Acceleration

Prevailing Homeowner Terri Page versus Deutsche Bank for Attorney Fees Reaches Florida Supreme Court

Foreclosure Defense Attorney Nicole Moskowitz appears before the Florida Supreme Court to argue landmark foreclosure case against Deutsche Bank for legal fees.

LIT COMMENTARY

Homeowner who defeated a wrongful foreclosure by Deutsche Bank in Florida waits for a decision from the Florida Supreme Court about her counsel’s request for legal fees. At oral argument, the Supreme Court Justices made it clear, Deutsche Banks’ arguments were unavailing.

IN THE SUPREME COURT OF FLORIDA

Case style: TERRI P. PAGE v. DEUTSCHE BANK TRUST COMPANY

Case number: SC19-1137

Originating court: Fourth District Court of Appeal

 

PETITIONER’S REPLY BRIEF

Nicole R. Moskowitz
Neustein Law Group, P.A.
18305 Biscayne Boulevard, Suite 250
Aventura, FL 33160
T: 305.531.245
NLGlaw@yahoo.com

TABLE OF CITATIONS

Citations in Brief                                                                    Page Number

Cases

Alhambra Homeowners Ass’n, v. Asad, 943 So. 2d 316, 319 (Fla. 4th DCA 2006)……………………………………………………………………………………………. 3

Applegate v. Barnett Bank of Tallahassee, 377 So.  2d  1150  (Fla. 1979)…………………………………………………………………………………………… 7

Benson v. Benson, 533 So. 2d 889 (Fla. 3d DCA 1988)………………….. 10

CalAtlantic Grp., Inc. v. Dau, 268 So. 3d 265, 267-68 (Fla. 5th DCA 2019)………………………………………………………………………………………….. 8

Cunningham v. Standard Guar. Ins. Co., 630 So. 2d 179, 181 (Fla.  1994)………………………………………………………………………………………….. 10

Dage v. Deutsche Bank Nat’l Tr. Co., 95 So. 3d 1021 (Fla. 2d DCA 2012)……………………………………………………………………………………………. 9

Deutsche Bank Tr. Co. Ams. v. Page, 44 Fla. L. Weekly D1479 n.1 (Fla. 4th DCA June 12, 2019)………………………………………………… in passim

Fla. Cmty. Bank, N.A. v. Red Rd. Residential, LLC, 197 So. 3d 1112, 1116 (Fla. 3d DCA 2016)……………………………………………………………………………………………. 6

Fla. Hurricane Protection & Awning Inc. v. Pastina, 43 So. 3d 893, 895 (Fla. 4th DCA 2010)………………………………………………………………………………………….. 13

Hardman v. Koslowski, 135 So. 3d 434, 436 (Fla. 1st DCA 2014)….…10

Harris v. Bank of New York Mellon, 44 Fla. L. Weekly D141 (Fla. 2d DCA Dec. 28, 2018)……………………………………………………… in passim

I-95 Motorsports, Inc. v. Goldberg, 155 So. 3d 449, 450 (Fla. 4th DCA 2015)……………………………………………………………………………………………. 7

Kelly v. BankUnited, FSB, 159 So. 3d 403, 407 (Fla. 4th DCA 2015)…. 3

Krivanek v. Take Back Tampa Political Comm., 625 So. 2d 840, 842 (Fla. 1993)……………………………………………………………………………… 9

Lucas v. Barnett Bank, 732 So. 2d 405, 407 (Fla. 2d DCA 1999)………. 3

Madl  v. Wells Fargo Bank, N.A., 244  So. 3d 1134  (Fla. 5th DCA 2017)…………………………………………………………………………. in passim

Malone v. Meres, 91 Fla. 709, 109 So. 677, 683 (Fla. 1926)………….. 10

McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170 (Fla. 4th DCA 2012)………………………………………………………………………… 4, 9

Nationstar Mortg. LLC v. Glass, 219  So.  3d  896  (Fla.  4th  DCA 2017)…………………………………………………………………………. in passim

Paulucci v. Gen. Dynamics Corp., 842 So. 2d 797, 801 n.3. (Fla.   2003)……………………………………………………………………………. 10, 11

Pino v. Bank of N.Y., 121 So. 3d 23, 42-43 (Fla. 2013)…………………. 11

PNC Bank, Nat’l Ass’n v. MDTR, LLC, 243 So. 3d 456 (Fla. 5th DCA 2018)………………………………………………………………………………………….. 7

Silver Star Citizens’ Comm. v. City Council of Orlando, 194 So. 2d 681 (Fla. 4th DCA 1967)………………………………………………………………. 10

Walter D. Padow, M.D., P.A. v. Knollwood Club Ass’n, 839 So. 2d 744, 746 (Fla. 4th DCA 2003)………………………………………………….. 3

Other Authorities

Florida Rule of Civil Procedure 1.540…………………………………………… 9, 10

Florida Statute Section 57.105(7)……………………………………………. 1, 6, 8, 13

Petitioner Terri Page, by and through the undersigned counsel, hereby replies to Respondent’s Answer Brief on the Merits, as follows:1

Petitioner Terri Page, by and through the undersigned counsel, hereby replies to Respondent’s Answer Brief on the Merits, as follows:1

ARGUMENT

A.   The Fourth’s opinion creates a bright-line rule that renders the Florida Statute Section 57.105(7) non-discretionary.

Petitioner and Respondent are in agreement—an award of attorney’s fees is discretionary. However, as discussed in the Initial Brief on the Merits (“Initial Brief”), the bright line rule, as the Fourth set out, takes discretion away from trial judges. Respondent’s argument regarding the discretionary nature of attorney’s fees misses the mark entirely. The word “discretion” does not appear within the Fourth’s opinion. Respondent is conjuring a nonexistent justification for the Fourth’s ruling that is otherwise plainly stated as “NO STANDING = NO ATTORNEY’S FEES.” Page at 1119. It is clear that such an absolute equation does not translate into a matter of discretion or a balancing of the equities.

