Archive for April 20th, 2011

Mark Stopa Thrown Out of Court (Literally)

I had a hearing earlier this week on a Motion to Substitute Party Plaintiff.  It’s the type of motion we’ve seen all too many times – one fraudster bank wants to remove itself as the plaintiff and allow a different fraudster bank to substitute in its place.  Unfortunately, these motions get granted all of the time, often ex parte, without notice, and without hearing.  Many times, I don’t even know these motions are filed until the Order is signed, as the plaintiff’s lawyers submit Orders to the judges without copying me.  I’ve complained about this process repeatedly, yet judges all seem to think this conduct is okay – not ideal, but a byproduct of insufficient budget funding. 

At my hearing on Monday, this process reached a new low. 

SunTrust Bank had at least six such motions pending, trying to substitute Nationstar in its place as the plaintiff, all at the same hearing time.  At a rocket-docket, I watched four such motions be granted without opposition.  When my motion came up for hearing, I wasn’t terribly optimistic, but I felt my argument was sound.  After all, Florida procedure authorizes a substitution of the party plaintiff in the event of a “transfer of interest,” but in its motion, SunTrust alleged no such transfer.  Here was the sequence of events:

1.  Lawsuit filed by SunTrust, alleging lost Note, no copy of Note attached to Complaint.

2.  Assignment executed and recorded, purportedly conveying to SunTrust.

3.  Nearly 2 years into the case, “original” Note filed, not in name of SunTrust, with no indorsement. 

4.  Assignment filed and recorded from SunTrust to Nationstar. 

5.  Motion to Substitute Party Plaintiff filed, alleging an Assignment of Mortgage had been recorded. 

As I see it, the second assignment, to Nationstar, was irrelevant and insufficient without more facts, particularly since SunTrust lacked standing at the inception of the case.  At minimum, SunTrust should have alleged some facts in its motion, something to the effect of:

The Note and Mortgage were transferred to Nationstar on X date, so Nationstar is now the proper Plaintiff.

This motion didn’t even have that much!  It pointed to the assignment (two years into the case, from a company that was not on the note and obtained its own assignment after the suit was filed), and that was it.  But what does the assignment really tell anyone without an allegation that the Note and Mortgage were transferred after the suit was filed?  Absolutely nothing. 

Quite candidly, this is not the strongest argument I’ve ever made.  It’s technical.  I think I’m right, but I’m not going to criticize a judge for ruling against me.  The problem was that I was about 45 seconds into my argument, and had clearly not finished my argument, when the judge interrupted, said “you can argue all of that later in the case, the motion is granted.” 

I immediately asked if the Order could so reflect, and he said “No, I’ve already signed the Order.”

At that point, I was pissed.  It wasn’t a matter of whether I was right or wrong on the merits of the motion.  It was a matter of the judge not even being willing to let me make the argument before making a ruling.  It’s not like I was rambling on and on, either – I had talked for less than a minute, with a very coherent argument, when he interrupted me (and signed an Order). 

Aggravated at the obvious denial of due process, I began to argue more.  The judge refused to listen, saying the hearing was over. 

I moved to disqualify him, arguing he refused to let me be heard.  He refused to rule on the motion to disqualify him, instead saying I was “out of order” and telling the bailiff to remove me from the courtroom. 

With all due respect, is this what it’s come to in our courtrooms?  Judges sign Orders without letting one side be heard?  Then refuse to let that party finish a brief argument?  Then tell the bailiff to remove the lawyer who moves to disqualify them? 

I don’t expect to win every hearing.  But I absolutely do expect that I will be given a fair chance to be heard at every hearing.  For this judge to take that away is offensive and degrades the entire system of justice.  If this is happening to you, fight.  I’m filing a written motion to disqualify this judge, and I’m going to word it in a way that it’s impossible for him to (lawfully) deny it.  And if he does deny it, I’ll go to the Second District. 

As lawyers in the foreclosure crisis, we all need to stand up for our right to be heard.  I’m not saying to pick a fight.  I’m not saying be argumentative.  I’m saying to not allow our basic rights to due process to be trampled.  If a judge refuses to listen, make him/her.  If the judge refuses, complain about it (respectfully, but without backing down).  If it takes getting thrown out of court, I’ll live with that.  What’s the alternative?  If I give up, then our system of justice will continue to erode, piece by piece, and pretty soon, they’ll be nothing left at all.

