Florida's Fourth DCA Holds Borrower is Not Entitled to Attorney’s Fees for Dismissal Based on Lack of Standing to Foreclose

Burr & Forman

Burr & Forman

Florida’s Fourth DCA issued an opinion on April 12, 2017 in Nationstar Mortgage LLC v. Glass, No. 4D15-4561, following suit with the Third and Fifth DCAs in denying a borrower’s motion for attorney’s fees based on a provision in the subject mortgage after the borrower successfully argued for the dismissal of the foreclosure action on the basis that the plaintiff lacked standing to foreclose.

Ann Marie Glass (“Glass”) obtained a dismissal with prejudice of Nationstar Mortgage LLC’s (“Nationstar”) amended foreclosure complaint in the lower tribunal.  See Glass, at 1.  Nationstar appealed the dismissal, but ultimately voluntarily dismissed the appeal.  Id.  Glass moved for appellate attorney’s fees and costs based on the provision in the mortgage allowing the holder of the mortgage to recover attorney’s fees and costs for the foreclosure action and Fla. Stat. § 57.105(7), which allows reciprocity of a one sided attorney’s fee provision in a contract.  Id.

In reaching its decision, the Fourth DCA noted that Florida follows the “American Rule,” which holds that in order to recover attorney’s fees as the prevailing party in a case, the award of attorney’s fees must be authorized by statute or a contract between the parties.  Id. at 2.  Because Fla. Stat. § 57.105(7) contravenes the common law rule, it must be strictly construed.  Id. To be entitled to attorney’s fees under Fla. Stat. § 57.105(7), the movant must be the prevailing party and the parties to the suit must also be parties to the contract containing the fee provision.  See id. at 2-3.  Accordingly, the Fourth DCA denied Glass’s motion for fees, holding “where a party prevails by arguing the plaintiff failed to establish it had the right pursuant to the contract to bring the action, the party cannot simultaneously seek to take advantage of a fee provision in that same contract.”  Id. at 2.

While the Glass decision follows the logic of both HFC Collection Center, Inc. v. Alexander, 190 So. 3d 1114 (5th DCA) and Bank of New York Mellon Trust Company, N.A. v. Fitzgerald, Case No. 3D16-981, 2017 WL 815352 (3rd DCA March 1, 2017) in denying Glass’s motion for fees, the Fourth DCA did not take the position that a contract did not exist between the parties, but instead emphasized that because the borrower prevailed on arguing the plaintiff lacked standing to enforce the contract, the borrower could not turn around and try to attempt to enforce the same contract against the plaintiff.  See id. at 3.  (“…the movant must establish that the parties to the suit are also parties to the contract containing the fee provision.  A party that prevails on an argument that dismissal is required because the plaintiff lacks standing pursuant to the contract sued upon cannot satisfy that requirement.”). Thus, because Glass could not meet the burden of proving Nationstar was a party to the mortgage, the Fourth DCA denied her motion for attorney’s fees.

A full copy of the opinion can be found here.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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