protection under Chapter 13.

[LEXOLOGY]

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Henderson v. COPPER RIDGE HOMES, LLC, | MISSISSIPPI SC – Finding that the trial court erred in granting Copper Ridge’s and First Bank’s post-foreclosure motions for dismissal of the Hendersons’ claims, the Court affirms the grant ofjudicial foreclosure, reverses the grant of summary judgment to both parties, and remands the case to the trial court for determination of the Hendersons’ claims.

Henderson v. COPPER RIDGE HOMES, LLC, | MISSISSIPPI SC – Finding that the trial court erred in granting Copper Ridge’s and First Bank’s post-foreclosure motions for dismissal of the Hendersons’ claims, the Court affirms the grant ofjudicial foreclosure, reverses the grant of summary judgment to both parties, and remands the case to the trial court for determination of the Hendersons’ claims.

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CINDY HENDERSON AND JOHN HENDERSON,
v.
COPPER RIDGE HOMES, LLC, RICHARD CONEY, INDIVIDUALLY AND FIRST BANK, A MISSISSIPPI BANKING CORPORATION.

No. 2017-CA-00959-SCT.
Supreme Court of Mississippi.
June 6, 2019.
Appeal from Pike County Circuit Court, 06/28/2017, Hon. Michael M. Taylor. Macy Derald Hanson Dennis I. Horn Shirley Payne W. Brady Kellems Joseph Preston Durr Alfred L. Felder Levoy Bryant Agnew, IV Trial Court Attorneys.

MACY DERALD HANSON, Attorney for Appellants.

DENNIS L. HORN, W. BRADY KELLEMS, SHIRLEY PAYNE, Attorneys for Appellees.

BEFORE RANDOLPH, C.J., MAXWELL AND BEAM, JJ.

ON MOTION FOR REHEARING

BEAM, Justice.

¶1. The motion for rehearing filed by First Bank is denied. The previous opinions are withdrawn, and these opinions are substituted therefor.

¶2. This appeal stems from a breach-of-contract and tort case in the Pike County Circuit Court. John and Cindy Henderson filed suit against Copper Ridge Homes (“Copper Ridge”) and First Bank regarding the construction of their new home in Magnolia, Mississippi. However, the case quickly spiraled into foreclosure proceedings upon the Hendersons’ defaulting on their loan with First Bank. Instead, the judge granted First Bank’s motion for judicial foreclosure.

¶3. After that, the Hendersons unsuccessfully moved multiple times to amend their complaint to add wrongful foreclosure. The judge granted Copper Ridge’s and First Bank’s motions for summary judgment on all of the Hendersons’ claims, finding that the claims, which arose from the alleged faulty construction of the house traveled with the title to the property. Because the Hendersons no longer owned any interest in the house and land, the judge found that they had lost their right to seek damages.

¶4. On appeal, the Hendersons argue that the trial court erred by granting First Bank a judicial foreclosure, by granting Copper Ridge’s and First Bank’s motions for summary judgment, and by denying their motions for leave to amend and to add wrongful foreclosure to their complaint. Finding that the trial court erred in granting Copper Ridge’s and First Bank’s post-foreclosure motions for dismissal of the Hendersons’ claims, the Court affirms the grant of judicial foreclosure, reverses the grant of summary judgment to both parties, and remands the case to the trial court for determination of the Hendersons’ claims.

FACTS AND PROCEDURAL HISTORY

¶5. The Hendersons and Copper Ridge entered into a new-home construction contract on May 9, 2014, in Magnolia, Mississippi. Shortly thereafter, on May 24, 2014, the Hendersons contracted with First Bank to finance the construction of their new home.

¶6. The Hendersons’ complaint stems from a dispute over the price of the home and whether the contract was a fixed-price or cost-plus contract.[1] The Hendersons contend that the contract was a fixed-price contract for $320,000, but Copper Ridge contends it was a cost-plus contract.

¶7. The construction contract contained a provision regarding the changes to the scope of work: any changes to be made had to be in writing. The record contains no evidence of any change orders. Yet the Hendersons received two invoices from Copper Ridge for overage charges in the amounts of $24,386.07 and $29,829.44.

¶8. The Hendersons further allege that First Bank, which exercised sole and exclusive control over the disbursements, had paid approximately $316,000 to Copper Ridge, leaving approximately $4,000 to complete the house under the fixed-price contract. John Henderson was asked to sign three backdated draw disbursements for First Bank. However, he refused to sign a final disbursement because the house was not close to being completed.

¶9. Dissatisfied with Copper Ridge and First Bank, the Hendersons filed their complaint on April 30, 2015, alleging breach-of-contract and tort claims against both parties. Shortly after filing their complaint, the Hendersons did not make their payment on May 23, 2015, as required by the promissory note. First Bank amended its initial answer on October 1, 2015, to include a counterclaim for judicial foreclosure. In response, the Hendersons filed a motion for leave to amend their complaint so they could add wrongful foreclosure, fraud, and breach of the duty of good faith and fair dealing to their complaint.

¶10. Because the foreclosure had not occurred at that time, the judge disallowed adding wrongful foreclosure, but he allowed the Hendersons to amend their complaint to include fraud and breach of the duty of good faith and fair dealing. At the summary-judgment hearing on judicial foreclosure, the trial court found that the Hendersons had not produced sufficient evidence to rebut the foreclosure; therefore, the judge granted First Bank’s motion for an order of judicial foreclosure.

¶11. Following the judicial foreclosure, the Hendersons sought leave to amend their complaint to add wrongful foreclosure a second time. Simultaneously, Copper Ridge and First Bank sought to dismiss the Hendersons’ claims altogether. The trial court denied the Hendersons’ motion for leave to amend and granted Copper Ridge’s and First Bank’s post-foreclosure summary-judgment motions, finding that the claims arising out of the alleged faulty construction of the house traveled with the title to the property. In view of the foreclosure, the trial court found that because the Hendersons no longer owned any interest in the house and land, they had lost their right to seek damages.

¶12. A third time, the Hendersons moved for leave to amend their complaint to add wrongful foreclosure, and the trial judge denied the motion. Aggrieved, the Hendersons appeal the orders entered by the trial court.

LAW AND ANALYSIS

I. Standard of Review

¶13. We must review three rulings on appeal—two grants of summary judgment and a denial of a motion to amend the complaint.

¶14. “We review the grant or denial of a motion for summary judgment de novo, viewing the evidence `in the light most favorable to the party against whom the motion has been made.'” Karpinsky v. Am. Nat’l Ins. Co., 109 So. 3d 84, 88 (Miss. 2013) (quoting Pratt v. Gulfport-Biloxi Reg’l Airport Auth., 97 So. 3d 68, 71 (Miss. 2012), overruled on other grounds by Wilcher v. Lincoln Cty. Bd. of Supervisors,243 So. 3d 177, 188 (Miss. 2018)).

Summary judgment is appropriate and “shall be rendered” if the “pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law.”

Id. (quoting M.R.C.P. 56(c)).

¶15. We review the denial of a motion to amend for abuse of discretion. Webb v. Braswell, 930 So. 2d 387, 392 (Miss. 2006).

II. First Grant of Summary Judgment: Judicial Foreclosure

¶16. First Bank first moved for summary judgment on its judicial foreclosure counterclaim. Tracking the summary judgment standard, First Bank argued there was no material fact dispute that the Hendersons had defaulted by not paying the construction loan and, consequently, First Bank was entitled to foreclosure as a matter of law. In support of its motion, the bank produced evidence of the promissory note that the Hendersons signed on May 23, 2014. The promissory note stated that the Hendersons had agreed to “pay this loan in one payment with all outstanding principal plus all accrued unpaid interest on May 23, 2015,” and to pay “regular monthly payments of all accrued unpaid interest due as of each payment date beginning July 5, 2014, with all subsequent interest payments to be due on the same day of each month after that.” First Bank also provided evidence of the Hendersons’ security for the promissory note, the assignment of the deposit account, and a construction deed of trust with First Bank as lender and beneficiary. The promissory note was not paid by May 23, 2015, and as of September 28, 2015, the payoff on the deed of trust was $326,969.38.

¶17. In response to First Bank’s motion, the Hendersons did not argue that the loan documents were erroneous; rather, they argued that First Bank’s alleged material breach was an excuse or defense to their default. The Hendersons further contended that ruling on the motion for judicial foreclosure then would have been premature when their other claims had yet to be adjudicated.

¶18. At this point, the trial judge granted First Bank’s request to foreclose, whileexpressly leaving open the Hendersons’ ability to pursue claims for damages against First Bank based on, among other things, alleged breaches of the loan agreement. Because the Hendersons chose to sue for money damages, the judge assured them, “nothing about a ruling, nothing about granting summary judgment on the foreclosure, cuts off any damages of the Plaintiff. As a matter of fact, it may create damage arguments for the Plaintiff.”

¶19. The judge’s decision to foreclose first and litigate later perhaps complicated matters. In hindsight, it would have been more practical for the court to delay granting a judicial foreclosure until it had resolved the Hendersons’ contract-based claims. That said, we cannot say the trial judge reversibly erred by allowing First Bank to foreclose based on the undisputed evidence of the Hendersons’ failure to pay the promissory note or by finding that the Hendersons had elected to pursue a claim for money damages against the bank instead of retaining title.

III. Second Grant of Summary Judgment: Dismissal of All Claims

¶20. We do, however, find error in the judge’s granting of First Bank’s secondmotion for summary judgment, which Copper Ridge joined. In these motions, both defendants argued the judicial foreclosure cut off the Hendersons’ right to pursue claims related to the alleged damage to the home.

¶21. First Bank argued it had purchased all of the Hendersons’ claims in the foreclosure. Similarly, Copper Ridge contended that because First Bank held title to the property, First Bank held all rights and claims associated with repairs or completion costs, so the Hendersons had no standing to pursue damages for construction claims against Copper Ridge. The Hendersons responded by arguing that their claims were personal and belonged to them and not to the real property. As they saw it, they lost neither claims nor standing in the foreclosure.

¶22. The trial judge agreed with First Bank and Copper Ridge. After previously stating at the judicial foreclosure motion hearing that the Hendersons would not forfeit the opportunity to argue their other claims, the trial judge found the judicial foreclosure “cut off” the Hendersons’ right to pursue their claims. Specifically, the trial judge ruled that “the claims arising out of the faulty construction of the house travel with the property” and that “no longer being in possession or owner[ship] of the property, those claims, to the extent that they exist, don’t belong to Plaintiff anymore.”

¶23. The Court finds that the trial court erred in finding that the claims traveled with the land and that the Hendersons thus lost rights to those claims. The deed of trust specifically stated that it conveys

all of Grantor’s right, title, and interest in and to the following described real property, together with all existing or subsequently erected or affixed buildings, improvements and fixtures; all easements, rights of way, and appurtenances; all water, water rights and ditch rights; and all other rights, royalties and profits relating to the real property including without limitation all minerals, oil, gas, geothermal and similar matters, (the “Real Property”) located in Pike County, State of Mississippi.

(Emphasis added.)

¶24. In support of its theory, the bank relied on Citizens National Bank v. Dixieland Forest Products, LLC, in which the Court held that the bank had purchased the plaintiff’s lender-liability causes of action against the bank and thus had a right to be substituted as the party in interest and to have the case dismissed. Citizens Nat’l Bank v. Dixieland Forest Prods., LLC, 935 So. 2d 1004, 1014 (Miss. 2006). This case is not analogous to Citizens, though, because the bank in Citizens did not foreclose; it purchased the claims in order to satisfy a debt. Id. at 1008. The bank purchased those choses in action and later filed a motion in the lender-liability suit (which it had purchased) to substitute itself as the party plaintiff and to have the suit dismissed, arguing that it owned the remaining claims in the suit and could rightfully dismiss them. Id. The trial court denied the bank’s motion; however, this Court on appeal reversed the trial court’s ruling in light of Maranatha Faith Center, Inc. v. Colonial Trust Co., 904 So. 2d 1004 (Miss. 2004)Citizens, 935 So. 2d at 1009.

¶25. The Maranatha Court had held that the bank had purchased the plaintiff’s lender-liability causes of action against the bank and was subsequently substituted as a party of interest with rights to dismiss the case. Id. (citing Maranatha, 904 So. 2d at 1009). In Maranatha, a creditor was granted a judgment against its debtor, and the judgment went unsatisfied for months. Id. (citing Maranatha, 904 So. 2d at 1005). The creditor levied execution on Maranatha’s choses in action against another company and found that the chose in action could be sold under execution. Id. at 1010 (citing Maranatha, 904 So. 2d at 1005). Here, First Bank was not asserting that it had purchased the Hendersons’ claims to satisfy any remaining deficiency on a judgment; it suggested that the claims either traveled with the title to the property by virtue of the foreclosure or that the Hendersons had lost their rights and the bank should be substituted as the real party in interest.

¶26. The deed of trust specifically conveys only the property identified in the deed of trust in the event of foreclosure. It did not convey the Hendersons’ contractual or common-law rights related to either the promissory note or its separate contract with Copper Ridge.[2] Therefore, the Court holds that the trial court erred in finding that the Hendersons’ claims traveled with the title to the property upon foreclosure. Accordingly, we reverse the grant of summary judgment to Copper Ridge and First Bank.

IV. Denial of Motion to Amend the Complaint: Wrongful Foreclosure

¶27. As a final matter, the Hendersons argue the trial judge abused his discretion when he denied them leave to amend their complaint to add wrongful foreclosure.

¶28. Under Mississippi Rule of Civil Procedure 15(a), “a party may amend a pleading only by leave of court or upon written consent of the adverse party; leave shall be freely given when justice so requires.” M.R.C.P. 15(a). “While the trial court has discretion to allow an amendment and should do so freely under the proper circumstances, an amendment should not occur when to do so would prejudice [the] defendant.” Webb, 930 So. 2d at 393 (quoting Hester v. Bandy, 627 So. 2d 833, 839 (Miss. 1993)).

¶29. Because we affirm the first grant of summary judgment permitting the foreclosure, we question whether the Hendersons will meet the high bar set for a traditional wrongful-foreclosure claim. Nat’l Mortg. Co. v. Williams, 357 So. 2d 934, 935-36 (Miss. 1978) (“A mortgagor is entitled to recover damages for a wrongful or fraudulent foreclosure of the mortgage, as where an unlawful foreclosure is attempted solely from a malicious desire to injure the mortgagor; or he may recover damages where the foreclosure is conducted negligently or in bad faith, to his detriment . . . .” (quoting 59 C.J.S. Mortgages § 491, at 774 (1949))). That said, because we are reversing the second grant of summary judgment, we see no reason why leave should not freely be given to the Hendersons to amend their complaint to add claims based on alleged damages arising from the foreclosure. However, any amendment should be limited to a claim for money damages only. Generally, a wrongful-foreclosure claimant “has the right to elect between (1) having the sale set aside and (2) recovering from the mortgagee the damages suffered as a result of the wrongful foreclosure.” Id. at 936. But in this specific case, we find that allowing the Hendersons to amend their complaint to add a claim to set aside the foreclosure sale would be prejudicial to First Bank and thus is outside the discretionary authority of Rule 15(a). Webb, 930 So. 2d at 393. As the record reflects, before the foreclosure, the Hendersons elected to affirm the contract with First Bank and to pursue a claim for money damages. And nothing in our ruling should be construed as permitting the Hendersons to reverse course and now seek recision and reclamation of title.

