Despite Successfully Obtaining Pinheaded Lower Court Foreclosure Ruling, Defense Attorney Gets Slammed With Sanctions, Bar Disciplinary Referral

A recent ruling by Florida's 3rd District Court of Appeal is evidence that a homeowner facing foreclosure can be the beneficiary of a pinheaded lower court ruling (Miami-Dade County Circuit Court Judge Peter Adrien), only to have it reversed on appeal.

The facts set forth in the 3-judge panel's ruling are 'mind-boggling' (a term used by the court elsewhere in the opinion), as evidenced by these excerpts:

• Debtors and their counsel, Attorney Paul B. Woods, managed to convince the trial court that a mere letter of "tender" and a fabricated Unilateral Note, without payment of any kind, were sufficient to discharge the entire debt owed to Washington Mutual. Judge Adrien, in turn, granted the Motion to Vacate, vacated the final judgment, discharged the lis pendens, and dismissed Washington Mutual's complaint with prejudice.

***

• Despite the nonsensical terms of the Unilateral Note, the Debtors amazingly claim that they are satisfying "any amount due Plaintiff pursuant to original promissory note" by tendering this newly concocted document, and therefore, owe nothing to Washington Mutual.
  
  The absurdity of this argument notwithstanding, there is absolutely no evidence in the record that Washington Mutual "negotiated and agreed [to]" the Unilateral Note, nor is there any evidence that Washington Mutual ever considered a possible pre-judgment modification of the Mortgage or renegotiation of the Promissory Note.
  
  Moreover, other than the Debtors' self-serving, unsupported statements, the record is devoid of any evidence demonstrating that the final judgment, much less the Promissory Note or the Mortgage, were ever satisfied. Given the sheer lack of evidence that there had been a satisfaction of any kind by the Debtors, the requirements of Florida Rule of Civil Procedure 1.540(b)(5) were simply not met, and, thus, there was no basis for vacating the final judgment.
  
  Accordingly, we reverse the trial court's April 2010 Order and remand with instructions to reinstate Washington Mutual's lawsuit, lis pendens, and the final judgment. The trial court is further instructed to reschedule the foreclosure sale.

The appeals court then went further:

• We also consider and grant Washington Mutual's motion for appellate attorneys' fees and sanctions. Under Florida law, "appellate attorney's fees may be assessed against a party and their counsel for filing a frivolous appeal pursuant to section 57.105, Florida Statutes . . . and Florida Rule of Appellate Procedure 9.410." Visoly v. Sec. Pac. Credit Corp., 768 So.2d 482, 490 (Fla. 3d DCA 2000); see T.I.E. Commc'ns, Inc. v. Toyota Motors Ctr., Inc., 391 So.2d 697 (Fla. 3d DCA 1980).
  
  Further, "[f]ees are appropriate under section 57.105(1) when the party or his attorney pursues a claim or defense that is without factual or legal merit." Sullivan v. Sullivan, 54 So.3d 520, 522 (Fla. 4th DCA 2010) (emphasis added).

***

• Accordingly, we grant Washington Mutual's motion for appellate attorneys' fees and sanctions against both the Debtors and their attorney, Paul B. Woods, jointly and severally. See id.; §57.105 Fla. Stat.
  
  Also, given the essentially fraudulent behavior of the Debtors, and the potentially unethical conduct of their counsel, based upon and in furtherance of this behavior, we refer Paul B. Woods to the Florida Bar for its determination of whether professional discipline is warranted.(1)

For the ruling, see JPMorgan Chase v. Hernandez & Hernandez, No. 3D10-1099 (Fla. App. 3d DCA, June 22, 2011).

(1) Once again, Section 57.105 of the Florida Statutes rears its head in a foreclosure case, and is expected to do so quite a bit as these cases continue to float up to the various Florida appeals courts.

For Florida foreclosure counsel unfamiliar with the operation of this statute, the Section 57.105 reading list is somewhat long. Whether one is seeking a recovery of prevailing party attorneys fees for a client, or looking to have a court impose sanctions on adversaries for their conduct (or dodge sanctions requested by one's adversaries), it might be a good idea to familiarize oneself as to how and when the statute has been applied in the past.