Archive for May, 2012
Posted on May 10th, 2012 by Mark Stopa
I’ve spent a fair amount of time discussing what should happen differently in foreclosure cases. Today, let’s change gears and applaud one circuit which, in my view, is unparalleled in its efforts to adjudicate foreclosure cases fairly – Florida’s Sixth Judicial Circuit.
To be clear, I’m not about to say every ruling in that court has been correct or that homeowners always win. It doesn’t work like that, nor should it. Judges are human, just like you and me, and, frankly, sometimes homeowners are going to get foreclosed. However, if you ever feel like you’ve been treated unfairly in a foreclosure case, walk into court in St. Petersburg, Florida and check out what’s happening.
Let’s start with what you won’t see. If you observe court proceedings in foreclosure cases in St. Petersburg, you won’t see (unelected) senior judges adjudicating contested foreclosure cases. Yes, there are senior judges, but their role is to handle uncontested cases – the contested foreclosures are left to the presiding circuit judges. Candidly, I love this distinction and I love the message it sends to the people of Pinellas County. It’s literally as if the court is saying “we care enough to have an elected circuit judge adjudicate a foreclosure case if it is being defended by a homeowner. If you care about your house, we care enough about you to have a presiding, elected circuit judge handle your case.” I’ve seen some people complain about senior judges handling uncontested cases, but, as I see it, who cares? If a homeowner doesn’t care enough about his/her house to defend the case, let that case be handled by a senior judge. Let the senior judges push through the slop on uncontested files. Contested files – cases where homeowners care about their homes – are handled by elected, presiding circuit court judges.
Who created this distinction? As far as I can tell, it’s Chief Judge Thomas McGrady. Of course, he’s the same judge who has periodically conducted meetings with foreclosure lawyers from both sides – the banks and the homeowners – to openly discuss ideas on how to best handle foreclosure cases going forward. It should be no surprise the foreclosure process is adjudicated as well in the Sixth Circuit as it is anywhere in Florida when the Chief Judge cares enough to procure input from both sides – and to implement those ideas going forward.
The fair adjudication of foreclosure cases in the Sixth Judicial Circuit goes beyond an administrative level.
I want to refrain from discussing specific rulings in specific cases, as that’s not the point. That said, if you walked into one St. Pete courtroom on May 8, 2012, you’d have seen the judge take a break from a medical malpractice trial to conduct an emergency hearing in two foreclosure cases. (The Florida legislature might not care enough about the court system to fund our courts appropriately, but the judges in St. Petersburg care.) If you were present on May 8, 2012, you’d have heard the judge disagree with my argument that a judge cannot set a case for trial where one of the parties had not noticed it for trial, but that she had read my memorandum of law on the issue, printed out the case law, read those cases on her own, personal time, and encouraged me to appeal since the Second District has not ruled on the issue. In foreclosure court, it’s not just about winning or losing – it’s about knowing the judge is giving you a chance to be heard, is listening, and is reading your case law. Once that hearing was over, you’d have seen the judge immediately return to her malpractice trial. (Break? What break? It’s enough to make anyone seethe at the apathy the legislature has shown for our courts.)
If you walk into another judge’s courtroom for a hearing on a motion to dismiss for lack of prosecution, you’ll likely hear that judge say that he has “no discretion” to deny the motion where the plaintiff has filed no record activity and there is no good cause to keep the case pending. I’m not sure if that judge agrees that should be the law, but he knows that is the law, and he strives to follow the law whether he agrees or not. Again, win or lose, knowing the judge will follow the law is half the battle in foreclosure-world.
If you walk into the courtroom of other judges in St. Pete, you’ll see them act in the manner I think a judge should act – like an umpire at a baseball game. The umpire doesn’t decide when the game will played, nor does he/she predetermine who will win – the ump just calls balls as strikes as the game is played. The attitude of “let me know when you need me” is precisely the role of a neutral and detached judge. If you’ve ever experienced a different dynamic, let me assure you … it’s really refreshing to go before these judges and know they’re going to call balls and strikes, not act like a second prosecutor of foreclosure cases and not do the job of plaintiff’s counsel from the bench where counsel is lax in prosecuting the case. For these judges, it’s about judging fairly, not about meeting a quota or disposing of a certain number of cases in a certain time period.
Our courts are overburdened, understaffed, and underpaid. And while I’m sometimes the first to point out procedures that aren’t up to snuff, let’s make sure we give credit to those many judges who are doing it the right way, especially in the Sixth Judicial Circuit.
Mark Stopa
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Posted on May 10th, 2012 by Mark Stopa
We all see the term “verified” in residential foreclosure lawsuits on a regular basis … but what, exactly, does it mean? Years ago, there wouldn’t have been a question in this regard. In years past, “verified” meant under oath, or under penalty of perjury, as provided under Fla. Stat. 92.525 … the equivalent of live testimony in open court. Now? The law is much less clear, so much so that plaintiffs’ lawyers are making arguments that are contrary to law.