CONCLUSION

¶30. Finding that the trial court erred in granting Copper Ridge’s and First Bank’s post-foreclosure summary-judgment motions on the Hendersons’ claims, the Court affirms the grant of judicial foreclosure, reverses the grant of summary judgment to Copper Ridge and First Bank, and remands the case to the trial court for proceedings consistent with this opinion.

¶31. AFFIRMED IN PART; REVERSED AND REMANDED IN PART.

RANDOLPH, C.J., KING, P.J., COLEMAN, MAXWELL, CHAMBERLIN AND ISHEE, JJ., CONCUR. KITCHENS, P.J., CONCURS WITH SEPARATE WRITTEN OPINION JOINED BY KING, P.J., AND BEAM, J.GRIFFIS, J., NOT PARTICIPATING.

KITCHENS, Presiding Justice, CONCURRING.

¶32. I fully join the majority opinion. I write separately to explain my vote with regard to whether the trial court erred in granting First Bank’s summary judgment motion for judicial foreclosure.

¶33. Cindy and John Henderson allege that First Bank “made unauthorized disbursements of the Henderson new home construction loan fund to Copper Ridge Homes[.]” After discovering those “unauthorized disbursements,” the Hendersons chose not to make any more payments on the promissory note. Assuming that is true,[3] First Bank was the first party to breach the contract. The Hendersons essentially argue that, since First Bank breached first, the trial court erred in granting the bank a judicial foreclosure. That argument is but partially correct and is not well developed.

¶34. Under the common law, “[a] party who has breached or failed to properly perform a contract has a responsibility and a right to cure the breach.” Byrd Bros., LLC v. Herring, 861 So. 2d 1070, 1073 (Miss. Ct. App. 2003) (citing Fitzner Pontiac-Buick-Cadillac, Inc. v. Smith, 523 So. 2d 324, 328 (Miss. 1988)). The nonbreaching party must give the breaching party notice of the breach and, assuming the breach can be cured, “must give [the breaching party] a reasonable opportunity to cure the breach.” Id. (citing Fitzner, 523 So. 2d at 328).

¶35. Additionally, there is a difference between a material and an immaterial breach.

A breach is material when there “is a failure to perform a substantial part of the contract or one or more of its essential terms or conditions, or if there is such a breach as substantially defeats its purpose,” or when “the breach of the contract is such that upon a reasonable construction of the contract, it is shown that the parties considered the breach as vital to the existence of the contract[.]”

UHS-Qualicare, Inc. v. Gulf Coast Cmty. Hosp., Inc., 525 So. 2d 746, 756 (Miss. 1987) (citations omitted). “Where the breach is a material one, the non-breaching party has a right to end the contract[.]” Herring, 861 So. 2d at 1073 (citing UHS-Qualicare, Inc., 525 So. 2d at 756). “[I]f the breach is immaterial or minor, the nonbreaching party is not relieved of its duty to perform but may still sue for damages.” Jeffrey Jackson, Mary Miller, Donald Campbell, et al., Encyclopedia of Miss. Law § 21:35 (2d ed.), Westlaw (database updated Oct. 2018) (citing Timms v. Pearson, 876 So. 2d 1083 (Miss. Ct. App. 2004)).

¶36. Based on these authorities, the Hendersons could have terminated the contract with First Bank if the bank’s breach had been material and if they had given First Bank an opportunity to cure it. Had the Hendersons terminated the contract, the trial court’s granting a judicial foreclosure to First Bank would have been erroneous. The issues of breach and the remedies available both to the Hendersons and to the bank would have to have been resolved before a judicial foreclosure could have occurred. But the record and arguments in this case are unclear with respect to this issue.

¶37. In their appellate brief, the Hendersons cite only one authority on this issue, Ferrara v. Walters, 919 So. 2d 876 (Miss. 2005), using that case to define a material breach. However, the Hendersons offered no argument or legal authorities to explain the reason First Bank’s breach was material as opposed to minor. Nor does the record reflect whether First Bank was given an opportunity to cure its alleged breach. Lacking argument on these points, we cannot ascertain from the record whether the contract was terminated before the Hendersons defaulted on their obligations under the promissory note.

¶38. “Failure to cite relevant authority obviates the appellate court’s obligation to review such issues.” Bell v. State, 879 So. 2d 423, 434 (Miss. 2004) (citing Simmons v. State, 805 So. 2d 452, 487 (Miss. 2001)). Additionally, when no “meaningful argument” is given in support of an issue on appeal, “the issue is considered waived.” Randolph v. State, 852 So. 2d 547, 558 (Miss. 2002)See also, Doss v. State, 956 So. 2d 1100, 1102 (Miss. Ct. App. 2007). The Hendersons waived a full consideration of the issue they presented by failing to cite relevant authority and to provide meaningful argument in support of the same.

¶39. Lawyers must provide authority in support of their arguments when appealing to this Court. If an issue is one of first impression, attorneys should state as much and, to the greatest extent possible, provide supporting authority for their arguments. The Court recognizes that Mississippi jurisprudence has not addressed every legal issue.[4] All the same, citation of some relevant authority—whether from other jurisdictions or secondary sources—is an important feature of appellate practice. Miss. R. App. P. 28(a)(7).

KING, P.J., AND BEAM, J., JOIN THIS OPINION.

[1] A cost-plus contract is “a contract in which payment is based on a fixed fee or a percentage added to the actual cost incurred.” Cost-plus contract, Black’s Law Dictionary (3d ed. 2001).

[2] We note the fact the Hendersons no longer own the home may impact the type of remedy or amount of damages available to them. But as we clarified in Business Communications, Inc. v. Banks, to prevail on a breach of contract claim, the plaintiff is required to prove by a preponderance of the evidence only “the existence of a valid and binding contract . . . that the defendant has broken, or breached it[,]. . . without regard to the remedy sought or the actual damage sustained.” Bus. Commc’ns, Inc. v. Banks,90 So.3d 1221, 1224-25 (Miss. 2012) (citation omitted)).

[3] “When reviewing an award of summary judgment, this Court . . . will presume that all evidence in the non-movant’s favor is true.” Diogenes Editions, Inc. v. State ex rel. Bd. of Trustees of Insts. of Higher Learning, 700 So. 2d 316, 319 (Miss. 1997) (quoting Allen v. Mac Tools, Inc., 671 So. 2d 636, 640 (Miss. 1996)).

[4] The issue at hand does not fall into this category.

 

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Note Capital Group, Inc. v. Perretta | RI SC –  the Perrettas contend that Note Capital was not entitled to enforce the note because the chain of title to the note was tainted by an improper transfer… that Note Capital was not entitled to enforce the note secured by a mortgage on their property because the note had been lost by the previous holder of the note, American Residential Equities, LIX, LLC (ARELIX),2 prior to the assignment of the mortgage to Note Capital

Note Capital Group, Inc. v. Perretta | RI SC – the Perrettas contend that Note Capital was not entitled to enforce the note because the chain of title to the note was tainted by an improper transfer… that Note Capital was not entitled to enforce the note secured by a mortgage on their property because the note had been lost by the previous holder of the note, American Residential Equities, LIX, LLC (ARELIX),2 prior to the assignment of the mortgage to Note Capital

H/T DUBIN LAW OFFICES

2019-17-7 by DinSFLA on Scribd

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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TFH 6/16 | Perjury: Another Under Used Homeowner Weapon in the Battle Between Finality Versus Validity in Foreclosure Defense

TFH 6/16 | Perjury: Another Under Used Homeowner Weapon in the Battle Between Finality Versus Validity in Foreclosure Defense

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Sunday – June 16, 2019

Perjury: Another Under Used Homeowner Weapon in the Battle Between Finality Versus Validity in Foreclosure Defense

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Faced with fake notes, fake endorsements, fake mortgage assignments, fake declarations supporting fake summary judgment motions, just about fake everything robo-signed and photo-shopped, homeowners in foreclosure proceedings continue to ask why they are nevertheless being evicted from their homes while crooked lenders are not being prosecuted.

The answer initially is found in English history, where land Lords and eventually Lord lenders were given broad powers in Law Courts, even to re-enter and evict upon claims of default and no matter how much homeowner equity remained in the property.

Later, English Equity Courts ameliorated to some extent the harsh judgments of its Law Courts, but almost all States upon joining the United States adopted English common law riddled with one-sided evidentiary protections favoring lenders.

American foreclosure laws, although written in terms of English mortgage laws, were informally ameliorated by local lenders who lent pursuant to a traditional mortgage model, where local banks had a vested interest in protecting properties in default and therefore grew to accommodate local homeowners to the fullest extent possible by modifying loan terms in what became known as “loan workouts” — the predecessor to what became now known as “loan modifications”.

The advent of securitized trusts, however, as our listeners know from our past radio shows, changed everything, eventually encouraging a wide spectrum of corruption, the underlying foundation of which has been widespread perjury as never before.

Perjury, the false swearing under oath in official proceedings, is shockingly commonplace today in foreclosure litigation, taking many forms: for example, service of process perjury, loan application perjury, note ownership and endorsement perjury, mortgage assignment perjury, notarization perjury, power of attorney perjury, declaration and affidavit perjury, default notice perjury, general ledger perjury, and attorney affirmation perjury.

Yet, securitized trust depositors, master loan servicers, collection loan servicers, trustees, and their foreclosure attorneys including big law and foreclosure mills are rarely, if ever, prosecuted for their false public office recordings, false foreclosures, false evictions, and false deficiency judgments, or even subject to meaningful criminal investigations, while their perjury driven misconduct continues virtually unchallenged in all American jurisdictions to this day.

It is not because this Nation lacks adequate perjury laws. It has more than enough, for example:

Perjury Generally, making false statements under oath to federal officials, is punishable by up to 5 years imprisonment, plus fines, 18 USC Section 1621, and in California if causing wrongful execution of death, is punishable as a capital offense.

Federal Loan Perjury, making false statements in loan applications, is punishable by up to 30 years imprisonment, plus fines up to $1 Million, 18 USC Section 1014.

Federal Court Perjury, making false statements under oath in judicial proceedings, is punishable up to 5 years imprisonments, plus fines, 18 USC 1623.

State Recording Office Perjury, filing and recording forged or false documents with a public office, is punishable by up to 9 years imprisonment, plus fines, for instance, in California, as criminal forgery, 470 PC, as criminal perjury, 118 PC, and/or as criminal grand theft, 487 PC.

State Notary Fraud, malfeasance in notarization is punishable by up to from 1 year as a misdemeanor to 3 years as a felony, plus fines, depending upon the severity of the misconduct and the harm done.

All States also have such Perjury proscriptions, often vigorously enforced except when involving foreclosure litigation. Again, why?

The answer historically may conceptually be found in the underlying battle between Finality and Validity discussed in recent Foreclosure Hour broadcasts, and the public policy considerations underlie each.

The simply fact is that unlike many other areas of the law, foreclosure litigation has remained unevolving, principally because of a strong body of otherwise outdated court procedures and antiquated caselaw, protected by powerful vested money interests overly represented in the United States Congress and in the Treasury Department, and due to a largely incompetent system of legal education in the United States ignoring foreclosure defense.

As a result, efforts to combat foreclosure perjury has met formidable opposition from a phalanx of Finality Doctrines.

In an attempt to simplify the clash between Finality and Validity, think of the battlefield as a chessboard.

On one side are the Giant protectors of Finality: for example, Stare Decisis, Res Judicata, Claim Preclusion, Collateral Estoppel, Laches, Waiver, In Pari Delicto, Conclusive Presumptions, Prospective Application, Rooker-Feldman, Mootness, Detrimental Reliance, Statute of Limitations, Statute of Repose, Materiality, Limited System Resources, the Rule Ritual, and Binding Precedent.

And on the other side are the Giant protectors of Validity: for example, Perjury, Fraud, Due Process, Reconsideration, Personal Jurisdiction, Subject Matter Jurisdiction, Standing, Illegality, Obstruction of Justice, Unconscionability, Duress, Adhesion, Inadequate Legal Representation, Retroactive Application, Estoppel, Mandamus, Certiorari, Prohibition, and Public Support.

These competing Giant doctrines tug and pull at each other before and after foreclosure judgments are awarded, (1) protecting the status quo versus (2) conforming foreclosure laws and procedures to existing truths and realities, reminiscent in many ways of earlier legal battles in American law regarding a woman’s right to vote, a laborer’s right to unionize, and a minority’s right to unsegregated equal educational opportunities.

Yet, so far a homeowner’s right to fair treatment has lagged very far behind.

Please join John and me this Sunday as we identify and emphasize the heretofore neglected perjury rampant in foreclosure litigation today and make the case for criminal prosecutions to trigger needed Validity reforms.

Gary

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GARY VICTOR DUBIN
Dubin Law Offices
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The Foreclosure Hour 12

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© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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HELL YES!! DID DEUTSCHE BANK SWEEP POSSIBLE MONEY LAUNDERING BY TRUMP UNDER THE RUG?

HELL YES!! DID DEUTSCHE BANK SWEEP POSSIBLE MONEY LAUNDERING BY TRUMP UNDER THE RUG?

Vanity Fair-

Last month, the New York Times reported that anti-money-laundering specialists at Deutsche Bank had flagged “suspicious activity” on the accounts of both Donald Trump and Jared Kushner in 2016 and 2017, advising that they be reported to a financial-crimes regulator—only to be told by higher-ups that their concerns were unfounded and to stop being so “negative.” And you’ll never believe it, but some people think that warrants further investigation!

In a letter sent to the Federal Reserve on Thursday, seven Democratic senators demandedthat Fed chair Jerome Powell and John Williams, the president of the Federal Reserve Bank of New York, examine the transactions and whether Deutsche Bank complied with the law after employees raised the alarm. “Only by conducting a thorough review of the full range of this activity can we better understand what happened in these cases; what practices, procedures, or personnel may need to be changed at the bank; and what regulators should do to ensure the Federal Reserve’s ability effectively to monitor compliance with anti-money-laundering laws,” wrote Senator Chris Van Hollen. “This is a test of the Fed’s independence,” he added in an interview with the Times. “It would be gross negligence if they weren’t investigating.” Other Democrats who signed the letter include Elizabeth Warren and Sherrod Brown.

[VANITY FAIR]

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© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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NY Attorney General James Announces Payments To Borrowers From $45 Million Multi-State Settlement With PHH Mortgage Corporation

NY Attorney General James Announces Payments To Borrowers From $45 Million Multi-State Settlement With PHH Mortgage Corporation

Borrowers in New York State will Receive More Than $666,000 in Total

NEW YORK – Attorney General Letitia James today announced payments to over 800 New Yorkers from a $45 million settlement with New Jersey-based mortgage lender and servicer PHH Mortgage Corporation.

“Today, homeowners who were unfairly and unwittingly victimized receive a piece of justice that they deserve,” said Attorney General Letitia James. “It is unfortunate that New York homeowners were victimized by improper mortgage servicing in the first place, but are at least now receiving the financial compensation owed to them. We will continue to use every resource at our disposal to reverse the damaging practices that helped to create the foreclosure crisis, and hold bad-acting mortgage companies accountable.”

The settlement agreement reached by 49 states, the District of Columbia and 45 state mortgage regulators resolves allegations that PHH, the nation’s ninth largest non-bank residential mortgage servicer, improperly serviced mortgage loans from January 1, 2009 through December 31, 2012. The $45 million settlement includes $30.4 million in payments to borrowers, and additional payments to states and mortgage regulators for costs and fees related to the investigation.

Over 800 New York borrowers applied for payments. Rust Consulting, the settlement administrator, issued checks to claimants on Friday, May 31, 2019. Borrowers who lost their homes to foreclosure during the eligible period will receive approximately $1,500, and borrowers referred (but did not ultimately lose their home) to foreclosure will receive approximately $540. Total payments to New York State borrowers exceeds $666,000.

