Use Of Voluntary Dismissal To Dodge Scrutiny After Failed Attempt To Dupe Court By Producing, Filing Dubious Docs At Issue In Recent Foreclosure Suit

In West Palm Beach, Florida, the South Florida Sun Sentinel reports:

• A South Florida homeowner who is fighting a mortgage foreclosure could end up reshaping state law. An appeals court on Wednesday asked the Florida Supreme Court to consider Roman Pino's case as a matter of "great public importance," a move legal experts say could result in reforms in foreclosure cases where there is evidence of fraud in the way documents were handled by lenders, mortgage servicers and law firms.(1)

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• If the case is taken up by the Supreme Court and results in a decision in favor of the homeowner, legal experts who specialize in foreclosure law say the case has the potential to affect thousands of foreclosures across the state where there are allegations of document fraud.

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• Pino hired Royal Palm Beach attorney Thomas Ice, whose law firm has been at the forefront of uncovering forged and fraudulent foreclosure documents. The bank alleged in its foreclosure complaint that it was the owner of the mortgage note through an assignment from another lender, but didn't include the assignment as part of the foreclosure complaint, according to the appellate decision. Ice's attorneys moved to dismiss the complaint, arguing that the bank needed the assignment in order to foreclose.

• Then the bank's attorney, from the law offices of David J. Stern in Plantation, filed an amended complaint and attached an assignment that had not been recorded in land records and "which happened to be dated just before the original pleading was filed," the appeals court wrote.

• Ice wanted to try to prove Pino was the victim of fraud, but the judge would not allow him to go forward because the bank voluntarily dropped the foreclosure action. The appeals court agreed with the judge, but because of the importance of the issue, sent the case to the state's highest court in Tallahassee. One appellate judge, Gary Farmer, disagreed, saying he thought the trial judge could have kept the case open so Ice could pursue his claim of fraud.(2)

• Ice said Wednesday that the bank dismissed the foreclosure just as his attorneys were set to take depositions of Stern employees to discover how the assignment was created. Stern's firm is one of four foreclosure law firms in the state under investigation by the Florida Attorney General's Office for document fabrication.

• The case illustrates a problem that is playing out in cases around the state, where problematic documents are discovered, and the foreclosure is dismissed only to be later refiled with different documents, Ice said.

• That is what happened to Pino. The bank refiled the foreclosure in August 2009, and that case is now going forward. "This seems to be a prevalent problem in foreclosures," Ice said. "That is why [the appellate judges] want the Florida Supreme Court to rule on it. This is going to be significant to thousands of cases across the state."

For the story, see Case involving alleged foreclosure fraud headed to Florida Supreme Court.

For the Florida appeals court ruling, see Pino v. The Bank of New York Mellon, 4D10-378 (Fla. App. 4th DCA, February 2, 2011) (en banc).

(1) Although the 12-member appeals court, in a 9-1 ruling (with one recusal and one retirement (Judge Farmer) subsequent to the hearing and prior to the issuance of the ruling) affirmed a lower court ruling in favor of the foreclosure mill, it obviously felt that it should be the state Supreme Court that should take a long, hard look at this issue and make the ultimate decision as to how to proceed when dealing with the dubious practices engaged in by foreclosure mills. In this regard, the court majority observed:

• We conclude that this is a question of great public importance, as many, many mortgage foreclosures appear tainted with suspect documents. The defendant has requested a denial of the equitable right to foreclose the mortgage at all. If this is an available remedy as a sanction after a voluntary dismissal, it may dramatically affect the mortgage foreclosure crisis in this State.

(2) In support of the homeowner's position in this case, the following excerpt gives a taste of the vigorous, six-page dissent originally authored by the since-retired Judge Gary Farmer (concurred with and formally filed by Judge Mark E. Polen) (bold text is my emphasis):

• This issue is one of unusual prominence and importance. Recently, the Supreme Court promulgated changes to a rule of procedure made necessary by the current wave of mortgage foreclosure litigation. See In re Amendments to Rules of Civil Procedure, 44 So. 3d 555 (Fla. 2010). In approving one amendment, the court pointedly explained:
  
  “[R]ule 1.110(b) is amended to require verification of mortgage foreclosure complaints involving residential real property. The primary purposes of this amendment are (1) to provide incentive for the plaintiff to appropriately investigate and verify its ownership of the note or right to enforce the note and ensure that the allegations in the complaint are accurate; (2) to conserve judicial resources that are currently being wasted on inappropriately pleaded ‘lost note’ counts and inconsistent allegations; (3) to prevent the wasting of judicial resources and harm to defendants resulting from suits brought by plaintiffs not entitled to enforce the note; and (4) to give trial courts greater authority to sanction plaintiffs who make false allegations.” [e.s.]
  
  44 So. 3d at 556. I think this rule change adds significant authority for the court system to take appropriate action when there has been, as here, a colorable showing of false or fraudulent evidence. We read this rule change as an important refutation of BNY Mellon’s lack of jurisdiction argument to avoid dealing with the issue founded on inapt procedural arcana.
  
  Decision-making in our courts depends on genuine, reliable evidence. The system cannot tolerate even an attempted use of fraudulent documents and false evidence in our courts. The judicial branch long ago recognized its responsibility to deal with, and punish, the attempted use of false and fraudulent evidence. When such an attempt has been colorably raised by a party, courts must be most vigilant to address the issue and pursue it to a resolution.

I suspect that this dissent may be the now-retired Judge Farmer's 'going-away' present to the citizens of Florida (usually, it's the guy going away who gets, not gives, the 'going-away' presents); it was his way to prod the state Supreme Court into hearing this case and help kick-start their analysis of the issues. If the Florida Supreme Court takes this case and ultimately reverses, don't be surprised if this Judge Farmer-authored, Judge Polen-filed dissent is incorporated, either in whole or in part, into the state high court's analysis. (Kudos to Judge Polen for going on the record and acknowledging the fine work of his now-retired colleague when filing the dissent).