Summary Judgment … for a Homeowner

I’m sorry I haven’t posted much in recent days.  You see, I’ve been really busy procuring summary judgments for some of my clients.  No, not summary judgments of foreclosure (against my clients) … summary judgments in my clients’ favor.  Summary judgments as in … case over … case dismissed … you lose, bank – do not pass go, do not foreclose, and do not collect any money.  Obviously this doesn’t work every time, but as the Orders below reflect, it certainly works sometimes.

What are the arguments?  How have I been able to do this?  Well, take a look at the Orders, all of which are also accessible via public records:

Order Granting Summary Judgment

Order Granting Summary Judgment

Order Granting Summary Judgment

Order Granting Summary Judgment

Order Granting Summary Judgment

Order Granting Summary Judgment

Order Granting Summary Judgment

Essentially, there are two arguments … two ways (at least) I believe homeowners can argue they’re entitled to summary judgment and the outright dismissal of a foreclosure case.

The first is predicated on a topic I’ve posted about many times – a plaintiff’s obligation to prove not just its standing to foreclose, but its standing to foreclose as of the time it filed suit.  There are many recent cases which have illustrated this proposition of law, reversing summary judgments of foreclosure entered for the banks when they failed to prove the requisite standing at inception.  My favorite, though, is McLean v. J.P. Morgan Chase Bank, N.A., 79 So. 3d 170 (Fla. 4th DCA 2012).  The reason I like McLean so much is because that case makes it clear that the remedy when a foreclosure plaintiff cannot prove standing at the inception of its lawsuit is the outright dismissal of the case – without prejudice and without leave to amend.  In other words, it’s not just that a plaintiff can’t win a foreclosure lawsuit without proving standing at inception; where the plaintiff cannot meet this burden, the defendant must prevail.  In the McLean court’s words:

 if the evidence shows that the note was endorsed to Chase after the lawsuit was filed, then Chase had no standing at the time the complaint was filed, in which case the trial court should dismiss the instant lawsuit and Chase must file a new complaint.

Following McLean, the argument for summary judgment is rather simple.  If the Note attached to the Complaint was not endorsed, and there is no assignment of mortgage in the court file, but an original note with an endorsement and/or an assignment of mortgage shows up later, then the homeowner files a motion for summary judgment asserting this chronology.  If the bank goes to the summary judgment hearing without evidence that it had an endorsed note or an assignment of mortgage before suit was filed, then summary judgment for the homeowner is proper.

But wait, one might argue.  Isn’t it the moving party’s burden at summary judgment to conclusively disprove the non-existence of factual disputes, i.e. to conclusively prove the bank lacked standing when it filed suit?  And isn’t that a high burden?  Yes and yes.  However, if a homeowner proves that the note attached to the Complaint lacked an endorsement, and that there was no assignment of mortgage before the suit was filed, then the homeowner has done just that.  The burden would then shift to the foreclosure plaintiff to present some evidence that it had an endorsed note and/or an assignment at the time the lawsuit was filed.  If it cannot, then the homeowner should prevail.

Sound too good to be true?  Read this and this.  So you’re aware when you’re making these arguments, among the local judges who have granted summary judgment in my clients’ favor on this argument:  Honorable Amy Williams (St. Petersburg), Honorable Lynn Tepper (Dade City) and Honorable Robert Foster (Tampa).  Obviously the facts of each case can vary, but it’s worth noting that these good judges were willing to look beyond the fact that a homeowner was alleged to be in default and strove to uphold the law.


The second basis for summary judgment is predicated on the bank’s failure to comply with a condition precedent to the filing of the lawsuit.  A condition precedent is just what it sounds like – something a bank must do prior to filing a lawsuit.  You see, many mortgages in the cases with which I deal (and the majority of mortgages in Florida) have a provision in them, typically in paragraph 22 of the mortgage, which requires the lender provide written notice to the homeowner of any alleged default and an opportunity to cure that default prior to filing suit – what I call a “notice and cure letter.”  This paragraph typically spells out certain provisions which must be set forth in the letter, often like such:

22.  Acceleration; Remedies.  Lender shall give notice to Borrower prior to acceleration following Borrower’s breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise).  The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the property.  The notice shall further inform the Borrower of the right to reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure.

As a nice touch, paragraph 22 of most mortgages is written in bold, creating a good argument that the parties obviously intended for that provision to carry great weight in the scope of the contract.

So how can a homeowner use this to obtain summary judgment?  Read paragraph 22 closely; there are a variety of ways.  The simplest is when the homeowner shows the “notice and cure” letter required by paragraph 22 was not sent, and the bank can’t prove otherwise.  When that happens, then summary judgment is proper.  Also, if the letter was sent, but it did not say what paragraph 22 required it to say, then summary judgment would also be proper.