The settlement agreement also requires PHH to adhere to comprehensive mortgage servicing standards, conduct audits, and provide audit results to a committee of states.The settlement does not release PHH from liability for conduct that occurred beginning in 2013.

“Empire Justice Center applauds Attorney General Letitia James for representing New York homeowners in the recent multi-state settlement with PHH Mortgage Corporation,” said Kirsten Keefe, Senior Attorney and Program Director for HOPP Anchor Partner Program at the Empire Justice Center. “The settlement requires PHH to clean-up its mortgage servicing practices so that they help, rather than harm homeowners. In addition, over 800 New Yorkers will share in a total of cash payments of more than $660,000. Fortunately in New York State, many homeowners who might have otherwise lost their homes because of the misconduct of PHH, received assistance from housing counseling and legal service providers funded through the Attorney General’s Homeowner Protection Program (HOPP) and so remain in their homes. We are very fortunate to have an Attorney General who is continuing to press for the rights of New York’s homeowners and communities.”   

“We commend the Attorney General’s office for holding mortgage servicer’s accountable for their actions to protect New Yorker’s homes, which is their largest and most important asset,” said Susan Boss, Executive Director of The Housing Council at PathStone. “Along with the A.G’s office, we will continue to advocate for all New York homeowners.” 

“We are thankful to Attorney General James for her dedicated support of New York homeowners,” said Christie Peale, CEO and Executive Director of the Center for NYC Neighborhoods. “This settlement provides direct compensation to hundreds of families, some of whom lost their homes to foreclosure during the financial crisis. Just as importantly, it shows that New York State will hold other mortgage lenders and servicers accountable for fully complying with all servicing regulations, and treating homeowners equitably.” 

The case was handled Deputy Bureau Chief Laura J. Levine under the supervision of Bureau Chief Jane M. Azia in the Consumer Frauds and Protection Bureau, and Executive Deputy Attorney General of Economic Justice Christopher D’Angelo.

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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BOGDEN v. CITIGROUP, INC., | Cal: Court of Appeal, 2nd Appellate Dist. – Bogden argues that her attorney’s declaration was sufficient under Code of Civil Procedure section 473, subdivision (b) to justify mandatory relief from the dismissal of her action against defendants and respondents Citigroup, Inc., Citibank, N.A., Citi Residential Lending, Inc., CitiMortgage Inc., Associates First Capital Corp. and CR Title Services (collectively, Citibank). We agree and reverse.

BOGDEN v. CITIGROUP, INC., | Cal: Court of Appeal, 2nd Appellate Dist. – Bogden argues that her attorney’s declaration was sufficient under Code of Civil Procedure section 473, subdivision (b) to justify mandatory relief from the dismissal of her action against defendants and respondents Citigroup, Inc., Citibank, N.A., Citi Residential Lending, Inc., CitiMortgage Inc., Associates First Capital Corp. and CR Title Services (collectively, Citibank). We agree and reverse.

 

DIANA BOGDEN, Plaintiff and Appellant,
v.
CITIGROUP, INC., et al., Defendants and Respondents.

No. B278352.
Court of Appeals of California, Second District, Division Five.
Filed May 30, 2019.
APPEAL from a judgment of the Superior Court of Los Angeles County, Super. Ct. No. BC526888, Holly E. Kendig, Judge. Reversed.

Diana Bogden, in pro. per., for Plaintiff and Appellant.

Bryan Cave Leighton Paisner, and Alfred Shaumyan, for Defendants and Respondents.

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

RUBIN, P.J.

Plaintiff and appellant Diana Bogden appeals from the trial court’s denial of her motion to vacate, for attorney fault, a dismissal entered against her. Bogden argues that her attorney’s declaration was sufficient under Code of Civil Procedure section 473, subdivision (b) to justify mandatory relief from the dismissal of her action against defendants and respondents Citigroup, Inc., Citibank, N.A., Citi Residential Lending, Inc., CitiMortgage Inc., Associates First Capital Corp. and CR Title Services (collectively, Citibank). We agree and reverse.

FACTUAL AND PROCEDURAL BACKGROUND

To call this case a procedural quagmire is something of an understatement. Bogden was one of many plaintiffs in a mass-joinder litigation brought by an attorney who abandoned his clients shortly after filing suit, and was suspended from the practice of law while the action was pending. Although the court and opposing counsel were aware of the attorney’s apparent abandonment, if not his actual suspension, they nonetheless allowed the action to proceed to dismissal against Bogden and her co-plaintiffs when they were virtually unrepresented. An associate who joined the suspended attorney’s firm filed a motion to vacate the dismissal, supported by a declaration of fault by the suspended attorney. Just before the hearing on the motion to vacate, a receiver took over the troubled firm and the parties stipulated to a continuance of the motion to vacate. The court denied the continuance, proceeded to a hearing where neither party appeared, and denied the motion to vacate.

As we shall explain, the road to this miscarriage of justice also contained a notice of ruling which did not match the court’s order, a dismissal order which did not match the court’s intended order, and a number of attorneys not officially substituting out of a representation when they should have done so.

Our recitation of the complete history of the case begins not with plaintiff Bogden, but with her attorney, Vito Torchia, Jr. and his law firm, Brookstone Law, PC.

1. Attorney Torchia and Brookstone Law

Attorney Torchia opened Brookstone in 2009. Some time after, he “expanded the scope of Brookstone’s practice to include mass-joinder litigation and related legal services necessary to postpone foreclosure sales on real property (e.g., bankruptcy). Mass-joinder litigation refers to lawsuits in which numerous (e.g., hundreds of) property/homeowners sue their common mortgage lender or servicer for alleged false, fraudulent, and deceptive lending and foreclosure practices.”

While it is unknown how Bogden came to be a client of Brookstone, Brookstone obtained some of its clients by means of “mass mailing advertising” to property owners.

2. The Mass-Joinder Complaint in This Action

On November 5, 2013, Attorney Torchia filed the complaint against Citibank in this action.[1] The plaintiffs were 68 individuals, Bogden among them, who together alleged 24 causes of action arising from: (1) the intentional placement of borrowers into dangerous loans they could not afford by use of deceptive tactics; (2) individual appraisal inflation; (3) market-fixing; (4) deception in loan modifications; and (5) (with respect to some plaintiffs other than Bogden) unauthorized foreclosures.

The complaint consisted of approximately 100 pages of allegations on behalf of all of the plaintiffs together, followed by an appendix setting forth the facts pertaining to each individual plaintiff. The appendix indicates that Bogden’s complaint arises from a mortgage refinance. She alleged that: (1) she had been steered into an adjustable rate mortgage, but did not know the interest rate was, in fact, adjustable, nor did she know her payments for the first five years were interest-only; (2) Citibank had altered her loan application without her knowledge, to indicate that she had a greater income, so that she would be approved for a loan she could not, in reality, afford; (3) defendants fraudulently inflated the appraisal on her property to justify an increased loan amount; (4) Citibank represented that she would be able to refinance the loan later, but she could not do so, because her actual income was too low and she had insufficient equity in her home; and (5) had she known the truth, she never would have accepted the loan.

3. The Case is Removed to Federal Court

On January 6, 2014, Citibank removed the case to federal court, due to the presence of a single federal law cause of action. The case would ultimately be remanded, but the proceedings in federal court are notable because it was during these proceedings that Attorney Torchia first disappeared.

4. Attorney Torchia Stops Participating

After the case was removed to federal court, plaintiffs conceded that their federal cause of action was not properly pleaded and should be dismissed, which would defeat federal question jurisdiction. On April 22, 2014, the district court concluded that the matter should be remanded back to state court, but indicated that its remand order would not be effective until plaintiffs filed a request for dismissal of their federal cause of action.

Attorney Torchia did not file a request for dismissal. Nor did he respond to a series of orders to show cause why he should not be sanctioned for failing to do so and failing to appear. Eventually, the district court dismissed the federal cause of action itself, imposed sanctions, remanded the matter to state court, and required Attorney Torchia to pay Citibank over $16,000 in attorney fees. The court’s order explained that Attorney Torchia could not “proceed with inappropriate litigation tactics, fail to comply with court orders, and cause the opposing parties to incur unnecessary costs, without consequences.” Attorney Torchia did not pay, and a bench warrant would ultimately be issued in February 2015.

5. The Case Returns to State Court

The case was remanded in August 2014. By order of August 21, 2014, the trial court set the case for a case management conference for September 29, 2014.

6. Citibank Demurs and Attorney Torchia Does Not Oppose

On September 10, 2014, Citibank demurred to the complaint, arguing, among other things, that the plaintiffs were misjoined. Attorney Torchia filed no opposition to the demurrer. Nor did he file an opposition to Citibank’s motion to strike, or the other defendants’ motions challenging the complaint. Attorney Torchia simply did not participate in the case, just as in federal court.

7. Attorney Torchia Briefly Surfaces in Connection with the Case Management Conference

After the case had been remanded to state court, Attorney Torchia filed only two documents on behalf of plaintiffs. The first was a September 26, 2014 case management statement for plaintiffs. Attorney Torchia also attended, by telephone, the September 29, 2014 case management conference. At the conference, the court ordered Attorney Torchia to file “a detailed declaration with information of all parties, including which parties have been served and what remains in this case” by October 17, 2014. The case management conference was continued to May 12, 2015, to be heard with the then-pending demurrers.

Attorney Torchia did not file the required declaration. In fact, he would go on to file only one more document on behalf of plaintiffs, an association of counsel.

8. Brookstone Has a Win in the Petersen Litigation

Before we discuss the association of counsel, we pause to recognize that, while Brookstone’s mass-joinder action against Citibank was pending in this court, Brookstone had been pursuing other mass-joinder litigations in other courts. Brookstone’s action against Countrywide Financial Corporation had been dismissed for misjoinder of plaintiffs. On December 11, 2014, Division Three of the Court of Appeal, Fourth Appellate District reversed, holding, albeit over a dissent, that Brookstone’s mass-joinder action was not, in fact, misjoined. (Petersen v. Bank of America Corp. (2014) 232 Cal.App.4th 238 (Petersen).) The Petersenaction had been filed by Attorney Torchia on behalf of 965 plaintiffs; and the complaint contained similar allegations to the complaint in this case. (Id. at pp. 240-241.) Review was denied in Petersen on March 25, 2015.

Because Attorney Torchia did not oppose Citibank’s demurrer, he did not bring the Petersen opinion to the court’s attention in response to Citibank’s demurrer for misjoinder. By the time the demurrer was heard, May 12, 2015, the Petersen case was final.

9. Attorney Torchia Associates in Attorney Mortimer

On March 4, 2015, Attorney Torchia filed, on behalf of plaintiffs, a notice of association of counsel, associating in as co-counsel Attorney John E. Mortimer, a non-Brookstone attorney. Both attorneys signed this association. Attorney Mortimer would ultimately submit a declaration explaining that he “agreed to assist as requested, and as mutually agreed upon, but never independently.” He was never asked to do anything by Attorney Torchia, and therefore, did nothing in the case.

After filing the association of Attorney Mortimer, Attorney Torchia filed nothing else in this case, until he was called upon to file a declaration of attorney fault.

10. The May 12, 2015 Demurrer Hearing Proceeds Without Attorney Torchia

Prior to the May 12, 2015 hearing, Citibank filed a notice of non-opposition to its demurrer.

Neither Attorney Torchia nor Attorney Mortimer attended the May 12, 2015 hearing.

Two things occurred at the demurrer hearing, somewhat simultaneously. First, one of the plaintiffs, Earl Luevano, had sought permission to substitute in for Attorney Torchia as a self-represented litigant, but had not been able to obtain Attorney Torchia’s signature on the substitution. The court issued an order allowing Luevano to substitute in without Attorney Torchia’s signature. The court stated, “The court bases this order on the court’s judicial notice of the proceedings in Federal District Court . . ., wherein attorney Torchia has failed to appear multiple times for hearings, and failed to follow court orders, and had to be ordered to appear via a bench warrant. Similarly, attorney Torchia failed to appear . . . today for a hearing on two demurrers, and failed to file any opposition. Therefore, the court rules plaintiff Luevano may terminate present counsel and file a Notice of Substitution without counsel’s signature, based on the court’s determination that plaintiff Earl Luevano’s attempts to find his counsel and obtain a signature would be futile.”

At the same time, the court sustained the demurrers for misjoinder of plaintiffs.[2]Other than plaintiff Luevano, who had sought permission to appear for himself, no one appeared for any of the plaintiffs. There is no indication that anyone present at the hearing questioned whether it was appropriate to proceed, given Attorney Torchia’s apparent abandonment of his clients.

The court concluded that the plaintiffs were improperly joined, in that they each relied on different transactions and alleged different misrepresentations based on different evidence. The court’s minute order states, “one of the plaintiff’s [sic] may amend to continue this lawsuit against the defendant or defendants of their choosing, within 10 days, . . .”[3] The court’s minute order did not explicitly address the disposition of the complaint as it pertained to all of the other plaintiffs.

Citibank was to give notice of ruling.

11. Citibank Serves an Erroneous Notice of Ruling

On May 13, 2015, Citibank served notice of ruling, which states that its demurrer “was SUSTAINED on the grounds of misjoinder with 10 days leave to amend as to all Plaintiffs, . . .” This is incorrect; the court’s minute order states that only one plaintiff may amend, while Citibank’s notice of ruling provided that “all Plaintiffs” had 10 days leave to amend. On appeal, Citibank represents that the trial court did, in fact, grant leave “so that a single plaintiff could file an amended complaint,” which is not what it stated in its notice of ruling. In reply, Bogden takes the position that the court had granted all plaintiffs leave to amend, as set forth in Citibank’s notice of ruling, and suggests that it was the court’s minute order which was wrong. We conclude the court’s minute order, and not Citibank’s notice of ruling, properly expresses the court’s ruling: the court sustained the demurrer on the ground of misjoinder, and permitted only a single plaintiff to amend.

However, Citibank’s mistaken notice of ruling would be the cause of confusion by the time of the motion to vacate. As we have noted, no counsel for plaintiffs attended the hearing, and the notice of ruling from Citibank indicated that, at this stage in the proceedings, all plaintiffs were permitted to file an amended pleading. In other words, Citibank’s notice of ruling gave the impression that plaintiffs were given a second bite at the misjoinder apple, even though this did not appear to have been the court’s ruling.

12. Attorney Torchia Is Suspended; Does Not Act

Unbeknownst to the parties, on May 14, 2015, two days after the trial court sustained Citibank’s demurrer, the State Bar Court entered Attorney Torchia’s default in disciplinary proceedings pending against him. As a result of his default, Attorney Torchia was enrolled as inactive as of May 17, 2015. Thus, during the 10-day period in which a single plaintiff had leave to file an amended complaint, Attorney Torchia was suspended from practice. No amended complaint was filed.

13. The Action is Dismissed With Prejudice

Given that the 10 days passed with no amended complaint, Citibank drafted and served a proposed order dismissing the claims of all plaintiffs. The proposed order indicated that the complaint was dismissed with prejudice. On June 12, 2015, the court signed the order.

On July 6, 2015, Citibank served notice of entry of that order on Attorneys Torchia and Mortimer.

14. Bogden Attempts to Take Action

According to Bogden, Citibank telephoned her on July 17, 2015, telling her that the case had been dismissed, so it was commencing foreclosure proceedings. At this point, she attempted to reach Attorney Torchia, but could not get a response from anyone at Brookstone. She ultimately came to understand that counsel had stopped working on the case sometime in 2014, but had not told his clients.

