Posted on October 4th, 2011 by Mark Stopa
Most of the foreclosure mills who work for the banks handle foreclosure lawsuits throughout the State of Florida. Typically, they don’t have offices throughout the state, yet they handle cases everywhere. Obviously, lawyers based in Fort Lauderdale don’t travel to every motion to dismiss hearing in Sarasota, or vice versa. So how can these mills get away with this, particularly in counties which have administrative orders requiring in-person attendance at all hearings? Their procedure is simple. If the foreclosure mill is based out of Fort Lauderdale and has cases in Sarasota, the mill hires a lawyer who lives in Sarasota to “cover” all hearings in that area. This “local counsel” isn’t an employee of the mill and isn’t counsel of record in the case – that attorney just “covers” hearings.
This practice has become so prevalent that, in many counties (such as Broward, Sarasota, and Manatee, among others), there are a small handful of attorneys who handle nearly 100% of the foreclosure hearings for banks. Go to the courthouse in Ft. Lauderdale, Room 519 or Sarasota, Room 5B, on a typical morning and you’ll see what I mean – the same 3-4 attorneys appear on behalf of numerous foreclosure mills and banks, even though they aren’t counsel in the case and don’t formally represent that bank.
How can this happen? Candidly, it happens because not enough homeowner and foreclosure defense attorneys complain about it. These lawyers aren’t allowed to “cover” for a hearing, yet they get away with it because too few people complain!
Florida Rule of Judicial Administration 2.505(e) lists the ways in which a lawyer can make an appearance in a case for a client. There are just three: (1) the attorney files the party’s first pleading; (2) the attorney files and serves a Notice of Appearance; or (3) the attorney stipulates to a substitution with current counsel, the client consents, and the Court signs an Order approving the stipulation.
If you’re a lawyer, and you want to argue at a hearing, you must do one of these three things. If you don’t, then guess what? You’re not counsel and you don’t get to talk/argue at a hearing! This may sound harsh or overly technical, but this is what the Second District ruled in Pasco County v. Quail Hollow Properties, 693 So. 2d 82 (Fla. 2d DCA 1997). The court’s rationale in Quail Hollow was clear, and it makes sense if you think about it:
The Court must be able to rely on representations of attorneys because such representations bind the client.
If the attorney is “covering” a hearing, as “local counsel,” but is not counsel of record, then he cannot bind the client, so he shouldn’t be permitted to argue/speak at a hearing. It’s really that simple.
Today, I encountered this precise issue in Sarasota County, before Judge Williams (who is currently hearing all foreclosure cases in Sarasota). As the hearing began, I argued that the opposing attorney should not be permitted to speak because she was not counsel of record, i.e. she hadn’t formally appeared in the case in any of the three ways listed above.
Judge Williams indicated he hadn’t heard this argument before, so he took a break, read Quail Hollow, and resumed Court. I’m pleased to say he agreed with me, requiring the attorney to file a Notice of Appearance if she wished to argue. In fact, he announced, in open court, that he would be requiring these “local” attorneys to file a Notice of Appearance whenever the opposing party objected to their attendance at a hearing.
What an incredible breath of fresh air! It’s great to see the rules being followed, but there’s more to it than that.
I’ve often found, in cases in these counties, the foreclosure mill which actually represents the bank is unwilling to do things that I’d ordinarily consider reasonable (cancel hearings that should be cancelled, consent to orders vacating a default, and the like) because they have nothing to lose by being obstinent. They aren’t actually attending the hearing anyway – they know their local attorney is attending. So they have nothing to lose by being disagreeable, rolling the dice by going to court, and hoping the judge will rule in their favor, even on issues they should lose. If these attorneys had to get in the car, travel, and go to court, they’d be more inclined to agree on such matters, but they don’t because they lose nothing by being disagreeable.
Also, it is patently unfair that foreclosure defense attorneys like Stopa Law Firm have to personally appear at hearings (and incur the expense associated therewith or pass that expense along to homeowners) when banks don’t have to bear this same expense – they just call a “local” attorney, who was already going to be in court that day anyway, and have him/her “cover” the hearing. Hence, so long as the banks get away with “local counsel” appearing, all of the counties that require in-person hearings are unfairly skewed against homeowners.
Finally, there is something patently unfair about the same couple of lawyers having hearing after hearing, day after day, before the same judge. I’ve personally witnessed these lawyers engage in friendly conversation with these judges, sometimes even criticizing defense lawyers and/or homeowners. They spend so much time together in court, the lawyers and these judges, they develop a type of friendship. Obviously, this dynamic doesn’t exist on the defense side – any one defense lawyer has hearings before one judge, in one county, every so often, but not every day, and certainly not multiple hearings every day.
I strongly encourage all homeowners and defense lawyers reading this to help put a stop to this dynamic. If “local” counsel is arguing in your case, and that “local” counsel has not filed a Notice of Appearance in the lawsuit and is not counsel of record, start the hearing by citing Quail Hollow to the judge and asking that the lawyer not be allowed to speak. Judge Williams in Sarasota agrees with this argument, and I trust other judges will do so as well.
Mark Stopa
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Posted on October 4th, 2011 by Mark Stopa
Florida homeowners, clients, and prospective clients often ask me how Stopa Law Firm (or any lawyer, for that matter) can defend a mortgage foreclosure lawsuit when the homeowner is behind on monthly mortgage payments. Sometimes, when I try to explain, I feel like I’m a surgeon giving a play-by-play of open-heart surgery or a mechanic giving a lecture on how-to rebuild a car engine. In other words, yes, it’s possible to explain, but if you’re not used to the terminology of surgeons or mechanics, it can be difficult to understand. This dynamic sometimes frustrates homeowners, who want to understand how the process works in layman’s terms. In other words, what do foreclosure defense lawyers do?
