Archive for April, 2011
Posted on April 30th, 2011 by Mark Stopa
According to today’s St. Pete Times, Chase is offering cash incentives to some homeowners to consent to foreclosure. I have yet to see this happen on a widespread basis, but it certainly seems like this is becoming more of a possibility for homeowners who fight their foreclosure cases.
This is indicative of what I’ve been telling homeowners for many years now – if you defend your case, you never know what type of settlement a bank may be induced to offer. Who knows; maybe the bank will offer a deal like this to you. Or, if you defend your foreclosure, maybe the laws will change in a way that helps you. The only certainty is this – if you give up, and get foreclosed, you lose any ability to take advantage of these possibilities.
Also, how cool is it that banks are being forced to pay cash to homeowners in foreclosure? Banks got their bailouts; it’s nice to see some homeowners getting a little relief, too.
Here is the article.
JP Morgan Chase has a deal for some homeowners behind on their payments: If they’ll accept a quick sale of their home, the bank will give them $10,000 to $20,000 and forgive what it loses on the mortgage. Homeowners get the cash after the home is purchased in a short sale, meaning the buyer pays less than what the bank is owed.
What’s in it for Chase? By avoiding foreclosure, a process that can take nearly two years in Florida, the bank saves attorney fees, court costs and property taxes. And it speeds the process of getting bad loans off its books. The bank began offering the incentive in late 2010.
“The net result is better for homeowners and investors,” said Mary Kay Bean, a Chase spokeswoman.
Chase still suffers a loss in the process. But generally speaking, sale prices on foreclosure homes are lower than those on short-sale homes.
Bean declined to discuss the criteria used to select homes in the program. But Realtors said the homes are in more desirable locations and newer.
Chase’s offer of cash to walk away from a home and forgiving the loan balance applies only to mortgages the banks owns.
Chase is also offering the cash payment to other homeowners whose mortgages it services. However, whether unpaid balances on these loans will be forgiven depends on the investors who own the mortgages.
In either case, borrowers aren’t walking away without consequence. After a home is sold, the settlement is reported to credit bureaus, Bean said. Sellers must also pay taxes on the money forgiven by Chase since it is considered income. Obviously, homeowners whose mortgage balance was not waived will be in worse shape creditwise.
Realtor blogs are buzzing with chatter about this program, saying Chase is offering up to $35,000. Bean declined to confirm that amount.
Another factor beneficial for homeowners and real estate agents: Chase provides an answer in about 35 to 40 days after an offer is made on a home. Most short sales typically take six to nine months to finalize.
“We’ve been working to get than down,” Bean said, stressing that Chase has closed more than 100,000 short sales since 2009.
Florida is saddled with more than 300,000 foreclosures. Thousands of other loans are nearing default because the homes are worth less than what is owed.
Bean declined to discuss whether the cash offer would propel more borrowers into a “strategic default.” The term describes homeowners who can pay their mortgages but stop because they owe more than the home is worth.
“It’s a very individual decision on how some people handle their financial decisions,” she said.
The St. Petersburg Times found two real estate agents who represent borrowers in the Chase program. The homeowners declined to talk.
Andrew Duncan, leader of the Duncan Duo & Associates at Keller Williams Realty in Tampa, is listing a Clearwater home for $150,000. He was skeptical of the offer until holding a conference call with a Chase representative.
“It’s a win-win all around,” he said. “The banks need to do something to get these homes on the market.”
Chris Hounchell, a short sale specialist with RE/MAX Metro in St. Petersburg, represents the seller of a high-end condo. Banks have finally realized they need to prevent more foreclosures, he said. More importantly, Hounchell said, the cash offers will help stabilize the housing market by ridding the rolls of distressed properties.
“It’s a step in the right direction,” he said. “Chase is offering more money than anybody else.”
Bean offered this advice to borrowers: “You should open your mail. This could be very important for some.”
