Should banks be able to avoid judicial fraud inquiries by voluntarily dismissing a case? The Florida Supreme Court heard arguments on that issue yesterday in Pino v. Bank of New York. The issue is pretty straightforward, but it is a very important one.
In Pino, the Bank of New York filed a foreclosure lawsuit against Mr. Pino. Mr. Pino’s lawyers challenged a document created by the bank’s lawyers (Law Offices of David J. Stern) and sought to question employees about the document’s veracity. On the eve of the depositions, the bank voluntarily dismissed the case thereby blocking the court’s ability to address any sanctions. [Under the Florida Rules of Civil Procedure, the court effectively loses jurisdiction over a case once it is voluntarily dismissed by the plaintiff.] Pino’s lawyers sought to block the bank from re-filing the case, which it did several months later. The trial court denied the request and Mr. Pino appealed to the Fourth District Court of Appeal. The Fourth DCA certified the issue to the Florida Supreme Court. In an interesting twist, the parties settled their dispute, but the Supreme Court still wanted to receive briefs and hear argument due to the importance of the issue.
Some of the questioning by the justices focused on the harm to Mr. Pino. For example, Chief Justice Charles Canady posed this question to Amanda Lundergan, Mr. Pino’s lawyer, “What it seems like to me, you’re just looking for a ‘gotcha’ to get out of the mortgage. Am I wrong?”
The bank’s argument was that voluntary dismissals in foreclosure cases should be treated the same as any other civil case and that rule changes aimed at voluntary dismissals in foreclosures could have far-reaching effects.
We have not had problems. This is, because it’s a mortgage foreclosure case, because there are a lot of those cases, it has attracted a lot of attention. But I think we have to look at this in the universe of general civil litigation. And this has not been a problem in general civil litigation. – Bruce Rogow, lawyer for BNY
Mr. Rogow’s point is well taken, but he overlooks the obvious. Fraudulent filings in have not been a widespread problem in “general civil litigation,” but they do remain a very real (and widespread) problem in foreclosure cases. The issues of robo-signing and fraudulent documents in residential mortgage foreclosure cases have been widely reported yet it continues to happen.
The underlying consideration should be preserving the integrity of the judicial system and the lawyers who are officers of the courts. The existing rule structure provides an opportunity for unscrupulous banks or lawyers to submit fraudulent paperwork in the hopes of getting away with it. When it appears the scheme didn’t work, they can simply dismiss the case and get a do-over. Our judicial system should not let that happen. We have a special rule of civil procedure for the verification of complaints which only applies in mortgage foreclosure cases. Why shouldn’t there be a similar special rule for voluntary dismissals in foreclosure cases?
The Supreme Court took the first step towards limiting this fraud by requiring verification of foreclosure complaints. However, much of the robosigning and fraud occurs in affidavits filed much later in the case. The next step should be to allow the trial courts to retain jurisdiction after a voluntary dismissal in a foreclosure case, upon a proper showing, to consider sanctions against lawyers and lenders who submit fraudulent documents to the courts. Thus, it is still too early to determine what the Court will ultimately decide.
Court watchers will tell you not to read too much into the questioning by the justices. The justices’ feelings can’t be assumed simply from their questioning, and the written opinion often reaches a completely different result than one would assume from the questions asked at the hearing.
We will post another blog on this issue once the Supreme Court issues its opinion.
For more background on the Pino case, here are links to articles in the Bradenton Herald and Palm Beach Post. You can also read the appellate briefs here.
I just feel that the foreclosures across the nation are getting out of hand. My neighborhood has had several foreclosures in the past year and their lawns are now dead with weeds growing everywhere there is dirt. This does not just effect the person who lost there home but also the people in the neighborhood who are stuck next to there home. I was under the impression that Obama’s plan was suppose to help these people keep their homes. I almost feel that the bail out on the banks has made them stingier. I feel like you can not even get a loan modification on your own now. I found the best way was to find somewhere with an on staff attorney to fight the bank for you. My friend recently used Carrotpeel.com and said they did a great job for him in lowering his monthly payments. Even though some are getting out of this mess I still feel like the banks need to be more helpful because even when a home is foreclosed the banks don’t know how to turn around and sell it cause they are in the banking business not in the real estate business.
they do not?Why is the Fed hiding from an audit? Since when does ANYONE or ANY crotorapion decide what they will and will not disclose in a potential criminal investigation. Blankfein can run, but he can’t hide.Enjoyed Mish The Magician Shedlock’s attack on the GM Stamping plant in Indiana plant workers, another of his one-sided, biased articles, lacking perspective and pertinent info on the subject. Frankly, he is a putz, and not a very good corporate hack.Why magician? Well, in his rant of how ungrateful those union workers are to have a good paying job ( many would line up to take those jobs ) that the Corporate beast of GM has decided to target he seems to leave out a few *details*, dont ya Mishiepoo?He leaves out the fact of whether the plant is MAKING A PROFIT. HOW MUCH OF A PROFIT, and whether the GM CEO, CFO, COO, the 890 million VPs, and the rest of Corporate will ALSO TAKE A 50% PAY CUT???? No? THEN FUCK YOU MISH!!!See, Mish *leaves out* the FACT THESE WORKERS OWN THIS PLANT: we bailed these cretins out, remember????? GM is owned BY US!!!Anyone asking Indiana factory workers to take a 50% PAY CUT???YOU, Max? Sherbert, YOU? No mention at all of what this NEW POTENTIAL OWNER ASKING FOR WAGE CUTS WILL MAKE IN PROFIT WITH our factory.Ours: we PAID FOR IT, didn’t we, you suckass Mish???Go peddle some worthless paper, you couldn’t bolt your own tire on our imported automobile, asshole.Have a nice day, Mr. Shedlock.