Appellate courts stepping on a rake: This thread of decisions makes it extremely important for attorneys representing homeowners to establish the earliest possible safe harbor period so they can recover fees when they win.
These decisions are essentially punishing homeowners on the grounds that they won on an issue that revealed the underhanded, fictitious narratives that are cooked up by central repositories of fabricated data and documents in order to obtain a foreclosure judgment to which the banks and servicers are not entitled.
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The bottom line is that Judge Jennifer Bailey was right and the appellate court was wrong. Another case of the rules being used to twist the court system against itself. There are consequences arising from the Courts making policy (a legislative function). One of them may well be that even the highest court in a state could be subject to obvious reprimand from courts in the Federal system.
Since 2001, foreclosure litigation has been a strange world combining Opposite Day with twisted legal opinions based upon the single premise that the Banks must win and the homeowners must lose. Nowhere is that more obvious than in Florida, where a homeowner can win the case, with Final judgment entered in the Homeowner’s favor, but still lose the case on the issue of recovery of reasonable attorney fees and costs.
Under the logic of the Alexander case and now this third district opinion, the Bank can assert rights under what is an existing contract and, if it wins, recover attorney fees and costs. But the homeowner cannot recover fees if the homeowner wins. Despite the provisions of F.S. §57.105(7) that expressly states that if one party is entitled to recovery of fees in a contract then the provision becomes reciprocal — i.e., if the party using the contract for suit loses the prevailing party gets fees upon winning the case.
As in other decisions the court is hell bent on making it more difficult for homeowners to defend their homes by denying them recovery for their attorney fees. The obvious impact is to increase the risk of challenging the core defect in all foreclosures — standing. The DEBT is simply not owned by any of the parties who have been acting as “servicers”, “collectors” or “lenders” or “investors.”
The logic of the courts is defective and twisted. If US Bank, for example, is defeated in a foreclosure action because it was never a party to any loan contract, written, implied or otherwise, then it nevertheless does not need to pay for attorney fees for the opposition homeowner BECAUSE the homeowner won on standing.
Thus a party like US Bank et al who invokes a presumably valid contract, stands to lose nothing if it loses. The simplicity of the decisions is misleading. The appellate courts are making a finding of fact contrary to that of the trial judge. In this case the trial judge found that the Plaintiff was not a party to the contract and never became one. Hence the court entered judgment for the homeowner and then ruled that the homeowner was entitled to attorney fees and costs and awarded over $40,000 to the defendant as recovery of fees and costs.
But the appellate courts invented a concept that simply does not exist. They are finding that the contract does not exist rather than the trial court’s finding that the Plaintiff never became a party to the contract despite its allegations to the contrary. Either the contract exists or it doesn’t. If it doesn’t exist then nobody gets to enforce it and the the homeowner is now free to quiet title and get the mythological “free house.”
The correct decision under these cases should be that the Plaintiff, having invoked the contract including an award of attorney fees, was admitting that the reciprocity provisions of F.S. §57.105(7) apply and is now bound by the contractual provisions regardless of the outcome of litigation. Having failed to prove their rights under the contract, they are subject to the consequences set forth in the contract that formed the entire basis of their lawsuit in foreclosure.
This issue should be taken up with the Florida Supreme Court. These decisions are essentially punishing homeowners on the grounds that they won on an issue that revealed the underhanded, fictitious narratives that are cooked up by central repositories of fabricated data and documents in order to obtain a foreclosure judgment to which the banks and servicers are not entitled.
But the interesting thing about this reasoning, is that the issue of whether the contract exists or not might lead to a quiet title action for the homeowner.
Having established that the Plaintiff had no right to bring the action, the trial court must then vault such a decision into a rule, per se, that therefore there is no contract. This can only be prevented in the event that the next step in this thread is to suggest that the contract DOES exist but not as to the Homeowner in connection with this Plaintiff. But that will muddy title even more, inasmuch as all the evidence adduced to date was that the loan was somehow under the control of the Plaintiff or Plaintiff’s agents. How does another creditor/predator come along and say “OK, it was really us all along?”
A plain reading of the doctrine of estoppel in a court of equity would clearly allow the award of fees to the homeowner who wins on the issue of standing.
None of this discounts my prime directive that there is no contract at all to enforce becasue the debt was never merged into the note and the mortgage only serves as collateral for the alleged obligations under the note. In the absence of merging the debt (owed to an undisclosed, unidentified third party) into the note, the note represents only a contingent liability — if the note ends up in the hands of a holder in due course who purchased the note in good faith and without knowledge of the borrower’s defenses.
I might add that in the case of the so-called purchase or transfer of loan documents in which the homeowner is already declared in default, the rights of any holder or any possessor of the note are dubious at best, since the note is no longer a negotiable instrument under the UCC.