Florida Court Clobbers Foreclosure Mill With $49K Contempt Citation; Continuous Failure To Appear At Hearings w/out Giving Notice Raises Judge's Ire

In Manatee County, Florida, the Sarasota Herald Tribune reports:

• A circuit judge singled out a Fort Lauderdale foreclosure firm on Monday, finding its business model violates legal ethics and leveling a $49,000 fine for scheduling hearings and then not showing up in court.

• In a judicial district that has taken a hard line on fraudulent or messy foreclosure filings, the judge's ruling is the first time a court officer has openly attacked the methods of one of the firms responsible for thousands of foreclosures statewide.

• Circuit Judge Janette Dunnigan scolded five lawyers from the Smith, Hiatt and Diaz firm in connection with a Manatee County foreclosure case filed in 2007. The firm is one of several "foreclosure mills" filing thousands of foreclosure cases monthly. The firm's attorneys filed what amounted to "sham" paperwork setting seven hearings over two years, and then failed to appear in court or tell the judge or other parties when they were canceled. The case is still unresolved.

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• Dunnigan brought the contempt of court herself, and threatened to push forward on a criminal contempt of court against the attorneys. [...] The firm will be fined $7,000 a day until [the firm] provides Dunnigan with a description of a new policy that attorneys cannot set hearings without having all documents ready. Also, every lawyer in the firm must sign documentation that they understand the new policies. The firm must also review all cases scheduled in Manatee County and have the attorney that will appear at that hearing sign a paper that they will do so.

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• The case turned out well for the homeowner. The law firm voluntarily dismissed the case, and must pay the owner $450 in lost wages for showing up at the last hearing.(1)(2)

For more, see Judge fines major legal firm for foreclosure conduct (Lawyers to pay $49,000 for not showing up at scheduled hearings).

(1) The homeowner may also be able to recover any legal fees paid or due to his/her attorney by asking the judge to order the foreclosing lender to cough up the cash. See Landry v. Countrywide Home Loans, Inc., 731 So. 2d 137 (Fla. 1st DCA 1999):

• The general rule is that "when a plaintiff voluntarily dismisses an action, the defendant is the prevailing party." See Thornber v. City of Ft. Walton Beach, 568 So. 2d 914, 919 (Fla. 1990). Further, "it is well established that attorney's fees are properly awarded after a voluntary dismissal where such award is provided for by statute or agreement of the parties." See Century Construction Corp. v. Koss, 559 So. 2d 611, 612 (Fla. 1st DCA 1990), review denied, 574 So. 2d 141 (Fla. 1990). See also Boca Airport, Inc. v. Roll-N-Roaster of Boca, Inc., 690 So. 2d 640, 641 (Fla. 4th DCA 1997), review dism'd, 698 So. 2d 543 (Fla. 1997)("for purposes of a prevailing party attorney's fees statute, a voluntary dismissal by the claimant makes the opposing party a 'prevailing party' as to the issue of entitlement to fees").

In Florida, where an agreement allows for an attorney fee award to one of the contracting parties, state statute mandates an award of prevailing party attorney's fees to the other party under the reciprocity provisions of section 57.105(7), Florida Statutes; Landry, supra. (Mortgages almost always contain a provision that allow a lender to tack on its legal fees to the amount owed by the borrower when bringing litigation to enforce its rights. Accordingly, by reason of section 57.105(7), the homeowner likewise would be entitled to a recovery of his/her attorney's fees from the losing lender).

See also Attorney Fee Awards For Successful Foreclosure Defense In Florida.

In addition, in this case, the law firm possibly may also be ordered to ante up part of the homeowner's legal fees by reason of section 57.105(1), Florida Statutes:

• Upon the court’s initiative or motion of any party, the court shall award a reasonable attorney’s fee, including prejudgment interest, to be paid to the prevailing party in equal amounts by the losing party and the losing party’s attorney on any claim or defense at any time during a civil proceeding or action in which the court finds that the losing party or the losing party’s attorney knew or should have known that a claim or defense when initially presented to the court or at any time before trial:
  
  (a) Was not supported by the material facts necessary to establish the claim or defense; or
  
  (b) Would not be supported by the application of then-existing law to those material facts.

In a peripherally related article (added 9-22-10), see The Florida Bar Journal: Pleading Requirements for a Claim for Attorneys' Fees.

(2) The Court reportedly awarded Barrington Ridge Homeowners Association, Inc., the association in which the property in foreclosure is a part of and which presumably holds a lien (subordinate to the foreclosing lender's mortgage) for unpaid HOA fees, its attorneys' fees from the filing of its Motion to Compel the Bank to Proceed with Foreclosure to the present, according to a press release issued by the association's law firm. See Becker & Poliakoff Applauds Manatee County Circuit Court Judge's Order Imposing Fines Against Bank's Foreclosure Law Firm.