Mark Stopa
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Posted on April 29th, 2011 by Mark Stopa
I’ve read a few blogs/posts from colleagues in the foreclosure defense industry criticizing this ruling from Florida’s Fourth District Court of Appeal, which affirmed an order quashing a subpoena of the Attorney General directed to Shapiro & Fishman. While I understand the frustration here, and by no means am I giving S&F a pass, I must respectfully disagree.
Applying proper procedure works both ways. If we want banks, the foreclosure mills, and judges to follow it, then homeowners and the AG must as well. As I read the Fourth District’s ruling, it seems clear the court is not saying S&F is undeserving of inquiry, nor is the court passing on the merits of any potential sanction/penalty/investigation. It is merely saying the procedure employed by the Attorney General was the incorrect way to obtain the result sought. In fact, the court even suggested one correct procedure, i.e. a criminal investigative subpoena.
I’m not saying I’m happy with this ruling. What I’m saying is that if we, as homeowners and defense advocates, want to force judges to follow the letter of the law in foreclosure cases when doing so would inure to our benefit, we cannot be too terribly upset when they do so in a way that does not. The point is, or should be, for everyone to follow the letter of the law regardless of the outcome, not to selectively do so in ways that only inure to our benefit.
In other words, the moral of this ruling, in my view, is that everyone needs to follow the law and apply the correct procedures to obtain the result desired, be it banks, homeowners, judges, and even the AG’s office, and if you don’t, then you risk a bad result on the merits because of poor procedure.
My concern about obtaining a bad result because of the utilization of the wrong procedures is especially high with pro se homeowners. If you’re thinking about defending a foreclosure case without a lawyer, think about it like this. The Florida Attorney General was unable to achieve the result it wanted because it employed an incorrect procedure. If the AG doesn’t know the right procedure to employ in these cases, and loses on the merits because of it, do you think that you, as a non-lawyer homeowner, will know the correct procedures to employ against banks represented by lawyers? Respectfully, I doubt it. In fact, I’ve seen many a homeowner prejudice his/her case by not knowing the right procedures to apply. Don’t learn this lesson the hard way, by making this mistake yourself – learn from the AG’s mistake. Get a competent lawyer to help you in your foreclosure case from its inception.
Mark Stopa
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Posted on April 28th, 2011 by Mark Stopa
On July 10, 2010, nearly a year ago and before Florida’s mediation program had begun, I wrote the following blog. I’m cutting and pasting it, below, to show that this story about the failure of the mediation program – just 4% of cases have settled – was, unfortunately, all too predictable. I realize the court system is under-funded and judges are dealing with an excess number of cases. But we can’t think settlements will ever happen when banks virtually never lose foreclosure cases on the merits. With no perceived risk of loss comes no incentive to compromise; hence the 4% settlement rate. Respectfully, if I was able to predict this, so long ago, then it was certainly predictable to others as well, including those in charge of the mediation program.
(Bear in mind, the 4% includes all settlements, including those who re-default and those who accepted things like a delayed foreclosure date, which is basically no settlement at all.)
Here was the blog….
Foreclosure defense attorney Mark Stopa attended a hearing last week on a Motion to Dismiss before a Pinellas County judge. The hearing was, unfortunately, like all too many other hearings in foreclosure cases – the judge denied the motion to dismiss (without reading or even looking at the case law and statutes provided). This hearing stood out, though, for two reasons: (1) the judge, upon seeing the case had been pending since 2008, actually said it was his/her (no reason to reveal the gender of the judge) ”job” to move cases towards judgment; and (2) the judge ordered the parties to mediation even though both parties said they did not want to go, then acted like he/she had done my client a favor. The tone and demeanor of the judge was as if he/she was saying ”I denied your motion to dismiss, but I’m ordering mediation, and now you can work something out there.”
