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Florida High Court Protects Consumers’ Right to Collect Attorney’s Fees

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The Florida Supreme Court has taken a step to help homeowners who seek out attorneys to help them fight foreclosure cases. The recent case allows firms like ours to continue helping those in need.

Prevailing Party Contract Provisions

It is established law that where a contract (which includes a mortgage) says that a party gets attorney’s fees if the party wins in court, either party who wins will be awarded attorney’s fees if they win—in other words, contractual prevailing party attorney’s fees are interpreted to be reciprocal even if the provision is not written that way in the contract. One party can’t get fees if they win and the other party not get them should it win.

In many cases, foreclosure defense attorneys take cases based on this provision in mortgage documents, easing the financial burden of attorney’s fees for the homeowner. Although there is a myriad of fee arrangements, generally, a defense attorney can take a nominal fee in the short term, and wait for the balance of payment to come from the bank when and if the case is won (or otherwise, a homeowner will pay an attorney all of the attorney’s fees and get a “refund” when and if the case is won).

Court Denies Fees After Homeowner’s Win

Recently, a homeowner alleged that a bank did not own, and thus could not enforce, a mortgage in a foreclosure case—a very common and often successful defense. The case was dismissed by the court before trial, and attorney’s fees were awarded to the homeowner.

The bank appealed the fee award. Breaking from precedent, an appellate court said that the attorney’s fee provision did not apply, because if the bank did not own the loan, neither it or the homeowner could take advantage of the attorney’s fees provision in the loan documents. In other words, the court said a homeowner can’t say that the bank doesn’t own the loan during the case, but when the case is dismissed ask for attorney’s fees under the contract for that loan.

Supreme Court Hears Case Denying Fees

The case went to the Florida Supreme Court, which just recently made its ruling. The Supreme Court first noted that the case was not dismissed by the trial court just on an allegation that the bank did not own the loan/contract (i.e., that it lacked standing), but on other grounds as well. There was a dismissal of the case, which led to the attorney’s fee award, but no explanation by the trial court the exact grounds on which the dismissal was based.

Additionally, the dismissal was not a finding that the bank didn’t own the loan. Rather, it was simply a finding that insufficient facts had been alleged in the foreclosure complaint to support that the bank had standing.

Lastly, even if the bank was ultimately found to have no standing, that would not mean that the contract never existed. It would just mean that it was unenforceable by this bank. Because the contract was possibly enforceable by someone, the attorney’s fee provision was applicable and the homeowner was permitted to be awarded attorney’s fees.

Don’t wait before getting help if you are in foreclosure. Contact Jacobs Legal in Miami for help fighting banks all the way through trial.

Resources:

mortgagecompliancemagazine.com/legal/floridas-high-court-accepts-jurisdiction-on-attorney-fee-issue-in-mortgage-foreclosure-action/

law.com/dailybusinessreview/2019/01/04/a-lot-of-ammunition-does-this-new-ruling-open-the-door-for-attorney-fees/

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