The ambiguity began in February, 2010, when the Florida Supreme Court, in response to widespread robo-signing, began requiring that all plaintiffs in residential foreclosure cases verify the foreclosure complaints they file. The intent was raise the bar … to create an additional hurdle for plaintiffs to follow to ensure they would investigate their lawsuits before filing them (and to eliminate garbage pleadings).
The problem is that the verification required under Rule 1.110(b) is not a normal verification, but a special one created just for purposes of residential foreclosure complaints. To illustrate, Fla. Stat. 92.525 requires a verification be made under penalty of perjury, i.e. sworn to be “true and correct,” whereas Rule 1.110(b) permits a lesser verification, i.e. “true and correct” to the best of one’s “knowledge and belief.”
The question hence becomes … in what contexts is a verification sufficient if done “to the best of one’s knowledge and belief,” and when is the normal verification under Fla. Stat. 92.525 required? Two specific situations come to mind – Summary Judgments, and Orders to Show Cause.
Plaintiffs’ attorneys will undoubtedly point to a recent decision from Florida’s Second District, which ruled that verifications on “knowledge and belief” are sufficient in a residential foreclosure complaint, in support of their position that verifications on “knowledge and belief” are satisfactory. See Trucap Grantor Trust 2010-1 v. Pelt, 37 Fla. L. Weekly D 622 (Fla. 2d DCA 2012). However, Trucap merely says a verification on “knowledge and belief” is sufficient in the run-of-the mill foreclosure pleading. It sheds no light whatsoever on the question of whether this type of verification is authorized in other contexts, i.e. Summary Judgment or an Order to Show Cause.
For instance, when a foreclosure case goes to summary judgment, is this type of equivocal verification allowed? And what about when a plaintiff seeks an Order to Show Cause under Fla. Stat. 702.10 – is the qualified verification under Trucap sufficient?
In each case, I think the answer is “no” – the verification must be unequivocal, i.e. under oath, as set forth in Fla. Stat. 92.525. Here’s why.
Fla. Stat. 702.10 has been in existence for a long time – long before Rule 1.110(b) was ever created. In my view, the law clearly requires, to obtain an Order to Show Cause in a residential foreclosure case, that a plaintiff verify the complaint consistent with Fla. Stat. 92.525, not the lesser verification under Rule 1.110(b). In fact, at least one Florida decision has specifically ruled that the verification must be done in this manner. See Muss v. Lennar Fla. Partners I, L.P., 673 So. 2d 84 (Fla. 4th DCA 1996) (not allowing verifications “on information and belief” in the context of an Order to Show Cause).
Plaintiffs’ attorneys will argue Muss was decided before Rule 1.110(b), and that is true. However, the entire purpose of Rule 1.110(b) was to raise the bar for plaintiffs in foreclosure cases – not to lower it. Hence, to argue 1.110(b) allows a qualified verification in the context of an Order to Show Cause, you’d necessarily be arguing that the Florida Supreme Court lowered the bar via Rule 1.110(b) for Orders to Show Cause without mentioning Orders to Show Cause at all. In my view, there is no way the Florida Supreme Court changed the requirements of Fla. Stat. 702.10 or overruled Muss without explicitly stating so. Rule 1.110(b) requires the verification set forth in Trucap without changing the verification requirements of Fla. Stat. 702.10 and Muss.
So what does this mean? If you’re facing an Order to Show Cause in a residential foreclosure case, make sure you argue that Rule 1.110(b) might be sufficient for a run-of-the-mill foreclosure complaint, but it’s not sufficient to enable a plaintiff to obtain an Order to Show Cause. For that, an unequivocal verification, as set forth in Fla. Stat. 92.525, is required – not merely one on “knowledge and belief.” At this point, there is not a written opinion from a Florida district court which makes this distinction. Trust me, though – it will happen at some point.
A similar clarification is important when dealing with motions for summary judgment. After all, long-standing Florida precedent requires that the verifications used for purposes of summary judgment be unequivocal. Quite simply, it is not sufficient for a plaintiff or a defendant to give an affidavit “on information and belief,” or “on knowledge and belief” – the affidavit must be verified under oath.
To illustrate, in Ballinger v. Bay Gulf Credit Union, 51 So. 2d 528 (Fla. 2d DCA 2010), the Second District reversed a summary judgment because it was based on a verification done “on knowledge and belief.” In other words, the court ruled the evidence supporting summary judgment was not sufficient because it was not “evidence” at all given the qualified verification.
As such, if you’re dealing with a motion for summary judgment in a mortgage foreclosure case, don’t allow the bank’s attorney to argue they’ve proven their right to summary judgment (or proven you’re not entitled to summary judgment) because their complaint is verified. After all, that complaint is probably verified “on knowledge and belief,” and that type of verification is simply not allowed in the summary judgment context.
Again, there is not yet a Florida case which makes this distinction, but I assure you – it’s coming.
Mark Stopa
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Posted on May 4th, 2012 by Mark Stopa
Those damn zealots at www.4closurefraud.org and www.foreclosurehamlet.com, they’re always screaming about fraud in foreclosure cases. We all know the cries of fraud are overblown, something asserted by deadbeat homeowners as an excuse to not pay their mortgages … right?
