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Florida Supreme Court to Weigh in on Foreclosure Fraud in Pino

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by Mike on February 10, 2011

“Many Mortgage Foreclosures Appear Tainted With Suspect Documents” says Fourth DCA

Florida’s Fourth District Court of Appeal is very concerned about foreclosure fraud. In a recent case, Pino v. Bank of New York Mellon [.pdf], the Court considered the case of whether a bank can avoid court sanctions for fraud by simply dismissing its case and walking away. And although the Court said in this case, a dismissal is a dismissal, it was clearly concerned about the conduct of the bank in this case and many others:

We conclude that this is a question of great public importance, as many, many mortgage foreclosures appear tainted with suspect documents.

In fact, it was so concerned about the widespread appearance of fraud in foreclosure cases, it asked the Florida Supreme Court to check its work. In a highly unusual move, the Fourth DCA certified a “question of great public importance” as to whether a bank can dodge sanctions—or an investigation that could lead to sanctions—by simply dropping its case.

Foreclosure Fraud is of Great Public Importance

Here’s the full question as certified:

Accordingly we certify the following question to the Florida Supreme
Court as of great public importance:

DOES A TRIAL COURT HAVE JURISDICTION AND AUTHORITY
UNDER RULE 1.540(b), Fla. R. Civ. P., OR UNDER ITS INHERENT
AUTHORITY TO GRANT RELIEF FROM A VOLUNTARY DISMISSAL
WHERE THE MOTION ALLEGES A FRAUD ON THE COURT IN THE
PROCEEDINGS BUT NO AFFIRMATIVE RELIEF ON BEHALF OF THE
PLAINTIFF HAS BEEN OBTAINED FROM THE COURT?

Here’s what led the Court to this highly unusual conclusion. The defendant, Roman Pino, hired Ice Legal to defend his foreclosure case. The fine lawyers at Ice Legal challenged the bank’s right to foreclose. In response, the bank—months into the case—produced a document showing a supposed assignment of the mortgage, which the Court observed, happened to be dated just before the original pleading was filed. It also had a notary seal that showed that the document could not have been notarized on the date in the document.

Ice Legal immediately filed a motion for sanctions, claiming the bank had produced fraudulent evidence of ownership. In order to support that claim, it tried to get sworn testimony from the person who signed the assignment, the notary, and the witnesses named on the document. Instead of appearing at the depositions, the bank just dismissed its case.

Then, five months later, the bank filed a brand-new lawsuit to foreclose the original mortgage. It no longer relied on the obviously fake assignment, but instead had a new assignment—dated after the first case was dismissed. The Pino Court did not condone this lightly, stating that the bank’s attorney on the original filing should be referred to the Florida Bar for discipline. However, it ultimately found that Pino and his lawyers could not re-open the first case to pursue the original sanctions motion. (The Court did not say whether Pino could pursue his claim in the new suit.)

Now, it’s asked the Florida Supreme Court to step in, and spell out how lower courts should handle allegations of fraud by banks and their lawyers, and what to do when banks dismiss cases of obvious fraud in order to give themselves a chance to paper over their initial fraud. Knowing how the Supreme Court feels about the issue, I’m looking forward to seeing what comes out of that case.

( Photo source / Photo rights )

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