Florida Supreme Court Sides With Banks That File Fraudulent Foreclosure Documents

The case of Pino v. Bank of New York, reached a disappointing conclusion earlier this month, when the Florida Supreme Court ruled that a bank should not be punished or held liable when it files fraudulent or flawed documentation in a foreclosure case, and then hurries to voluntarily dismiss it without prejudice. computerfrustration.jpg

Our Miami foreclosure lawyers of course aren’t surprised that yet again, banks have prevailed, but it paints a picture for potential clients of what you are up against in these cases.

It’s almost as if banks have gotten away with it by virtue of the fact that it happened so often. The question posed was not whether the court has the ability to sanction parties in a civil proceeding for filing fraudulent documents, but whether in such cases the court should have the ability to re-open the case, reverse a voluntary dismissal without prejudice and subsequently issue a dismissal with prejudice – as a sanction to the original party for having committed the fraud.

The court ruled that such action is not within the authority of the court.

Here’s what happened: Roman Pinto was a Florida resident who was sued for foreclosure back in 2010 for defaulting on his mortgage. However, when Pinto’s foreclosure defense attorney sought to challenge the validity of ownership documents filed by the bank (that is, to allege they were in fact fraudulent, as so many documents are in these cases), the bank suddenly moved to voluntarily dismiss the case without prejudice.

The judge in the case agreed – which mean the bank could subsequently re-file the case, sans fraudulent documents, with no penalties or sanctions at all for having done so in the first place.

Subsequently, Pino appealed his case to the Fourth District Court of Appeal, asserting that the court should put the original voluntarily dismissal aside – as it was requested solely because the bank knew it had been caught submitting false and fraudulent documents – and enter a new dismissal that would render the bank unable to take further action.

However, the Fourth District Court of Appeal held that a trial court did not have this authority in a case where the plaintiff (in this case the bank) had not yet had the opportunity to obtain any affirmative relief from the defendant (in this case the homeowner) prior to the case being dismissed.

Still, the appellate court requested that the state Supreme Court answer the question directly, as it was applicable to numerous cases throughout the state as an issue “of great public importance.”

The Florida Supreme Court certified the question in the negative. The justices reasoned that had the plaintiff actually obtained some form of affirmative relief from the defendant based on fraudulent conduct, then there would be an adverse impact on the defendant, who could then clearly be entitled to seek relief pursuant to Florida Rule of Civil Procedure 1.540(b)(3). But absent that, the court decided, a dismissal with prejudice would be improper.

If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.

Additional Resources:
Pino v. Bank of New York, Feb. 7, 2013, Supreme Court of Florida
More Blog Entries:
Florida Bar Takes On Another “Foreclosure Mill” Attorney, Feb. 9, 2013, Miami Foreclosure Lawyer Blog