In my view, the judge was totally missing the boat. Respectfully, how is a mediation going to accomplish anything when the bank has already indicated it’s not going to settle? More importantly, how are mediations ever going to keep homeowners in their homes when judges are systematically pushing through foreclosure lawsuits, entering final judgments for the banks for all of the relief requested? The incident got me thinking, and, ultimately, writing a letter to the Honorable Thomas McGrady, Chief Judge of Florida’s Sixth Judicial Circuit, which can be found here –
Open Letter to Judge McGrady
Mediations have settled lawsuits throughout Florida for many decades, primarily for two reasons: (1) parties want to avoid expenses (attorneys’ fees) associated with litigation; and (2) parties want to eliminate their risk of losing the case. The problem with mediating foreclosure cases is that banks perceive no risk of loss because judges so rarely, if ever, rule in the homeowner’s favor. Why should a bank settle when it knows the judge will enter judgment in its favor for all of the relief requested?
Contrary to what banks and their lawyers (and even some judges) may believe, Florida homeowners have valid defenses to foreclosure in many cases – and I’m not just talking about the fraudulent assignments with which we’ve become so familiar. For instance, in recent weeks I’ve seen several cases where the bank attached a Note to a Complaint that contains an indorsement to a different company (not the plaintiff), I move to dismiss on the basis the bank is not the “holder” under Section 671.201(21), and magically, the bank then files the same Note, only this time it has two more indorsements on it, including one to the bank that is suing. When this happens, it’s clear that the indorsements were done after the suit was filed – after all, if they were done beforehand, the Note attached to the Complaint would have contained all three indorsements. This is a fatal impediment to forelosure because standing cannot be acquired post-filing. In cases like this, final judgments should be entered for homeowners, yet that never happens. Why? There have been hundreds of thousands of foreclosure cases filed in Florida, yet I don’t know that I’ve ever seen a case where a final judgment was entered in the homeowner’s favor on a standing defense. With respect to our learned judges, how is that possible?
I get that judges want us to mediate these cases. I get that judges want to reduce the backlog of cases on their dockets. But until judges start ruling for homeowners in some of these cases, banks will never perceive that they have a risk of losing, and they’ll never settle, no matter how many mediations they’re ordered to attend.
If judges want cases to settle, it’s incumbent upon them to start listening to the arguments of the many bright foreclosure defense attorneys in Florida, applying the law, and, when appropriate, entering orders and judgments in favor of homeowners, even if they haven’t paid their mortgage. Until the banks start perceiving that they can lose a case, the mediation process, no matter how well-intentioned, just won’t work.
Mark Stopa
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Posted on April 26th, 2011 by Mark Stopa
I had lots of great comments/responses to this blog, where I posted this Assignment of Mortgage in one of my cases and asked everyone “Can you find the fraud?”
My intent wasn’t to initiate a complicated legal argument, but to show that anyone, even a non-lawyer, can find fraud in foreclosure cases.
Here’s my take…
Before I get to the fraud, a little backdrop is important. The case in which this Assignment of Mortgage was filed started out as a two-count Complaint for mortgage foreclosure and re-establishment of a lost note. The plaintiff, a securitized trust, had a copy of the Note attached to the Complaint, but no indorsement, and there was no Assignment of Mortgage recorded in the public records as of the date the Complaint was filed.
So no assignment, no indorsement, and no possession of the original Note.
I move to dismiss, and it’s granted. In fact, multiple motions to dismiss were granted, forcing Plaintiff to file a Third Amended Complaint. Now on their fourth (fourth!) attempt to state a cause of action, the Plaintiff now, magically, has possession of the original Note, which, unlike previously, is indorsed in blank. Plaintiff also attached an Assignment of Mortgage that, as of the filing of the Complaint, was nowhere to be found.
