Thursday, May 10, 2012

Florida Supreme Court Case Could Overturn Thousands of Foreclosures

The Florida Supreme Court will hear oral arguments today on the issue of whether a bank can file a foreclosure suit with fraudulent documents, and when those documents are discovered to be fraudulent by a defendant, voluntarily dismiss the case to avoid sanctions for filing the fraudulent documents which happened in Pino v. Bank of New York Mellon.


At the heart of the issue is whether a voluntary dismissal under Florida Rules of Civil Procedure Rule 1.420 is absolute to deny a trial court jurisdiction to later impose sanctions if the defendant had not yet been awarded affirmative relief.


In the case of Pino, a motion for sanctions had been filed, but no affirmative relief had been awarded to the defendant prior to the bank filing its voluntary dismissal.  The trial court refused to revive the case at the defendant's request to impose sanctions for the fraudulent documents.  The 4th District Court of Appeal upheld the trial court's decision.


Throwing another wrench into the issues is that the bank then later re-filed another foreclosure case against Pino with a different set of documents thereby avoiding sanctions in the first case while going forward once again with its foreclosure action.


Florida foreclosure cases have been fraught with fraudulent documents produced by loan service providers and quickly hustled through the courts by 'fraudclosure mill' law firms in Florida.


Ultimately, the parties settled when the case had reached the Florida Supreme Court.  But since the Florida Supreme Court has certified the case to be of great public importance, it will still hear the case to provide guidance to trial and appellate courts throughout Florida.  


Depending on how the Florida Supreme Court rules, and the breadth of its ruling, it is possible that thousands of Florida foreclosure cases could be overturned.


All of the filings in the Florida Supreme Court case can be found here.

Live oral arguments today can be found here.