Burr & Forman

11.9.2018   |   Blog Articles, Consumer Finance Litigation, DCA, Florida

Florida’s Fourth DCA Continues Broad Application of Glass Opinion on Fee Entitlement

Florida’s Fourth District Court of Appeal continued to broadly apply the holding in Nationstar Mortgage LLC v. Glass, 219 So. 3d 896, 898 (Fla. 4th DCA 2017), review granted, SC17-1387, 2018 WL 2069328 (Fla. Feb. 13, 2018) in a recent appeal handled by Burr & Forman.

In Wells Fargo Bank v. Moccia, a foreclosure action was dismissed based upon evidence that the borrower had entered into a deed-in-lieu of foreclosure agreement with the prior servicer. The order of dismissal reserved jurisdiction to enforce the deed-in-lieu agreement. The borrower then moved for attorney’s fees pursuant to the fee provision of the mortgage and was awarded a large fee judgment over the objection of the lender. Subsequent to entry of this fee judgment, the borrower refused to deliver the promised deed to his lender. The lender then moved to enforce the deed-in-lieu agreement and the trial court ordered the defendant to tender the promised deed to his lender.

Both parties appealed.

First, the District Court of Appeal affirmed the jurisdiction of the trial court to enforce the deed-in-lieu agreement on motion, even though neither party had sought to enforce the agreement in the pleadings. See 4D18-710. This opinion was a simple per curium affirmance without opinion.

As to the fee judgment, the District Court of Appeal reversed the trial court and authored an opinion with positive implications for lenders in dismissed foreclosures. The appellate court held that the trial court’s determination of entitlement to attorney’s fees was incorrect for three reasons: 1) because the borrower established that the lender could not enforce the mortgage in the foreclosure action by virtue of the deed-in-lieu agreement, the borrower could not then use the mortgage as a basis for attorney’s fees 2) the evidence established that the deed-in-lieu agreement had effectively extinguished the mortgage (including its fee provision) and the deed-in-lieu agreement itself did not contain a fee provision, and 3) neither party was the “prevailing party” for purpose of attorney’s fees since the lender’s efforts to foreclose were denied, but the lender was successful in enforcing the deed-in-lieu agreement over the borrower’s objection in the litigation. The Court again rejected any notion that its opinion in Glass should be read narrowly as applying only to cases involving a successful defense premised on a lender’s supposed lack of standing. See 4D18-0479.

The case represents the latest instance of broad treatment for Fourth DCA’s holding in Glass, which is still pending Florida Supreme Court review.

The opinion in Moccia also relied upon well-hewn case law which holds that a party does not “prevail” in litigation for purposes of an attorney’s fee award where both sides are forced to cave to the other’s demands and the litigation ends in a proverbial tie. It certainly appears in this case, if there was any winner, it is the lender who successfully avoided paying defense attorney’s fees incurred during the dismissed foreclosure while simultaneously enforcing a years-old deed-in-lieu of foreclosure agreement to secure recovery of its collateral.

The Court’s opinion can be viewed here: https://www.4dca.org/content/download/405213/3640322/file/180479_1709_11072018_09133115_i.pdf

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