Archive for April 26th, 2013

Motions to Dismiss in Foreclosure Cases

In the foreclosure-world in which we now live, motions to dismiss are widely viewed with disdain.  They’re a pest.  An annoyance.  They accomplish nothing but delay.  I don’t feel that way, of course.  I think motions to dismiss are an important aspect of foreclosure defense, as they, when used properly, ensure a plaintiff has stated a cause of action in its complaint and otherwise done what it’s supposed to do upon filing suit.

Unfortunately, many plaintiffs and, yes, judges, see motions to dismiss purely as a stall.  You see, so long as the motion to dismiss is pending, the homeowner need not file an Answer, and without an Answer in place, the case isn’t “at issue” under Fla.R.Civ.P. 1.440 and can’t be set for trial.  Hence, a motion to dismiss prevents a trial from being set.

Those pesky motions to dismiss.  We need to get rid of those.  There are trials to set and dockets to clear! 

I’m glad the good judges in Hillsborough and Pinellas don’t share this mindset, as it has annoyed and frustrated me for a long time.  Unfortunately, there has been little opportunity to do anything about it, either, as there is virtually no case law from Florida’s appellate courts on the circumstances in which a motion to dismiss in a foreclosure case should be granted.  The problem is procedural.  You see, when a motion to dismiss is denied, that ruling cannot be appealed until the end of the case.  But once the case reaches its end, the homeowner isn’t concerned with appealing whether the foreclosure plaintiff stated a cause of action as much as whether the plaintiff was entitled to foreclosure.  So if/when the appeal is ultimately brought, nobody talks about whether the plaintiff stated a cause of action, but whether foreclosure was permitted.  As a result, case law on the circumstances in which a motion to dismiss is warranted in a foreclosure case is virtually non-existent.

That changed a bit recently, and I think it should change the way motions to dismiss are viewed throughout Florida.

On April 22, 2013, Florida’s First District Court of Appeal issued a written opinion in Wells Fargo Bank, N.A. v. Bokatka, Case No. 1D11-3356 (Fla. 1st DCA 2013).  At first blush, the opinion seems unfavorable to homeowners, as the lower court dismissed the foreclosure suit with prejudice and the First District reversed that ruling.  Dismissal with prejudice was wrong.  Ugh.

If you look closer, however, the court made it clear that the motion to dismiss was properly granted, it just shouldn’t have been granted with prejudice.  Take a look at this language from the opinion:

In this case, we do not fault the trial judge for dismissing the bank’s initial complaint, which facially created a contradiction between who the bank alleged was the owner of the note (the bank) and whom the attached note and mortgage identified as the owner (Option One). Putting aside (for the moment) the parties’ attempts to interject or examine materials outside the pleadings, dismissal without prejudice was appropriate simply to allow the bank an opportunity to amend its initial complaint to address this discrepancy and to fortify its allegations and attachments (perhaps with the allonge and some of the items the bank presented in support of its motion to vacate and set aside).

Mortgage foreclosure cases have many factual permutations—such as the many ways that ownership of notes can be established—that do not lead to simplistic judicial resolution at the frontend of litigation.

This language is important.  Every plaintiff’s attorney and every judge who thinks a motion to dismiss is just something that gets denied so a case can be set for trial should re-read that last sentence:

Mortgage foreclosure cases have many factual permutations – such as the many ways that ownership of notes can be established – that do not lead to simplistic judicial resolution at the frontend of litigation.

I want every foreclosure defense attorney and every pro se homeowner to bring this case to every motion to dismiss hearing.  That sentence needs to be shown to every single judge who adjudicates motions to dismiss.  Every one.

When a foreclosure plaintiff alleges in its Complaint it is “entitled to enforce” the Note and Mortgage, point to that sentence.

When a foreclosure plaintiff alleges in its Complaint it is the “holder” of the Note, but the Note attached to the Complaint is payable to a different entity and does not contain an endorsement, point to that sentence.

When a foreclosure plaintiff asserts it has authority to prosecute the case on behalf of the owner of the Note, but does not specify who the owner is, point to that sentence.

These are the types of issues that motions to dismiss are supposed to resolve.  Foreclosure plaintiffs should have to clarify these ”factual permutations” in their complaints, as the “judicial resolution” of such issues is not “simplistic.”

Legalese aside, I hope the First District’s opinion will make everyone realize motions to dismiss in foreclosure cases should be treated the same way as all homeowners should be treated – with respect.

Mark Stopa

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