So let me get this straight. When the suit started, Plaintiff had no note, no indorsement, and no assignment, but now, after it’s lawsuit has been repeatedly dismissed for these problems, it somehow, magically, has the Note, which has an indorsement, and an Assignment of Mortgage. And, by pure coincidence, the Assignment was recorded in January, 2010, after the lawsuit was filed, but was executed and notarized in August, 2006 (meaning the plaintiff held onto the assignment, for nearly four years, without recording it). Gotcha.
Sure, it’s my job to be skeptical, and yes, I’m biased. But knowing what I know and seeing what I’ve seen, I find it impossible to believe this newly-discovered “evidence” is on the up and up. It’s just far too convenient to think the plaintiff had possession of the Note all along, with an indorsement, and the Assignment, yet held that Assignment for three-plus years without recording it. And sure enough, even a cursory review of the Assignment of Mortgage reveals the fraud.
If you look closely at the Assignment, you’ll see the mortgage that was supposedly being transferred was recorded on September 21, 2006. In fact, the Assignment, which was purportedly executed and recorded on August 31, 2006, actually cites the book and page number where the mortgage was recorded – some three weeks later.
And there is the fraud. It was necessarily impossible for Ameriquest (or anyone else) to know, when this Assignment was executed and recorded on August 31, 2006, that the mortgage would be recorded on September 21, 2006 at the OR Book and Page number identified. The Assignment had to have been executed after that date. How long after? Who knows. I strongly suspect it was done in January, 2010, shortly before the Assignment was recorded (and after the lawsuit was filed), as that’s the standard M.O. for these banks (to execute and record and Assignment of Mortgage after filing suit). In some respects, though, the specific date is irrelevant – the fraud has been proven, as there is no way the bank could have known the recording date or the OR Book and Page Number on August 31, 2006.
You may think this is irrelevant. After all, who cares if the date is wrong – isn’t the point whether the Plaintiff is the correct Plaintiff? Well, the date makes a big difference. Under well-established law, a plaintiff cannot acquire standing to foreclose after filing suit. See Progressive Exp. v. Mcgrath Chiropractic, 913 So.2d 1281 (Fl. 2d DCA 2005). Avoiding dismissal on this principle of law is clear motive for the plaintiff to back-date this Assignment of Mortgage. The date matters – a lot.
You may think this isn’t fraud and there is some other explanation. For instance, it’s theoretically possible the Assignment was executed and notarized on August 31, 2006 and the “Recorded 9-21-2006″ and the OR Book and Page were filled in afterwards. The problem with that argument, though, is that it’s illegal to alter a notarized document after-the-fact. Hence, taking the position that information was filled in later is to admit to notary fraud. In other words, whether the Assignment was fraudulently backdated or the Recording information was filled in afterwards … either way, it’s fraud (particularly once the plaintiff used that fraudulent document in support of its standing in the pending lawsuit).
As several readers commented, there are other problems with this Assignment of Mortgage. A few readers delved deep into California notary laws to discuss problems with this Assignment. That is great stuff, and I’m not trying to diminish its value. My point, though, was that you sometimes don’t have to be a legal expert to see the fraud in the documents banks use to prosecute foreclosure cases … you just have to have a keen eye for detail and know what you’re looking for.
Mark Stopa
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Posted on April 26th, 2011 by Mark Stopa
I’m known for being a foreclosure defense attorney, but I spend a fair amount of time litigating against insurance companies as well. And while I don’t think anything can compare to the disgust I feel on a regular basis in my foreclosure defense practice, the insurance industry comes close.
Many insurance companies’ idea of a business model is to wrongly deny coverage on claims they know to be covered, knowing many homeowners will never do anything about it. From the insurance company’s perspective, if they deny all covered claims and half of those homeowners never complain, then that’s half of their covered claims they don’t have to pay (even though they should). And for those that do complain, they can always change course later and pay with little or no penalty. Quite a way to make a profit, eh? Screw over everyone and hope they don’t complain.
