The Second District Court of Appeal affirmed Van Ness Law Firm’s client on the issue of contractual entitlement to attorney’s fees in a no standing, no fees appeal. In Florida, a party is only entitled to attorney’s fees if those fees are provided for in a statute, rule, or contract. There is no statute or rule providing for fees in foreclosure cases. Therefore, the parties rely on the note and mortgage. But if the note and mortgage are not between the parties, there is a question as to whether there is an entitlement to fees.
The Second District Court of Appeal had not opined on whether a borrower would be entitled to fees in the event that they prevailed in a foreclosure action by demonstrating that the bank failed to prove that either the note or mortgage were in favor of the bank. However, the Second District has now answered the question.
In Hopson v. Deutsche Bank Nat’l Trust Co., No. 2D18-0673 (Fla. 2d DCA Aug. 28, 2019), the borrower prevailed at trial. The note had no endorsements. The bank relied on an assignment of mortgage. The borrower attacked the assignment of mortgage. The trial court agreed with the borrower that the assignment of mortgage could not confer standing upon the bank. And the trial court awarded attorney’s fees to the borrower.
Van Ness moved for rehearing on the attorney’s fees issue, claiming that the lack of endorsements on the note combined with the fact that the assignment of mortgage had been impugned rendered the borrower devoid of an avenue to claim a contractual entitlement to attorney’s fees. The borrower appealed. The Second District, agreeing with the bank’s position, explained, “Because Hopson could not establish that Deutsche Bank was a party to the mortgage containing the fees provision on which Hopson relied, we affirm the trial court’s order denying Hopson attorney’s fees pursuant to section 57.105(7).”
Summary judgments are subject to reversal on appeal more than judgments entered after trial because a summary judgment effectively denies a litigant their day in court. Van Ness procured a summary judgment in favor of its client and it was recently affirmed on appeal. In Capital Markets Group v. LendingHome Funding Corp., Case No. 1D18-2276 (Fla. 1st DCA June 4, 2019), the borrowers argued that the Florida statutes and rules of civil procedure relating to note certification create a condition precedent to filing a foreclosure action and that plaintiff failed to sufficiently authenticate the note in its note certification. Van Ness defended its case on appeal.
Van Ness argued that the grounds for appeal had been waived because the borrowers did not provide a transcript of the proceeding. Whether a transcript is necessary is a fundamental concern of appellate practice in Florida and can be the end of many appellate actions. Van Ness argued that, because the borrowers did not claim that the final judgment in favor of plaintiff was fundamentally and facially erroneous, the appellate court could not reverse the trial court in the absence of a transcript.
Van Ness also argued that neither section 702.015 of the Florida Statutes nor rule 1.115 of the Florida Rules of Civil Procedure establish a condition precedent to filing suit. If a plaintiff fails to meet a condition precedent to filing a lawsuit, the lawsuit is subject to dismissal. Construing a provision as not creating a condition precedent can prevent such a dismissal. This effort requires a technical analysis of the pertinent statutes and rules. The distinction between a statutory or rule requirement and a condition precedent in Florida can save a case.
Appellate actions present two distinct requirements for counsel: detailed knowledge of the appellate system and a robust understanding of the ever-changing landscape of foreclosure law. Counsel must be aware of the requirements for preservation of error, the appropriate standard of review, and how to properly construct an argument on appeal. All this knowledge must be set against the substantive backdrop of foreclosure law in the State of Florida.
The Florida courts have recently clarified that, where a complaint is dismissed without prejudice and the dismissal does not operate as an adjudication on the merits, plaintiff may not have to send a new breach letter prior to instituting a subsequent action to foreclose the mortgage.
Foreclosure can be a complex legal area because of the nuance involved in the practice. Strategic decisions need to be made to minimize cost and exposure. A great counselor steps in the shoes of the opposing attorney, analyzing the case from both sides and always staying a chess move ahead. Such strategies can be simple as proactively seeking additional relief in orders, how you conduct motion practice, or dropping certain parties that will delay the cases if deficiency is not an option.
The case law surrounding how a plaintiff can limit its exposure to attorney’s fees liability is growing. Decisions about whether to voluntarily dismiss a claim or ask that it be dismissed without prejudice can be important. In HSBC Bank USA v. Leone, 2019 Fla. App. LEXIS 6753, 2019 WL 1967650, No. 2D17-2851 (Fla. 2d DCA May 3, 2019), plaintiff appealed an involuntary dismissal of its foreclosure case. Plaintiff had filed a second foreclosure case after the first was dismissed without prejudice. The trial court dismissed the claim on the basis that no new notice of default was sent. The trial court found that a “new default notice was required to be mailed prior to filing the second foreclosure action.” The court’s order was appealed and the appellate court reversed.
The Second District Court of Appeal provided that the issue was one of contract interpretation, specifically, one must look to the plain meaning of the mortgage. Analyzing paragraph twenty-two (22) of the standard form mortgage, the court looked to the phrase “on or before the date specified in the notice.” The court discounted the position that cases questioning the application of the statute of limitations would require that a second notice be sent.
Where a foreclosure case had been dismissed without prejudice and a subsequent complaint to enforce the note and foreclose the mortgage has been filed, there is no need to send a new breach letter prior to filing if the default was never cured. However, in the event that the dismissal was with prejudice, a new notice may be required.