Consumer Finance Litigation

On April 1, 2020, Florida’s Third District Court of Appeal released its opinion in the case 78D Team, LLC v. U.S. Bank, N.A., etc., 3D 19-1708 (Fla. 3d DCA April 1, 2020). In this appeal, Burr successfully defended an appeal that challenged a payments order under Florida Statute 701.10(2), which permits trial courts in Florida to enter an order requiring monthly mortgage payments be made in foreclosure actions that do not involve owner occupied residential real estate. If payments are not made following such an order, the trial court can order the eviction of the property’s ...

On April 2, 2020, in light of the COVID-19 pandemic, Governor Ron DeSantis of Florida entered Executive Order 20-94, requiring a 45-day suspension of “any statute providing for a mortgage foreclosure cause of action under Florida law.” The Executive Order also requires a 45-day suspension of statutes providing for a cause of action for residential eviction.

Presumably, the Governor ordered the suspension of any statute providing for foreclosure and eviction causes of action in light of § 252.36(5)(a), Florida Statutes, which allows the Governor to suspend any “regulatory ...

The Florida Supreme Court released an opinion in Glass v. Nationstar, SC17-1387 with widespread implications in contract litigation, and mortgage foreclosure litigation in particular, as it relates to attorney's fee entitlement. In Nationstar Mortgage LLC v. Glass, 219 So. 3d 896 (Fla. 4th DCA 2017) the Fourth District Court of Appeal held that where a borrower prevails on the issue of standing, the borrower cannot utilize the attorney's fee provisions of the note and mortgage to secure prevailing party attorney's fees. The rationale for this decision seemed simple, if the ...

On October 31, 2018, Florida's Second District Court of Appeal recently distinguished two of its prior opinions and held that a foreclosure plaintiff does not lose its standing as a holder of a negotiable instrument if it surrenders a promissory note to the clerk of court for purposes of obtaining a foreclosure judgment, and later re-files the action without retaking possession of the note from the clerk.

Two prior opinions from the Second District Court of Appeal, Partridge v. Nationstar Mortgage, LLC, 224 So. 3d 839 (Fla. 2d DCA 2017) and Geweye v. Ventures Trust 2013-I-H-R, 189 So. 3d ...

Florida's Fourth District Court of Appeal breathed life back into the lis pendens statute by reversing course in Ober v. Town of Lauderdale-By-the-Sea. On a motion for rehearing, the Court withdrew and replaced its August 24, 2016 opinion, which "eviscerated" the lis pendens statute by holding that liens placed on property between a final judgment of foreclosure and the judicial sale were not discharged by Florida Statute § 48.23. For an in-depth discussion of the Court's August 24, 2016 opinion, click here. Consistent with the real property and mortgage industry's understanding ...

The Florida Supreme Court today affirmed Bartram v. U.S. Bank National Association in a virtually unanimous decision. The decision resolves a long standing controversy regarding the effect (if any) of a prior unsuccessful foreclosure action with regards to Florida's statute of limitations for mortgage foreclosure. The Court's opinion in case number SC14-1265, which was joined by all the justices with the exception of Justice Lewis (who concurred in result only and authored a short opinion of his own) and contains several important holdings. The vast majority of the opinion is ...

On October 4, 2016, the Eleventh Circuit Court of Appeals ruled that chapter 7 debtors who file a statement of intention to surrender real property in bankruptcy cannot later contest a foreclosure action, and bankruptcy courts have broad power and authority to sanction violations. Failla v. CitiBank, N.A., case no. 15-15626 (11th Cir. October 4, 2016). The bankruptcy court in Failla reopened a chapter 7 bankruptcy case several years after entry of discharge and ordered the debtors to cease their defense of the bank's foreclosure action, threatening to vacate the discharge order for ...

In a recent opinion, the Second District Court of Appeal explained its approval of agency relationship to establish that a plaintiff is entitled to foreclose as "holder" of the original note under Florida Statute Section 673.3011(1). Phan v. Deutsche Bank Nat'l Trust Co., Case No. 2D14-3364, 2016 WL 746400 (Fla. 2d DCA Feb. 26, 2016). Recounting the relevant facts of this case, Deutsche Bank initiated a foreclosure action against Ms. Ngoc Phan on April 28, 2009, alleging she failed to make the loan payments on her Pinellas County home since January 1, 2009. Ms. Phan denied the Bank's ...

