Third DCA Holds No Standing Means No Attorneys Fees
In a very important decision out of the Third District Court of Appeal today, in Bank of New York Mellon et al. v. Fitzgerald, the 3DCA held that where a defendant-homeowner raises and proves that the plaintiff-bank lacked standing to foreclose on a note at the time of filing that the homeowner is not entitled to prevailing party attorneys’ fees pursuant to Fla. Stat. 57.105(7). If more courts adopt this reasoning, many homeowners who cannot afford adequate representation may be forced to go without counsel, as foreclosure attorneys would not longer be willing to take cases hoping to recover their reasonable attorneys’ fees from the bank.
Florida Statute 57.105(7) states that when a contract allows for prevailing party attorneys’ fees to be collected by one party to the contract, the statute will allow the other party to collect prevailing party attorneys fees if they prevail as well. This “reciprocity” provision is very important in making foreclosure defense cases affordable to many homeowners that cannot afford to pay for representation. The provision also incentivizes banks to ensure that they dot their I’s and cross their T’s when bringing an action because if they don’t, they could be at risk of paying tens of thousands of dollars in attorney’s fees.
What This Means Going Forward
In today’s decision the 3DCA reasoned that if the defendant proves that the plaintiff did not have standing to foreclose at the inception of the lawsuit, and therefore they are not a party to the contract, they will not be bound by the terms of that contract, in this case the mortgage. This means that 57.105(7) would not obligate them to pay prevailing party attorneys’ fees. The 5DCA in HFC Collection Ctr. v. Alexander, 190 So. 3d. 1114 (Fla. 5th DCA 2016) came to a similar conclusion. Unfortunately, that may mean many attorneys in the Miami-Dade County area will no longer be willing represent homeowners in their foreclosure defense cases on a reduced fee amount.
There still may be some hope. Both of these decisions discount the fact that in many South Florida foreclosure cases, the plaintiff does have standing to foreclose or enforce the contract at some point in the litigation. This means they were in privity with the homeowner at some point (often times even at the time of entry of the final judgment) and should be liable for the attorneys fees.
Only time will tell if the remainder of the District Courts and the Florida Supreme Court will follow suit.
Contact South Florida Foreclosure Lawyers
Contact the South Florida Foreclosure Lawyers at Light & Gonzalez, PLLC if the bank has filed a foreclosure action against you and you don’t want to lose your home.