Further, Respondent’s suggestion in Footnote 4 that a contract must explicitly use the words “only a prevailing party is entitled to attorney’s fees” is unfounded. Answer Brief at 7 n. 4. Lenders routinely rely on the same provision when they prevail in foreclosure cases. Further, Respondent has never argued that the Mortgage itself does not provide for prevailing party attorney’s fees because it lacks the

1 This Reply Brief will use the same designations as set forth in the Initial Brief on the Merits.

 

specific words “prevailing party.” It goes without saying that if the contract did not provide for prevailing party attorney’s fees, neither party would be here. As such, the three-prong test, as discussed in the Initial Brief, is applicable and Petitioner satisfies it. Madl and Harris succinctly state the requirements to obtain attorney’s fees, they do not interject a new requirement. Having met the three-prong test, attorney’s fees should be awarded.

B.    An examination of the substance of the litigation’s outcome reveals that the Parties had an enforceable contract by the time of trial.

Respondent’s insistence that a court look to the substance of a litigation’s outcome weighs in favor of the holdings in Madl and Harris. As set out by the Fourth, no other facts are relevant to the determination of entitlement of attorney’s fees other than whether the plaintiff lacked standing at the time a complaint is filed. The Second and Fifth both take the actual evidence into consideration and look at the actual findings.

Respondent’s myopic view of the case law in this area ignores important details. Respondent would have the court look to the substance of the litigation outcome to the extent the general concept of standing is involved, but then no further. However, the cases Respondent relies upon show that this type of analysis goes deeper than simply looking to see which affirmative defense was successful. Moreover, all of these cases are in the context of determining the prevailing party where there had been a voluntary dismissal.

Respondent relies upon Alhambra Homeowners Ass’n, v. Asad, 943 So. 2d 316 (Fla. 4th DCA 2006), Walter D. Padow, M.D., P.A. v. Knollwood Club Ass’n, 839 So. 2d 744 (Fla. 4th DCA 2003), and Kelly v. BankUnited, FSB, 159 So. 3d 403 (Fla. 4th DCA 2015). These all show the manner in which a court analyzes the “substance of the litigation outcome.” Answer Brief at 11. When read together they illustrate the two exceptions to the general rule in the Fourth that the defendant is the prevailing party where a plaintiff voluntarily dismisses its case. In these cases, the Fourth stated that it was necessary to look behind the outcome of the litigation Asad, 943 So. 2d at 319. The Fourth has found only two instances where it is proper to do so—1) where “plaintiff’s voluntary dismissal follow[s] the defendant’s payment of substantially all of the plaintiff’s claim” (see Walter D. Padow, M.D., 839 So. 2d at 746); and 2) the court’s “finding that neither party has substantially prevailed by virtue of the voluntary dismissal” (see Kelly, 159 So. 3d at 407). As such, these cases are irrelevant because they were voluntarily dismissed and there was no adjudication on the merits. It is clear that when courts look at the substance of the litigation outcome, it is to determine the beneficial outcome to the losing party, or, whichever party appears to be the non-prevailing party. Here, as in Madl and Harris, Respondent did not receive any benefit that led to dismissal of the case. Rather, Respondent failed to prove its case. Petitioner, on the other hand, prevailed in the action as she achieved her goal in this litigation. See Lucas v. Barnett Bank,

732 So. 2d 405, 407 (Fla. 2d DCA 1999). As such, the substance of the outcome is in Petitioner’s favor and attorney’s fees should be awarded.

C.    A plaintiff can lack standing at the inception of a lawsuit but still become a party to the contract sued upon.

A lack of standing at the outset of a lawsuit and the acknowledgement of a valid contract between the parties are not inconsistent positions. Regardless of the genesis of the requirement of standing at two stages, it is a plaintiff’s burden to prove it in foreclosure cases. To that end, however, Respondent is incorrect in its assertion that the “‘standing at two stages’ theory originated in cases involving a substitution of party plaintiffs.” Answer Brief at 15. Madl relies upon McLean v. JP Morgan Chase Bank Nat’l Ass’n, 79 So. 3d 170 (Fla. 4th DCA 2012), for the proposition that a foreclosing plaintiff must prove standing both at the time the lawsuit is filed and at trial. Madl at 1138. McLean predated all of the cases cited to and did not involve a substitution. McLean recognized that standing could be obtained at any point during the lawsuit, even if the plaintiff did not have standing at the inception. McLean, 79 So. 3d at 173. (“Because Chase presented to the trial court the original promissory note, which contained a special endorsement in its favor, it obtained standing to foreclose, at least at some point.”).

Of course, while a failure to prove standing at the inception is fatal to a plaintiff’s case, that is a distinct issue from the fact that the plaintiff and defendant can become parties to the note and mortgage. It is obvious that the standing at two stages theory has roots that go far deeper than the cases involving a substitution of parties. It follows that standing at the time of trial would arise more frequently in cases where there has been a substitution of plaintiff, and therefore, more cases involving substitutions, but this in no way confines the standing at two stages requirement to cases involving substituted plaintiffs. Therefore, Respondent’s argument that “absent a substitution of party plaintiff, a foreclosure plaintiff need only prove standing at the inception of the case” is simply wrong. Answer Brief at 17.

As discussed, this is simply not true. More significant though, is the fact that a plaintiff can lack the required standing to file a lawsuit, but still become a party to the contract it is suing upon. If this were not the case, then a lack of standing would forever preclude a lender from refiling a foreclosure lawsuit, as in the instant case where Respondent filed a new lawsuit during the appeal to the Fourth.

Further, whether Respondent failed to prove it had standing at the inception of the case has no bearing on whether a contract exists. The fact the Fourth did not engage in any analysis of whether there was a contract between the parties was not the correct approach, and not aligned with the case law. What Respondent terms “mental gymnastics” is simply the court doing its job. Answer Brief at 17. As discussed, because entitlement to attorney’s fees is discretionary, courts may be obligated to analyze the findings and facts of each case. There is no extra burden placed upon the courts. In fact, Respondent is urging this Court to look at the “substance of the litigation” which necessarily requires an analysis of the facts. Further, in this case, there are no “mental gymnastics” required of the court to determine whether there was a contract at the time of trial because the trial judge already made that determination.