On July 21, 2015, Bogden, acting in pro. per., but without having formally substituted in, filed a motion requesting compliance with Code of Civil Procedure section 286 and for reconsideration of the order of dismissal.[4]

Section 286 provides, “When an attorney dies, or is removed or suspended, or ceases to act as such, a party to an action, for whom he was acting as attorney, must, before any further proceedings are had against him, be required by the adverse party, by written notice, to appoint another attorney, or to appear in person.” Case authority provides that when notice is required under section 286 but not given, the court is “deprived of jurisdiction.” (California Water Service Co. v. Edward Sidebotham & Son, Inc. (1964) 224 Cal.App.2d 715, 734.) Proceedings occurring in violation of this section are void, and may be set aside as such on noticed motion. (Aldrich v. San Fernando Valley Lumber Co. (1985) 170 Cal.App.3d 725, 743.)

Bogden’s motion did not specifically seek to vacate the court’s orders. Instead, Bogden sought reconsideration of the dismissal, and retroactive notice under section 286. This motion, which we refer to as “Bogden’s section 286 motion,” was set for hearing on March 4, 2016, was continued once by stipulation, and would never actually be heard.

15. The July 30, 2015 Status Conference

A status conference was held on July 30, 2015. Bogden was represented by counsel at the hearing. Attorney David Azar filed a notice of limited scope representation for Bogden, stating he was representing her only at the status conference.[5] At the status conference, Attorney Azar informed the court that the order of dismissal had been with prejudice. The court explained that it had not intended to dismiss the plaintiffs with prejudice, and would consider an amended order. A status conference regarding submission of an amended order of dismissal was set for September 8, 2015. Attorney Azar filed a second notice of limited scope representation, in order to continue representing Bogden to negotiate the amended order.

16. Attorney Jonathan Tarkowski of Brookstone Becomes Involved

At this point, Attorney Jonathan Tarkowski represented himself to be a new attorney with Brookstone and “counsel for all Plaintiffs.” He filed a motion for an amended order dismissing the plaintiffs’ claims without prejudice. Thereafter, negotiations took place among Attorney Azar (representing Bogden), Attorney Tarkowski (possibly representing all plaintiffs) and counsel for Citibank, attempting to reach agreement on a joint proposed order.[6] They could not do so.

17. The Dismissal is Amended to “Without Prejudice”

At the hearing on September 8, 2015, the court ordered its prior order of dismissal with prejudice amended nunc pro tunc to a dismissal without prejudice. The court expressed frustration with Citibank’s counsel for having drafted the order as a dismissal with prejudice when the court had never intended that. At this hearing, the court also questioned why Attorney Azar had not contacted Attorney Mortimer, who was still counsel of record for plaintiffs.

18. Attorney Mortimer Withdraws

The court’s comments regarding Attorney Mortimer brought results. On October 1, 2015, Attorney Mortimer, who had done nothing in the case since he had been associated in, withdrew his association as co-counsel for plaintiffs.

19. Attorney Tarkowski Files a Motion to Vacate the Dismissal

On November 12, 2015, Attorney Tarkowski, purporting to act for all plaintiffs, filed a motion to vacate the dismissal under section 473. The motion was set for hearing on August 10, 2016.

Attorney Tarkowski sought to vacate both the dismissal and the order sustaining the demurrer which led to the dismissal. He sought relief under both branches of section 473 — discretionary relief and mandatory relief for attorney fault. Additionally, he sought relief under the court’s inherent power to provide equitable relief.

As we will resolve the appeal on the issue of mandatory relief due to attorney fault, we limit our discussion of the motion to that basis. Section 473(b)’s mandatory relief provision states in pertinent part: “Notwithstanding any other requirements of this section, the court shall, whenever an application for relief is made no more than six months after entry of judgment, is in proper form, and is accompanied by an attorney’s sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect. The court shall, whenever relief is granted based on an attorney’s affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties.”

Attorney Tarkowski argued that the adverse demurrer ruling and dismissal arose because of Attorney Torchia’s failure to oppose the demurrer. He specifically argued that if Attorney Torchia had bothered to oppose the demurrer, he could could have successfully defeated the misjoinder argument by relying on the recent Petersen case.

The motion was supported by a declaration of Attorney Torchia accepting responsibility for the dismissal of the action. First, he admitted fault for failing to oppose the demurrer. He explained that, during this time, he fell into a depression and “started drinking at an alarming rate.” He explained, “As a result of my deep depression and heavy drinking, I failed to properly represent the clients myself, or provide for their representation by proving adequate support and assistance through other attorneys.” He stated, “Due to my condition I failed to draft and file oppositions to any and all Defendants’ demurrers.” He also admitted failing to attend the hearing. He stated, “I do believe that if I was not in deep depression, heavily drinking, and isolated that I would have opposed the demurrers filed by Defendants and attended the May 12, 2015 [hearing].”

Second, he admitted fault for not responding when granted 10 days leave to amend. He admitted that he was suspended effective May 17, 2015 (five days after the hearing on the demurrer). He stated that he does not recall “when or if” he was served with Citibank’s notice of ruling from the demurrer hearing. Nonetheless, he explained that if he was served with the notice of ruling (or the orders), he was not licensed to practice law at that time. If he had been able to practice law and was not depressed or under the influence of alcohol, he “would have filed an amended complaint to properly address the joinder issue on which Citi Defendants’ demurrer was granted,” by relying on Petersen. More than that, Attorney Torchia admitted, “I failed to adequately notify Plaintiffs in this matter of my suspension from practicing law and their rights as a result of my suspension.”

Finally, Attorney Torchia admitted that all fault was his and not Attorney Mortimer’s. He explained that, although he had associated in Attorney Mortimer, he “failed to provide any instructions to Mr. Mortimer as to proceed with prosecuting the case. I failed to notify Mr. Mortimer of hearings, filings, deadlines, and/or tasks that needed to be completed to prosecute this action.” Attorney Mortimer filed a declaration confirming that he had associated in to assist “as requested” by Brookstone, but that he had never been requested to provide any legal services in the case.

20. Attorney Tarkowski Seeks Leave to File an Amended Complaint

When a motion to vacate seeks discretionary relief under section 473, as Attorney Tarkowski’s motion did, the motion must be accompanied by a copy of the pleading proposed to be filed. Instead of attaching a proposed amended complaint to the motion for relief from default, Attorney Tarkowski filed a simultaneous motion for leave to file a first amended complaint. The proposed amended complaint was again, a mass-joinder complaint, filed on behalf of many plaintiffs, including Bogden.

21. A Receiver Takes Over Brookstone

While the parties were awaiting the August 2016 hearing on the motion to vacate, they were blissfully unaware that the Federal Trade Commission (FTC) was preparing a complaint against Brookstone and related individuals and entities, including Attorneys Torchia and Tarkowski. While the actual allegations of the FTC are not before us, it appears that the FTC believed Brookstone ran afoul of the federal Mortgage Assistance Relief Services Rule, possibly in connection with the advertising of its services to consumers.

The FTC obtained the appointment of a temporary receiver over Brookstone by means of a temporary restraining order dated June 1, 2016. The receivership was to last until to July 1, 2016, so that the matter could be heard on the FTC’s application for a preliminary injunction.

22. The Receiver Requests a Stay; The Parties Stipulate to It

On June 17, 2016, the receiver filed a notice, in this action, that Brookstone had been placed in receivership, and requested a 90-day stay of proceedings. The receiver stated that it had taken control of Brookstone “and suspended operations.” It represented that Brookstone would remain closed until the hearing on the preliminary injunction and, if such an injunction issued, Brookstone “will remain closed indefinitely afterwards . . . .” The receiver requested a 90-day stay so that Brookstone’s clients could be notified and given an opportunity to obtain new counsel.

At the end of June 2016, the temporary restraining order, including the appointment of a receiver, was transformed into a preliminary injunction.

On July 22, 2016, the receiver, Citibank, and Bogden (representing herself) stipulated to stay the proceedings and continue the scheduled hearing on the motion to vacate, then currently set for August 10, 2016. They stipulated to stay the case for 90 days and continue the hearing for at least 180 days.

The parties assumed the stipulation would be approved. Indeed, on appeal, Citibank concedes that it “did not file an opposition [to the pending motion to vacate] because of the parties’ stipulation attempting to continue the hearing.”

23. The Court Denies the Stipulation and the Motion to Vacate

The court denied approval of the stipulation. It proceeded with the scheduled hearing on the motion to vacate and motion for leave to file an amended complaint on August 10, 2016. The only appearances were one plaintiff (not Bogden) in pro. per., and counsel for a non-Citibank defendant. There was no court reporter.

The minute order reads as follows: “Matter is called for hearing. [¶] Plaintiffs’ motion to vacate orders of dismissal is DENIED. Given that the first motion is denied, this case remains dismissed without prejudice and the accompanying motion to file a FAC is also DENIED. There is no basis for the court to stay this case as it was already dismissed in May 2015. The Stipulation for Stay of Proceedings submitted by the court appointed receiver is not signed.”

24. Bogden Appeals

Bogden filed timely a notice of appeal from the August 10, 2016 order, stating that she was appealing “from the final judgment and all orders that are separately appealable.”

DISCUSSION

On appeal, Bogden represents that she is appealing from: (1) the denial of the motion to vacate; (2) the denial of the motion for leave to file the first amended complaint; and (3) the failure of the court to hear and rule on Bogden’s section 286 motion. We need address only the first of these. We conclude that the motion to vacate was properly supported by Attorney Torchia’s declaration of fault and should have been granted.

Although Citibank disagrees substantively, it also raises multiple procedural challenges to this court even reaching the merits of the appeal. It argues: (1) the order denying the motion to vacate is not an appealable order; (2) the record is inadequate to enable appellate review because there is no reporter’s transcript of the August 10, 2016 hearing; and (3) Bogden forfeited the right to appeal by not attending the hearing on her motion to vacate. We will first consider, and reject, Citibank’s procedural challenges. We will then discuss the merits of the motion to vacate and conclude Attorney Torchia’s declaration was sufficient to mandate relief.

1. The Order Denying the Motion to Vacate is Appealable

Citibank’s first argument is that the court’s order denying the motion to vacate is not an appealable order.

“An order denying a motion to vacate a judgment or dismissal under section 473 is appealable . . . .” (Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 611.) Citibank’s argument that Bogden may not appeal the order denying the motion to vacate under section 473 is based on the following rationale: The order denying a motion to vacate is a postjudgment order, which is only appealable if the underlying judgment is. But the underlying judgment in this case was a dismissal without prejudice. Being without prejudice, the dismissal is not a final appealable judgment.

Citibank is twice mistaken. While it is true that the denial of a motion to vacate is appealable as a postjudgment order under section 904.1, subdivision (a)(2), the denial of a statutory motion to vacate under section 473 may be appealable even when the underlying judgment is not. (Jackson v. Kaiser Foundation Hospitals, Inc.(2019) 32 Cal.App.5th 166, 169-170.)

As to the dismissal without prejudice in this case, it is, in fact, a final appealable judgment. The confusion appears to have arisen from the line of cases culminating in Kurwa v. Kislinger (2013) 57 Cal.4th 1097, in which the Supreme Court concluded that parties cannot create appealability, when a judgment does not dispose of all causes of action, by voluntarily dismissing the remaining causes of action without prejudice and stipulating to waive operation of the statute of limitations. (Id. at p. 1100.) Citibank apparently believes that the factor causing non-appealability in that scenario is that the dismissal is without prejudice. To the contrary, Kurwa expressly approved of Abatti v. Imperial Irrigation Dist. (2012) 205 Cal.App.4th 650, 655, which held that the determinative factor was not whether the dismissal was without prejudice, but whether the parties waived the statute of limitations.

The Abatti court concluded “that claims that are dismissed without prejudice are no less final for purposes of the one final judgment rule than are adjudicated claims, unless . . . there is a stipulation between the parties that facilitates potential future litigation of the dismissed claims.” (Abatti, supra, 205 Cal.App.4th at p. 655.) “In our view, the theoretical possibility of future litigation of claims that have been dismissed without prejudice and without a stipulation does not render a judgment any less final than does the possibility of litigation of claims that may be asserted in the first instance on remand.” (Id. at p. 667.) In Kurwa, our Supreme Court agreed, observing that a dismissal without prejudice unaccompanied by a stipulation to waive the statute is, in fact, sufficiently final. (Kurwa, supra, 57 Cal.4th at pp. 1105-1106.)

In this case, the claims of all plaintiffs were involuntarily dismissed without prejudice. Nothing was preserved to facilitate future litigation. That dismissal is final and appealable, rendering the denial of the motion to vacate that dismissal an appealable postjudgment order.

2. The Record on Appeal is Sufficient to Enable Appellate Review

There was no reporter present at the hearing on the plaintiffs’ motion to vacate the dismissal in favor of Citibank. Citibank contends the absence of a reporter’s transcript is fatal to Bogden’s appeal.

Counsel has a duty to ensure that a court reporter is present at a hearing when counsel has reason to anticipate that what is said at the hearing may be pertinent to a subsequent appeal, and the failure to obtain a reporter can be tantamount to a waiver of the right to appeal. (In re Christina P. (1985) 175 Cal.App.3d 115, 129.) The absence of a reporter’s transcript is fatal to an appellate challenge to the sufficiency of the evidence; without a transcript, it is presumed that the unreported testimony would demonstrate the absence of error. (Estate of Fain (1999) 75 Cal.App.4th 973, 992.) But when our review is de novo, and the record contains the court’s written orders and all evidentiary materials germane to the motion, a record of the hearing is not necessary to resolve the appeal. (Bel Air Internet, LLC v. Morales (2018) 20 Cal.App.5th 924, 933-934.)

Thus, to determine whether the record is adequate in the absence of a reporter’s transcript, we must turn to the standard of review of the denial of Bogden’s section 473 motion for mandatory relief due to attorney fault. If the prerequisites for relief are met, a trial court is without discretion to deny relief. Our review is de novo, unless the applicability of the provision turns on disputed facts. (Leader v. Health Industries of America, Inc., supra, 89 Cal.App.4th at p. 612.) Here, plaintiffs submitted a declaration of Attorney Torchia attesting to his neglect. Citibank submitted no evidence in opposition to the motion and, in fact, no opposition at all. Neither plaintiffs nor Citibank appeared at the hearing on the motion; thus, no evidence could have been introduced in connection with the motion at the hearing. As such, there are no disputed facts, and our review is de novo.[7] The absence of a reporter’s transcript does not prevent our review.

3. Bogden Did Not Forfeit Her Right to Appeal by Failing to Attend the Hearing

Relying on In re Aaron B. (1996) 46 Cal.App.4th 843, Citibank contends Bogden forfeited her right to appeal by not attending the hearing on the motion to vacate and objecting to the court’s ruling denying the motion. In re Aaron B. included the following language: “We recently have been deluged with similar cases in which the appellant raises issues on appeal without having appeared or made a record in the trial court. At the risk of sounding like a broken record, we again cite the general rule: `[A] party is precluded from urging on appeal any point not raised in the trial court. [Citation.] Any other rule would “`”permit a party to play fast and loose with the administration of justice by deliberately standing by without making an objection of which he is aware and thereby permitting the proceedings to go to a conclusion which he may acquiesce in, if favorable, and which he may avoid, if not.”‘ [Citations.]” [Citation.]’ [Citation.] Appellant failed to make court appearances below, failed to keep in contact with his attorney, failed to object to the challenged reports below, and failed to provide the trial court with evidence supporting his position. Consequently, he cannot raise the issue on appeal.” (Id. at p. 846.)

