Banks Are Baffled by Florida Supreme Court Ruling in Glass v Nationwide

Yesterday’s article was about a paradigm shift at the Florida Supreme Court that flipped, for the most part, law that prevented homeowners from being granted attorney fees when they won their foreclosure cases.

Today (hat tip to Greg Da Goose) I received an article published by Burr Forman (bank lawyers) that admitted that the ruling was surprising and also projected that the ruling could have far reaching implications under various proceedings and laws.

seehttp://www.burr.com/2019/01/07/blogs/consumer-finance-litigation/Florida-Supreme-Court-Reverses-Fourth-DCA-on-No-Standing-No-Fees

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Here are some notable quotes from the Burr Forman analysis:

“In a surprising opinion, the Florida Supreme Court determined that the Fourth DCA’s opinion “both misstates the basis of the trial court’s ruling on Glass’s motion for dismissal and fails to address Glass’s motion for appellate attorney’s fees based on the voluntary dismissal.” Notably, the Florida Supreme Court found that the trial court had dismissed the case based on pleading defects in the Complaint, not based on an express finding that Nationstar was not in privity with the note and mortgage.”

Editor’s Note: The author was right to zoom in on that language. Here is the real problem. If a court finds that there was a lack of privity, then it is arguable that the named claimant could never bring the foreclosure action again. (this is more complicated that it appears). So the lawyers for the claimant do not want an express finding of lack of privity unless the express finding is limited to “before suit was filed.” The homeowner’s lawyers on the other hand have a two pronged issue: a finding of no privity does support a wrongful foreclosure action and related torts and breach of statute etc., but it may at the same time bar an award of attorney fees.

The author finds the opinion has contradictory statements. But I find that the Court is finally addressing the real issue, slowly perhaps, that the foreclosure claimants either do not exist or have no right, justification, title, interest or authority to be party to a foreclosure action.

The Florida Supreme Court is signaling that it will look at issues that were previously ignored. And the Court is not stupid: the implications of homeowners winning so many foreclosure cases is that the foreclosure cases are winnable. By inference, the Court is saying “if these are ‘standard foreclosure cases’ as counsel recites in the opening statement in court, then why are so many failing?”

The lawyers for the banks and servicers might have shot themselves in the foot or as Mayer calls it “stepped on a rake.”

First, by filing appeals on fee awards, they were going off of an ad hoc plan instead of the bank playbook. They highlighted the fact that homeowners were winning their cases — something the banks have meticulous about keeping out of the press.

By appealing orders awarding fees they directly put the issue of privity — the relationship between the parties — directly in issue. They will never survive scrutiny on the issue because they changed the debt in the note into an unrecognizable obligation of an investment bank that was using some sort of “Trust” name as a fictitious DBA name. And so they can never assert any conclusions of fact or law that says otherwise.

This cycle of appeals brought by the banks may well have accomplished what homeowners have been trying to do for the last two decades — raise the issue of whether the real party in interest is at the table or in the courtroom.

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