To illustrate, take a look at this Order Granting Summary Judgment, where the Court explained that the “notice and cure” letter did not specify what was necessary to cure the default (as the letter indicated that additional monies in unspecified amounts were owed above and beyond that set forth in the letter, leaving the homeowners guessing as to the amounts necessary to cure the default) and the letter did not indicate that failure to cure the default would result in a “foreclosure by judicial proceeding.”  Mind you, those are just a few of the ways a letter could be deficient.  Just off the top of my head, here are a few things I look for when I’m evaluating if a letter complies with paragraph 22:

– Was the letter sent to the homeowner’s correct address?

– Was at least 30 days’ notice provided (bearing in mind that if the notice is sent by mail, the homeowner obviously didn’t receive the letter on the day it was dated, though that may not matter depending on how “notice” is defined in the mortgage)?

– Is there some admissible evidence from the Plaintiff that the letter was actually sent (as opposed to merely being filed in the court file by plaintiff’s counsel)?

– Does the letter specify the amount necessary to cure the default, or does it make reference to additional, unspecified charges as to the amounts owed, leaving the homeowner in the dark as to the total amount he must pay to cure the default?

– Does the letter apprise the homeowner that a “foreclosure by judicial proceeding” may result if the default is not cured, or does it tell the homeowner that it may initiate a legal action?  Many of the letters I’ve seen do the latter, and not the former, and several judges in Florida have found the letter deficient on this basis.  In fact, Judge Amy Williams granted a summary judgment in one of my cases based on this distinction earlier today.

– Does the letter inform the homeowner of the right to reinstate after acceleration?

– Does the letter inform the homeowner of the right to assert in the foreclosure proceeding the non-existence of a default or any other defense to acceleration and foreclosure?

In my view, even if the bank satisfied some or most of these obligations, a homeowner should still prevail in a foreclosure lawsuit if the bank didn’t comply with all of them.  Yes, all of them.

But that’s crazy, you say.  The homeowner is in default, so the bank should win.  This paragraph 22 stuff is so technical – would a judge really care about this?  Fortunately, yes.  This argument may be technical, especially if a letter was sent but it did not contain all of the requisite language.  However, this is what the homeowner and the bank negotiated in their contract when the mortgage was entered.  The fact that the banks drafted these mortgages, and paragraph 22 is usually bolded, make it all the more appropriate to hold the banks to the terms of their own contracts.

Though homeowners need not prove prejudice to prevail on this issue, there was/is a good reason for judges to enforce the terms of paragraph 22.  Quite simply, under the terms of these mortgages, every homeowner is entitled to an opportunity to cure any default before facing foreclosure on his/her home.  That’s the point of the letter, and the point of paragraph 22 – to ensure the homeowner knows about the alleged default and can fix it before facing foreclosure.  Where the letter didn’t comply, the homeowner is deprived of that chance, and that’s simply not fair.

If you feel bad about making this argument, don’t.  Frankly, one of the reasons I love making this argument is because insurance companies have been using it to screw honest homeowners for many years.  You see, when homeowners make a claim for money under an insurance policy, insurance companies often deny coverage – not because there’s no coverage, but because that’s what they do to make money – deny coverage and force the homeowners to go to court.  Then, once facing a lawsuit, insurance companies love to defend that suit by complaining that the homeowner failed to comply with the conditions precedent set forth in the policy, namely submitting to a proof of loss or an EUO (examination under oath).  There are many cases where courts have ruled against homeowners, and in favor of insurance companies, not because insurance company was correct in denying coverage, but because the homeowners didn’t do what they were supposed to do before filing suit.  See Goldman v. State Farm Fire Gen. Ins. Co., 660 So. 2d 300 (Fla. 4th DCA 1995); Edwards v. State Farm Fla. Ins. Co., 64 So. 3d 730 (Fla. 3d DCA 2011).  While I hate how insurance companies have been able to do this, I love being able to use this case law in support of my arguments in foreclosure cases.  After all, Florida courts have been requiring parties to comply with conditions precedent in a contract for many years, and have consistently granted summary judgments where they failed to do so.  Though some might argue otherwise, there is no reason to treat foreclosure cases any differently.  Hence, where a bank didn’t comply with the terms of paragraph 22, the court should dismiss the lawsuit for failure to comply with conditions precedent.

Sound too good to be true?  Read this, this, this, this, this, and this.  Among the judges who have granted summary judgment, and/or dismissed a foreclosure lawsuit based on this argument, are Honorable Lynn Tepper (Dade City), Honorable Amy Williams (St. Petersburg), Honorable Robert Foster (Tampa), Honorable James Barton (Tampa), Honorable Donald Evans (Tampa), Honorable John Schaefer (Clearwater), Honorable Walter Schafer (New Port Richey), and Honorable J. Rodgers Padgett (Tampa).  Again, the facts of each case may vary, but you should rest assured that there are good judges in Florida willing to follow the law even if some would argue that dismissing a foreclosure lawsuit where the homeowner hasn’t paid his mortgage is inequitable.