The brief era of confusion amongst Florida trial judges regarding the standard for judging compliance with conditions precedent in residential mortgage foreclosures is hopefully coming to a close. Despite a rash of written opinions from Florida trial judges adopting a strict compliance standard for contractual conditions precedent, Florida's Fifth District Court of Appeal joined the Second and the Third District Court of Appeal in adopting a substantial compliance standard in Bank of New York Mellon, etc. v. Donna D. Johnson, 5D14-3626 (Fla. 5th DCA Jan. 29, 2016). The opinion ...

In a split two-one decision, Florida's Second District Court of Appeal affirmed the decision reached below and held that Fla. Stat. 559.715's notice of assignment provision does not create a condition precedent to foreclosure. The case is Brindise v. U.S. Bank, N.A., 2D14-3316, 2016 Fla. App. LEXIS 653 (Fla. 2d DCA Jan. 20, 2015). The Second DCA further certified the following question to the Florida Supreme Court as a matter of great public importance: "IS THE PROVISION OF WRITTEN NOTICE OF ASSIGNMENT UNDER SECTION 559.715 A CONDITION PRECEDENT TO THE INSTITUTION OF A FORECLOSURE ...

For years, counsel for borrowers have successfully argued that the bank failed to meet conditions precedent required under Section 559.715 of Florida's Consumer Collection Practices Act ("FCCPA"). Procedurally, this argument has been raised in the borrower's answer to the mortgage foreclosure complaint. Rather than simply alleging it as a well-pled affirmative defense, the borrower generally denies that the lender complied with all conditions precedent required to bring a mortgage foreclosure action. The borrowers' strategy is to then move for summary judgment denying ...

In the case of Sill v. JPMorgan Chase Bank National Association, Michael Sill appealed a final judgment of foreclosure entered in favor of JPMorgan Chase Bank ("Chase"), in which he asserted three issues. 4D14-1014, 2016 WL 67256 (Fla. 4th DCA Jan. 6, 2016). Of note, is Mr. Sill's third contention arguing that Chase was required to send a new notice of default after it voluntarily dismissed the first suit and before it filed the second suit. The Fourth DCA affirmed on all issues, but it wrote an opinion to address the sole issue of whether a new notice of default was required to be sent by ...

With its recently-issued opinion in Elsman v. HSBC Bank USA as Trustee for MLMI 2006-AF1, slip op. 5D14-1753, 41 Fla. L. Weekly D57b, 2015 WL 9491875 (Dec. 31, 2015), the Fifth DCA has added to a growing body of case law regarding what is required to evidence a plaintiff's standing to foreclose a mortgage. In Elsman, the plaintiff asserted standing as holder of the promissory note at issue but failed to attach an endorsed copy of the promissory note at issue to its complaint or to present any alternate evidence of its status as holder. Because the plaintiff, HSBC Bank USA, as Trustee for MLMI ...

In Bank of New York Mellon Trust Company v. Dennis M. Conley, 4D14-2430 (Fla. 4th DCA Jan. 6, 2016), Florida's Fourth District Court of Appeal clarified the methods by which a foreclosure plaintiff can seek to enforce a note indorsed to another party. Specifically, the court held that, "[w]here a bank is seeking to enforce a note which his specially indorsed to another, the bank is a nonholder in possession." The court went on to hold that in order to prove standing as a non-holder the plaintiff must provide proof of an effective transfer, purchase of the debt, or a valid assignment. In ...

In Bank of America, N.A. v. Kipps Colony II Condominium Association, Inc., the Second District Court of Appeal reversed a 2011 final judgment entered in favor of Kipps Colony II Condominium Association, Inc. ("Association"). See Nos. 2D14-858, 2D14-4436, 2015 WL 8321268 (Fla. 2d DCA Dec. 9, 2015). Though Bank of America had been defaulted in the Association's claim of lien foreclosure action, the appellate court found the trial court erred in denying Bank of America's Florida Rule of Civil Procedure 1.540(b) motion. Judge Black delivered the opinion of the court finding that the ...

In Ensler v. Aurora Loan Servs., LLC, the Fourth District Court of Appeal of Florida was faced with the issue of whether a prior mortgage loan servicer's documents could be introduced into evidence when the current servicer testified the prior servicer's records were "accurate" because "[t]hey're a reputable big company and we trust them and they trust us." At trial, Plaintiff sought to introduce the following documents into evidence (through the testimony of the current servicer): the breach letter, payment history, and power of attorney. All of these documents were authored ...