D.   Petitioner met her burden to prove entitlement to fees under Section 57.105(7).

Respondent’s argument that Petitioner failed to offer any evidence in conjunction with her Motion for Attorney’s Fees is completely ignoring the record evidence showing an endorsed note admitted at trial and the findings of the trial judge. More importantly, however, the Fourth did not even consider whether there was a lack of evidence. Rather, the Fourth simply followed Nationstar Mortg. LLC

  1. Glass, 219 So. 3d 896 (Fla. 4th DCA 2017). The Fourth’s unequivocal holding of “NO STANDING = NO ATTORNEY’S FEES” failed to take anything into consideration other than the finding of no standing at the inception of the lawsuit. Page at 1119. As such, this argument is simply a misdirection as it contradicts Respondent’s own evidence at trial.

Respondent makes this argument despite the fact that the original Note was admitted as an exhibit at trial and the circuit court recognized that the Note was endorsed to Respondent. Respondent cannot simply wish away its own evidence. Respondent’s reliance on Fla. Cmty. Bank, N.A. v. Red Rd. Residential, LLC, 197 So. 3d 1112, 1116 (Fla. 3d DCA 2016) is misplaced. In Fla. Cmty. Bank, the defendant argued that she was not a mortgagor. That is not the case here. That is different than a finding of lack of standing when a case is filed. Similarly, in PNC Bank, Nat’l Ass’n v. MDTR, LLC, 243 So. 3d 456 (Fla. 5th DCA 2018), the defendant who sought fees was not a mortgagor. The defendant in MDTR was a third party who bought the property from a bankruptcy trustee, and as such was “a stranger” to the mortgage contract. Id. at 458.

Further, Respondent failed to properly preserve the record below and attach a transcript of the hearing that took place on September 12, 2016 where the circuit court granted entitlement to attorney’s fees. The order granting Defendant’s Motion for Attorney’s Fees contains no facial or fundamental invalidity, nor does the Final Judgment Awarding Attorney’s Fees. R at 356 & 425-426, respectively. In the absence of a transcript, this Court has no way to determine the basis for the trial court’s granting of Defendant’s motion and, therefore, cannot make a determination as to whether entitlement was proper. Where a record is inadequate to demonstrate reversible error, a trial court’s ruling or judgment should be affirmed. See Applegate v. Barnett Bank of Tallahassee, 377 So. 2d 1150 (Fla. 1979); I-95 Motorsports, Inc. v. Goldberg, 155 So. 3d 449, 450 (Fla. 4th DCA 2015).

There is no basis to conclude that the trial court’s finding of entitlement was in error because the record arrives with the presumption of correctness on appeal and the Note was sufficient to support the award of entitlement. Finally, Respondent’s position is simply not true because in Petitioner’s Response to Plaintiff’s Motion for Reconsideration of Order Awarding Entitlement to Attorney’ Fees, Petitioner relied upon the trial transcript wherein Judge Ireland found that Respondent was the proper party at trial and had the proper endorsements. R at 408-409.

E.  Madl and Harris construed and applied Section 57.105(7) correctly.

Respondent’s interpretation of Florida Station Section 57.105(7) causes the statute to fail to achieve its purpose, which cannot be the intended result of the Legislature in enacting the statute. As Jonathan Kline, Esq. and Joseph G. Paggi III, Esq.’s Brief of Amicus Curiae aptly states:

The purpose of Fla. Stat. § 57.105(7) is to “level the playing field”. The Statute achieves the Legislature’s intent to remedy the unfairness inherent in unilateral fee provisions by making them bilateral. In the context of residential mortgages, the party in whose favor the unilateral fee provision is drafted is the bank. The “other party” Fla. Stat. § 57.105(7) is the borrower.

Jonathan Kline, P.A., Brief of Amicus Curiae, at 3 (quoting CalAtlantic Grp., Inc.

  1. Dau, 268 So. 3d 265, 267-68 (Fla. 5th DCA 2019)). We must read the statute and construe it strictly but not so strictly as to nullify the Legislature’s intent. Rather, we must read and construe the statute strictly but also liberally so as to allow it to achieve its legislative purpose. That is what Madl and Harris allow. They allow for Section 57.105(7) to achieve its purpose.

Respondent’s  argument  regarding  estoppel  is  a  red  herring. As stated  in Harris, “proof of standing is not required to establish a contractual relationship between the parties. Harris at *10. A lack of standing at the time a complaint is filed is a separate issue from whether an enforceable contract existed between the parties at some point in the litigation.

Arguing that a plaintiff was not a holder of the note prior to the lawsuit being filed, and therefore lacking standing at that time, is not inconsistent with arguing that a contract between the parties existed during the lawsuit.

As discussed, McLean considered this exact scenario. Because the issue of whether Respondent was the proper party to file the lawsuit is a different question than whether Respondent and Petitioner became parties to the contract, Petitioner is not estopped from obtaining attorney’s fees.

F.     A lack of standing does not deprive the court of subject matter jurisdiction.

Respondent’s view that a lack of standing at the outset of a case equates to a lack of subject matter jurisdiction to award attorney’s fees is wrong. First, Respondent is mixing apples and oranges. Lack of standing is an affirmative defense. Unlike the defense of lack of subject matter jurisdiction, it must be raised, or it is waived. Krivanek v. Take Back Tampa Political Comm., 625 So. 2d 840, 842 (Fla. 1993) (“The issue of standing should have been raised as an affirmative defense before the trial court, and Krivanek’s failure to do so constitutes a waiver of that defense, precluding her from raising that issue now.”).