Many homeowners don’t know how this process works. They think “it’s an insurance company, they must be right,” so they accept the wrongful denial of coverage without filing suit. (This is terribly similar to what most homeowners thought about banks a few years ago – they must be acting on the up and up – they’re my bank.) Many other homeowners fear making a claim will prompt the insurance company to drop coverage, which makes me wonder ”what’s the point of having insurance if you can’t submit a claim when you need it?”
In my experience/opinion, some insurance companies are worse than others. Personally, I’d go without homeowners’ insurance rather than insure my home with Florida Peninsula or Liberty Mutual. Just my opinion.
If you’ve had any repairs/problems with your home, don’t take your insurance company’s word for it that the damage is not covered. For example, I represent companies who repair/restore attics after raccoons, opossums and bats cause property damage (which happens with surprising regularity). It may surprise you to know that, under most policies, these are covered items. This is just an example – there are many others. In other words, like I say with foreclosure cases:
You have rights. Don’t give up. And don’t trust your insurance company – they make money by denying claims.
Mark Stopa
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Posted on April 25th, 2011 by Mark Stopa
People who default on mortgages they can afford to pay are savvy about credit and tend to have better credit histories than other defaulters, new research shows.
By David Zalubowski, AP file
FICO, the firm that created the widely used FICO credit score, studied credit bureau data to develop what it says is a more accurate portrait of strategic defaulters. FICO defines them as people who are underwater on their mortgage — owing more than their home is worth — and more than 90 days delinquent on payments but current on other credit lines.
Compared with other mortgage defaulters, strategic defaulters generally:
•Have higher credit scores. The majority of them have credit scores above 620, FICO’s research shows. FICO scores go up to 850.
•Use credit more judiciously. More than 35% of non-strategic defaulters max out their credit cards vs. less than 10% of strategic defaulters.
•Have not been in their home very long.
•Shop for new credit card lines before they strategically default.
“They’re getting their life in order,” says Andrew Jennings, chief analytics officer at FICO.
Lenders have traditionally used the degree of home price depreciation as a basis for predicting strategic defaults. But FICO’s research gives a more complete picture, Jennings says. The company last week announced new tools that it says will help lenders better identify strategic defaulters before they default.
Other companies, including CoreLogic, have launched similar products as the strategic defaults continue to erode home values.
While the exact number of strategic defaults can’t be determined, studies indicate they account for many lost homes. The University of Chicago Booth School of Business estimates that strategic defaults accounted for 35% of defaults in September vs. 26% in March 2009. In January, the Nevada Association of Realtors released a study showing that 23% of Nevadans who lost homes admitted to strategically defaulting.
Nationwide, 23% of homeowners with a mortgage are underwater, CoreLogic says. That means the problem of strategic defaults is likely to persist, says Craig Focardi, a TowerGroup banking consultant.
Strategic defaulters can be hard to identify because they typically make their house payments, and pay other bills, until they begin the strategic default process, Focardi says.
By identifying at-risk borrowers sooner, lenders may be able to guide them to options other than strategic default, say Frank Pallotta of Loan Value Group. His company aims to reduce strategic defaults by getting lenders to reward borrowers who pay off their loans.
Mark Stopa
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Posted on April 25th, 2011 by Mark Stopa
You may not think you’re a robo-signer, and, hopefully, you’re not. But in today’s climate of foreclosure chaos, you may be a robo-signer and not even know it! That’s what West Palm Beach resident Liz Mills realized when she googled her name on-line, as the Palm Beach Post describes here.
Is this what it’s come to nowadays? The fraud is so rampant that people have their signatures forged and don’t even know it?
Here’s the article, another in a series of fine reporting by Kimberly Miller.
West Palm Beach resident Liz Mills learned she was a robo-signer when a friend suggested she search her own name online. On foreclosure blogs and in at least one newspaper article, the 51-year-old process server was singled out for the numerous and varying styles of her signatures on summons paperwork used to prove her efforts in locating homeowners in foreclosure.
