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In 'Bizarre' Flip, Florida Supreme Court Retracts Nationstar Attorney-Fee Ruling

Florida Supreme Court in Tallahassee, Florida. Photo: Raychel Lean/ALM.

Florida Supreme Court in Tallahassee, Florida. Photo: Raychel Lean/ALM.

The fears of some foreclosure defense attorneys became reality Thursday when the new Florida Supreme Court bench walked back the ruling in a case involving attorney fees, which could send ripples into contract law and financial asset deals.

Borrower Marie Ann Glass asked the court to grant her attorney fees from plaintiff Nationstar Mortgage LLC, which lost its foreclosure suit against her. The case divided justices in January when they ruled in Glass' favor, leaning on case law that says voluntary dismissal of an appeal gives the opposing side the right to claim fees.

But the court withdrew that ruling in a per curiam opinion this week, having suddenly found that jurisdiction was "improvidently granted." The court didn't elaborate but had initially accepted the case that had conflicted with a First District Court of Appeal decision in Bank of New York v. Williams.

If the decision had stood, it could have opened the door for countless Florida homeowners to collect fees from banks and lenders who sued them and failed — sometimes multiple times. Legal aid groups eagerly watched the case, filing amicus briefs to express fears that siding with Nationstar could embolden banks and discourage lawyers from defending homeowners.

The Fourth District Court of Appeal had sided with Nationstar. Even though the court found Nationstar lacked legal standing because it wasn't a party to the underlying mortgage contract, this meant that the financial company could then not owe Glass attorney fees under that same contract.

Attorneys like Matthew Bayard of Legal Services of Greater Miami fear many low-income Floridians will no longer be able to hire them.

"Without effective legal representation, these homeowners won’t have meaningful access to the courts and will face an unlevel playing field," Bayard said.

Awkward optics?



Florida Justice Peggy Quince wrote the Jan. 4 opinion addressing "the mischaracterization of the procedural history of this case by the district court," backed by Barbara Pariente, R. Fred Lewis and Jorge Labarga. But Quince, Lewis and Pariente have since retired, and their replacements — Barbara Lagoa, Robert Luck and Carlos Muniz — interpreted the case differently, making Labarga now the sole dissenter.

Roy D. Oppenheim of Oppenheim Law in Weston supported Glass with an amicus brief, and has practiced foreclosure defense and real estate law in New York and Florida for 32 years. He called the decision “bizarre to say the least.”

"I have never in my lifetime seen a Supreme Court do what this Supreme Court is doing in Glass," Oppenheim said. "For the new judges to undo what the old judges have done is very unusual and, I would say, disturbing. ... They effectively put into question the integrity of the process, and they should never, ever do that."

Observers point out that the original opinion ended with, "No motions for rehearing will be allowed," so the swift about-turn has made some lawyers anxious about the court's credibility.

"Rightly or wrongly, the optics of this reversal are awkward in these hyperpartisan times," said Nicholas Vidoni of Vidoni Law in Cocoa.

Vidoni agreed with the court's original ruling and said he'd have preferred the Fourth DCA asked the trial court to decide on contractual issues.

Peter Ticktin of the Ticktin Law Group also supported Glass, but said he still has faith in the court.

"I do not believe, as I think others do, that this court is on the side of the banks," Ticktin said. "Unfortunately, to some extent, even if justice was done, it may not appear to all that it was done, and this is unfortunate."

Foreclosure defense lawyers like Oppenheim say they will keep fighting.

"We're not being disrespectful. We're asserting our First Amendment rights and we're simply stating that we think this was not the best day for Florida jurisprudence. It's going to give all lawyers and all judges, at the end of the day, a black eye," Oppenheim said.

Robert R. Edwards of Choice Legal Group in Coral Springs has a different take. He filed an amicus brief supporting Nationstar as lead attorney at the American Legal and Financial Network, and pointed out that the court isn't changing its mind on the original opinion. Instead, it's saying it shouldn't have decided.

"I think that the court made the right decision with respect to its lack of jurisdiction," Edwards said. "The supreme court said, 'You know what? Having issued our opinion, we don’t think there’s really a conflict. These two opinions that supposedly conflict, they really don’t.'"

That said, Edwards suspects the issue will eventually boomerang back for a review on merit.

Brian Korte of Korte & Associates in West Palm Beach wished the court had elaborated.

"Just tell me why," Korte said. "I'm not OK losing but I understand I will lose sometimes. If I don't know why I lost, I can't avoid the mistake in the future."

The way Korte sees it, homeowners will draw the short straw.

"When the prior composition of the supreme court says there’s a conflict, renders an opinion and then a new composition of the supreme court comes in and says there is no conflict, it makes it really difficult to advise your clients," he said. "We’re going to keep muddling along until this gets to be a bigger and bigger problem."

Nationstar’s attorney, Marc James Ayers of Bradley Arant Boult Cummings in Birmingham, Alabama, did not immediately respond to a request for comment. F. Malcolm Cunnigham Jr. and Amy L. Fischer of the Cunningham Law Firm in West Palm Beach, counsel to Glass, also did not respond.

The court used similar legal reasoning to retract another Jan. 4 opinion, which found Florida Election Code allowed Orange County to set term limits for constitutional officers, like clerk of the circuit court, and could require a nonpartisan race rather than a partisan one. But Thursday's new opinion walked that back.

 

Read the full court opinion:



 

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'A Lot of Ammunition': Ruling Could Open the Door for Attorney Fees

Attorney Fee Debate Heats Up as Florida Supreme Court Accepts Case