Florida Supreme Court to Rule on Important Case Involving Attorney’s Fees
The Florida Supreme Court is set to decide an important case on attorney’s fees. While the issue of attorney’s fees may not seem like one of great importance to your everyday consumer, this one is. Despite the fact the case is a foreclosure case, it could have striking ramifications for many kinds of consumer cases.
Prevailing Party Attorney’s Fees
Notes and mortgages generally have what’s known as prevailing party attorney’s fees provisions in them. This means that the party that wins gets their attorney’s fees. This is important because under Florida law, the winning party doesn’t just get awarded attorney’s fees. Attorney’s fees can only be awarded if a statute allows them, or, as in foreclosure cases, when a contract or agreement such as a mortgage allows them.
Many consumers are able to retain some of the top foreclosure defense attorneys to help them because of this provision. Many attorneys take cases at reduced fees, in return for the fees that could be awarded if they are successful in trial. Alternatively, many homeowners spend money retaining top foreclosure defense attorneys with the knowledge that they may be paid back by an attorney’s fee award if the case is won.
Fees Rejected After Victory Based on Standing
There are many defenses to a foreclosure case, but a big one is lack of standing—that is, that the entity foreclosing doesn’t actually own the loan or the note, and doesn’t have the right to sue on it.
Recently, a case went forward where the homeowner was successful in this defense. The case was won, and the homeowner, under the attorney’s fee provision of the loan, asked for his attorney’s fees as the party that prevailed in the case.
But the court took an unexpected turn. The court said that because the plaintiff didn’t actually own the loan or have the right to enforce it, the part of the loan that entitled the prevailing party to attorney’s fees could not be enforced. In other words, the court reasoned, the homeowner could not on one hand say that the bank wasn’t the right party to enforce the loan but then ask for fees pursuant to a provision in that same loan. Thus, the court denied attorney’s fees to the homeowner. Other cases after that one have upheld that ruling.
Supreme Court to Make the Final Decision
The case has now been appealed to the Florida Supreme Court. If the case holds up, it could mean that a borrower who wins a case on lack of standing sacrifices attorney’s fees.
Banks would essentially be able to bring foreclosure cases, even those that have little merit, without any fear of repercussion because if they lose based on standing, they don’t have to pay attorneys fees (and they get to refile the case under a different name.)
This is also an issue that comes up in credit card defense cases, where credit agreements often have similar provisions. Attorney’s fee provisions make it possible for attorneys to be retained even where the money at stake is a relatively small amount.
Do you have questions about a foreclosure case? Contact Jacobs Legal in Miami today to discuss every available option and defense to your foreclosure case.