Now Mills is coming forward in affidavits filed in three foreclosure cases, saying she didn’t sign the paperwork and never signed in front of a notary despite notary stamps affixed to the documents.
In one case, Mills allegedly signed a return of non-service, meaning the homeowner could not be found, for a foreclosure in Lehigh Acres near Florida’s west coast – a town where Mills said she has never been.
“I’m not really sure what’s going on with all of this or what could happen, but it’s upsetting because if you read the articles it’s like they are trying to make the individual process servers the fall guy,” said Mills, who became a process server 12 years ago. “I think they just wanted to move the paperwork along faster.”
Service of process is sometimes the first notice a homeowner has that the bank has filed for foreclosure . Sloppy service or “sewer service,” as some defense attorneys call bad service of process, can leave a homeowner in the dark and defenseless until after the final judgment and a notice of sale is sent out.
Defense attorney Tom Ice, of Royal Palm Beach-based Ice Legal, believes Mills’ testimony in the three cases could force them to be re-served, sending the banks back to square one in the proceedings. “It’s always bothered me that a high number of my clients come in and say they didn’t know there was a lawsuit,” said Ice, who is defending the homeowners in the cases.
With the crush of foreclosures statewide, process service has become big business. Once entrusted only to sheriff’s deputies, summonses may now be handled by special process servers certified by the court. The servers often work for larger companies that dole out the legwork.
Mills worked for several process service companies, including Miami-based Gissen & Zawyer Process Service Inc.
The Florida Attorney General’s Office is investigating the company after allegations of backdating returns of service, improper billing practices and filing questionable affidavits with the courts.
Mills said she believes her signatures were forged on documents because she has a short name that’s easy to sign.
But Alan Rosenthal, an attorney defending Gissen & Zawyer, said the company believes the documents in question in the Mills cases bear her true signature.
“Gissen & Zawyer does not have any of its personnel sign affidavits of service other than the process server whose name is on the signature line, and does not condone such behavior by anyone who works for them,” Rosenthal said. “Gissen & Zawyer believes the signatures on the Liz Mills affidavits are hers.”
Process service company Caplan, Caplan and Caplan, which Mills also worked for and is involved in one of the cases, had no comment.
While Mills’ affidavits attesting to forged documents directly affect three foreclosures, there could be an impact on other cases that bear her name.
Judges have recently dismissed foreclosures based on bad service of process, although the cases can usually be refiled.
A 4th District Court of Appeal decision in December sided with the homeowner, based on paperwork that contained an illegible grouping of numbers – either the server’s identification number or the time of service. Both are required by state statute.
Mills, a former waitress, said she became a process server because she was a single mom and it offered a flexible schedule.
The typical charge for process service is $45, about $10 of which goes to pay Mills, who may have to make several visits to a home.
When Gissen & Zawyer didn’t think she was working fast enough, she said, she was called to Miami for a conference.
“They stood there and screamed at me that I was not serving their work fast enough,” said Mills, who worked for the company about 10 months.
Ice said the reprimand shows speed was valued over thoroughness. “These were processed like an assembly line,” said Ice, whose firm handled the 4th DCA case. “The pressure was not just on Mills. It’s on all of the process servers to do whatever it takes to get the job done quickly.”
Mark Stopa
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Posted on April 25th, 2011 by Mark Stopa
I want to do something a little different today – give everyone a chance to see what I see and tell me what they think. So here goes. …
Attached, here, is an Assignment of Mortgage filed in one of the foreclosure lawsuits I’m defending. Can you spot the fraud (or what I perceive to be the fraud)? You don’t need to resort to any other documents – you should smell something fishy merely by reviewing this three-page document.
Where’s the fraud?
I’ll post my opinion shortly, in a follow-up blog.
Mark Stopa
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Posted on April 20th, 2011 by Mark Stopa
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
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Posted on April 20th, 2011 by Mark Stopa
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
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