That is not this case. Initially, it was Bogden’s attorney who abandoned her; she was one of only a handful of plaintiffs who attempted to become involved and take action when she learned of the abandonment. As to her specific failure to attend the hearing on the motion to vacate, it is apparent that Bogden did not attend because she believed, as did Citibank, that the court accepted the parties’ stipulation to continue the hearing due to Brookstone’s receivership. This was not a party playing fast and loose with the administration of justice by deliberately standing by without objection. Instead, it was a party who chose not to attend a hearing all parties had stipulated to continue because the law firm which had brought the scheduled motion was barred by federal court injunction from pursuing it.

Having rejected Citibank’s procedural challenges, we turn to the merits of the appeal — whether the trial court should have granted Bogden’s motion to vacate the dismissal on the basis of attorney fault.

4. The Dismissal was the Proper Subject of a Motion to Vacate for Attorney Fault

Preliminarily, Citibank argues that mandatory relief under section 473, subdivision (b), should not apply to the type of dismissal entered in this case. In Leader v. Health Industries of America, Inc., supra, 89 Cal.App.4th at page 618, the court explained that mandatory relief for attorney fault does not apply to all dismissals. Instead, it is limited to dismissals which are comparable to defaults — those dismissals which occur because an attorney failed to oppose a dismissal motion. Thus, it does not apply to discretionary dismissals based on the failure to file an amended complaint after a demurrer has been sustained with leave to amend where “the dismissal was entered after a hearing on noticed motions that required the court to evaluate the reasons for delay in determining how to exercise its discretion.” (Id. at p. 621.) Citibank argues that relief should be precluded in this case under an extension of Leader.

We need not decide whether every dismissal without prejudice is the equivalent of a default judgment such that the trial court is required to grant relief under section 473, subdivision (b). Here, however, notwithstanding the language of its September 8, 2015 order that the dismissal was without prejudice, on August 10, 2016, the trial court denied the plaintiff’s request to file a first amended complaint, and the only possible basis for the denial of that motion was that plaintiff had failed to timely file an amended complaint after failing to oppose the demurrer. That is precisely the type of dismissal that mandatory relief for attorney default was intended to relieve. This was a dismissal which was the equivalent of a default; counsel did not oppose the dispositive motions. Case authority has established that Leader does not foreclose relief when a dismissal is entered for a failure to respond to a demurrer and to timely file an amended complaint. (Pagnini v. Union Bank, N.A. (2018) 28 Cal.App.5th 298, 306Younessi v. Woolf (2016) 244 Cal.App.4th 1137, 1148-1149.)

5. Attorney Torchia’s Declaration of Fault was Sufficient

Reviewing Attorney Torchia’s declaration and the undisputed procedural history de novo, it is difficult to conceive of a case more strongly calling out for relief for attorney fault. Citibank’s demurrer was sustained on the basis of misjoinder. Attorney Torchia had (with the exception of participation in the case management conference) disappeared from the case for a year, resulting in sanctions and a bench warrant. He had not opposed the demurrer, even though he possessed recent case authority holding that joinder was proper in a nearly identical mass-joinder case he had brought. He declared that his lack of opposition was due to depression and drinking to excess, and accepted full responsibility. As to the dismissal for failing to amend in the time period allotted, Attorney Torchia’s declaration was the same, except it added that, during the 10-day period to amend, he had been suspended from the practice of law, and failed to inform his clients of that fact. Perhaps Attorney Torchia did not die on the proverbial sword, but he certainly pointed the weapon in his own direction. In short, the declaration admits mistake and neglect.

The sole issue left for determination is whether “the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect.” (§ 473, subd. (b).) Causation, for the purposes of a motion to vacate for attorney fault, is governed by the same standard of proximate cause as in the context of legal malpractice. (Milton v. Perceptual Development Corp. (1997) 53 Cal.App.4th 861, 867.) Thus, the attorney’s negligence need not be the only proximate cause, as long as there is causation in fact. (Ibid.) Citibank suggests that the attorney must be the sole cause; this is incorrect. There is authority that, to obtain relief, the attorney must be solely responsible, vis-à-vis the client, who must be innocent of wrongdoing.[8] (Lang v. Hochman (2000) 77 Cal.App.4th 1225, 1251-1252.) Citibank cites no authority for the proposition that relief is not available when there may be causes, other than the client, in addition to the attorney’s fault. To the contrary, as long as the attorney is a proximate cause of the default or dismissal, relief is mandatory even when the client was simultaneously represented by a second attorney who took no action. (Milton, supra, at p. 867 & fn. 5.) Thus, Citibank’s argument that Attorney Mortimer’s presence in the case defeats causation is unavailing.

We are similarly not persuaded by Citibank’s argument that Attorney Torchia did not admit sole fault because he did not specifically admit receiving Citibank’s notice of ruling on the demurrer, stating instead that he did not recall when or if he received the notice. Even if there had been a problem with service, it would not make Attorney Torchia less culpable; his abandonment remained a proximate cause. In any event, Attorney Torchia’s declaration is not reasonably construed as asserting a service error. Instead, Attorney Torchia candidly admitted that he simply has no recollection of receiving the notice of ruling in the midst of his depression and heavy drinking.

Citibank also suggests that Attorney Torchia’s declaration is insufficient because Attorney Torchia stated that if he had received the notice of ruling and was not suspended or under the influence, he would have filed an amended complaint to properly address the joinder issue. Citibank argues that this is inadequate because filing an amended complaint to address the joinder issue would have, in fact, violated the trial court’s order, as the court granted leave for only one plaintiff to file an amended complaint. But it was Citibank’s notice of ruling which misstated that all plaintiffs had been granted leave to amend. If Attorney Torchia was mistaken about the court’s ruling in this respect, Citibank cannot be heard to complain about it.

6. Procedure on Remand

The trial court erred in denying the motion to vacate the dismissal. We therefore reverse the order and remand with directions that the court vacate the dismissal entered against Bogden and grant her reasonable leave to amend her complaint.

Citibank states that, if we conclude that Bogden is entitled to vacate the dismissal, “Bogden must pay Citi’s reasonable compensatory legal fees and costs [under section 473, subdivision (b)].” That section provides, “The court shall, whenever relief is granted based on an attorney’s affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties.” The plain language of the statute provides that the attorney, not the client, be directed to pay compensatory fees and costs. Any requests for fees and costs from Attorney Torchia should be directed, in the first instance, to the trial court.

DISPOSITION

The order denying Bogden’s motion to vacate the dismissal is reversed. The trial court shall enter a new and different order granting the motion to vacate the dismissal and allowing Bogden reasonable leave to amend her complaint. Citibank is to pay Bogden’s costs on appeal.

MOOR, J. and KIM, J., concurs.

[1] There were other defendants named in the action. In her brief on appeal, Bogden concedes that she is only pursuing Citibank.

[2] The non-Citibank defendants also successfully demurred on the merits. Again, these defendants are not parties to this appeal.

[3] The remainder of the quote referred to plaintiff Luevano, whose different treatment is of no further relevance to this appeal.

[4] All future undesignated statutory references are to the Code of Civil Procedure.

[5] There are specific rules governing a limited scope representation. California Rules of Court, rule 3.36(b) provides that once a party and attorney provide notice of limited scope representation, all papers must be served on both the attorney providing the limited scope representation and the client. A limited scope representation is not self-terminating; instead, if the client does not sign a substitution when the limited scope tasks are completed, rule 3.36 provides a means by which the limited scope attorney can be relieved by the court. No substitution out was ever filed, nor did Attorney Azar follow the rule 3.36 procedure to be relieved. For this reason, Citibank takes the position that Attorney Azar remained Bogden’s counsel of record long after his limited scope representation was completed, even though neither he nor Bogden believed he was still representing her.

[6] Whether Attorney Tarkowski believed himself to be representing all of the plaintiffs at this point, and whether he actually was, is somewhat unclear. He submitted a proposed order which included his representation that he “now plans to file an amended complaint on behalf of any Plaintiffs who would like a Brookstone attorney to continue to represent them, but given the recent history in this matter, and the fact that he is [a] new employee at Brookstone, has practiced for only one year and has limited experience in this area, he wants to provide full disclosure to the Court and the individual plaintiffs, and permit the individual plaintiffs sufficient time after that disclosure (sixty days) to either find alternative counsel, represent themselves, or consciously choose to have him represent them.” (Emphasis original.) At the next hearing, Attorney Tarkowski entered his appearance for all plaintiffs except Bogden, while Attorney Azar said that he believed Brookstone (and therefore, Attorney Tarkowski) also represented Bogden. The court stated that since Attorney Tarkowski had not substituted in, he was “like some sort of a third-party arriver here,” who lacked standing to appear in the case. The issue is not directly before us, although we note that the Brookstone firm never actually substituted out. Later, apparently in an effort to satisfy the court’s concerns, Attorney Tarkowski (on behalf of Brookstone) associated himself (again, on behalf of Brookstone) into the case.

[7] To the extent Citibank suggests that Adoption of Arthur M. (2007) 149 Cal.App.4th 704, 717 holds that we may use substantial evidence review even on uncontradicted evidence, Citibank’s statement of the case’s holding is correct, but inapplicable. Arthur M. was concerned with whether a baby’s father had failed to promptly assume his parental responsibilities. The father testified that he was afraid to come forward because he feared he would be prosecuted for rape. His testimony as to his belief itself was uncontradicted — obviously, nobody else could testify as to what he was thinking. But his testimony was not undisputed — the mother introduced a great deal of evidence showing by the father’s conduct that this was not, in fact, the reason that he failed to assume his obligations toward the child. The Court of Appeal held that the trial court had not been bound by uncontradicted testimony which was, in fact, disputed by other evidence. (Ibid.) Here, in contrast, there was no disputed evidence. De novo review applies.

[8] This is a disputed issue in the law. “[C]ourts are still divided as to whether [relief] is available when the error lies partly at the client’s feet and partly at the attorney’s [citations].” (Martin Potts & Associates, Inc. v. Corsair, LLC (2016) 244 Cal.App.4th 432, 442.)

 

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Unique Concerns When Foreclosing Junior Liens on Real Estate in Ohio

Unique Concerns When Foreclosing Junior Liens on Real Estate in Ohio

Lexology-

There has been some significant activity recently involving the rights and obligations of junior real estate lienorsin Ohio who file foreclosures to realize on real estate liens. The purpose of this post is to discuss that activity and remind lenders and their counsel of one important right of senior lenders that has not changed.

1. In December 2018 Governor Kasich signed an amendment to Ohio’s Residential Mortgage Lending Act. Inter alia, the change provides a new notice requirement for all actions to collect a debt secured by residential real property if the foreclosed lien is a second mortgage or junior lien. Titled Collecting debt on junior liens Ohio Revised Code Section 1349.72 now states in part:

  1. Before a person collecting a debt secured by residential real property collects or attempts to collect any part of the debt, the person shall first send written notice as described in division (B) of this section via United States mail to the residential address of the debtor, if both of the following apply:
    1. The debt is a second mortgage or junior lien on the debtor’s residential real property.
    2. The debt is in default.
  2. The written notice shall be printed in at least twelve-point type and state the following:
    1. The name and contact information of the person collecting the debt;
    2. The amount of the debt;
    3. A statement that the debtor has a right to an attorney;
    4. A statement that the debtor may qualify for debt relief under Chapter 7 or 13 of the United States Bankruptcy Code, 11 U.S.C. Chapter 7 or 13, as amended;
    5. A statement that a debtor that qualifies under Chapter 13 of the United States Bankruptcy Code may be able to protect their residential real property from foreclosure.
  3. Upon written request of the debtor, the owner of the debt shall provide a copy of the note and the loan history to the debtor. . . .. (bold added)

[LEXOLOGY]

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TFH 6/2 | Discovering Discovery: What Every Homeowner Needs To Know About How Enhanced Discovery Techniques Can Defeat Attempts at Foreclosure by Securitized Trusts

TFH 6/2 | Discovering Discovery: What Every Homeowner Needs To Know About How Enhanced Discovery Techniques Can Defeat Attempts at Foreclosure by Securitized Trusts

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)

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.

Sunday – June 2, 2019

Discovering Discovery: What Every Homeowner Needs To Know About How Enhanced Discovery Techniques Can Defeat Attempts at Foreclosure by Securitized Trusts

.

 ———————

 

Securitized trust litigation has proven extremely difficult and overly expensive for homeowners in foreclosure.

Deterred and delayed by seemingly unknowledgeable judges and arrogantly uncooperative securitized trust attorneys, homeowners battling foreclosure too often find that seeking the truth regarding the otherwise hidden fraud being committed by securitized trusts resembles too often frustratingly trying to catch a greased pig.

Nevertheless, the law does provide effective methods
for securing the truth in litigation called “discovery,” which homeowners in foreclosure as well as most foreclosure defense attorneys have heretofore unfortunately largely neglected or improperly used.

Simply put, there is more to discovery than asking the other side for answers or documents. Effective discovery is a complex science of its own.

On today’s show John and I examine enhanced techniques for weaponizing discovery requests, providing our listeners exclusively with several dozen specific examples, time permitting.

Be with us this Sunday to discover discovery anew, and learn how enhanced discovery techniques, some relatively expensive and some relatively cheap, all however little known or little used, followed up by motions to compel if needed, could save your home from foreclosure and prevent eviction.

You cannot afford to miss this Sunday’s show.

Gary

———————

GARY VICTOR DUBIN
Dubin Law Offices
Suite 3100, Harbor Court
55 Merchant Street
Honolulu, Hawaii 96813
Office: (808) 537-2300
Cellular: (808) 392-9191
Facsimile: (808) 523-7733
Email: gdubin@dubinlaw.net.

Host: Gary Dubin Co-Host: John Waihee

.

CALL IN AT (808) 521-8383

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

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Senior citizen threatens to come back to his bank with a gun if they foreclose on his home

Senior citizen threatens to come back to his bank with a gun if they foreclose on his home

NY Daily News-

An 67-year-old man in a small town in Illinois told bank employees he would “bring a gun back” if they foreclosed on his house.

When police contacted the man asking that he not do so, he said he wouldn’t.

Identified only as a resident of Princeville, Ill., the senior citizen is accused of entering a bank in the 1.66-square-mile town at 10 a.m. on May 22, upset that that foreclosure procedures on his home were moving forward, according to the Peoria Journal Star.

[NY DAILY NEWS]

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Bank Not Liable for Death of Woman Evicted Following Foreclosure

Bank Not Liable for Death of Woman Evicted Following Foreclosure

MetNews-

The  Ninth U.S. Circuit Court of Appeals yesterday affirmed a summary judgment in favor of Wells Fargo in an action against it alleging the wrongful death of a 62-year-old woman it evicted from a home on which the bank foreclosed after she fell behind in her payments, having ceased working in light of having contracted breast cancer.

The decedent, Marsha Kilgore, died Oct. 16, 2013 “from inability to breathe” because, being homeless, she was unable to plug in her oxygen concentrator, according to the complaint in the case.

Her daughter, Brooke Noble, brought the action.

Ordered to Leave

Noble had lived with her mother in a Fresno condominium Kilgore had owned until the foreclosure. The complaint alleged that an agent of Wells Fargo told them to gather their belongings and leave, agreed to give them a 24-hour delay, returned the next day, and ordered them to quit the premises.

Wells Fargo had a policy of according financial assistance to persons who are evicted and leave willingly, but offered none to Kilgore.

Kilgore was a plaintiff in a class action against Wells Fargo based on a promised loan modification that never materialized.