This point is further illustrated when analyzing the effect of standing as it relates to motions to vacate under Florida Rule of Civil Procedure 1.540. In Dage v. Deutsche Bank Nat’l Tr. Co., 95 So. 3d 1021 (Fla. 2d DCA 2012), the defendant moved under Rule 1.540(4) to vacate the judgment as void because the plaintiff lacked standing.

The Second held, “[e]ven if Deutsche Bank lacked standing when it filed suit, the final judgment is merely voidable, not void. A voidable judgment may not be set aside under rule 1.540(b)(4).” Id. at 1024. Whereas, “a lack of subject matter jurisdiction renders a judgment void.” Hardman v. Koslowski, 135 So. 3d 434, 436 (Fla. 1st DCA 2014).

This Honorable Court has analyzed the meaning of subject matter jurisdiction and stated that “[s]ubject matter jurisdiction ‘means no more than the power lawfully existing to hear and determine a cause.’ It ‘concerns the power of the trial court to deal with a class of cases to which a particular case belongs.’” Paulucci v. Gen. Dynamics Corp., 842 So. 2d 797, 801 n.3. (Fla. 2003) (citing Cunningham v. Standard Guar. Ins. Co., 630 So. 2d 179, 181 (Fla. 1994) (quoting Malone v. Meres, 91 Fla. 709, 109 So. 677, 683 (Fla. 1926)).

Respondent filed the proper class of lawsuit—a foreclosure—enabling the court to obtain subject matter jurisdiction.

Next, the cases that Respondent relies upon are inapposite. Benson v. Benson, 533 So. 2d 889 (Fla. 3d DCA 1988), concerns a statutory cause of action wherein the plaintiff did not meet a statutory requirement. Silver Star Citizens’ Comm. v. City Council of Orlando, 194 So. 2d 681 (Fla. 4th DCA 1967), does not even mention the word standing.

Respondent is asking this Court to adopt a novel interpretation of jurisdiction unique to foreclosure matters. That is not the issue upon which this court granted jurisdiction.

Respondent raised this issue in its brief in the Fourth, however, the Fourth chose not to discuss it in the Page opinion. Neither the Madl nor Harris opinions discuss the issue. Further, Respondent never raised this issue in the circuit court.

Respondent’s position would lead the courts down a dangerous road where any meritorious affirmative defense could be said to deprive the court of subject matter jurisdiction. There is simply no nexus between standing and subject matter jurisdiction as framed by Respondent.

As such, Respondent’s contention that the court lacked subject matter jurisdiction based on the finding of lack of standing is not a meritorious argument.

Finally, even if the court lacked jurisdiction as a result of Respondent’s failure to prove it had standing to file the lawsuit, the court can still award attorney’s fees.

There would be continuing jurisdiction to award attorney’s fees based on the contractual relationship between the parties that was established via the endorsed Note and recognized by the trial judge. See Pino v. Bank of N.Y., 121 So. 3d 23, 42- 43 (Fla. 2013); Paulucci v. Gen. Dynamics Corp., 842 So. 2d 797, 801 n.3. (Fla. 2003).

In any event, it is clear from the case law that a lack of standing is not intended to be equated with subject matter jurisdiction. Therefore, Respondent’s argument with respect to this issue is incorrect.

G.   The Fourth refused to go down the “rabbit hole.”

The Fourth’s conclusion was explicit. However, how the Fourth came to that conclusion remains a mystery that this Court cannot be asked to resolve as the Fourth passed on the opportunity to provide its reasoning when it “decline[d] to go down the rabbit hole.” Page at 1119.

In other words, having not traveled down the rabbit hole, the Fourth concedes that no analysis is needed to reach its conclusion.

This is the very definition of a bright line rule. Respondent is incorrect that “proof of a contractual relationship unquestionably confers standing upon the parties to the contract to commence a lawsuit.” Answer Brief at 34.

If the contractual relationship did not come in existence until after the lawsuit was filed, there could be no retroactive standing. While “someone other than a party to a contract can have standing to enforce a contract,” no matter the circumstance, the party initiating the lawsuit must prove that it had standing to file the complaint. Id. at 35.

That is a separate issue from whether a contract existed between the parties by the time of trial. The Fourth simply did not offer any explanation for refusing to follow Madl and Harris.

H.   The equities weigh in favor of following Madl and Harris.

The Fourth did not make any equitable consideration when forming its mathematical holding. Respondent conflates two separate concepts.

The first is whether Respondent had standing at the inception of the lawsuit.

The second is whether Respondent became a party to the contract at some point during the litigation.

These two concepts can co-exist as they involve separate analyses. Further, as discussed, the case law contemplates that the parties’ relationship can change throughout the litigation.

Further, the equities were properly considered and balanced by the Legislature when it enacted Florida Statute Section 57.105(7) and affirmed when the Legislature chose not to amend the statute to add additional language following its enactment.

The Fourth’s holding and Respondent’s interpretation thereof runs afoul of the equities the Legislature duly put in place when it passed Section 57.105(7) and it is not any court’s position to encroach upon the Legislature by causing the statute to fail to achieve its purpose and Legislative intent.

“The purpose of section 57.105(7) is to level the playing field and ‘to ensure that each party gets what it gives[, i.e.,] the ability to recover fees in litigation arising under these contractual provisions.’” Harris at *11 (quoting Fla. Hurricane Protection & Awning Inc. v. Pastina, 43 So. 3d 893, 895 (Fla. 4th DCA 2010)).

As discussed in Harris and the Initial Brief, Petitioner could have won by another means or defense and would have been entitled to recover fees. In an equitable proceeding, it would be inequitable to deny attorney’s fees to Petitioner.

I.  The holdings of Madl and Harris serve the public

Respondent does not offer any public policy arguments that weigh in favor of following Page. Rather, Respondent takes the approach that this Honorable Court should simply ignore the public policy implications of the Page ruling.

It is incumbent upon this Court to make public policy considerations in this area of the law.

As argued in the Initial Brief, refusing attorney’s fees in this instance would be against public policy. As seen in 2008 and thereafter, Florida is uniquely situated to have an abundance of foreclosure cases.