I’ve said many times – foreclosure defense lawyers such as Stopa Law Firm force banks to prove their case … to prove their entitlement to foreclosure, every step of the way. If that sounds vague, it is. I don’t intend it that way, it’s just hard to explain – like the car engine. That’s why I’m pleased to have encountered a recent appellate decision that helps remove the cloak of ambiguity, providing two simple examples of the types of things foreclosure defense attorneys do to defend mortgage foreclosure lawsuits.
By way of background, remember – no matter how delinquent a homeowner is on monthly mortgage payments, there are basically only two ways a bank can prevail in a foreclosure lawsuit – via entry of summary judgment or trial. As I’ve repeatedly explained, banks don’t want to have to go to trial. In fact, as I showed, here, there were fewer than 200 trials in foreclosure cases in the entire state of Florida in a recent, one-year period. As a result, banks rely almost exclusively on a procedure called “summary judgment” to win a foreclosure case. This is why it’s so critical for defense attorneys to defeat summary judgment, as it is the mechanism by which most foreclosrue lawsuits are adjudicated.
The good news for homeowners, and the problem for banks, is that prevailing at summary judgment is typically not easy if a lawsuit is properly defended. Banks have a high burden of proof at the summary judgment stage, and, as Florida’s Fifth District recently explained in Gee v. U.S. Bank Nat’l Ass’n, there are many procedural requirements with which the banks must comply, failing which summary judgment must be denied. (Remember, the denial of a summary judgment motion forces the bank to go to trial, and that’s a great dynamic for homeowners, as we’ve already established they don’t want to have to go to trial. In other words, if you want a settlement, perhaps the best way to get one is to defeat the bank’s summary judgment motion and force it to go to trial.)
One procedural requirement of summary judgment which I absolutely love, and assert every chance I can, is the banks’ obligation to specify all of the grounds for summary judgment in the written motion itself. As the Fifth District explained in Gee, it’s not enough for a bank to show up at the hearing and argue the reasons it is entitled to summary judgment – those grounds must be set forth in the written motion. In the Court’s words:
The purpose of the rule is to prevent ambush by allowing the non-moving party to be prepared for the issues that will be argued at the summary judgment hearing.
In Gee, for example, the bank asked the judge, at the summary judgment hearing, to grant its request to re-establish a lost note and to reform the mortgage (a common request in foreclosure cases). The judge agreed, but the appellate court reversed that ruling because that request was not set forth in the written motion.
Requests to reinstate a lost note are somewhat common, but they don’t happen in every case. What is more common, though, is when a bank tries to disprove a homeowner’s affirmative defenses at the summary judgment hearing (as it must to obtain summary judgment), yet the bank failed to articulate those arguments in the written motion itself.
Think about this for a moment – how often do you think banks take the time to disprove affirmative defenses in their written motion for summary judgment? I’ve seen a lot of summary judgment motions, and I assure you – it almost never happens. Yet under Gee, the banks are required to do just that, failing which summary judgment must be denied.
That may sound technical, but as the Fifth District explained, if banks are going to ask for summary judgment, they shouldn’t be able to “ambush” homeowners with arguments not set forth in their written motions. In other words, banks must explain, in their written motions, why the homeowners’ affirmative defenses are insufficient to preclude summary judgment, failing which their request for summary judgment must be denied.
If that sounds complicated, it’s not. All I’m saying is this – one thing foreclosure defense attorneys do is ensure all of the banks’ arguments in support of summary judgment are properly set forth the bank’s written motion, and if/when the bank fails to do so, show the judge cases like Gee which require the judge to deny summary judgment.
A second example from Gee is seen in the Court’s explanation regarding standing. In Gee, the plaintiff was not the original mortgage holder (which is very common – the plaintiff that is suing is usually not the company that originally received the mortgage). To prove standing, the plaintiff relied on an assignment from the original mortgage holder (who I’ll call “A”), to a second bank (which I’ll call “B”), and a second assignment from the successor-by-merger to “B”, which I’ll call “B- Succ.” to a third bank, which I’ll call “C.”
It sounds complicated, but it’s not – A assigned to B, and B’s successor assigned to C, and C is the plaintiff.
Anyway, the Fifth District ruled, in Gee, that the plaintiff could not obtain summary judgment because it failed to provide evidence that B’s successor was actually B’s successor. Frankly, this isn’t terribly difficult to do – usually, in my experience, banks file something called “Articles of Merger,” or something of that ilk. The point, though, is that the bank had to put on evidence in this regard, and its failure to do so precluded summary judgment. To illustrate, I particularly liked this quote from Gee:
Incredibly, [plaintiff] argues “it would be inequitable for [the homeowner] to avoid foreclosure based on the absence of an indorsement.” But that argument flies in the face of well-established precedent requiring the party seeking foreclosure to present evidence that it owns and holds the note and mortgage in question in order to proceed with a foreclosure action.
In layman’s terms, even though the homeowner was behind on mortgage payments, the plaintiff/bank did not get to foreclose without proving its right to do so via evidence.
Ensuring the banks prove their right to foreclose, with evidence, is another example of what foreclosure defense attorneys do. Again, that may sound simple, but as the Gee case shows, this issue arises with incredible frequency.
So what’s the moral of the story? Defend your foreclosure case with competent counsel. And remember – defending a foreclosure case is like rebuilding a car engine or performing open-heart surgery. I can explain, in layman’s terms, what we do, but these are just two examples. There are legions of technical requirements like this which, if utilized correctly, can make it really difficult for banks to prevail in their attempts to foreclose on Florida homeowners.
Mark Stopa
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