Entitlement to Discovery in Foreclosure Cases

Posted on June 16th, 2011 by Mark Stopa

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.

Mark Stopa

www.stayinmyhome.com

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“Uncontested” Foreclosure Hearings in Bradenton

Posted on June 16th, 2011 by Mark Stopa

I attended a mass-motion calendar in Bradenton today, and geez, was it eye-opening.  You see, most of the hearings I attend in foreclosure cases are “special set,” meaning mine is the only case set for hearing at that time (so I don’t sit around and watch other hearings in other cases).  In the unusual instances where I have a hearing on a mass-motion calendar, they typically involve lawyers, so the hearings are contested.  Today, though, was totally different.  There were upwards of 100 “uncontested” cases set, all at the same time.  (My hearing was put on that calendar before I was retained, hence my presence at an “uncontested” hearing.)

The hearing started with the court addressing those cases where the homeowners personally appeared.  (Why the court began with these cases, instead of the cases involving lawyers, is beyond me.  Respectfully, why is the court in a rush to get the homeowners out the door instead of the lawyers?  The lack of respect in this regard for defense lawyers is disturbing.)  Anyway, these all followed a disturbing pattern – the homeowner saying he/she tried to get a loan modification, the bank wouldn’t oblige, and the judge saying he couldn’t stop the bank from foreclosing.  Sale set, 120 days out.  In many of these cases, it was clear to me that what the homeowners were saying was a valid defense to foreclosure, especially for summary judgment purposes, but it was clear this judge wasn’t going to deny a summary judgment for a pro se homeowner.  In fact, of all the cases heard, summary judgment wasn’t denied, even once. 

Those cases where the homeowner did not appear (and had no lawyer) were over in a flash.  I’d say each took 10 seconds, but that might be over-estimating.  When a case was called, a plaintiff’s lawyer introduced himself and asked for a “standard date.”  When nobody said anything for a homeowner, the the “standard” foreclosure sale was set – 30 days out.  There were no arguments made, not even a perfunctory “summary judgment is appropriate.”  I’d estimate 50 foreclosure sales were set, either on July 19, 20, or 21, in this manner. 

On those cases where a lawyer was present for a homeowner, the judge did not try to hide his displeasure, noting it was supposed to be an “uncontested” calendar and that he didn’t want hearings with arguments between two lawyers.  Seeing this, I realized that the hearing on plaintiff’s motion for summary judgment in my case was probably going to get continued.  That was frustrating, because I filed a motion for continuance and asked the bank to agree, yet they refused.  But there was no way around this – I had 6-7 reasons why summary judgment was inappropriate, with case law, and the judge was clearly not going to allow that at this hearing. 

Anyway, when it got to my hearing, the judge agreed a continuance was inappropriate.  But then he arbitrarily picked a date, July 7 at 9am, and re-set the hearing.  I argued forcefully about how I didn’t have my calendar, had never seen a judge re-set a hearing like soon, and that I wanted to check my calendar before the hearing was re-set.  I asked, “Are you really going to re-set this hearing without letting me check my calendar to see if I have a conflict?”  His response – “Yes.”  My retort, “Respectfully, I find that patently unfair.”  Obviously unmoved, he said nothing and moved on to the next hearing. 

So what did I take out of this hearing? 

Homeowners who don’t show up get foreclosed, without any argument from the plaintiff’s lawyer, and got a foreclosure sale scheduled 30 days out.  Homeowners who showed up, pro se, and complained, bought themselves an extra 90 days, but still got foreclosed.  And lawyers who waited for an hour to have a hearing, like me, didn’t get a hearing at all, or even the courtesy of having the hearing re-set at a mutally-available date. 

I guess you could say “welcome to foreclosure court.”

With budget constraints prompting the end of the senior judge system, I will say this.  Many of the senior judges were fair and tried to do the right thing.  But after an experience like this, I can’t say I’ll miss the senior judge system.

Mark Stopa

www.stayinmyhome.com

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