The outcome of this case could directly effect whether or not attorneys take these cases on in the future.

CONCLUSION

For the reasons stated in Petitioner’s Initial Brief on the Merits, and the reasons stated herein, this Honorable Court should affirm the decisions in Madl and Harris and reverse the decision in Page.

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that a true and correct copy of the foregoing was furnished on June 15, 2020 to: William L. Grimsley, Esq., McGlinchey Stafford, 10407 Centurion Pkwy. N., Suite 200, Jacksonville, Florida 32256 via e-mail at wgrimsley@mcglinchey.com, lwhite@mcglinchey.com.

NEUSTEIN LAW GROUP, P.A.
18305 Biscayne Blvd., Suite 250
Aventura, Florida 33160
T: (305) 531-2545 F: (305) 531-2365

Primary Email:NLGLaw@yahoo.com Secondary Email: Gabrielle@neusteinlaw.com

By:                                                     Nicole R. Moskowitz, Esq.

Fla. Bar No. 56570

CERTIFICATE OF COMPLIANCE

I HEREBY CERTIFY that this Motion is in compliance with the font requirements of Florida Rules of Appellate Procedure 9.210(a)(2).

By: /s/ Nicole R. Moskowitz                        Nicole R. Moskowitz, Esq.

Florida Bar No.:56570

nmoskowitz-200bw.fw

Talk About a Hot Summer! Neustein Law Group was on Fire, Wins Six Foreclosure Appeals Across State of Florida

September 6, 2016 | Republished by LIT; 13 Oct., 2020

In Stoltz v. Aurora Loan Services, LLC, the Second District Court of Appeal ruled that Neustein Law Group successfully challenged the bank’s right to bring the foreclosure action, which resulted in a dismissal. In that case, Neustien Law Group successfully argued that Aurora Loan Services, LLC did not prove that they had the right to foreclose.

In HSBC Bank USA v. Magua, Neustein Law Group challenged a final judgment of this 2007 foreclosure case based on Hearsay evidence and lack of Standing. After Neustein Law Group filed its initial brief attacking the bank’s right to foreclose and the evidence used at trial, the bank filed a confession of error, resulting in another win for the homeowners.

The Fourth District Court of Appeal affirmed two more victories by Neustein Law Group against Deutsche Bank National Trust Company, as Trustee for Harborview Mortgage Loan Trust Mortgage Loan Pass-Through Certificates, Series 2007-5 v. Preddie

and

Deutsche Bank Trust Company Americas as Trustee RALI2006-QS6 v. Page.

The Fourth District Court of Appeal also reversed in part Lasala v. Nationstar Mortgage, LLC, due to the bank’s failure to prove the amount owed.

In that case, Neustein Law Group successfully argued that the bank failed to prove the amount of damages sought in the Final Judgment. The case was remanded back to the trial court.

In 575 Adams, LLC v. Wells Fargo Bank, Neustein Law Group represents a non-borrower who was wrongfully denied his right to conduct discovery and take the deposition of the bank’s trial witness.

The Third District Court of Appeal quashed the lower court’s order granting the bank’s Motion for Protective Order.

This case affirmed that a property owner has the legal right to aggressively defend a foreclosure action even if he or she is not the original Borrower.

The attorneys and staff at the Neustein Law Group, PA have been defending foreclosures longer than most any other firm in the State of Florida. Led by Frederick Neustein, Esq. and Nicole Moskowitz, Esq., Neustein Law Group, PA is a boutique commercial litigation firm headquartered in Aventura, Florida in Miami-Dade County and has several convenient satellite offices located twenty minutes from wherever you are in Miami-Dade County, Ft. Lauderdale/Broward County, Boca Raton, West Palm Beach, Palm Beach County, and throughout the state of Florida.

Stoltz v. Aurora Loan Services, LLC, 194 So. 3d 1097 (Fla. Dist. Ct. App. 2016)

No. 2D15–1095.

07-06-2016

Robert J. STOLTZ, Appellant, v. AURORA LOAN SERVICES, LLC; Nationstar Mortgage, LCC; Heritage Bay Umbrella Association, Inc.; The Quarry Community Association, Inc.; Loretta M. Stoltz; Robert B. Stoltz ; Unknown Tenant n/k/a Justin Stoltz, Appellees.

Nicole R. Moskowitz of Neustein Law Group, P.A., Aventura, for Appellant. Nancy M. Wallace and Ryan D. O’Connor of Akerman LLP, Tallahassee, and William P. Heller of Akerman LLP, Ft. Lauderdale, for Appellee Aurora Loan Services, LLC. No appearance for remaining Appellees.

Nicole R. Moskowitz of Neustein Law Group, P.A., Aventura, for Appellant.

Nancy M. Wallace and Ryan D. O’Connor of Akerman LLP, Tallahassee, and William P. Heller of Akerman LLP, Ft. Lauderdale, for Appellee Aurora Loan Services, LLC.

No appearance for remaining Appellees.

SALARIO, Judge.

We are again required to reverse a final judgment of foreclosure because of the plaintiff’s failure to prove at trial the existence of standing at inception of the case. See Dickson v. Roseville Props., LLC, 198 So.3d 48, 40 Fla. L. Weekly D2520, 2015 WL 6777155 (Fla. 2d DCA Nov. 6, 2015) (“For better or for worse, it is settled that it is not enough for the plaintiff to prove that it has standing when the case is tried; it must also prove that it had standing when the complaint was filed.”).

In this instance, a mortgage servicer filed suit against the borrower and homeowner, Robert Stoltz, and a different servicer was substituted as plaintiff prior to trial.

The action was commenced and maintained on the theory that the servicers were the holders of the note at issue, not on the theory that the servicers were authorized to foreclose on behalf of a holder.

Mr. Stoltz placed the question of standing at inception at issue by pleading it as an affirmative defense in an amended answer.

