In West Palm Beach, Florida, the Daily Business Review
- Borrowers seeking attorneys' fees on appeal can't have it both ways when it comes to lenders' legal standing to foreclose.
If they prevail on arguments that plaintiffs don't own their mortgage debts and therefore lack legal right to foreclose, they can't then turn around and seek attorneys' fees under these same contracts.
It's either one or the other, said an April 12 opinion by Fourth District Court of Appeal Judge Jeffrey T. Kuntz, writing for a state appellate panel of Chief Judge Cory J. Ciklin and Judge Robert M. Gross.
Kuntz, who rose to the bench in November, wrote the opinion weighing borrower Marie Ann Glass' reliance on a mortgage clause and the reciprocity provisions in Florida Statutes.
That statute permits courts to apply contractual fee provisions to benefit both parties, even in cases of one-sided contracts. But it has two requirements: a prevailing litigant and parties to the contract.
"Because the statute is in derogation of the common law, it must be strictly construed," Kuntz wrote.
Glass sought appellate attorney's fees and costs from Nationstar Mortgage LLC, doing business as Champion Mortgage Co., after the lender challenged Broward Circuit Senior Judge Joel T. Lazarus' dismissal of its amended foreclosure complaint with prejudice. Her argument that Nationstar lacked standing to foreclose on her debt succeeded in the circuit court. But that victory blocked her claim for appellate fees.
"Simply put, to 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 parties to the contract containing the fee provision," Kuntz wrote. "A party that prevails on its argument that dismissal is required because the plaintiff lacks standing pursuant to the contract sued upon cannot satisfy that requirement."
But there is an exception, according to a nugget in the appellate ruling, which appears to leave the door open for collecting appellate fees in cases where lenders are party to the contract, but fail to establish legal standing.
"The result is different when the plaintiff was also the originating lender," Kuntz wrote.