“Equity” Does Not Trump Law, Even in Foreclosures
If you’ve ever sat through a mass-motion calendar in foreclosure court, you’ve seen it happen. An elderly or disabled homeowner appears pro se and makes a heart-wrenching, emotional argument why he/she shouldn’t be foreclosed. Cancer. Job loss. Nowhere else to live. Invariably, the judge will respond with something like “I’m sorry, but that’s not a legal defense to foreclosure.” Often, in fact, Florida’s judges are so used to hearing these stories from homeowners that they begin each hearing by asking “do you have any legal defense to foreclosure?” (emphasizing the term “legal defense”).
As much as we may not like it, equity does not trump law. If my client is 85, cancer-stricken, and has just six months to live, that is not a reason for a judge to deny foreclosure. We might think it should be, but it’s not.
I often find myself lamenting this concept, but, fortunately, it works both ways. You see, just as a judge cannot ignore the law when foreclosure might seem terribly unfair to the elderly/disabled woman, the judge cannot ignore viable legal defenses just because that judge might find it inequitable for the homeowner to live in the house for free.
Unfortunately, I see this concept more and more nowadays. Judges have been litigating foreclosure cases for five years. Some are tired of dealing with it. All are under immense pressure from higher-ups to “clear the backlog” of foreclosure cases. This has caused some judges to view certain foreclosure defenses as inequitable. ”They’re living in their house without paying, so why should I dismiss the foreclosure suit against them based on some technical defense?”
To be fair, most judges won’t come right out and say it like that. But if you litigate for homeowners enough, you can see this thought process from some judges. ”Foreclosure is an equitable proceeding. I can rule in a way that I find equitable.” Sometimes, that means disregarding defenses for the sake of a more expeditious foreclosure.
Respectfully, I believe that’s the wrong approach.
Let’s give some examples.
Florida Statute 57.011 requires any plaintiff who is not a resident of Florida to post a $100 non-resident cost bond upon filing suit. Under the terms of the statute, if the plaintiff doesn’t post the bond, the defendant gives written notice of the failure to do so. Then, if the Plaintiff still doesn’t post the bond, the defendant moves for dismissal and the court “shall” dismiss the lawsuit without prejudice.
I can totally see how enforcement of this statute, as drafted, seems terribly inequitable. What is the point of a $100 cost bond, anyway? To ensure a defendant can recoup $100 if the case is dismissed? Are we really going to dismiss a case over $100? Perhaps unsurprisingly, many judges don’t like dismissing a foreclosure case when a plaintiff fails to post the non-resident cost bond. Some have outright told me they “do not dismiss cases” on this basis. That sounds reasonable, perhaps, but I respectfully submit it is wrong.
It doesn’t matter if the judge thinks a statute is arcane and outdated, that dismissal is too harsh of a penalty, or that the defendant shouldn’t get to recoup attorneys’ fees for winning the case on a “technicality.” A judge’s role is to enforce statutes as they are written, not to inject his/her own, subjective views of equity in applying a statute. After all, that’s how our government is set up – judges enforce statutes and the legislature writes (and re-writes) them. Florida’s highest courts have explained this concept on many occasions – statutes must be enforced even if the judge finds it unfair to do so. See e.g. Thomas v. State, 65 So. 2d 866 (Fla. 1953) (“in deference to the Legislative Department of the Government, we have no authority to ignore the statute. Whether or not we believe in the statute is immaterial. If the statute is unwise, the remedy is to repeal by legislative enactment and not by judicial decree because we disagree with it.”).
Similarly, I’ve had a lot of success getting foreclosure cases dismissed when the paragraph 22 letter the bank sent before filing suit did not contain the information required by that paragraph of the mortgage. That’s not to say all cases turn on this, of course. After all, some of these letters are sufficient and some are not, and most judges will rule accordingly (dismissing the cases where the letter is the requisite information and not dismissing those that are sufficient). Some judges, though, don’t rule that way. Most won’t come right out and say so, but some judges have never found a paragraph 22 letter that did not “substantially comply.” Since there is not one appellate decision in Florida that says “substantial compliance” is the standard in the paragraph 22 context – not one – I don’t believe these judges are ruling this way based on law, but a mixture of law and what that judge perceives to be equitable.
On one level, I can understand that. Why should a foreclosure case be dismissed because a letter a bank sent a homeowner before filing suit did not say precisely what it was supposed to say? I get that argument, I do. But where the parties’ contract required that letter to contain certain information before filing suit – in a contract drafted by the bank and put in boldfaced font – how can anyone choose to ignore the parties’ own contract simply because they wouldn’t like the result of enforcing that contract as written?
As I see it, all of us in foreclosure-world must insist the law be enforced and subjective views of equity be cast aside. As much as we might want sympathy to guide a judge’s decision when dealing with that elderly/handicapped woman, equity can’t drive the train. Otherwise, our entire system of laws gets thrown by the wayside in favor of what each judge thinks is fair. ”Law” would cease to exist, being replaced by each judge’s subjective view of equity. We just can’t have that.
This might sound like I’m saying “judges aren’t fair.” That’s not what I’m saying. My point is that our system of laws can’t operate in a way that each judge rules based on what he/she thinks is fair because there is no way to enforce that. After all, if you take any two, random people, they will often disagree on what is fair or equitable. Realizing that Florida has many dozens of judges, with a myriad of different backgrounds and experiences, it’s easy to see how equity cannot drive the train – the opinions about what is “equitable” would be all over the map! One judge would think foreclosure was equitable in a given situation (the homeowner didn’t pay), while another would not (the homeowner was elderly/handicapped). There would be no way to know/predict how any particular judge felt, and no way to enforce these subjective views of fairness.
Don’t take my word for it. In 1986, the Florida Supreme Court was presented with an “equitable” argument in a mortgage foreclosure case. The Court ruled:
Petitioners argue that the foreclosure should be denied because an acceleration of the due date would be an inequitable or unjust result and the circumstances would render the acceleration unconscionable. … Although providing equitable relief in a proper case is discretionary with the trial judge, were that discretion not guided by fixed principles, the degree of uncertainty injected into contractual relations would be intolerable. Equity cannot therefore look solely to the result in determining whether to grant relief, but must apply rules which confer some degree of predictability on the decision-making process.
David v. Sun Fed. Savings & Loan Assn., 461 So. 2d 93 (Fla. 1984). That’s it, folks. Foreclosure cases are adjudicated based on a compilation of “rules which confer some degree of predictability on the decision-making process.” Id.; see also Smiley v. Manufactured Housing Assocs. III Ltd. P’ship, 679 So. 2d 1229 (Fla. 2d DCA 1996) (“in determining whether to grant equitable relief, the trial court cannot look solely to the result but must apply rules which confer some degree of predictability on the decision-making process”).
So the next time you have a judge disregard the cost-bond statute as arcane and outdated, or inject his/her views about how foreclosure defense is not “equitable,” remind the judge of these concepts. Point out how “equity” isn’t a defense for that elderly/handicapped homeowner, so “equity” can’t be a basis for ignoring statutes or laws that work in the homeowner’s favor, either.
Mark Stopawww.stayinmyhome.com
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