To satisfy the requirement of standing at inception, therefore, the second servicer (the one that took the case to trial) was required to prove at trial that the first servicer (the one that filed the suit) held the note when the case was filed. See Russell v. Aurora Loan Servs., LLC, 163 So.3d 639, 642 (Fla. 2d DCA 2015).

At the trial, the second servicer attempted to meet this burden by offering a note bearing an undated indorsement in blank.

An indorsement in blank is sufficient to prove that the person in possession of the note is its holder. Focht v. Wells Fargo Bank, N.A., 124 So.3d 308, 310 (Fla. 2d DCA 2013). Because the indorsement in this case was undated and was not attached to the original complaint, however, it was insufficient to prove that the first servicer held the note at the inception of the case absent additional evidence that the first servicer actually possessed the note at the inception of the case. See Sorrell v. U.S. Bank Nat’l Ass’n, ––– So.3d ––––, 41 Fla. L. Weekly D847, 2016 WL 1360758 (Fla. 2d DCA Apr. 6, 2016).

The only additional evidence the second servicer presented was the testimony of its representative.

That testimony established at most that the first servicer was in fact servicing the mortgage when it filed suit, not that the first servicer held the note when it filed suit.

For that reason, the second servicer failed to carry its burden of proving standing at inception, and the borrower’s motion for involuntary dismissal, made at the close of the second servicer’s case at trial, should have been granted. See Russell, 163 So.3d at 643 ; May v. PHH Mortg. Corp., 150 So.3d 247, 249 (Fla. 2d DCA 2014).

We observe that the operative complaint attaches a copy of an assignment purporting to transfer both the note and mortgage to the first servicer prior to the date suit was originally filed. That document might have proved that the first servicer had standing at inception. See Focht, 124 So.3d at 310 (“A plaintiff who is not the original lender may establish standing to foreclose a mortgage loan by submitting a note with a blank or special endorsement, an assignment of the note, or an affidavit otherwise proving the plaintiff’s status as the holder of the note.”).

The second servicer, however, made no effort to have this document admitted into evidence at trial.

On appeal, no argument is made or authority cited that, notwithstanding that failure, the assignment is sufficient to support the judgment when standing is contested at trial. See Beaumont v. Bank of N.Y. Mellon, 81 So.3d 553, 555 n. 2 (Fla. 5th DCA 2012) (noting that a copy of an assignment of a note in the court file was not competent evidence where it was never authenticated and offered into evidence).

We reverse the final judgment and remand the case to the trial court with instructions to enter an order of involuntary dismissal.

VILLANTI, C.J., and CRENSHAW, J., Concur.

Lasala v. Nationstar Mortgage, LLC, 197 So. 3d 1228 (Fla. Dist. Ct. App. 2016) No. 4D15–129.

07-27-2016

Barbara LASALA, James Lasala, and Richard Coulter, Appellants, v. NATIONSTAR MORTGAGE, LLC, Appellee.

 Nicole Moskowitz of Neustein Law Group, P.A., Aventura, for appellants. Nancy M. Wallace and Michael J. Larson of Akerman LLP, Tallahassee, and William P. Heller of Akerman LLP, Fort Lauderdale, for appellee.

Nicole Moskowitz of Neustein Law Group, P.A., Aventura, for appellants.

Nancy M. Wallace and Michael J. Larson of Akerman LLP, Tallahassee, and William P. Heller of Akerman LLP, Fort Lauderdale, for appellee.

Opinion

FORST, J.

Appellants Barbara Lasala, James Lasala, and Richard Coulter appeal a final judgment of foreclosure entered in favor of Appellee Nationstar Mortgage, LLC. Because we agree with the Appellants that Nationstar failed to prove its damages at trial, we reverse and remand for recalculation of damages. We affirm on the other issues raised by the Appellants without further discussion.

Background

A prior plaintiff, Aurora Loan Services, LLC, initiated this foreclosure action against the Appellants in September 2009, alleging the Appellants had defaulted on their obligations under a promissory note. Prior to trial, Nationstar was substituted as the plaintiff.

At trial, Nationstar called one of its employees to testify. The employee provided the foundation for the admission of several documents under the business records exception to hearsay, including the original note, mortgage, default letter, and loan payment history.

The employee stated that she had confirmed the amounts in the payment history and that these figures had been verified as part of Nationstar’s boarding process. She further testified that she had reviewed the judgment figures in the proposed final judgment and that they accurately matched the payment history.

Notably, however, the proposed final judgment was never admitted into evidence and the employee never provided a specific figure for Nationstar’s damages.

The Appellants moved to dismiss, arguing Nationstar failed to establish the debt owed. The trial court denied the motion and later entered final judgment in favor of Nationstar. This appeal followed.

Analysis

On appeal, the Appellants again argue Nationstar failed to prove the amounts owed in the final judgment, as the employee failed to present a total sum due in her testimony and the proposed judgment the employee referred to was not in evidence.

As such, the Appellants contend the case should be reversed and remanded for involuntary dismissal. Nationstar admits that the full judgment amount is not supported in the record and urges this Court to recalculate the interest due on the note or remand for recalculation at the trial court.

A claim regarding the sufficiency of the evidence is reviewed for competent substantial evidence. Colson v. State Farm Bank, F.S.B., 183 So.3d 1038, 1040 (Fla. 2d DCA 2015).

The current case is analogous to Peuguero v. Bank of America, N.A., 169 So.3d 1198 (Fla. 4th DCA 2015).

In that case, like here, “the only evidence of the amount of interest owed by Appellants came from the witness, who merely testified that the amount written on a proposed final judgment was correct.” Id. at 1203.

The proposed judgment was not admitted into evidence and the payment history, though admitted, failed to account for the full interest awarded in the judgment. Id.

Nationstar was required to provide competent substantial evidence of its damages.

The proposed judgment, alone, was insufficient, as a “document that was identified but never admitted into evidence as an exhibit is not competent evidence to support a judgment.” Id. (quoting Wolkoff v. Am. Home Mortg. Servicing, Inc., 153 So.3d 280, 281–82 (Fla. 2d DCA 2014) ).