I’m going to have to exercise some restraint on this one and save the commentary. Instead, take a look at this document and compare it to this document. Notice any differences? You won’t at first – the distinction is subtle. Before I point out the difference, a little background.
I’ve been defending this foreclosure lawsuit for some time, and the plaintiff chose to voluntarily dismiss it, entitling me to seek prevailing party attorneys’ fees. Under Rule 1.525, that motion has to be filed within 30 days of the dismissal. This document was served upon my office, and it reflects the case was dismissed on January 17, 2012. As a result, I did a motion for fees on February 16, 2012 – within 30 days. (Usually I don’t wait until the last day, but that’s what happened here.)
A hearing on this motion is scheduled for Monday, and plaintiff’s counsel just called my office, arguing the motion should be denied because the dismissal was done on January 13, 2012 (so the February 16, 2012 motion was beyond 30 days). I took another look at this document, the one served upon me, and it seemed clear to me that she was blowing smoke.
Then I decided to check the Official Records to see what was filed there. To my surprise, what did I find? This document appears to be the same as what was provided to me, but it reflects the case was dismissed on January 13, 2012.
Look at the Certificate of Service. Notice the handwritten “3″ on the version filed with the Court? And how that “3″ isn’t on the version sent to me? In my view, these lawyers gave me a document dated the 17th, yet filed a document dated the 13th, then tried to use the fact that they sent me a different document as an excuse for arguing the motion for fees wasn’t timely served.
Again, I’ll save the commentary for those zealots at www.foreclosurehamlet.com and www.4closurefraud.org. They sure are nuts, eh?
Mark Stopa
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Posted on May 1st, 2012 by Mark Stopa
I’ve often wondered – sometimes silently, sometimes loudly – what those persons who are adamant about pushing foreclosures through the court system think they are accomplishing. Who does it help when foreclosure judgments are prosecuted faster? What is the objective here, exactly?
Proponents argue this helps the economy. I’ve heard one local judge say it is the court’s “duty” to taxpayers. Respectfully, you tell me … how does it help to throw homeowners onto the streets only to have those homes be uninhabited? After all, it’s well-established at this point that banks are usually the high bidders at foreclosure sales, not third parties. Of course, that’s when the banks actually care enough about taking title to properties to schedule the sales (as opposed to the countless cases where the banks have already prevailed, and the homeowner has moved on, yet the sales keep getting cancelled ad infinitum, for no apparent reason).
Today, I encountered a perfect example of my frustration at the foreclosure process.
Recently, the homeowner, who was trying to defend his foreclosure lawsuit on his own (a mistake, obviously, but that’s a different story), asked the judge to deny summary judgment. He told the court he wanted to work something out with the bank. The judge entered summary judgment anyway. I suppose that’s understandable, if not ideal, as there was nothing filed in the case to stop the judge from entering summary judgment.
But then it got really bizarre. After the Final Judgment was entered, and the foreclosure sale scheduled, the homeowner submitted paperwork to the bank to try to reach a resolution. The bank agreed, and filed this this motion, asking the court to cancel the foreclosure sale. As the motion reflected, the bank was trying to work something out with this homeowner to avoid foreclosing on this homeowner. That’s obviously what the homeowner wanted, too, so at that point, both the bank (the plaintiff in the case) and the homeowner (the defendant in the case) were telling the court that they did not want the foreclosure sale to proceed because they wanted to reach a resolution.
So what happens? The court issues an Order denying the motion, directing that the foreclosure sale proceed anyway.
Look, I understand the arguments about improving the economy and wrapping up old foreclosure cases. I get it. I might not agree, but I get it. That said, with all due respect, I will never understand why a court will insist on a foreclosure sale going forward when the plaintiff AND the defendant agree the sale should not proceed.
If the plaintiff doesn’t want the foreclosure sale, and the defendant doesn’t want the foreclosure sale, then whose interests are being served by forcing the foreclosure sale to proceed?
I suppose I could understand this a bit better if the house was abandoned and the bank had cancelled the sale repeatedly. In that situation, I could see an argument for forcing the sale to go forward anyway … that could be said to help the economy, forcing that house to be sold to someone else.
Here, though, the Final Judgment had just been entered, and both sides were trying to reach a resolution to keep this homeowner in his home. With all due respect, I fail to see how anyone could think it equitable or just to require the foreclosure sale to go forward on those facts.
I just talked to Matt Weidner about this, and he raised a great point … Can you imagine this in any other context? Husband and wife file for divorce. The case proceeds, and the husband and wife decide they want to stay married. Can you imagine a judge saying “no, I’m requiring you to get divorced.”? Can you fathom that ever happening? I doubt anyone can … so why is it acceptable in the context of foreclosure?
That really makes me wonder … why? Why? Why? What are foreclosure judgments accomplishing, exactly? And what is the court’s role in these cases? Should the court really have the power to require a foreclosure sale when both sides are saying they don’t want the sale to proceed? If you think so, then why? Whose interests are being served by doing so? What, exactly, is the point here?
Mark Stopa
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