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Miami-Dade Judge Rules Retroactive Provision in Florida's Foreclosure Law is Unconstitutional

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A portion of a Florida law created to deal with a deluge of foreclosure cases has been declared unconstitutional by a Miami-Dade Circuit Judge.

Judge David Miller found the Florida Fair Foreclosure Act violates provisions of the Florida Constitution by retroactively altering the terms of contracts. He issued the order March 30 in a foreclosure case, U.S. Bank National Association vs. Ricardo Rivas, et. al.

Miller's finding was premised on the Florida Constitution's proscription against the “creation, enforcement, extension or impairment of liens based on private contracts.” Additionally, he held the law "unreasonably impairs the defendant’s contractual rights under the mortgage to use the property as he sees fit without having to pay monies during litigation" and was intended to be applied retroactively to pre-existing foreclosure agreements. The judge wrote the rule also violated Article I, Section 10 of the Florida Constitution, which outlines “No bill of attainder, ex post facto law or law impairing the obligation of contracts shall be passed.”

The 2013 law was meant to alleviate the heavy load of foreclosure cases on Florida courts, and allow lenders to request expedited foreclosures.

The litigation at the center of the order dates back to 2013. After seeking to foreclose on the defendant's property, the plaintiff also requested the court to require defendants to make monthly mortgage payments while the suit was pending. In a brief on the constitutionality of the law, Gavin MacMillan, the McGlinchey Stafford attorney representing the plaintiff, wrote the Florida Fair Foreclosure Act "simply enables plaintiff to collect what it is already entitled to seek."

"The 2013 amendments to the section neither created a new obligation or imposed an

additional penalty," the brief said. "The Florida Fair Foreclosure Act simply enables a foreclosing party to collect what the terms of the Note demand. The non-payment of the loan gives the lender the right to recover on the agreed upon collateral and the amended section simply streamlines the procedures for the lender and the trial court. The contractual rights agreed to by the parties in the loan documents remain the same and are in no way impaired or modified."

According to plaintiff counsel, Miami foreclosure attorney Bruce Jacobs, the law was passed "with the intent of speeding up foreclosures that were uncontested," or were left without a proper defense in light of the housing crisis. Jacobs challenged the law's provision allowing for the terms of agreement between borrowers and lenders to be changed retroactively.

"Under the contract my client signed ... you don’t have any right to demand monthly payments or a writ of possession," Jacobs said, noting the defendant was seeking a final judgment if his client didn't make the routine payments. The attorney added Judge Miller "took his time" in authoring the opinion.

Read the order: 

"He understood and made it clear that if you didn’t have the right when you signed the contract, the legislature can't give you that right after the fact and change the playing field. ... It's a retroactive impairment of contract and it’s an extension of lien rights, both of which are expressly prohibited by the Florida Constitution," Jacobs said. "Going forward they would be fine, but for contracts that were issued before. ... That triggers this whole constitutional analysis."

Looking ahead, Jacobs said the ball's in the opposing counsel's court as to what happens next.

"It doesn’t look like we’re close to done with this case," he said, noting it may wind up with the Third DCA because it's a constitutional matter. "They haven’t made a meaningful settlement offer, which leaves us no option but to fight."

MacMillan did not respond to repeated requests for comment by deadline. Reflecting on the issue on a macro level, Jacobs said he hopes the judge's order "becomes the law of the state."

"It’s significant anytime a judge sees that the legislature has overstepped its bounds, particularly when it’s doing it for the most wealthy and powerful in our society," he said. "The courts are supposed to step in and say you can't do that."

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