The payment history introduced at trial supports the trial court’s finding as to the principal amount owed on the loan, but does not appear to reflect the amount of interest in the judgment.

Therefore, it is clear that Nationstar insufficiently proved its damages in this case.

When faced with plaintiffs that failed to prove damages in an initial foreclosure action, courts have remanded for either recalculation of damages or dismissal.

Compare Peuguero, 169 So.3d at 1204 (remanding for recalculation), and Sas v. Fed. Nat’l Mortg. Ass’n, 112 So.3d 778, 780 (Fla. 2d DCA 2013) (same), with Wolkoff, 153 So.3d at 283 (remanding for dismissal).

We discussed the rationale for different outcomes in Beauchamp v. Bank of New York, 150 So.3d 827 (Fla. 4th DCA 2014), noting that “in Sas, the plaintiff ‘submitted evidence of the amount of indebtedness through witness testimony,’ although that testimony was inadmissible hearsay, unlike the plaintiff in Wolkoff, who failed to offer any evidence at all—whether admissible or not.” Id. at 829 n. 2.

In this case, Nationstar attempted to establish the amount of indebtedness through the testimony of its witness, but failed to admit one of the documents on which she relied.

However, like the plaintiff in Peuguero, Nationstar admitted the loan payment history, which provides some evidence the trial court can use to support a judgment on the principal amount owed. Peuguero, 169 So.3d at 1204.

Accordingly, “the proper remedy in this case is to remand for further proceedings to properly establish the damages owed.” Id.

Conclusion

The trial court erred in entering final judgment for an amount not supported by evidence in the record. We therefore reverse and remand for determination of the amounts owed.

Affirmed in part, reversed in part, and remanded.
GROSS and KLINGENSMITH, JJ, concur.

575 Adams, LLC v. Wells Fargo Bank, N.A., 197 So. 3d 1235 (Fla. Dist. Ct. App. 2016)

No. 3D16–1240.

08-03-2016

575 ADAMS, LLC, Petitioner, v. WELLS FARGO BANK, N.A., etc., Respondent.

Neustein Law Group, P.A., and Nicole R. Moskowitz, for petitioner. Marinosci Law Group, P.C., and Bart Heffernan, Fort Lauderdale, for respondent.


Neustein Law Group, P.A., and Nicole R. Moskowitz, for petitioner.

Marinosci Law Group, P.C., and Bart Heffernan, Fort Lauderdale, for respondent.

Before SUAREZ, C.J., and ROTHENBERG and FERNANDEZ, JJ.

Opinion

ROTHENBERG, J.

575 Adams, LLC (“575 Adams”) seeks a writ of certiorari quashing the trial court’s order granting Wells Fargo Bank’s (“Wells Fargo”) motion for a protective order, which prevents 575 Adams from deposing the only witness listed to testify on Wells Fargo’s behalf, Nathan Shue (“Shue”), Wells Fargo’s servicer’s corporate representative. For the following reasons, we grant the petition and quash the trial court’s protective order.

Wells Fargo filed a mortgage foreclosure action against 575 Adams and others. 575 Adams was not a signatory to the promissory note or mortgage but is the owner of the subject property by a quit claim deed, which was filed prior to the filing of the instant foreclosure action. Wells Fargo listed only one witness on its witness list, Shue, who Wells Fargo stated had “personal knowledge as to verification of the business records of the subject loan, including the Note and Mortgage, payment history, breach letter, other documents pertaining to this loan, as well as standing and capacity, and the amounts due and owing, and other matters relating to the subject loan default or in response to defenses, as necessary.”

575 Adams filed a motion to compel the deposition of Shue after several unsuccessful attempts to coordinate a deposition with Wells Fargo. In its motion to compel, 575 Adams argued that Shue’s testimony at trial would directly relate to its defenses, including lack of standing, notice, and conditions precedent. Thus, the inability to depose Shue would greatly prejudice 575 Adams’s ability to present an adequate defense at trial. In response, Wells Fargo filed a motion for a protective order, claiming that because 575 Adams was not a signatory to the note or mortgage, it was not entitled to take Shue’s deposition or raise certain affirmative defenses.

At a hearing on the two motions, the trial court acknowledged that 575 Adams could raise the affirmative defense that Wells Fargo lacked standing, but stated that it had not yet read the parties’ motions and reserved ruling. Thereafter, the trial court entered a cursory order granting Wells Fargo’s motion for a protective order, stating that 575 Adams was a “stranger to the mortgage and note.” 575 Adams filed the instant petition for writ of certiorari to challenge the trial court’s protective order. A non-final discovery order may be reviewed by certiorari only if the contested order (1) results in a material injury (2) that cannot be remedied on postjudgment appeal and (3) departs from the essential requirements of law. Bd. of Trs. of Internal Improvement Trust Fund v. Am. Educ. Enters., LLC, 99 So.3d 450, 454 (Fla.2012) ; Racetrac Petroleum, Inc. v. Sewell, 150 So.3d 1247, 1251 (Fla. 3d DCA 2014).

The record on appeal does not contain a transcript of the hearing, but 575 Adams has filed a brief statement of the proceedings that was approved by the trial court. See Fla. R. App. P. 9.200(b)(4).

——–

The first two requirements are satisfied because Shue is a material witness, and as this Court has previously stated, “an order prohibiting the taking of a material witness’s deposition inflicts the type of harm that cannot be remedied on final appeal.” Marshall v. Buttonwood Bay Condo. Ass’n, 118 So.3d 901, 903 (Fla. 3d DCA 2013). Additionally, we find that the trial court’s protective order departed from the essential requirements of law because it failed to make a finding of good cause to prohibit 575 Adams from deposing Wells Fargo’s material witness. Id.; Medero v. Fla. Power & Light Co., 658 So.2d 566, 567 (Fla. 3d DCA 1995) (holding that a “trial court has the right to deny discovery upon a showing of good cause ”) (emphasis added); see also Fla. R. Civ. P. 1.280(c).

