Entitlement to Discovery in Foreclosure Cases
One of the things that frustrates me when I see homeowners back down from a foreclosure lawsuit without a fight, particularly at a hearing on a motion for summary judgment (like I explained, here) is my knowledge of just how easy it is to prevent a summary judgment by the bank.
For instance, Florida law is replete with appellate court decisions that reversed a lower court’s entry of summary judgment where the defendant had not had an opportunity to complete discovery. This is really basic law – a homeowner is entitled to a fair chance to procure discovery from the bank prior to entry of adverse summary judgment.
Below are the cases I used to convince a St. Augustine judge to vacate a Final Judgment of Foreclosure, as I explained here. The argument is really this simple:
Judge, it would be reversible error to grant summary judgment because discovery is outstanding. Specifically, my client has served interrogatories and a request for production and the bank has not responded. My client is entitled to this discovery prior to a summary judgment hearing.
See Kimball v. Publix Supermarkets, Inc., 901 So. 2d 293 (Fla. 2d DCA 2005) (“before Publix complied with the discovery order, the trial court granted summary judgment in favor of Publix. This award of summary judgment was error.”); Sanchez v. Sears, Roebuck & Co., 807 So. 2d 196 (Fla. 3d DCA 2002) (“summary judgment was granted before the facts of the case were sufficiently developed to enable the trial court to be reasonably certain that no genuine issue of material fact existed”); St. Fort v. Fla. Dept. of Trans., 688 So. 2d 469 (Fla. 4th DCA 1997) (“at the time of summary judgment, discovery was still ongoing, and the facts were not so crystallized that nothing remained but questions of law”); Henderson v. Reyes, 702 So. 2d 616 (Fla. 3d DCA 1997) (“the trial court erred in granting summary judgment in favor of Reyes while there were depositions that had not been completed and an outstanding request for the production of documents.”); Abbate v. Publix Super Markets, Inc., 632 So. 2d 114 (Fla. 4th DCA 1994) (“We are at a loss to understand how the summary judgment was entered with the plaintiff’s motion to compel still pending.”)
By no means is this an exhaustive list of cases. In fact, I’d estimate there are 50-60 more cases just like this in Florida.
So if you’re trying to prevent a bank from getting summary judgment (and a quickie foreclosure), serve some discovery! Homeowners are perfectly entitled to obtain answers to interrogatories and documents from the bank before a final judgment is entered.
Some people would argue that this discovery is unnecessary and should not preclude summary judgment. That argument goes like this – “it’s undisputed the homeowner is in default; discovery won’t change anything.”
I understand that argument, but I totally disagree. Homeowners aren’t required to accept what the bank says as true. Even if non-payment of the mortgage is undisputed, that doesn’t mean the homeowner doesn’t get to challenge the amount owed. Banks are notorious for including fees and charges that should not be included. This is one legitimate purpose of discovery – to see if the amount the bank says is owed is accurate.
Discovery regarding the bank’s standing to sue is also appropriate. For instance, if a note has an indorsement, homeowners are entitled to ask, via interrogatories and/or depositions, about the circumstances in which the indorsement was signed. Did the bank procure the indorsement from the prior owner/holder in the normal course of business? Or, to use an extreme example, did the bank steal the note and forge an indorsement to create the false impression it could foreclose? That may sound like a ridiculous question, but if you know anything about securitized trusts, you know that interrogatories and even depositions are perfectly appropriate in foreclosure cases … and until such discovery is complete, summary judgment is inappropriate.
I realize there are cases which hold that a party’s right to discovery is not without limits. I agree. However, the cases which allow summary judgment with discovery pending stand for the proposition that a party cannot let a case languish for three years, watch the opposing party set a summary judgment motion, and then seek discovery just to delay summary judgment. That’s not appropriate, and that’s not what I’m advocating. What I’m saying is that homeowners can and should force the bank to produce discovery to prove/support the claims in its lawsuit before rolling over and allowing the bank to procure a Final Judgment of Foreclosure. The banks might not like it, and judges may not be thrilled with it, either, but homeowners are absolutely entitled to discovery before a final judgment is entered. Who knows – that discovery may just show that the bank is either not entitled to foreclose or not entitled to the amount it claims.