[METNEWS]

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PL III, LLC v. Puu Lani Ranch Corp. | HAWAII ICA – Another, MAJOR Appellate Victory for DUBIN LAW OFFICES!

PL III, LLC v. Puu Lani Ranch Corp. | HAWAII ICA – Another, MAJOR Appellate Victory for DUBIN LAW OFFICES!

CAAP-14-0001115mop by DinSFLA on Scribd

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California Supreme Court Confirms Lender Foreclosure Option

California Supreme Court Confirms Lender Foreclosure Option

NatLawReview-

Earlier this month, in Black Sky Capital v. Cobb, the California Supreme Court addressed the following question: when a creditor holds senior and junior liens on the same property, can the creditor non-judicially foreclose on the senior lien, and then seek a deficiency judgment against the borrower on the junior debt? For 25 years, California courts had answered that question “No” based on the First District Court of Appeal’s 1992 decision in Simon v. Superior Court, which held that the anti-deficiency protections of California Code of Civil Procedure 580d barred a creditor in such circumstances from pursuing a deficiency on the junior note. In 2017, however, the Fourth District Court of Appeal reached a different conclusion in Black Sky Capital v. Cobb, holding that section 580d only barred further recovery on that note following a non-judicial foreclosure sale, and did not bar recovery on a different (i.e. the junior) note. The conflict between the two Courts of Appeal has now been resolved.

The California Supreme Court has affirmed the Fourth District’s ruling, adopting the stricter reading of section 580d which holds that the statute only bars deficiency judgments on the same debt at issue in the senior foreclosure sale. While the Supreme Court recognized the concern raised in Simon that lenders will simply structure one loan as separate senior and junior loans in order to circumvent the borrower’s anti-deficiency protections, the court stated that such circumstances were not present in the case before it, as the loans at issue were made more than two years apart. The court did note that “a substantial question would arise” if “there is evidence of gamesmanship by the [creditor].” The court did not define “gamesmanship” but referenced two situations that might qualify: “intentional loan splitting” and “recovery in excess of what any junior lienholder would be able to recover.” The former situation clearly refers to a lender making two loans rather than one to avoid anti-deficiency protections, and the latter situation likely refers to the lender manipulating the senior foreclosure sale itself (e.g. bid rigging).

[NATLAWREVIEW]

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TFH 5/26 | An Evening with Max Gardner Discussing Securitization, Foreclosure, and Bankruptcy (originally broadcast on October 20, 2013)

TFH 5/26 | An Evening with Max Gardner Discussing Securitization, Foreclosure, and Bankruptcy (originally broadcast on October 20, 2013)

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 – MAY 26, 2019

An Evening with Max Gardner Discussing Securitization, Foreclosure, and Bankruptcy (originally broadcast on October 20, 2013)

.

 ———————

 

Max Gardner, whose law office is headquartered in Shelby, North Carolina, has long been recognized as one of America’s leading lawyers specializing in predatory lending issues in consumer bankruptcy cases.

An undergraduate of the University of North Carolina and its School of Law, Max has had a highly successful career as a trial attorney, and now limits his practice to the representation of individual consumers in Chapter 13 and Chapter 7 bankruptcy cases, protecting debtors from predatory lending.

Today, Max is perhaps the best known, nationally recognized consumer bankruptcy attorney in the United States.

Receiving special national acclaim has been his “Bankruptcy Bootcamp” lectures in which he has been training motivated consumer attorneys from across the country for many years to join in his battle against the lenders, creditors, mortgage loan servicers, and collectors who seek to profit from unethical practices and illegal fees.

His next, two-day Boot Camp seminar, for instance, will be held this July 13-14, 2019, at Max’s remote 160-acre farm in the mountains of western North Carolina, focusing on “Proof of Claim Litigation and Loan Modification.”

Max’s family has a rich historical heritage of public service. He is the Grandson of former North Carolina Governor O. Max Gardner, and the Grandnephew of former Governor of North Carolina/United States Senator Clyde R. Hoey.

You are invited to be with Max and me this Sunday and learn from his many interesting and successful courtroom experiences.

Gary

———————

GARY VICTOR DUBIN
Dubin Law Offices
Suite 3100, Harbor Court
55 Merchant Street
Honolulu, Hawaii 96813
Office: (808) 537-2300
Cellular: (808) 392-9191
Facsimile: (808) 523-7733
Email: gdubin@dubinlaw.net.

Host: Gary Dubin Co-Host: John Waihee

.

CALL IN AT (808) 521-8383

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

image: Video Hive

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U.S. Bank National Association v. Kim | HAWAII ICA – DUBIN LAW OFFICES DOES IT AGAIN!! JUDGMENTS VACATED!!!

U.S. Bank National Association v. Kim | HAWAII ICA – DUBIN LAW OFFICES DOES IT AGAIN!! JUDGMENTS VACATED!!!

H/T DUBIN LAW OFFICES!

8189407027 by DinSFLA on Scribd

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NATIONSTAR MORTGAGE LLC v. Adee | NY: Appellate Div., 3rd Dept. – Based on the foregoing, defendants satisfied their burden of establishing that plaintiff was not entitled to foreclose on the subject property.

NATIONSTAR MORTGAGE LLC v. Adee | NY: Appellate Div., 3rd Dept. – Based on the foregoing, defendants satisfied their burden of establishing that plaintiff was not entitled to foreclose on the subject property.

2019 NY Slip Op 03873

NATIONSTAR MORTGAGE LLC, Doing Business as CHAMPION MORTGAGE COMPANY, Appellant,
v.
BRIAN S. ADEE et al., as Trustees of the Gerald F. and Marjorie C. Adee Trust, Respondents, et al., Defendants.

527518.
Appellate Division of the Supreme Court of New York, Third Department.
Decided May 16, 2019.
Appeal from an order of the Supreme Court (Cawley Jr., J.), entered March 14, 2018 in Broome County, which, among other things, granted certain defendants’ cross motion for summary judgment dismissing the complaint against them.

Goldberg Segalla LLP, Buffalo (Marc W. Brown of counsel) and Gross Polowy, LLC, Williamsville (Laura Strauss of counsel), for appellant.

Coughlin & Gerhart, LLP, Binghamton (Robert R. Jones of counsel), for respondents.

Before: Lynch, J.P., Clark, Mulvey, Aarons and Rumsey, JJ.

MEMORANDUM AND ORDER

AARONS, J.

Marjorie C. Adee (hereinafter Adee), along with her husband, owned real property in the Town of Vestal, Broome County. They created the Gerald F. and Marjorie C. Adee Trust (hereinafter the trust) and their children, defendants Brian S. Adee, Barbara L. Torrey and Kathy Anne Drumm (hereinafter collectively referred to as defendants) were named trustees. In 1995, the subject property was conveyed to the trust via a quitclaim deed with a life estate reserved for Adee and her husband. After her husband died, Adee, in 2003, entered into a loan agreement with M & T Bank for a home equity line of credit in the amount of $55,000. Under the loan agreement, Adee and the trust gave M & T Bank a mortgage secured by the subject property (hereinafter the HELOC mortgage). The HELOC mortgage was recorded in the Broome County Clerk’s office in July 2003.

In October 2007, Adee applied for a reverse mortgage with Bank of America, N.A. Adee was immediately approved and executed a note and reverse mortgage in the amount of $255,900 in favor of Bank of America. According to the reverse mortgage, Adee gave the subject property as security. In conjunction with this reverse mortgage, Adee also completed a US Department of Housing and Urban Development Addendum to the Uniform Residential Loan Application, as well as a settlement statement, which stated, among other things, that the HELOC mortgage was paid by Bank of America. The satisfaction of the HELOC mortgage was recorded in November 2007.

In 2012, Bank of America assigned the reverse mortgage to plaintiff. In 2015, Adee died. In 2017, plaintiff commenced this foreclosure action against defendants, as trustees of the trust, among others, after the requisite payments due were not made following Adee’s death. Following joinder of issue, plaintiff moved for summary judgment and dismissal of defendants’ affirmative defenses. Defendants cross-moved for summary judgment dismissing the complaint on the basis that the trust did not execute the reverse mortgage. In a March 2018 order, Supreme Court denied plaintiff’s motion and granted defendants’ cross motion. Plaintiff appeals. We affirm.

In support of their cross motion for summary judgment, defendants submitted, among other things, a copy of the quitclaim deed reflecting that Adee and her husband conveyed the subject property to the trust in 1995 and that they reserved for themselves a life estate interest. Defendants therefore demonstrated that the trust, and not Adee, was the sole owner of the subject property when Adee applied for the reverse mortgage in 2007. Critically, Adee, at most, only had a life estate interest in the subject property when she entered into the reverse mortgage and such interest was extinguished upon her death in 2015. Based on the foregoing, defendants satisfied their burden of establishing that plaintiff was not entitled to foreclose on the subject property.

With the burden shifted, it was incumbent upon plaintiff to raise a triable issue of fact (see Zuckerman v City of New York, 49 NY2d 557, 562-563 [1980]Bouchard v Champlain Enters., 279 AD2d 935, 937 [2001]). In our view, plaintiff failed to do so. Plaintiff asserts that because defendants served as a power of attorney for Adee and because two of them were listed on the reverse mortgage application as alternative contacts, they were aware of the reverse mortgage. However, even if we agreed with plaintiff that defendants knew about the reverse mortgage, such knowledge does not raise an issue of fact as to Adee’s possessory interest in the property. Nor do we agree with plaintiff’s claim that the reference on the settlement statement indicating a payment for the recording of a deed raises an issue of fact as to whether Adee was a fee owner of the subject property at the time she applied for the reverse mortgage.

Plaintiff also relies on the doctrine of equitable subrogation. This doctrine applies in situations “where the funds of a mortgagee are used to satisfy the lien of an existing, known incumbrance when, unbeknown to the mortgagee, another lien on or interest in the property exists which is senior to his or her but junior to the one satisfied with his or her funds” (Green Tree Servicing, LLC v Feller, 159 AD3d 1246, 1248 [2018] [internal quotation marks, brackets and citation omitted]; see Matter of Benedictine Hosp. v Glessing, 90 AD3d 1383, 1386 [2011]). If the subrogee had actual notice of the intervening interest, equitable subrogation is inapplicable (see Green Tree Servicing, LLC v Feller, 159 AD3d at 1248). Given that the quitclaim deed reflecting Adee’s interest in the subject property was validly recorded and the documentary evidence establishes that plaintiff’s predecessor had actual notice of it, plaintiff cannot rely on the doctrine of equitable estoppel (see RTR Props., LLC v Sagastume, 145 AD3d 697, 699 [2016]compare Elwood v Hoffman, 61 AD3d 1073, 1075-1076 [2009]).

Finally, to the extent that plaintiff contends that it should have an equitable mortgage on the subject property or that defendants ratified the reverse mortgage, such claims are improperly raised for the first time on appeal (see MLB Constr. Servs., LLC v Lake Ave. Plaza, LLC, 156 AD3d 983, 985 [2017]). Plaintiff’s remaining contentions are either without merit or academic.

Lynch, J.P., Clark, Mulvey and Rumsey, JJ., concur.

ORDERED that the order is affirmed, with costs.

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FL HOMES 1 LLC v. KOKOLIS | FL 4DCA – VOID! Full of sound and fury, this foreclosure case is the tale of the legal chaos that can happen when a mortgage holder initiates a foreclosure action but fails to include the sole record title holder as a party.

FL HOMES 1 LLC v. KOKOLIS | FL 4DCA – VOID! Full of sound and fury, this foreclosure case is the tale of the legal chaos that can happen when a mortgage holder initiates a foreclosure action but fails to include the sole record title holder as a party.

 

FL HOMES 1 LLC and JOSE PEREZ, Appellants,
v.
TOULA KOKOLIS, as Trustee of the TOULA KOKOLIS REVOCABLE TRUST dated July 2, 2014, and FL HOMES, LLC, Appellees.

No. 4D18-2709.
District Court of Appeal of Florida, Fourth District.
May 15, 2019.
Appeal from the Circuit Court for the Seventeenth Judicial Circuit, Broward County; Joel T. Lazarus, Judge; L.T. Case No. CACE 18-11249 (11).

Michael Winer, Fort Lauderdale, for appellants.

Steven L. Wall of Mestdagh & Wall, P.A., Winter Park, for appellee, Toula Kokolis, as Trustee of the Toula Kokolis Revocable Trust dated July 2, 2014.

GROSS, J.

Full of sound and fury, this foreclosure case is the tale of the legal chaos that can happen when a mortgage holder initiates a foreclosure action but fails to include the sole record title holder as a party. We hold that a foreclosure judgment was void for the failure of the plaintiff to join the only record title owner of the property; because the judgment was void, a lis pendens filed in that proceeding had no effect on unrecorded property interests whose holders did not intervene in the foreclosure action.

Florida Homes I LLC and Jose Perez appeal a summary final judgment of reforeclosure in favor of appellee Toula Kokolis, as trustee of the Toula Kokolis Revocable Trust. The property at issue in this case has been the subject of three separate foreclosure actions: (1) an action filed by a homeowners’ association; (2) the initial mortgage foreclosure lawsuit; and (3) the reforeclosure lawsuit.

Before any litigation, the property was owned by non-parties to this appeal, John Keefer and Denise Derosa-Keefer, who borrowed money and executed a note and mortgage in favor of the original lender. After multiple assignments, the note and mortgage landed with Greenwich Investors XLIII Trust 2013-1.

The Homeowners’ Association Foreclosure Action

In 2012, Tall Pines Community Homeowners’ Association, Inc. (the “HOA”) initiated a lawsuit to foreclose the association’s lien against the property. A final judgment of foreclosure led to a foreclosure sale on October 25, 2012.

At that foreclosure sale, appellant Perez made the winning bid of $22,100. Instead of putting the certificate of title in his name, Perez instructed the Clerk of Court to issue the title in the name of “FL Homes LLC.” The certificate of title was subsequently issued in the name of FL Homes LLC on November 6, 2012.

At the time the certificate issued, Perez was unaware that an entity named FL Homes LLC already existed in Florida. Perez had absolutely no connection to that entity, so he had no authority to acquire property on its behalf. Perez chose the name FL Homes LLC believing that the name had not yet been taken. Not until he went to register FL Homes LLC, did Perez learn that a company with that name already existed.

On November 27, 2012, Perez registered a new entity named “FL Homes 1 LLC.” Perez has never tried to retitle the property in the name of FL Homes 1 LLC. Perez took possession of the property, rented it out, and deposited rent checks in a bank account in the name of FL Homes 1 LLC. Perez also claims that he paid taxes and necessary fees associated with the property.

Initial Mortgage Foreclosure Action

Not surprisingly, after Keefer and Derosa-Keefer lost the property in the HOA foreclosure action, their mortgage loan was in default. On February 8, 2013, a lawsuit to foreclose that mortgage was filed. Greenwich Investors was later substituted as the plaintiff. This foreclosure action named the HOA and the prior owners of the property, Keefer and Derosa-Keefer, as defendants. The lawsuit did not name FL Homes LLC as a defendant, nor did it mention or seek to foreclose any interest in the property conveyed by the certificate of title in the HOA foreclosure action.

On February 14, 2013, a notice of lis pendens was recorded. After such recording, appellants did not seek to intervene in the lawsuit.

On December 16, 2014, a final judgment was entered against John Keefer, Denise Derosa-Keefer, and the HOA. A judicial sale was held in accordance with that final judgment on February 11, 2015. Greenwich Investors was the highest bidder at the judicial sale and a certificate of title for the property was issued to Greenwich Investors on February 24, 2015.

