Explaining Judge Rondolino’s Order – a case study on the issues we face

If you’ve ever wondered what “foreclosure fraud” is all about or how a homeowner could possibly have legitimate defenses to a foreclosure lawsuit, take a close look at the Order of Dismissal from Judge Rondolino. 

The Plaintiff in this case is Deutsche Bank National Trust Company, as Trustee Under the Pooling and Servicing Agreement Dated as of May 1, 2001.  However, the Note and Mortgage attached to the Complaint are in the name of Maxwell Mortgage, Inc.  The Note contains no indorsement, and there is no allonge, no assignment of mortgage, and no other documentary evidence reflecting a transfer of the Note/Mortgage from Maxwell to Deutsche.  Hence, on the face of the Complaint, Deutsche has no basis to obtain a foreclosure.

After Judge Rondolino dismissed the case the first time, Deutsche filed an assignment of mortgage.  However, the assignment was not created until after the lawsuit was filed, and Florida law does not enable a plaintiff to acquire standing after filing suit.  See Progress Exp. Ins. v. McGrath Community Chiro., 913 So. 2d 1281 (Fla. 2d DCA 2005).  To circumvent this deficiency, Deutsche contends the Note was transferred to it before the suit was filed (even though the written assignment was done after) by some sort of “equitable assignment.”  However, as Florida law requires the pleading of facts, alleging an “equitable assignment” is insufficient without specifying the time, place, and manner of transfer.  In other words, where the written assignment post-dates the filing of the lawsuit, how could the “equitable transfer” have taken place beforehand? 

If this sounds like a lot of legal jargon, it is.  So here’s what’s really going on, both in this case and many others.

Banks don’t have their paperwork in order.  Banks, in this case Deutsche, file foreclosure lawsuits on a regular basis without the requisite paperwork.  When foreclosure cases go unchallenged, these deficiencies go unchallenged, so the banks generally get away with the deficient paperwork.  When foreclosure lawsuits are contested, by attorneys such as myself, banks and their lawyers often try to fix the problem after the fact.  That’s why I routinely see allegations like those in this case alleging an “equitable transfer,” without any factual basis, before the suit was filed even though the written assignment is dated after suit was filed.  Again, how could an “equitable transfer” have taken place before the suit was filed when the written assignment is dated months after?

Whether these types of allegations are permitted is the issue in thousands of Motions to Dismiss (and, ultimately, motions for summary judgment) in foreclosure cases throughout Florida.  Many judges, particularly senior judges, in their ongoing attempt to “push through” foreclosure cases, have denied Motions to Dismiss by homeowners, enabling Plaintiffs such as Deutsche to get away with conclusory allegations of “equitable transfer” without any factual basis. 

As you can see, Judge Rondolino is not one of these judges.  He believes Plaintiffs, even in foreclosure cases, should have to plead some facts in support of an alleged “equitable transfer” of the Note/Mortgage, particularly when the filing of suit precedes the date of the written assignment.  Obviously, I agree … but there’s more to it than that. 

The issue isn’t just whether Plaintiffs such as Deutsche should have to plead facts in support of the alleged equitable transfer … the issue is whether such facts exist.  Again, how could an “equitable transfer” have taken place before the suit was filed when the written assignment is dated months after?

Given his reference to “incacerative sanctions” (if Deutsche’s allegations are proven untrue), it seems Judge Rondolino shares the same belief that I do – in many of these cases, the requisite facts don’t exist.  In other words, it seems there was no “equitable transfer” before the suit was filed, yet Deutsche alleges otherwise to try to “push through” the foreclosure. 

This sounds complicated, but this is the issue in foreclosure cases throughout Florida.  Is the Plaintiff entitled to foreclose?  Can it establish standing as of the date it filed suit?  Is the bank’s paperwork in order?  Many times, the answer is “no,” and it’s good to see a judge call out the banks on these deficient filings.

Posted in Main | 4 Comments »

4 Responses to Explaining Judge Rondolino’s Order – a case study on the issues we face

  1. RJG Publishing says:

    It seems to me asking the banks to make sure their paperwork in order is very reasonable. Is it too much to ask that the bank prove thier allowed to foreclose? They think so. I know, personally, of a bank that tried to foreclose on property they had no right to foreclose on. Had the old man’s son not been a real estate investor, his son is my good friend and business associate, this guys bank would have literally stolen property from him.

