In the event that the borrower prevails in a foreclosure case, servicers need to minimize their exposure to prevailing party attorney’s fees. One strategy is, if applicable, using the “standing” defense premised on the fact if the plaintiff did not have standing to foreclose, they cannot in turn use the mortgage agreement fee provision(s) against them.
The above standing argument is developing and has been tested in a number of appellate actions, one of which had reached the Florida Supreme Court. At the district court of appeal level in Nationstar v. Glass, 219 So. 3d 896 (Fla. 4th DCA 2019), the court had agreed with the servicer and found that the borrower’s having prevailed on standing meant they was no privity of contract and they were estopped from claiming they were entitled to contractual attorney’s fees.
The case went up to the Florida Supreme Court as Glass v. Nationstar Mortgage, LLC, Case No. SC17-1387 (Fla. Jan. 4, 2019). The Court reversed the district court of appeal reasoning that the contract may have been unenforceable as opposed to being nonexistent between the parties. This opinion led to a rush to distinguish the facts at issue in multiple trial and appellate cases throughout the state.
However, the Florida Supreme Court had revisited its opinion. Today, April 18, 2019, the Florida Supreme Court announced that its opinion is withdrawn and a substitute opinion would stand in its place. That substitute opinion expresses the Court “initially accepted review of the decision of the Fourth District Court of Appeal in Nationstar Mortgage LLC v. Glass, 219 So. 3d 896 (Fla. 4th DCA 2017), based on express and direct conflict….” The Court then explains that, “Upon further consideration, we conclude that jurisdiction was improvidently granted.”
Inasmuch as there was no conflict jurisdiction for the review, the Court dismissed the proceeding. Because the original opinion was substituted with a dismissal for lack of jurisdiction, there is no longer a Florida Supreme Court decision of the matter. The original district court opinion in Glass may once again be relied on as authority. Servicers should note that the arguments advanced by the Florida Supreme Court in its January opinion have not been found invalid; instead, the Court has provided that it should not have issued its opinion in this case. In the future, the Court may in fact find that it has jurisdiction to issue a substantially similar opinion, once again causing greater uncertainty with regard to fee liability.