Mark Stopa

Posted in Main | 15 Comments »

15 Responses to Summary Judgment … for a Homeowner

  1. Mark Bowen says:

    Don’t even bother with this approach in Lee County. The 20th District Nazis couldn’t care less about case law, recent or otherwise. This is nice work Mark, best of luck to you after they re-file with T’s crossed and I’s dotted.

    • Janne Winters says:

      True that eventually they will ‘cross all their ‘t’s’. However, if judges followed the law regarding ‘standing’ from the outset and immediatly put the banks and trusts on notice that they would not let them slip by with questionable documents in the future (far in the future) things may change.

      We need more attorneys, like Mark and judges like the ones mentioned above before this will happen.

      Great bit of legal work and points to the judges for doing the right thing.

    • One Foot Out The Door says:

      As cogent and logically formed as these legal arguments are, judging by the successes listed here, I agree with Mr. Bowman. I am fighting my foreclosure in the 18th Circuit, Seminole County and my Judge like most Judges in Seminole County, is not the least bit interested in the semantics of an intelligent legal defense. This is a robo foreclosure county. Judges here are interested in clearing their docket, spending approximately 3 minutes in a hearing and nothing else. Due process is right out the window.

      It appears being in foreclosure in the metro Tampa/St. Pete, Dade area at least gives homeowners a fighting chance.

      And the best part is that my Judge has a clear disdain for all rulings out of the 4th circuit and dressed me down for referencing any case law that did not come out of the 18th. My Judge made it clear that rulings from other Florida circuits will not be heard or allowed in her courtroom.

      So if I was in front of a Judge that was interested in making rulings on recent case law and in a fair and impartial manner, Mr. Bowens’ recent wins would bolster what I consider to be a highly winnable case. But alas, I am not.

      • Mark Stopa Mark Stopa says:

        I’ve thought about this argument a lot.
        Here’s the thing…

        Are the judges in the Tampa/St. Pete area inherently more fair for homeowners, or are those judges perceived as more fair because there are a handful of defense lawyers like myself who are consistently insisting on due process and repeatedly explaining why issues like this are bona fide defenses? Perhaps the judges in other areas of the state would be viewed in the same light as some of the judges in the Tampa area if these judges were more consistently presented with some of these same arguments.

        In other words, don’t give up. Just because a judgge hasn’t ruled this way before doesn’t mean that he/she won’t in the future.

  2. sara smite says:

    Thank you mark for saving so many homes in or area. My question is in #22 it states “lender” to accelerate. the foreclosure party in all our cases is the servicer not the lender. i wonder about the use of this avenue as well? thanks for all you do

    • Mark Stopa Mark Stopa says:

      I’ve argued before that the company that sent the notice was not the “lender,” so I’m with you here.
      As a practical matter, I think this will make a difference if the homeowner can reasonably assert that he/she didn’t know what the letter was because he/she didn’t recognize the company that sent it.
      If it’s not the lender, and the homeowner doesn’t recognize the company which sent it, I can see the argument for sure.

  3. Pingback: Mark Stopa | Summary Judgment(s)… for a Homeowner | Foreclosure Fraud – Fighting Foreclosure Fraud by Sharing the Knowledge

  4. usedkarguy says:

    Congrats Counselor! We’re all pulling for you! I too am blessed with a great attorney, and victory may be in sight. Keep it up! RPR

  5. Laura says:

    Hi Mark,
    Summary Judgement for homeowner you state case over, what is Mark Bowen saying to you best of luck after re-file??? Does this mean they are going to come after the homeowner again in yet another try at foreclosure on their home?? I am confused can you explain.
    Thank You

    • Mark Stopa Mark Stopa says:

      Yes, Laura. Even when summary judgment is entered for a homeowner or a case is dismissed, there are limited circumstances where a bank is prevented from filing a new suit.

      • Chuck says:

        This is very concerning to me. If the lender has offered to waive the deficiency owed on the subject note in return for a Consent to Judgment, are you saying that they can still come back and file a new suit? What circumstances would prevent them from filing that new suit?

        • Mark Stopa Mark Stopa says:

          If a Final Judgment of Foreclosure is entered, and that Final Judgment clarifies that the plaintiff is not entitled to a deficiency, then any subsequent lawsuit for a deficiency would be barred by res judicata.
          That doesn’t necessarily mean a bank won’t file such a suit, but the homeowner could assert res judiciata as a defense and should prevail.

  6. Monica says:

    So why use this tactic rather than just file a Motion to Dismiss?

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