In Hicks v. Wells Fargo, 5D14-1748, Florida's Fifth District Court of Appeal issued the first appellate opinion to pass on the proper method of pleading a re-filed foreclosure where a prior foreclosure effort was dismissed and certain defaults are now outside the five year statute of limitations for mortgage foreclosure. The facts of the case were as follows: a foreclosure complaint was filed in September 8, 2006 premised on the borrowers' alleged failure to make the June 1, 2006 payment. The complaint was voluntarily dismissed in 2008. A new notice of default was sent in 2011 ...

With its decision up on re-hearing, Florida's Third District Court of Appeal may be rethinking its decision in Deutsche Bank Trust Co. Americas v. Beauvais, No. 3D14-575, 2014 WL 7156961 (Fla. 3d DCA Dec. 17, 2014). In Beauvais, the court held that only a dismissal with prejudice will allow a cause of action for mortgage foreclosure to accrue after a failed foreclosure effort is dismissed. The effect of the decision was to render numerous foreclosures time-barred where a prior dismissal had been taken voluntarily, or otherwise without prejudice. The Third DCA acknowledged its ...

In Cooper v. Fay Servicing, LLC, 2015 WL 4470213 (S.D. Ohio July 17, 2015), the mortgagors sued the servicer of their real estate loan asserting claims for alleged violations of Regulation X relating to the loss mitigation process. Critical to this case was the timing of the loss mitigation process that resulted in the alleged Regulation X violations, the date of the foreclosure filing, and the date of the foreclosure sale. Specifically, the foreclosure proceeding was initiated on January 4, 2014, six days prior to the effective date of the CFPB's new Mortgage Rules, while the alleged ...

As Florida works through its foreclosure backlog, many of the cases remaining are those with complications, for example a lost promissory note. Such issues are not insurmountable, but do require an attention to detail. For example, in Boumarate v. HSBC Bank USA, N.A., 5D14-1379, 40 Fla. L. Weekly D1899a (Fla. 5th DCA August 14, 2015), Florida's Fifth District Court of Appeal provided guidance on the proof required by Florida's UCC provision for enforcing lost promissory notes. Specifically, Florida Statutes section 673.3091 provides that:

(1) A person not in possession of an ...

On July 29, 2015, Florida's Second District Court of Appeal held that substantial compliance, rather than strict compliance, is the legal standard for evaluating a foreclosing plaintiff's compliance with contractual conditions precedent to acceleration of mortgage debt (and in particular, the conditions identified in paragraph 22 of most standard residential first mortgages). Green Tree Servicing, Inc. v. Milam, 2015 WL 4549200, at 4-5, 2015 Fla. App. LEXIS 11324, at 9-11. The Milam decision built upon and clarified prior case law from Florida's Second and Fifth DCAs that ...

The UCC was supposed to make enforcing negotiable instruments a simpler, more streamlined process. It has proven anything but in Florida. Continuing a trend that now stretches back years, mortgage lenders have had an increasingly tough time proving standing to the satisfaction of Florida's District Courts of Appeal in the last few months. Florida's Fourth District Court of Appeal has long been the most vocal on the standing issue. See e.g. McLean v. JP Morgan Chase Bank Nat. Ass'n, 79 So. 3d 170 (Fla. 4^th DCA 2012). The last few months have been no different. One opinion of particular ...

The Eleventh Circuit Court of Appeals and Georgia Court of Appeals recently issued competing orders about mortgage borrowers' standing to challenge security deed assignments. Though the Eleventh Circuit affirmed that borrowers cannot challenge their security deed assignments when making wrongful foreclosure claims, the Georgia Court of Appeals found that borrowers can challenge their assignments under Georgia's Quiet Title Act. This newly-clarified distinction will perhaps provoke borrowers to file quiet title actions to frustrate Georgia foreclosure efforts in the ...