On December 22, 2015, Greenwich conveyed the property to Toula Kokolis for $539,900. In 2016, Toula Kokolis conveyed the property by quitclaim deed to Toula Kokolis, as trustee of the Toula Kokolis Revocable Trust, the appellee here.

The Reforeclosure Lawsuit

On May 10, 2018, appellee filed the underlying action (the “reforeclosure lawsuit”) to foreclose the mortgage against the interests or potential interests of parties omitted from the initial mortgage foreclosure lawsuit. The reforeclosure lawsuit named FL Homes LLC, FL Homes 1 LLC, and Perez as defendants. A notice of lis pendens was also recorded.

Appellants answered the complaint. FL Homes LLC also filed a response which stated, “FL Homes LLC claims no interest in this property and does not oppose the relief sought . . . .”

Appellee moved for summary judgment. Appellee argued that neither Perez nor FL Homes 1 LLC held any interest in the property. Appellee contended that any interest that existed by virtue of Perez’s winning bid at the HOA foreclosure sale was unrecorded at the time the lis pendens was filed in the initial mortgage foreclosure lawsuit, so that such unrecorded interests were discharged by section 48.23, Florida Statutes.

Appellants responded that the lis pendens, final judgment of foreclosure, and certificate of title issued in the initial mortgage foreclosure lawsuit were void ab initio due to Greenwich’s failure to name FL Homes LLC as a party in that lawsuit.

At the hearing on appellee’s motion for summary judgment, appellee acknowledged that appellants may have an interest in the property because, after the HOA foreclosure sale, Perez took possession of the property, rented it out, and collected rent. Appellee argued that because appellants’ interest was unrecorded, under the lis pendens statute, appellants had thirty days from the date the lis pendens was filed to intervene in the initial mortgage foreclosure action. Appellee contended that appellants’ failure to intervene meant that the judicial sale in the initial mortgage foreclosure action “forever discharged” the property from all unrecorded interests and liens under section 48.23(1)(d), Florida Statutes (2017).

Appellants responded that because Greenwich failed to name Florida Homes LLC, an indispensable party, in the initial mortgage foreclosure action, both the lis pendens and final judgment were void.

The trial court ultimately found that the judgment was not “void for failure to name the indispensable party” and granted the summary final judgment of foreclosure.

The trial court entered a written final judgment of reforeclosure, which recognized that FL Homes LLC was the party named in the November 6, 2012 Certificate of Title and was the only defendant who had an interest in the property recorded in the public records. The final judgment granted FL Homes LLC an opportunity to redeem the property and set the redemption amount at $728,789.46.

Discussion

The failure to include FL Homes LLC in the initial mortgage foreclosure action resulted in a void final judgment. FL Homes LLC held title to the property at the time the initial mortgage foreclosure action was filed. “The fee simple title holder is an indispensable party in an action to foreclose a mortgage on property.” Citibank, N.A. v. Villanueva, 174 So. 3d 612, 613 (Fla. 4th DCA 2015) (citing Oakland Props. Corp. v. Hogan, 117 So. 846, 848 (Fla. 1928) (stating that “[o]ne who holds the legal title to mortgaged property is not only necessary, but is an indispensable, party defendant in a suit to foreclose a mortgage.”)).

The failure to join FL Homes LLC rendered the entire foreclosure action void, so that the lis pendens filed in the initial foreclosure action cannot have had any legal effect. Under section 48.23, the nullifying impact of the lis pendens statute on unrecorded property interests turns on the prosecution of the lawsuit “to a judicial sale of the property.” § 48.23(1)(d), Fla. Stat. (2017). A void final judgment begets a void judicial sale. It was as if the lis pendens were discharged, so that the notice did “not affect the validity of any unrecorded interest or lien.” Id.

In English v. Bankers Trust Co. of California, N.A., 895 So. 2d 1120 (Fla. 4th DCA 2005), we wrote that the failure to join the fee simple owner in a foreclosure action rendered the foreclosure action void. There, the lender filed a foreclosure action against the original borrower, obtained a final judgment, and purchased the property at the foreclosure sale. Id. at 1121. Immediately thereafter, the lender learned that the borrower had conveyed the property to another before the foreclosure action, so it brought a second foreclosure action, naming both the original borrower and the new owner as defendants. Id. Summary judgment was entered for the lender. Id.

On appeal, the original borrower sought to avoid a deficiency judgment by arguing that res judicata precluded her from being joined in the new action because of the prior action. Id. We affirmed the summary judgment, explaining that res judicata did not apply because the original judgment was void:

The trial court correctly concluded that the first action was void. Significantly, this is not a re-foreclosure to extinguish a junior lienor. Rather, this second action is an initial foreclosure as to the fee simple owner. Because Lesa Investments, the undisputed owner, was not a party to the first suit, the initial foreclosure judgment could not result in a valid sale, as the owner of the fee simple title was an indispensable party.

. . . .

We note that, more than a century ago, the Florida Supreme Court recognized that “a foreclosure proceeding resulting in a final decree and a sale of the mortgaged property, without the holder of the legal title being before the court will have no effect to transfer his title to the purchaser at said sale.” If the foreclosure proceeding has no effect to transfer title because the legal title holder has not been joined, it is simply another way of saying that the foreclosure proceeding is void.

Id. at 1121 (emphasis added) (internal citations omitted); see also Villanueva, 174 So. 3d at 613-14.

That the initial foreclosure judgment was void for failure to join an indispensable party distinguishes this case from Epstein v. Bank of America, 162 So. 3d 159 (Fla. 4th DCA 2015). There, we rejected a bank’s due process challenge to a final judgment where the bank was not asserting its own constitutional rights, but those of another. Id. at 162. We observed that “constitutional rights are personal and may not be asserted vicariously.” Id. (quoting Broadrick v. Oklahoma, 413 U.S. 601, 610 (1973)). This case involves statutory rights under the lis pendens statute, not constitutional rights. Because the impact of the lis pendens upon appellants’ property rights depended upon the validity of the initial final judgment, appellants had standing to attack the final judgment as void.

Appellee argues that the final judgment in the initial mortgage foreclosure lawsuit was not void in its entirety and was ineffective only as to FL Homes LLC’s interest in the property. However, the cases cited by appellee are distinguishable because in those cases, at least one owner of the property was named in the foreclosure action and was properly foreclosed upon, while another owner was omitted from the action. See R.W. Holding Corp. v. R.I.W. Waterproofing & Decorating Co., Inc.,179 So. 753 (Fla. 1938) (title owners for two of three parcels of land named in foreclosure action, but title owner of third parcel omitted); Key West Wharf & Coal Co. v. Porter, 58 So. 599 (Fla. 1912) (mortgagor named in foreclosure action, but not others whom the mortgagor had conveyed portions of the premises to); Sudhoff v. Fed. Nat’l Mortg. Ass’n, 942 So. 2d 425 (Fla. 5th DCA 2006) (husband named in foreclosure lawsuit, but not wife). Thus, in cases where there are multiple owners of property, but one or more of the property owners is omitted, “a foreclosure suit may be maintained even though the holder of the legal title to the property is not a party to the foreclosure, but . . . the decree only establishes the rights of persons who are parties.” Pan Am. Bank of Miami v. City of Miami Beach,198 So. 2d 45, 47 (Fla. 3d DCA 1967).

Unlike the cases cited by appellee, in this case there was only one record title owner of the property at the time the initial mortgage foreclosure lawsuit was filed-FL Homes LLC. Therefore, consistent with this court’s precedent, the failure to name FL Homes LLC in the initial mortgage foreclosure lawsuit rendered the entire foreclosure action void. As the successor in interest to the original mortgage, appellee’s interest in the property is superior to that of appellants; our holding is that appellee may not rely on section 48.23 in a summary judgment to obtain a final judgment of foreclosure.

We reverse the summary judgment of foreclosure and remand to the circuit court for further proceedings consistent with this opinion.

WARNER and FORST, JJ., concur.

Not final until disposition of timely filed motion for rehearing.

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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TFH 5/19 | Is a Homeowner’s Appeal Moot Upon  the Sale of Foreclosed Property? — Another Major Finality Versus Validity Controversy Today in State and Federal Courts

TFH 5/19 | Is a Homeowner’s Appeal Moot Upon the Sale of Foreclosed Property? — Another Major Finality Versus Validity Controversy Today in State and Federal Courts

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

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Sunday – MAY 19, 2019

Is a Homeowner’s Appeal Moot Upon the Sale of Foreclosed Property? — Another Major Finality Versus Validity Controversy Today in State and Federal Courts

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 ———————

 

As a result of a recent increase in the number of appellate decisions more favorable to mortgage borrowers in many but not all state and federal courts, foreclosed homeowners are timely appealing in greater numbers, challenging their otherwise completed foreclosures.

During several of our prior shows we have referred to this newest and perhaps most significant issue emerging in foreclosure defense today as “Finality Versus Validity.”

On prior shows we have focused our attention on whether doctrines such as res judicata prevent reopening of final foreclosure judgments whether or not appealed.

On today’s show we discuss and attempt, time permitting, to answer the following questions:

What effect does an intervening sale of an appellant’s foreclosed property have on an otherwise timely-filed appeal?

Is a foreclosure appeal therefore rendered “moot,” causing it to be dismissed?

As in most areas of foreclosure defense, our appellate courts have historically favored foreclosing plaintiffs and robotically dismissed homeowners’ appeals, holding that the appeal is or has become moot, reasoning that courts are powerless to grant appellant homeowners the relief they seek, the return of their sold property.

Today, however, many appellate courts are rethinking that view and proceeding to decide foreclosure appeals on their merits instead.

John and I on today’s show discuss the reasons why such foreclosure appeals should not be dismissed and how homeowners and attorneys alike can and should defend against appellate mootness, in favor of Validity over Finality.

The following are the questions to be discussed on today’s show, which include “exceptions” to the mootness doctrine that both federal and state appellate courts are increasingly recognizing today:

1. What are the policy reasons supporting the appellate mootness doctrine?

2. How is the mootness doctrine applied differently in federal versus state appellate courts?

3. What is the “foreclosing plaintiff exception” to appellate mootness, and how to argue that it should be applied in defense of your appeal?

4. What is the “assumption-of-risk purchaser exception” to appellate mootness, and how to argue that it should be applied in defense of your appeal?

5. What is the “collusive purchaser exception” to appellate mootness, and how to argue that it should be applied in defense of your appeal?

6. What is the “public policy exception” to appellate mootness, and how to argue that it should be applied in defense of your appeal?

7. What is the “jurisdictional exception” to appellate mootness, and how to argue that it should be applied in defense of your appeal?

8. What is the “supervening authority exception” to appellate mootness, and how to argue that it should be applied in defense of your appeal?

9. What is the “estoppel exception” to appellate mootness, and how to argue that it should be applied in defense of your appeal?

10. What is the “fraud exception” to appellate mootness, and how to argue that it should be applied in defense of your appeal?

11. What is the “bankruptcy court exception” to appellate mootness, and how to argue that it should be applied in defense of your appeal?

12. What is the “damages exception” to appellate mootness, and how to argue that it should be applied in defense of your appeal?

13. What is the “additional consequences exception” to appellate mootness, and how to argue that it should be applied in defense of your appeal?

14. What is the “remand exception” to appellate mootness, and how to argue that it should be applied in defense of your appeal?

15. What is the “balancing of the equities exception” to appellate mootness, and how to argue that it should be applied in defense of your appeal?

Be sure to be with John and me this Sunday, especially if you are planning to or are now in the process of appealing an adverse foreclosure-related judgment.

You will not want to miss this uniquely important, groundbreaking broadcast in order to apply the above analysis and exceptions to the specific facts of your case, protecting your appeal, and to further improve your understanding of the future of foreclosure defense in this, the last and final frontier.

Gary

———————

GARY VICTOR DUBIN
Dubin Law Offices
Suite 3100, Harbor Court
55 Merchant Street
Honolulu, Hawaii 96813
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Grosso v. HSBC BANK USA, NA EX REL. ACE SECURITIES CORP. | FL 4DCA – the homeowner was entitled to prevailing party attorney’s fees. We reverse and remand for the trial court to grant attorney’s fees and determine the reasonableness of the amount sought.

Grosso v. HSBC BANK USA, NA EX REL. ACE SECURITIES CORP. | FL 4DCA – the homeowner was entitled to prevailing party attorney’s fees. We reverse and remand for the trial court to grant attorney’s fees and determine the reasonableness of the amount sought.

 

DOMENIC GROSSO a/k/a DOMENIC L. GROSSO, Appellant,
v.
HSBC BANK USA, N.A., AS TRUSTEE ON BEHALF OF ACE SECURITIES CORP., Appellee.

No. 4D17-2874.
District Court of Appeal of Florida, Fourth District.
May 8, 2019.
Appeal from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Susan R. Lubitz, Senior Judge; L.T. Case No. 50-2012-CA-005882-XXXX-MB.

Michael Vater, Kendrick Almaguer, and Peter Ticktin of The Ticktin Law Group, PLLC, Deerfield Beach, for appellant.

Kimberly S. Mello and Joseph H. Picone of Greenberg Traurig, P.A., Tampa, for appellee.

ON MOTION FOR REHEARING

PER CURIAM.

We deny the bank’s motion for rehearing, but withdraw our previously issued opinion and substitute the following in its place.

The homeowner appeals an order denying his motion for attorney’s fees following the bank’s voluntary dismissal of its foreclosure action. We reverse because the voluntary dismissal rendered the homeowner the prevailing party for purposes of attorney’s fees.

HSBC Bank filed a foreclosure complaint against the homeowner, alleging it was the owner and holder of the note and mortgage. HSBC further alleged it was entitled to attorney’s fees under the contract. A copy of the note attached to the complaint listed DB Home Lending LLC as the lender and the homeowner as the borrower. The note contained a specific endorsement by DB Home Lending to HSBC.

The homeowner filed an answer and affirmative defenses. In his affirmative defenses, the homeowner stated that the bank lacked standing, the bank did not have legal rights to enforce the note and mortgage, and the endorsement on the note was not valid and authentic. The homeowner also requested attorney’s fees.

A year after filing the complaint, HSBC voluntarily dismissed the case without prejudice. The homeowner moved for prevailing party attorney’s fees under the contract. Specifically, the homeowner alleged in the motion for attorney’s fees that “[t]he Mortgage that was the subject matter of this lawsuit provided for costs and expenses if the Note holder was to enforce the Note” and that section 57.105(7), Florida Statutes, made this provision applicable to the homeowner. HSBC opposed the motion, arguing that the homeowner’s lack of standing defense precluded him from recovering fees. After a hearing, the trial court denied the homeowner’s motion, finding that he failed to prove that he and HSBC were parties to the contract.

A trial court’s determination of whether a party is entitled to attorney’s fees based on a fee provision in the mortgage is reviewed de novo. Bank of N.Y. Mellon Tr. Co., N.A. v. Fitzgerald, 215 So. 3d 116, 118 (Fla. 3d DCA 2017). Section 57.105(7), Florida Statutes, operates to make a unilateral attorney’s fees provision in a mortgage contract reciprocal. In order for a prevailing party to avail itself of section 57.105(7), both the movant and the opponent must be parties to the contract containing the fee provision. Madl v. Wells Fargo Bank, N.A., 244 So. 3d 1134, 1138 (Fla. 5th DCA 2017).