    You guys are doing good work! Someone has to keep these banks in line.

  2. JamesM says:

    I think we can start to make more than a few valiant motions. We could put together a guide for judges, backed by case law and sound equitable reasoning. It could be a check list and flow chart of the things that must be PROVED, and why they are inportant.

    Because the court system is struggling with case management I think it is something the courts would latch onto and adopt, at lest in part.

    Before a plane takes of for a quick one hour flight, a lot of people went through checklists to make sure it did not fall out of the sky. We can do the same for litigation. With a structured checklist, before a judgement is entered the court and parties could hold the process to some orderly and orgnized system. We do it for tax forms, we do it for aircraft, we do it for ships, we do it for some medical procedures.

    There is reason that detailed checklists are used in so many industries where getting it right is inportant: No person is capable of keeping everything in their mind at once, all the time, without errors.

    When you have a team of people the error rate and missed connections goes up. Just ask any large team of computer programmers. Also, when attorneys and judges see hundreds of cases the cases and parties blend together in their minds.

    Counsel may forget to argue points, judges may be swayed by Plaintiff counsels arguments instead of evidence. The checklist could identify not just what is right but what is wrong. A checklist that says if the AOM is executed at the time or after the plaintiff filed it is inductive of fraud and the transfer of the note must be backed by other substantial assessable evidence.

    A check list could be run down on material facts: Is there a despite about when the note transferred or if plaintiff had possession when commencing the hearing. Remembering for a summary judgement the court cannot weigh the evidence, it may only look to see if there are materiel facts about the evidence in dispute. It must also look to see if the evidence supports the motion. Defendant could put up no defense but the evidence may still fail, especially if a checklist is used. Fail one item, no SJ at this time, try again later.

    For example, is the legal description correct, or even plead? Is the note to the right parties? Is the note non-negotiable?

    By using a check list it would help the court and defense to prevent defendants getting screwed in a SJ hearing. The court may even ask defense counsel to identify the items that need to be examined and are in despite. It should not be an exclusive list, not a punch list for Plaintiff to claim “All OK – give us the property” but a starting point to make sure the bases are covered and which should not preclude defendant counsel from arguing any other relevant issues, introducing other evidence or proceeding with discovery.

    On an aircraft there are conditions which preclude takeoff, like oil presure low or strong cross winds. Sometimes it is a combination of things that individually would not preclude takeoff but when summed together suggest it would be unwise. Same thing for granting a summary judgement.

    While the allegations and alleged ‘evidence’ may on the face of it suggest plaintiff might be considered sufficient it would be wise for the court and defendant, (for the court must see everything in a SJ hearing in the favor of defendants), to have a checklist for vetting evidence and flagging indicators of fraud, in the same way the orignal loan application should have been examined by the underwrites before issuing a mortgage, and if several red flags appear the court should put the breaks and just deny the SJ motion. Sorry, looks fishy, try again or go to trial.

    We have to remember the hole point of a judicial process is not to have rocket docket summary judgement hearings, but to have trials where people actually have to put on witness and evidence. The SJ process should be used sparingly, when everything checks out, when there evidence is all there and there are no material facts in dispute.

    It is difficult and costly to travel to depose someone who signed an affidavit. Making defense of affidavits a burden on the defendants. We need more incarceration for perjury, eliciting perjury and penalties to Plaintiffs for using perjured testimony, like denial of an equitable remedy.

    Lawyers to prepare affidavits for people to sign, when the facts in them are not true, or the affidavit is cunningly devised to obscure pertinent facts like the person is not really the custodian of the records, should be sanctioned: Unless they can show the plaintiff made the allegations themselves and it was not boiler plate manufactured lies by the foreclosure mill.

    The problem is not that the system is broken. The problem is the courts are not following the system and the law. Checklists would help keep the court on track and maybe prevent the court from making serious errors, granting unwarranted summary judgments.

  3. BobMc says:

    This seems like a very good step in the right direction:

    “a three-judge panel of the 4th District Court of Appeal in West Palm Beach overturned an earlier summary judgment…”

  4. Ivan says:

    Hola, Todo dinбmica y muy positiva! :)


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