The opinion of Florida's Third District Court of Appeal in Deutsche Bank Trust Co. Americas v. Beauvais, No. 3D14-575, 2014 WL 7156961 (Fla. 3d DCA Dec. 17, 2014) has been a lightning rod for criticism from federal courts in Florida. The opinion, which holds that only a dismissal with prejudice will serve to reset the statute of limitations for mortgage foreclosure following a failed foreclosure attempt, has already been rejected by three separate opinions of United States District Courts in Florida. See LNB-017-13, LLC v. HSBC Bank USA, No. 1:14-CV-24800-UU, 2015 WL 1546150 (S.D ...

Florida's Third District Court of Appeal shocked many court watchers with its opinion in Deutsche Bank Trust Co. Americas v. Beauvais, No. 3D14-575, 2014 WL 7156961 (Fla. 3d DCA Dec. 17, 2014) when it created a split of authority on Florida's statute of limitations for mortgage foreclosure. Before Beauvais, Florida's case law was consistent that a dismissal, be it with or without prejudice, permitted new non-time-barred causes of action for foreclosure to accrue based upon post-dismissal breaches of mortgage covenants. See Evergrene Partners, Inc. v. Citibank, N.A., 143 So. 3d ...

In Haynes v. McCalla Raymer, LLC, No. 14-14036, __ F. 3d __, 2015 WL 4188459 (11th Cir. July 13, 2015), the Eleventh Circuit Court of Appeals affirmed the Northern District of Georgia's grant of summary judgment in favor of Bank of America, N.A. ("BANA") on the mortgagors' wrongful foreclosure claim. The court held that the mortgagors lacked standing to challenge any alleged deficiencies in the assignment of the security deed from MERS to BANA and that the borrowers' own default, rather than any alleged defect in the foreclosure notice, led to the foreclosure. With respect to the ...

In David L. Ham, Jr. v. Nationstar Mortgage, LLC, 1D14-4024 (Fla. 1st DCA May 12, 2015), the First District Court of Appeals ("First DCA") reversed the trial court's Final Judgment of Foreclosure in favor of Nationstar for failing to furnish competent and substantial evidence overcoming Borrower's standing defense, and that the original Plaintiff possessed the original note, indorsed in blank, at the inception of the lawsuit. Here, 123 Loan, LLC ("123 Loan") originated the subject loan in 2004, and allegedly assigned the note to Aurora Loan Services, LLC ("Aurora") at some unknown ...

In Gorel v. Bank of New York Mellon, 5D13-3272 (Fla. 5th DCA May 8, 2015) Florida's Fifth District Court of Appeal offered relief to increasingly popular arguments using minor defects in paragraph 22 notices of default as a defense to foreclosure. It has become popular among the foreclosure defense bar to point to minor variances between the language used in notices of default and the express language of paragraph 22, and assert that because the notices do not strictly conform word for word with paragraph 22, that foreclosure should be denied. These arguments have had some measure of ...

In Deutsche Bank Nat'l Trust Co. v. Adriana Avila-Gonzalez, 2015 WL 2089094 (Fla. 3d DCA May 6, 2015), the Florida Third District Court of Appeal reversed a trial court order that dismissed a foreclosure action with prejudice and cancelled the note and mortgage. Central to the Court's ruling was the determination that the Bank was negligent in asserting the note was lost, by pleadings and by affidavit, when the note was actually in the servicing agent's possession for the duration of the foreclosure action. Contrary to the trial court's ruling, the Court found the Bank's negligence did ...

In Russell v. Aurora Loan Services, LLC, 40 Fla. L. Weekly D967a (Fla. 2d DCA Apr. 24, 2015), Florida's Second District Court of Appeal added to the emerging line of case law regarding the proof required to establish standing in mortgage foreclosure actions. There, the Second DCA held that substituted party-plaintiff, Nationstar Mortgage, LLC, failed to establish at trial that either Nationstar or the original plaintiff, Aurora Loan Services, LLC, had standing as the servicer acting on behalf of the real party in interest to foreclose against borrower William Russell. As a result ...

Andrew D. Dunavant, Jr., and Mary Dunavant (the Dunavants) appealed the district court's partial denial of their motion for summary judgment and its grant of the defendant's motion for summary judgment. Dunavant v. Sirote & Permutt, P.C., 2015 WL 525536, 1 (11th Cir. Feb. 9, 2015) (per curiam). The Dunavants allege that the defendant, Sirote & Permutt, P.C. (Sirote), unlawfully published two notices of foreclosure sale for the Dunavants' property after a state court enjoined the foreclosure action. Id. On appeal, the Dunavants first argue that the district court incorrectly ...