In denying the motion for fees, the trial court relied on Florida Community Bank, N.A. v. Red Road Residential, LLC, 197 So. 3d 1112 (Fla. 3d DCA 2016). In Red Road Residential, the borrower maintained throughout the litigation, including in sworn discovery, that she never signed the mortgage. Id. at 1114. Rather than litigating its claim against the borrower, the bank ultimately dismissed her from the lawsuit with prejudice. Id. Unlike Red Road Residential, the instant case did not involve any sworn discovery and the dismissal was without prejudice.

We find instructive Rodriguez v. Wilmington Savings Fund Society, FSB as Trustee for Stanwich Mortgage Loan Trust A, No. 4D18-310, 2018 WL 6528491 (Fla. 4th DCA Dec. 12, 2018). In that case, a borrower was found to be entitled to prevailing party fees after the bank’s voluntary dismissal even though she had challenged the bank’s standing throughout the lawsuit. This court found that “the parties never litigated the merits of [the bank’s] standing below, and the trial court never made a finding that the Borrower was not a party to the note or mortgage.” Id. at *2. Because the bank voluntarily dismissed the action without the trial court resolving the standing issue on the merits, the borrower was entitled to fees. Id. See also Wells Fargo Bank, N.A. v. Elkind, 254 So. 3d 1153, 1154 (Fla. 4th DCA 2018)(finding borrower who raised lack of standing as affirmative defense was entitled to prevailing party attorney’s fees following the bank’s voluntary dismissal because the parties never litigated standing and “the trial court never made a finding that the bank or the borrower were not parties to the contract”); Harris v. Bank of N.Y. Mellon, No. 2D17-2555, 2018 WL 6816177, at *4 (Fla. 2d DCA Dec. 28, 2018) (“[P]roof of standing is not required to establish a contractual relationship between the parties.”).

In this case, HSBC voluntarily dismissed its complaint, thus rendering the homeowner the prevailing party for purposes of attorney’s fees. Notably, the trial court never made a judicial determination that HSBC or the homeowner was not a party to the contract. Additionally, HSBC maintained in its complaint a right to enforce the contract. Significantly, the copy of the note attached to the complaint contained a specific endorsement by the original lender to HSBC and listed the homeowner as the borrower. This should be sufficient record evidence to demonstrate that HSBC and the homeowner were parties to the underlying contract so as to justify attorney’s fees pursuant to section 57.105(7). See Mihalyi v. LaSalle Bank, N.A., 162 So. 3d 113, 115 (Fla. 4th DCA 2014) (implying that an evidentiary hearing is required for determining the amount of fees, not for determining entitlement to fees); Hensley v. Eckerhart, 461 U.S. 424, 437 (1983)(“A request for attorney’s fees should not result in a second major litigation.”).

The cases the dissent relies on are distinguishable, as none involve a voluntary dismissal without prejudice like the instant case. The dissent attempts to distinguish Rodriguez and Elkind by stating that those cases dealt with judicial estoppel or prevailing parties, and not with the burden for attorney’s fees. But cases with the same facts should get the same result. A voluntary dismissal, without a judicial determination, should allow reliance on the reciprocal attorney’s fees provision of section 57.105(7).

Based on the foregoing authority, the homeowner was entitled to prevailing party attorney’s fees. We reverse and remand for the trial court to grant attorney’s fees and determine the reasonableness of the amount sought.

Reversed and remanded with instructions.

LEVINE and FORST, JJ., concur.

CONNER, J., dissents with opinion.

CONNER, J., dissenting.

I respectfully dissent for two reasons: (1) the trial court properly determined that no evidence was presented by the homeowner establishing the homeowner and HSBC were parties to a contract with a fee provision; and (2) the two cases from this District primarily relied upon by the majority are inapplicable to the specific argument made by HSBC in the trial court, which the trial court found to be dispositive.

Our recent opinions in Rodriguez v. Wilmington Savings Fund Society, FSB as Trustee for Stanwich Mortgage Loan Trust A, No. 4D18-310, 2018 WL 6528491 (Fla. 4th DCA Dec. 12, 2018) and Wells Fargo Bank, N.A. v. Elkind, 254 So. 3d 1153 (Fla. 4th DCA 2018), are inapposite because those opinions address issues concerning determination of a prevailing party and judicial estoppel, but they do not address the specific argument raised in the trial court by HSBC as to who has the burden of proof regarding a contractual relationship.

I respectfully submit the case law on the issue of attorney’s fees after a voluntary dismissal is confusing. In part, this is because appellate courts have frequently failed to articulate with precision the distinction in law between who is a “prevailing party” in litigation and who is a “party” to a contract. Moreover, standing, in the context of foreclosures, can be confusing because there are two phases of standing (at the time suit is filed and at the time of trial), which can be pertinent to determining who prevails on a legal issue. Additionally, the case law frequently fails to emphasize that promissory notes are a special specie of contracts, involving a special set of legal principles. For example, a person who does not properly obtain ownership of a blank indorsed note can enforce it because he or she is in possession of it. See § 673.3011, Fla. Stat. (2018). Presumably, enforcement of the note with an attorney fee provision allows such possessor to also receive attorney’s fees. At first blush, it seems implausible to say a person who is not in the chain of ownership can be considered in privity with the maker of the note, however, simple possession of contract (the blank indorsed note) provides the privity, even though there is no meeting of the minds. I also submit that much of the confusion stems from a failure to properly analyze and apply legal principles regarding judicial estoppel.

Our case law regarding entitlement to attorney’s fees after a voluntary dismissal has properly discerned that in terms of analysis, there is a difference between cases where the trial court has made evidentiary determinations regarding standing and cases where such evidentiary determinations have not been made. See Rodriguez, 2018 WL 6528491 at *1; Elkind, 254 So. 3d at 1154. However, trial judges are frequently led down the wrong path by attorneys who fail to recognize the difference between who is the prevailing party in litigation and who has the burden of proof for entitlement to fees. More importantly, if a party to a suit seeks attorney’s fees pursuant to a contract clause, but is not in a contractual relationship with the opposing party in the suit from whom fees are sought, it is improper to award attorney’s fees based on the contract provision. Novastar Mortg., Inc. v. Strassburger, 855 So. 2d 130, 131 (Fla. 4th DCA 2003) (“Because the Strassburgers were not parties to the mortgage, they were not entitled to recover attorney’s fees under the mortgage.”); see also Gibson v. Courtois, 539 So. 2d 459, 460 (Fla. 1989) (determining that the fact that no contract was formed was dispositive on the issue of fees based on a contract provision); Fitzgerald, 215 So. 3d at 121 (“Because no contract existed between the parties, the trial court erred in awarding Fitzgerald attorney’s fees pursuant to section 57.105(7)[.]”); HFC Collection Ctr., Inc. v. Alexander, 190 So. 3d 1114, 1117 (Fla. 5th DCA 2016)(holding that a party cannot employ section 57.105(7) as a basis for fees after proving the opposing party never became a party to the contract).

In granting rehearing and denying fees to the homeowner in this case, the trial court relied upon Judge Scales’s insightful opinion in Florida Community Bank, N.A. v. Red Road Residential, LLC, 197 So. 3d 1112 (Fla. 3d DCA 2016). There, the bank filed a voluntary dismissal after one of the defendants, Rios, filed a motion for fees as a sanction under section 57.105(1), Florida Statutes. Id. at 1114. After the voluntary dismissal, Rios moved for fees under both section 57.105(1) and section 57.105(7) (the contract reciprocity fee provision). Id. The trial court denied fees under section 57.105(1), but granted fees under section 57.105(7). Id.Notably, Judge Scales observed that “[a]s section 57.105(7) plainly requires, to gain the benefit of its substantive entitlement to prevailing party fees, the party seeking the benefit of reciprocity must be a party to the contract containing the fee provision.” Id. at 1115 (emphasis added). After making the observation, the opinion goes on to explain:

Ada Rios does not appear to contest this proposition. Rather, in oral argument, she sought to distinguish the reasoning in Novastarv. Strassburger] by arguing that, in Novastar and other similar cases, the trial court actually adjudicated that the party seeking fees was not a party to the contract. Ada Rios points out that, in this case, the Bank voluntarily dismissed its lawsuit before such an adjudication occurred. Ada Rios argues that, as the prevailing party (by virtue of the Bank’s dismissal), she should be the beneficiary of the fact that her status as a mortgagor specifically was not adjudicated.

Not surprisingly, the Bank takes the contrary position in the form of this syllogism: because Ada Rios’s principal defense was that she was not a party to the mortgage, and because Ada prevailed, therefore, for the purposes of section 57.105(7), Ada Rios was not a party to the mortgage.

Regarding whether Ada Rios was a party to the mortgage, we note that both the Bank and Ada Rios take positions opposite to the positions they took before the Bank’s voluntary dismissal of Ada Rios from the lawsuit. While both the Bank and Ada Rios suggest that the other party should be estopped from making its respective argument about whether Ada was a party to the mortgage, we view the case not from the parties’ estoppel perspectives, but from the perspective of burden: which party had the threshold burden of establishing whether Ada Rios was a party to the mortgage?

In our view, in order to avail herself of section 57.105(7)’s reciprocity, Ada Rios, as the prevailing party and movant seeking fees under the mortgage’s fee provision, had the threshold burden to plead and establish that she was a party to the mortgage containing the fee provision. Ada Rios’s status as the lawsuit’s prevailing party does not equate to Ada Rios being a mortgagor under the mortgage so as to trigger section 57.105(7)’s reciprocity provision.

Id. at 1115-16 (emphases added) (footnote omitted) (citations omitted). The Third District reversed the order awarding fees and remanded the case for further proceedings because “[t]he burden lies with the prevailing party to establish, as a threshold matter, her status as a party to the contract.” Id. at 1116. I agree with the Third District that in litigation seeking to enforce a contract (which includes foreclosure cases), establishing one party as the prevailing party in the suit does not necessarily establish that the prevailing party is also in a contractual relationship with the opposing party. See id.

In the trial court below, HSBC consistently argued in opposition to the homeowner’s motion for fees, as well as in support of its motion for rehearing, that in order to prove entitlement, the homeowner had the evidentiary burden of proving not only that the homeowner was the prevailing party, but also that the homeowner and HSBC were in a contractual relationship while the foreclosure suit was being litigated. The trial court granted fees to the homeowner, after initially determining that Red Road Residential was factually distinguishable from this case. HSBC moved for rehearing contending the trial court erred in its interpretation and application of Red Road Residential. After entertaining argument on the motion for rehearing, the trial court granted rehearing and specifically set a new evidentiary hearing on the fee motion. At the conclusion of the new hearing on the fee motion, the trial court found that

the Defendant [(the homeowner)] failed to prove that the Plaintiff [(HSBC)] and Defendant were parties to the note and mortgage. The Defendant’s Answer denied paragraphs 3, 4, & 5 of Plaintiff’s Complaint and Defendant’s Affirmative Defense asserted the Defendant [sic] did not have standing to file the Complaint. These assertions have not been overcome by evidence to show the Plaintiff and Defendants were parties to the Contract.

My review of the transcript of the hearing confirms that the homeowner presented no evidence that he was in a contractual relationship with HSBC. Thus, it appears the trial court’s finding was correct that there was no competent substantial evidence to support a determination that the homeowner and HSBC were parties to a contract which contained a provision of a fee award. Therefore, I contend that we have no legal basis to reverse the trial court. I disagree with the majority’s conclusion that the copy of the note attached to the complaint provided “sufficient record evidence to demonstrate HSBC and the homeowner were parties to the underlying contract so as to justify attorney’s fees pursuant to section 57.105(7).” When the issue of entitlement is uncontested, it is not uncommon for stipulations, admissions in pleadings, and affidavits to be used. When entitlement is contested, evidentiary hearings are required, with proof by testimony, exhibits, or both, unless summary judgment proceedings are properly invoked.

In addition to arguing the homeowner was not entitled to attorney’s fees for failure to carry his burden and provide evidence of a contractual relationship, HSBC made arguments below and on appeal asserting the homeowner could not make a factual showing of entitlement based on principles of judicial estoppel. Such arguments were incorrect and distracting. Trial advocates are to be reminded:

In judicial proceedings, a party simply is not estopped from asserting a later inconsistent position (if that it can be called), unless the party’s initial position was successfully maintained.

Leitman v. Boone, 439 So. 2d 318, 322 (Fla. 3d DCA 1983).

I emphasize that judicial estoppel arguments in these fee cases are distracting, when the argument is inappropriate, for a reason. I said above that Elkind was inapposite for the disposition of this case. I was one of the panel members deciding Elkind. In going back and reviewing our analysis and the briefs submitted in that case, I now realize that a somewhat similar argument about the burden of proof in fee cases was made in Elkind, but the clarity of the argument was lost by infusing it with arguments about judicial estoppel and not as a stand-alone argument.

For the reasons I have discussed, I would affirm the trial court.

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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His lawn overgrew while he was tending to his mom’s estate. Now, he faces foreclosure and a $30,000 fine.

His lawn overgrew while he was tending to his mom’s estate. Now, he faces foreclosure and a $30,000 fine.

WAPO-

The grass got long. Jim Ficken knows it.

But was it so long that he should have to pay the city of Dunedin, Fla., nearly $30,000 and lose his home to foreclosure?

Ficken, for one, would rather ask a judge.

The 69-year-old retiree is now at risk of losing his home because he doesn’t have the $29,833.50 plus interest that he needs to resolve the exorbitant fines that accrued while he was away in South Carolina for nearly two months last summer, tending to his deceased mother’s estate, according to a lawsuit he filed against the city of Dunedin last week.

[WASHINGTON POST]

image: Institute for Justice

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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New Jersey Creates Mortgage Servicers License as Part of Legislative Efforts to Curb Foreclosures in State

New Jersey Creates Mortgage Servicers License as Part of Legislative Efforts to Curb Foreclosures in State

Consumer Financial Services LAW MONITOR-

On April 29, New Jersey’s governor signed into law bill A4997, known as the Mortgage Servicers Licensing Act. As the title indicates, the Act creates a licensing regime for servicers of residential mortgage loans secured by real property within New Jersey. As with many state licensing regimes, the Act exempts most banks and credit unions from licensing. It also excludes from licensing certain entities regulated under the New Jersey Residential Mortgage Lending Act. Consequently, the licensing regime principally impacts non-bank servicers who do not lend in New Jersey.

Also like other licensing regimes, the Act requires licensees to maintain and submit evidence of surety and fidelity bonds, designate qualified individuals to serve in various roles, such as “Qualified Individual” and “Branch Manager,” and pay applicable licensing and renewal fees. Additionally, the Act:

  • Creates new operational requirements for some servicers;
  • Creates a list of prohibited activities for all servicers;
  • Provides the New Jersey Department of Banking and Insurance with investigative and examination authority; and
  • Provides the Department of Banking with enforcement authority, which includes the power to impose civil penalties of up to $25,000 per violation.

[Consumer Financial Services LAW MONITOR]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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Facing Foreclosure Single Mom and Breast Cancer Survivor Makes a Call to 2 Wants To Know That Changes Everything

Facing Foreclosure Single Mom and Breast Cancer Survivor Makes a Call to 2 Wants To Know That Changes Everything

Pamela Mosley was just starting a new business when she was diagnosed with breast cancer. Unable to work for the next 13 months she fell way behind on her mortgage payments and was about to be foreclosed on.

WFMYNEWS2-

Pamela Mosley is the type of person who does things, anything and everything. Mosley has three grown kids and is now raising her god-daughter on her own, “I’m always going,” says Mosley.

Balancing being a single mom and work is no simple task. In hopes of spending more time with her family she decided to start her own business, “It was going pretty well,” said Mosley.

She was also working at a temp agency to make sure she had some money coming in as her housekeeping business got started.

[WFMYNEWS2]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.



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