Consumer Finance Litigation

In OneWest Bank, FSB v. Gino Alessio, et al., 4D14-1444 (Fla. 4th DCA Jan. 6, 2014), the Fourth District Court of Appeal reversed a trial judge's order dismissing a foreclosure after the defendant improperly used a motion in limine to exclude the bank's sole witness and procured dismissal of the action. While the trial court's order was ostensibly a sanction for violating the pre-trial order's requirements regarding witness and exhibit lists, the Fourth District Court of Appeal reversed because the trial court failed to consider the factors set forth in the Florida Supreme Court's opinion in Kozel v. Ostendorf, 629 So. 2d 817, 818 (Fla. 1993) regarding whether dismissal is warranted. It has become common place for foreclosure defense counsel to use last minute motions in limine seeking to exclude bank witnesses. The grounds are almost always related to some sort of irregularity with the witness and exhibit list. While a continuance would ordinarily be the best solution for such instances, and not exclusion of witnesses, certain trial judges have taken the extreme approach of excluding the witness and dismissing the case. This has spawned a large number of appeals, and Alessio is the first to reach a decision from the Fourth DCA since the trend began. In the opinion in Alessio the Fourth District Court of Appeal reaffirmed the long held premise that the failure to consider the Kozel factors is itself reversible error. The Kozel factors are as follows: 1) whether the attorney's disobedience was willful, deliberate, or contumacious, rather than an act of neglect or inexperience; 2) whether the attorney has been previously sanctioned; 3) whether the client was personally involved in the act of disobedience; 4) whether the delay prejudiced the opposing party through undue expense, loss of evidence, or in some other fashion; 5) whether the attorney offered reasonable justification for noncompliance; and 6) whether the delay created significant problems of judicial administration. Based on the absence of any record evidence suggesting those factors were applied by the trial court, the 4th DCA reversed. This case is illustrative that counsel for lenders should be cognizant of the requirements of pre-trial orders and ensure compliance whenever possible. However, where non-compliance occurs, it is not the case that an automatic dismissal is appropriate and lender's should insist that the trial court apply the appropriate factors before imposing harsh sanctions, such as dismissal. A copy of the opinion can be located here.