In LNB-017-13, LLC v. HSBC Bank USA, N.A., 14-cv-24800-UU, 2015 WL 1546150 (S.D. Fla. April 7, 2015), Judge Ursula Ungaro revisited the familiar topic of the statute of limitations for mortgage foreclosure and previously dismissed foreclosure actions. In two prior opinions on the subject, Judge Ungaro dismissed efforts to quiet title to mortgages where the borrowers had alleged the expiration of the statute of limitations as grounds for removing valid mortgage liens from title. See Lopez v. HSBC Bank, N.A., 1:14-cv-20798-UU, 2014 WL 3361755, at 1 (S.D. Fla. Apr. 28, 2014); Torres ...

In Ros v. Lasalle Bank, N.A., et al., 14-CIV-22112-BLOOM/VALLE (S.D. Fla. July 18, 2014) the Southern District of Florida became the first United States District Court to apply the holding in Evergrene Partners, Inc. v. Citibank, N.A., 39 Fla. L. Weekly D1342 (Fla. 4th DCA 2014) regarding efforts quiet title of a mortgage based upon the alleged expiration of the statute of limitations for mortgage foreclosure. As discussed in previous posts, after a failed foreclosure lawsuit occurs, it has become common for borrowers to file quiet title suits which allege that the applicable five ...

The U.S. Court of Appeals for the Fifth Circuit recently held in Reinagel v. Deutsche Bank National Trust Co., No. 12-50569, 2013 WL 3480207 (5th Cir. July 11, 2013), that facially valid assignments can only be challenged for want of authority by the defrauded assignor. In Reinagel, the plaintiffs/borrowers alleged that the "robo-signed" assignments of their note and deed of trust were invalid and prohibited the defendant's foreclosure. First, the Fifth Circuit found the plaintiffs had standing to challenge the validity of the assignments of the note and deed of trust to Deutsche ...

In You et al. v. JP Morgan Chase Bank, N.A. et al., No.S13Q0040(Ga. May 20, 2013), the Supreme Court of Georgia ruled that the holder of a security deed seeking to exercise a power of sale is not required to also hold the underlying promissory note. Further, the Court held that a party exercising its right to foreclose as a holder of the security deed does not need to identify the holder of the note in the statutorily-mandated notice to debtor. The borrowers in this case primarily argued that JP Morgan Chase Bank, N.A. did not have the right to exercise power of sale because it was not the holder of ...

In early 2010, the Florida Supreme Court amended Rule 1.110(b) of the Florida Rules of Civil Procedure to require that all residential foreclosure complaints be verified. The Rule requires a simple recitation:

Under penalties of perjury, I declare that I have read the foregoing, and the facts alleged therein are true and correct to the best of my knowledge and belief.

In Wells Fargo Bank v. Bohatka, et al., 38 Fla. L. Weekly D885a (Fla. 1st DCA April 22, 2013), the Florida First DCA reversed dismissal with prejudice of a residential foreclosure complaint. While the appellate court agreed that dismissal of the complaint was proper, it held that dismissal with prejudice was not. The trial court erred by going beyond the four corners of the complaint on the borrowers' motion to dismiss. In its foreclosure complaint, Wells Fargo alleged that it was the owner and holder of the subject promissory note and mortgage by virtue of an equitable transfer which ...

The Florida Fourth DCA opinion in Shahar v. Green Tree Servicing, 38 Fla. L. Weekly D563d (Fla. 4th DCA March 6, 2013) demonstrates the dangers of inadequately addressing each and every affirmative defense raised by a foreclosure defendant. In Shahar, the appellate court reversed the trial court's entry of summary judgment where the lender did not factually or legally refute the defendants' unclean hands defense. The defendants' Verified Amended Answer, Affirmative Defenses and Counterclaim included allegations that the lender had engaged in a variety of inequitable and ...

As Burr & Forman has offices located in five southeastern states (Alabama, Florida, Georgia, Mississippi and Tennessee), our attorneys have been actively involved in various forms of litigation involving Chinese drywall for the last several years. While standard Chinese drywall lawsuits have involved claims related to construction and products liability, a recent case handled by our financial services litigation attorneys involved the interplay between Chinese drywall and mortgage servicing. In Buckentin v. SunTrust Mortgage Corporation, No. 2:11-cv-00532-RDP, 2013 WL ...