Mark Stopa

Posted in Main | 30 Comments »

Fighting Service of Process Leads to Deficiency Waiver

I recently had a hearing on a Motion to Quash Service.  The Plaintiff was unable to serve my client via personal service, i.e. a process server hand-delivering the Summons and Complaint, see Fla. Stat. 48.031, so it resorted to service of process by publication.  This is where a plaintiff can follow statutory procedures to effectuate service on a defendant through the Secretary of State. 

There were several problems, any one of which required that service be quashed. 

First, by including a request for a deficiency judgment in its Complaint, Plaintiff was seeking monetary relief, and Florida law does not authorize service of process by publication in cases where the plaintiff seeks monetary relief.  See Fla. Stat. 49.011; see also Huguenor v. Huguenor, 420 So. 2d 344 (Fla. 5th DCA 1982) (“The action here is one for money damages based on the tort of conversion.  It is simply not the type of action where service may be obtained by publication.”). 

Second, Plaintiff contended my client had evaded service, but failed to so allege in the body of its Complaint.  This failure requires that service be quashed.  See Monaco v. Nealon, 810 So. 2d 1084 (Fla. 4th 2002); Drake v. Scharlau, 353 So. 2d 961 (Fla. 2d DCA 1978). 

When I argued this second principle of law, the judge found it difficult to believe – “How can a plaintiff allege evasion of service in the Complaint?”  This is a fair criticism, particularly since a plaintiff would have no way to know a defendant will evade service when it drafts the Complaint.  However, the law requires this, and the requirements for service by publication are strictly construed, so this requirement must be followed.  As I told the judge, it’s not as hard as one might think – the plaintiff just needs to file an Amended Complaint. 

Third, my client did not evade service; the plaintiff resorted to service by publication too quickly.  To illustrate, the process server went to my client’s property on just six different occasions, and he easily could have not been home.  Also, the process server left a business card, and my client called and offered to cooperate, but by that point was told the process server no longer had the paperwork.

When I made the third argument, the judge appropriately wondered whether an evidentiary hearing was required to resolve the factual dispute.  I told him it was necessary to resolve the factual dispute on that issue, i.e. whether my client evaded service, but the motion should be granted for both of the first two reasons (which required that the motion be granted regardless of anything else). 

I also asked for a stay pending appeal, as in the event the court ruled against me, I was entitled to seek appellate review and have the case stayed while I did.  (And, yes, there is case law on this as well.)

The plaintiff’s attorney realized he was getting destroyed in the arguments.  Hence, before the judge could rule, he offered to waive deficiency if my client agreed to have the motion to quash service be denied.  His thought process made sense, sort of – if service by publication was not authorized in cases that seek monetary relief, as I argued, the plaintiff could cure the problem (or that problem, anyway), by striking the request for monetary relief.  It was as if the lawyer was saying “we struck the request for monetary relief, so now service by publication was okay.” 

The judge asked if I agreed to this request.  When I said I’d need to speak to my client, he stopped the hearing to allow me to do so.  My client agreed, and I hand-wrote an Order, to which the other side agreed and the judge signed, saying:

The motion to quash service is denied.  Plaintiff’s request for a deficiency judgment and monetary relief is stricken with prejudice.  This is an in rem proceeding only, and Plaintiff is entitled to no relief against Defendant. 

Perhaps my favorite part about this episode, aside from the fact that the deficiency was stricken with prejudice (meaning it cannot be pursued ever again) is that the case is still not over; in fact, my client’s Motion to Dismiss is still pending.  In other words, my client is still able to defend the foreclosure case on the merits, and continue living in his home while he does, without risk of a money judgment against him. 

This sounds like an impossibly good result, but I can see this scenario unfolding again.  So make sure you challenge service of process by publication.  Make sure you point out that deficiency judgments are unavailable if process is served by publication.  It wouldn’t surprise me if the plaintiff agrees to waive/strike the claim for deficiency to try to avoid more headaches with deficient service of process (particularly if you request a stay pending appeal, as that will lawfully throw a huge monkey wrench into any attempts to move the foreclosure suit forward).

Mark Stopa

Posted in Main | 1 Comment »