Archive for September 21st, 2012

Jurisdictional Arguments in Foreclosure Cases

Do you understand the concept of subject matter jurisdiction?  Do you know when and how jurisdictional arguments can arise?  Do you know when and how to incorporate such arguments into your defense of a foreclosure case?

“Subject matter jurisdiction” is the authority of a court to adjudicate a specific case or type of case.  In the foreclosure context, the concept is generally quite simple.  In Florida, when a plaintiff sues for mortgage foreclosure, and the amount in controversy exceeds $15,000, then the circuit court has exclusive jurisdiction to adjudicate that case.

Candidly, foreclosure cases are often litigated without subject matter jurisdiction ever becoming an issue.  In other words, the lack of subject matter jurisdiction is typically not a defense.  So why would I want to talk about it?  Two reasons.

First, the issue of subject matter jurisdiction is incredibly nuanced, so much so that most lawyers (not just pro se homeowners – most lawyers) don’t understand all of the subtleties.  Hence, if you do understand the concept, or have a lawyer who does, you’ll have a significant leg up on everyone else, including the foreclosure mills.

Second, the upside if you’re able to prevail on a jurisdictional defense is significant.  Think about it.  If you’re a homeowner defending a foreclosure case, and you prevail on an argument that the court in which the case was filed lacks subject matter jurisdiction, that means the court cannot adjudicate your case.  Hence, you cannot be foreclosed, at least not in that case, because the presiding court does not even have the authority to rule!  It wouldn’t matter if you were behind on mortgage payments or had a defense to the foreclosure lawsuit – the court could would not have the authority to foreclose upon you, even if it wanted to!

Jurisdictional issues have arisen in several of my cases in recent weeks.  While an explanation of all of the nuances of subject matter jurisdiction is beyond the scope of this blog, let me give an example.

I had a hearing on a Motion for Summary Judgment.  I prevailed, and the Court entered this Order Granting Summary Judgment, dismissing the case.  The plaintiff moved for rehearing, and the court entered an Order denying rehearing.  Two weeks later, though, the judge that entered the Order denying rehearing sua sponte vacated that Order, then directed that a hearing be scheduled on the motion for rehearing.

For technical, legal reasons that are difficult to explain (i.e. one of the nuances of subject matter jurisdiction), I did not believe the Court had subject matter jurisdiction to vacate its Order denying rehearing or to require that a hearing be scheduled on the motion for rehearing.  Basically, I believed the case was over and that the court lacked the authority to conduct a rehearing.  As such, I moved to vacate the Order directing the hearing.  The Court entered an Order denying that motion, again directing that the rehearing proceed.

I lost the jurisdictional argument at the trial court level, but I still believed the court lacked jurisdiction.  Hence, I filed this Petition for Writ of Prohibition in Florida’s Second District Court of Appeal.  The same day I filed it, and just one day before the hearing, the Second District issued this Order, directing that the hearing be cancelled and all activity in the circuit court be stayed until the Second District adjudicated the petition.  In fact, the Second District even ordered that the plaintiff show cause, within 10 days, why the petition should not be granted.

The petition has not yet been adjudicated, and I don’t know how the Second District is ultimately going to rule.  However, this is a good example of one of the tools that a good foreclosure attorney should be able to pull out of his or her toolbox when the need arises.  Quite simply, if a court doesn’t have jurisdiction, then we as lawyers have to be able to say so, and if the lower court rules against us, we have to be able to seek relief in the appellate court.  The issues may be complicated, but if we don’t argue them, then we’re missing out on perfectly legitimate reasons/arguments to help homeowners avoid foreclosure.

How can a homeowner know when to assert a jurisdictional defense?  That’s a hard question to answer – outside the scope of this blog.  That said, jurisdictional issues typically arise in foreclosure cases when a case is dismissed and a plaintiff or the court tries to vacate or undo that dismissal.  There are some rigid, hard and fast rules on when it’s possible to vacate a dismissal, so this is where the jurisdictional issues come into play.

Also, I’ve seen cases that were dismissed by the court but the plaintiff simply ignores the dismissal and keeps filing papers.  In this type of situation, the parties and the clerk can all act as if the case is still pending (essentially ignoring the dismissal), but it doesn’t matter – if the case is dismissed, the court lacks jurisdiction unless the dismissal is vacated appropriately.

As you’re fighting foreclosure, please keep jurisdictional defenses in mind.  If you’re not sure whether they apply (and you undoubtedly aren’t – like I said, the concept is lost on many lawyers, much less pro se homeowners), then make sure you seek competent counsel for assistance.

Mark Stopa

Posted in Main | 2 Comments »