The trial court’s statement that 575 Adams was a “stranger to the note and mortgage,” without more, cannot constitute a finding of good cause to issue its protective order prohibiting 575 Adams from deposing Shue. While 575 Adams might not be a party to the note and mortgage, neither Wells Fargo nor the trial court have explained why that finding amounts to good cause to forbid the owner of the property being foreclosed upon from deposing the only witness listed to testify on Wells Fargo’s behalf. Additionally, the trial court stated that 575 Adams could raise lack of standing as an affirmative defense, and Wells Fargo admitted in its witness list that Shue had personal knowledge of Wells Fargo’s standing. Therefore, 575 Adams has a legitimate ground to depose Shue, as his testimony is relevant to an affirmative defense, and there is nothing in the record to suggest that a deposition of Shue would be cumulative, abusive, or frivolous.

In conclusion, because the trial court’s protective order prohibited 575 Adams, a defendant in the foreclosure litigation and the owner of the subject property, from deposing a material witness, and because neither the protective order under review nor the record on appeal suggest that the trial court found good cause to enter the protective order, we grant the petition for writ of certiorari, quash the trial court’s protective order, and remand for proceedings consistent with this opinion.

Petition granted; order quashed; remanded.

HSBC Bank USA v. Magua, 243 So. 3d 983 (Fla. Dist. Ct. App. 2018)

No. 4D17–1685

03-28-2018

HSBC BANK USA, as Trustee FOR PHH 2007–2, Appellant, v. David MAGUA; Sylvia J. Magua; Weston Lakes Maintenance Association Inc.; and The Town Foundation, Inc., Appellees.

Nicholas S. Agnello, Matt Mitchell and Sabrina Niewialkouski of Burr & Forman LLP, Fort Lauderdale, for appellant. Nicole R. Moskowitz of Neustein Law Group, P.A., Aventura, for appellees David and Sylvia J. Magua.

Nicholas S. Agnello, Matt Mitchell and Sabrina Niewialkouski of Burr & Forman LLP, Fort Lauderdale, for appellant.

Nicole R. Moskowitz of Neustein Law Group, P.A., Aventura, for appellees David and Sylvia J. Magua.

Ciklin, J.

This appeal arises out of a foreclosure complaint filed by the bank. After a bench trial, the trial court entered a foreclosure judgment in favor of the bank and the homeowners appealed. With respect to that first appeal, the homeowners argued that (1) the bank lacked standing and (2) it failed to prove damages and satisfaction of a condition precedent, as the exhibits used to prove these elements constituted hearsay. In lieu of an answer brief in the first appeal, the bank filed a confession of error which stated that it “confesses to error and does not oppose reversal of the Final Judgment.”

Then, as to the first appeal, this court issued an opinion which provided the following: “Appellee confesses error, and does not oppose reversal of the final judgment. After reviewing the record, we agree that the trial court erred, and reverse the final judgment of foreclosure entered by the trial court and remand for further proceedings.” Magua v. HSBC Bank USA , 197 So.3d 1274, 1274 (Fla. 4th DCA 2016). On remand, the homeowners moved for and were awarded attorney’s fees and costs.

Now on this second appeal, the bank challenges the award of fees and costs awarded following the agreed upon reversal asserting that fees and costs cannot be awarded because the reversal came about upon the bank’s confession of error regarding standing. The bank cites a recent opinion of this court, Nationstar Mortgage LLC v. Glass , 219 So.3d 896 (Fla. 4th DCA 2017). There, this court recognized the following:

[T]o be entitled to fees pursuant to the reciprocity provision of section 57.105(7), the movant must establish that the parties to the suit are also entitled to enforce the contract containing the fee provision. A party that prevails on its argument that dismissal is required because the plaintiff lacked standing to sue upon the contract cannot recover fees based upon a provision in that same contract.

Id. at 899.

The bank argues that because this court reversed the final judgment in the first appeal based on the homeowners’ argument that the bank lacked standing, the trial court could not award fees based on a provision of the mortgage contract which the bank had no right to enforce. This, the bank argues, has become the “law of the case.”

We find the bank’s argument fails though because as to the first appeal, the bank confessed error without specification as to which of the two appellate issues it was confessing error. Likewise, this court (without objection or a motion to reconsider or clarify) reversed based on a finding of an unspecified error. Thus, it is not apparent that this court considered the standing issue, a requirement under the law of the case doctrine. Fla. Dep’t of Transp. v. Juliano , 801 So.2d 101, 105 (Fla. 2001) (“The doctrine of the law of the case requires that questions of law actually decided on appeal must govern the case in the same court and the trial court, through all subsequent stages of the proceedings.”).

The bank argues that this court implicitly or necessarily decided the standing issue when it reversed. See id. at 106. (“[T]he law of the case doctrine may foreclose subsequent consideration of issues implicitly addressed or necessarily considered by the appellate court’s decision.”). However, it cannot be said that this court’s reversal equates to an implicit or necessary finding on the standing issue. Clearly, reversal could have been based solely on the second (condition precedent) ground raised by the homeowners. See, e.g., Edmonds v. U.S. Bank Nat’l Ass’n , 215 So.3d 628, 629 (Fla. 2d DCA 2017) (declining to reach remaining issues raised on appeal where reversal was based on dispositive issue of whether bank complied with condition precedent to filing suit). For similar reasons, the bank’s judicial estoppel argument is unpersuasive.

Based on the foregoing, we affirm.

Affirmed.

Levine and Klingensmith, JJ., concur.

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Laws In Texas is a blog about the Financial Crisis and how the banks and government are colluding against the citizens and homeowners of the State of Texas and relying on a system of #FakeDocs and post-crisis legal precedents, specially created by the Court of Appeals for the Fifth Circuit to foreclose on homeowners around this great State. We are not lawyers. We do not offer legal advice. We are citizens of the State of Texas who have spent a decade in the court system in Texas and have been party to during this period to the good, the bad and the very ugly.

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