A Florida Supreme Court on Friday ruled on a closely watched case concerning attorney fees that elicited about a dozen amicus briefs—some claiming far-reaching implications on contract law and deals involving assets assigned from one owner to the next.
The high court sided with borrower Marie Ann Glass, who was seeking attorney fees from plaintiff Nationstar Mortgage LLC (now Mr. Cooper) after the dismissal of a foreclosure suit against her.
The question before the justices was whether the plaintiff’s voluntary dismissal of an appeal provided Glass with a basis for considering herself the prevailing party, able to seek appellate attorney fees.
Florida’s Fourth District of Appeal previously had ruled for Nationstar, in part, because of the strength of Glass’ own arguments.
Glass had argued Nationstar—a successor plaintiff pursuing an in rem action that determines ownership of property—was not party to the mortgage contract, and therefore lacked legal standing to bring a foreclosure suit against her. She won on that argument, but it came back to haunt her when she sought to recoup court expenses under that same contract. The Fourth DCA ruled that because Nationstar (Mr Cooper) was not a party to the underlying deal, it owed no legal fees under provisions in that contract.
“Because our case law is clear that a voluntary dismissal of an appeal renders the opposing party the prevailing party for the purpose of appellate attorney fees, and because Nationstar (Mr Cooper) maintained its right to enforce the reverse mortgage contract in its appeal until the dismissal, we quash the decision below,” Justice Peggy Quince wrote for the majority, with Justices Barbara Pariente, R. Fred Lewis and Jorge Labarga concurring.
The decision went a step further, suggesting the appellate court had focused on the wrong issue: Glass’ success in dismissing Nationstar’s claim, as opposed to her entitlement to fees after the plaintiff voluntarily dismissed its suit.
“Additionally, we write to address the mischaracterization of the procedural history of this case by the district court,” Quince wrote.
In the instant case, a reverse mortgage contract clearly existed between Glass and Countrywide Mortgage Company, which was assigned from its successor in interest, Bank of America, to Nationstar Mortgage. Even if we assume that Glass prevailed on her standing argument, the contract was merely unenforceable by Nationstar because it failed to demonstrate that it was the rightful successor in interest. We therefore conclude that, had the issue been presented as an issue on appeal to the Fourth District, Glass would be entitled to attorney’s fees at the trial level.
Glass’ attorneys welcomed the ruling.
“What this opinion does is it restores the right under the statute to get attorneys’ fees upon a voluntary dismissal,” said defense counsel Amy L. Fischer of The Cunningham Law Firm in West Palm Beach.
The case drew observers from across the state, including Davie-based foreclosure defense attorney Michael J. Wrubel, who feared the Fourth DCA ruling in Glass v. Nationstar Mortgage would leave him unable to collect fees for years of work.
Now, Wrubel finds hope in the high court’s dicta in two sentences of the majority’s opinion: that the appellate court had focused on the wrong issue.
“It remains to be seen, but with those last two sentences, lawyers are going to have a lot of ammunition,” Wrubel said. “With future litigation there’s a reasonable probability that … appellate courts may recede from their prior opinions.”
Florida’s 5th Circuit Appellate Court reviews State Court Attorney Fees in Foreclosure Case
November 15, 2019
A recent Law 360 story by Nathan Hale, “Exception to Attys’ Rule Misapplied, Fla. Court Says,” reports that a Florida state appeals court ruled that a lower court erred when it applied an exception to a general rule against awarding attorneys’ fees incurred litigating the amount of a fees award and made such an award to a homeowner who prevailed in a mortgage foreclosure suit.
Florida’s Fifth District said in its opinion that language in three attorneys’ fees provisions in the note and mortgage at issue in the case between Bayview Loan Servicing LLC and homeowner Jason Cross lacked the kind of “broad and undefined language” that two other state appeals courts found warranted exceptions to the general rule against “fees for fees” awards. But the appeals panel sided with Cross on his cross-appeal and found that the trial court erred in finding he was not entitled to collect prejudgment interest for the period when Bayview was contesting the amount of attorneys’ fees to be awarded.
The panel ordered that the Orange County Circuit Judge Kevin B. Weiss should award Cross prejudgment interest for the period from Dec. 27, 2016 — when he orally pronounced that Cross entitled to attorneys’ fees — through the entry of a new final judgment in the case. “We find untenable the suggestion that a party against whom attorney’s fees are assessed may avoid the opposing party’s entitlement to the award from being fixed by merely continuing to dispute entitlement,” the Fifth District said.
Bayview’s and Cross’ appeals arose from a final judgment that awarded Cross contractual attorneys’ fees after the Fifth District affirmed the involuntary dismissal of Bayview’s mortgage foreclosure action against Cross, according to the opinion. The Fifth District said in its opinion that it was affirming without discussion several other issues raised by the parties on appeal. On the “fees for fees” issue, the appeals court said that as a general rule, attorneys’ fees incurred while litigating the amount of an attorneys’ fees award in a case are not recoverable, but exceptions have been found in two rulings by its sister district courts.
In 2012’s Waverly at Las Olas Condo Association v. Waverly Las Olas LLC, the Fourth District found that a provision authorizing the award of prevailing party fees “[i]n the event of any litigation between the parties under [the agreement],” was broad enough “to encompass fees incurred in litigating the amount of fees,” according to the opinion.
The Second District reached a similar conclusion in 2017 in the case Trial Practices Inc. v. Hahn Loeser & Parks LLP, where a contractual fees provision said: “prevailing party in any action arising from or relating to this agreement will be entitled to recover all expenses of any nature incurred in any way in connection with the matter … including, but not limited to, attorneys’ and experts’ fees.” The Second District found the language permitting recovery of “all expenses of any nature incurred in any way” was “broad enough to encompass fees incurred in litigating the amount of the fees,” according to the opinion.
In contrast, the contractual language in the mortgage and note in this case contained more limited authorization for recovery of attorneys’ fees, including those incurred “in enforcing th[e] note” and “to the extent not prohibited by applicable law,” and in connection with acceleration or foreclosure of the note and appeal and bankruptcy proceedings, according to the opinion.
A representative for Cross praised the Fifth District’s consideration of the case, if not all its findings. “We believe the court carefully considered the matter and correctly ruled on many of the issues raised on appeal and cross-appeal. We, however, respectfully disagree with the court’s decision to limit our client’s right to recover certain fees and costs,” said attorney Michelle Branch of Ghantous & Branch PLLC, which represented Cross.