Harris Case a Big Deal in Foreclosure Attorney’s Fees Litigation
Updated: Dec 10, 2019
A very contentious issue in foreclosure litigation recently has been whether a borrower may recover attorney’s fees in a case where the borrower prevailed because the bank failed to prove standing to foreclose.
You see, most mortgage contracts contain an attorney’s fees clause which provides that in any litigation arising under the mortgage contract, the bank will be entitled to recover its reasonable attorney’s fees and costs, if the bank is the prevailing party, including appellate attorney’s fees.
Florida has an interesting statute, Fla. Stat. 57.105(7), which provides that when a contract provides prevailing party attorney’s fees to one party, if the other party wins, they get to collect attorney’s fees too. So even though the mortgage contract is written by the bank and provides that the bank can collect its attorney’s fees, if the borrower wins the foreclosure case, the borrower can collect his or her attorney’s fees.
The banks have decided they would like to have their cake and eat it too. Heads they win, tails you lose. If they beat you and foreclose on your home, of course they want to collect their attorney's fees, but if you win, they say you shouldn't be able to recover a dime. So even though you, as a homeowner, have been hailed into court by the bank, had to pay for an attorney, and won the case, the banks say you should just have to eat those fees. On this, the banks are dead wrong.
So the banks have been advancing the argument that if a borrower wins a foreclosure case because the bank failed to prove standing to foreclose, then the borrower should not be able to recover prevailing party attorney’s fees. The argument goes something like this: if the borrower wins the case by arguing that the bank did not have legal standing to enforce the mortgage contract and foreclose, then the borrower should not be able to turn around and latch on to the attorney’s fees clause of the mortgage contract to recover his or her own attorney’s fees from the bank.
The banks were armed with some extra ammunition when the Fourth District Court of Appeal released its opinion in Nationstar Mortgage, LLC v. Glass. The full opinion can be read here. In Glass, the Fourth District held that when a borrower prevails in a foreclosure case on an argument of lack of standing, that the borrower may not recover attorney’s fees pursuant to Fla. Stat. 57.105(7).
The Florida Supreme Court has now agreed to review the decision in Glass and will eventually render its ruling on the subject, which will then be the law for all the Florida courts.
As an attorney based out of Tampa, much of the litigation I am involved in is in trial courts within the territorial jurisdiction of the Second District Court of Appeal, so most of the trial courts I appear before must follow the decisions of the Second District.
Just three days ago, the Second District Court of Appeal released a bombshell of an opinion in the case of Harris v. Bank of New York Mellon. You can read the full opinion here. In Harris, the Second District rules that even if a borrower prevails in a foreclosure case on an argument of lack of standing, as long as there was some evidence that the bank was a party to the contract (i.e. the original note, an assignment of the note, etc.) then the borrower will be entitled to recover attorney’s fees against the bank.
We were already prevailing in attorney’s fees litigation in the trial courts within the Second District before the Harris decision, and this judgment is an example of that. However, Harris will make my life a lot easier when pursuing banks on attorney’s fees claims after winning on an argument of lack of standing.
The Harris ruling makes public policy sense, too, as the whole point of the fee-shifting feature of Fla. Stat. 57.105(7) is to open up access to counsel to those who otherwise could not afford competent counsel to represent them. If a homeowner is hailed into Court by the bank, has to pay for an attorney to represent them, then wins the case, the homeowner should be able to recover their reasonable attorney’s fees. It’s only fair.
If you are in foreclosure and would like a consultation with me about your case, feel free to call us at 813-260-4883 or email me at firstname.lastname@example.org.
Thanks for reading and have a Happy New Year, in your home!
All the best,
Foreclosure defense attorney