Bizarro Florida Supremes Issue Bartram v US Bank Opinion

Why the Foreclosure Statute of Limitations Applies to the Payment Schedule (and acceleration does not happen till Foreclosure Final Judgment)

Florida foreclosure defense attorney Roy Oppenheim explained his foreclosure statute of limitations win for a mortgagor client in his May 2016 blog article appended below. He says the legislature intended the statute of limitations as an inequitable resolution of an equity dispute. Why? Because it just does not seem right to allow an injured party FOREVER to bring an action against his defendant.

Creditors have 5 years to bring a foreclosure action against the borrower after the borrower defaults on the debt payments and the creditor accelerates the loan, foreshortening the lengthy monthly payment plan into one payment of the entire loan balance plus costs of collecting the debt, to one lump sum, payable immediately.

Borrower and lender agreed to the acceleration in the loan security instrument. They also agreed that the creditor could refuse any payment less than that required to bring the loan current. But the present uniform security instrument (a “mortgage” in Florida) makes no provision for decelerating an accelerated loan balance. Thus, the acceleration essentially notifies the borrower “Pay us everything you owe us right now or we will foreclose and force a sale of the mortgaged property to retire the debt.” In Florida that means the creditor must file a foreclosure law suit against the borrower. And the statute of limitations allows a 5-year window for such a lawsuit. The statute terminates the right to collect the debt.

Florida judges differ in their opinions as to how the statute of limitations apply, but few have embraced the above question. Some seem offended by the notion that mere statue can rightly make a mortgage debt disappear into thin air, leaving the creditor empty-handed and with no way to collect. Those have accepted creditor arguments that the 5 year limit applies only to the monthly payments overdue by more than 5 years, even after the creditor has accelerated the loan.

Hold it. Not so fast. What if the creditor does not accelerate the loan until the court issues a foreclosure judgment?
It seems dead wrong to allow banks or borrowers to have it both ways. Borrowers should pay their debts timely or face foreclosure. Creditors should prepare a case and sue for foreclosure within the statutory 5 years after acceleration. But creditors should not have the right to accelerate the payment schedule into one immediately due total loan balance AND have the 5 year statute of limitation apply only to all monthly payments more than 5 years overdue. It must apply only to the accelerated balance due as of the date of acceleration. So, the statute of limitations clock should start ticking upon borrower receipt of the letter in which the creditor explicitly declares the loan accelerated.

Today the Florida Supreme Court issued its long-awaited Bartram v US Bank opinion (appended below) which shows how to construe the meaning of the term “acceleration” in the uniform Mortgage Security Instrument.

The Supremes did not have to opine that the Statute of Limitations applies to every payment in the installment contract schedule, rather than to the accelerated amount (the full loan balance). Instead, the Court claimed acceleration did not become effective until final judgment of foreclosure. The Court pointed out that the creditor never said in its letters to the borrower that it had exercised its right to accelerate, but only said that it retained the right to accelerate. Very clever and sneaky.

Maybe the Supremes are technically right. After all, what is the law and what is the contract if not a technicality. But the opinion seems like a flim-flam to me. The language of the mortgage security instrument allowing the borrower to “reinstate” the original loan repayment schedule by bringing the loan current implicitly means that acceleration of the loan “uninstates” that schedule and replaces it with the requirement to pay the entire loan balance immediately. The court pointed out that the right to reinstate disappears upon rendering of foreclosure final judgment.

That means the reinstatement window opens and then slams shut all in the same instant. That can only hold true in the Bizarro universe created by the Florida Supreme Court in defiance of all common sense.

The mortgage gives the creditor the right to accelerate and the borrower the right to reinstate. To me that means the creditor exercises the acceleration right by demanding immediate payment of the loan balance, by asserting a written intention to foreclose, or by filing a foreclosure action. The acceleration stays in effect till final judgment of foreclosure or until the creditor rescinds it. And the borrower does not reinstate the original payment schedule except by paying an amount sufficient to bring the loan current, including all accrued interest, cost of collection, and escrow deficiency.

The Bizarro Supremes might change their minds some day. So, borrowers should not too quickly rush to assume that the Bartram opinion limits their right to buck against untimely foreclosure using the statute of limitation defense IF any notice from the creditor or servicer states something like “we hereby accelerate the loan.” Such language might start the ticking of the statute of limitations clock.

Weird? Kinda. Nevertheless, the Bartram opinion exhaustively analyzes the issues. Readers will find it interesting if not instructive.

Bob Hurt

Oppenheim Win Shows Five Year Statute is Still Alive

Posted on May 10, 2016 Posted in Florida Law News by Roy Oppenheim
Five-Year Statute of Limitations Law still has a Few Lifelines Left in South Florida Foreclosures; Notwithstanding Bank-Friendly Opinion

The Third District Court of Appeal’s recent decision in Beauvais would suggest that the five-year statute of limitation does not apply to mortgage foreclosure actions. However, not all courts would agree.

Oppenheim Law recently secured a win in Port St. Lucie County for the five-year statute of limitations. Indeed, Judge William L. Roby entered judgment for the borrower based on our argument that the lender’s lawsuit was barred by the five-year statute of limitations. The Judge moved forward and allowed argument even though Bartram is still pending.

Acceleration and the lack of deceleration

The plaintiff sued our client to foreclose in 2008, alleging in its complaint that the entire amount under the loan was due and owing, and its lawsuit was dismissed without prejudice in 2012. Plaintiff then filed another lawsuit some five years and several days later, in response to which our client asserted the statute of limitations defense. Through a strategic, successful deposition, we were able to confirm the fact of acceleration and the lack of deceleration. Armed with this information, we asked the court to rule in our favor. Within twenty (20) minutes, we were able to obtain a ruling favorable to our client. Plaintiff forfeits its right to file suit on the borrowers note In finding in our client’s favor, the judge found that the Plaintiff did accelerate the loan when it filed the initial complaint declaring that the entire amount was due and owing, and then had only five years to bring a subsequent action to foreclose. Having failed to do so, the Plaintiff forfeited its right to file suit on the Note:

Having elected to accelerate the total amount due and owing on December 10, 2008, Plaintiff had five (5) years from that date in which to bring a subsequent action to foreclose on the Note.

Thus, to comply with the five-year statute of limitations, Plaintiff was obligated to file suit no later than December 10, 2013, to attempt re-foreclosure on the Note. However, Plaintiff did not file the Complaint in the 2013 Foreclosure Lawsuit until December 20, 2013, thereby missing the deadline by ten (10) days. The failure to timely re-file cut off Provident’s right to file suit on the Note.

Each new default date is a different cause of action

In so ruling, the Court specifically addressed—and dismissed—the Plaintiff’s argument that each new default date is a different cause of action:

The Plaintiff’s legal argument in its written and oral opposition to the Defendants’ Motion for Summary Judgment is that each new default date is a different cause of action; therefore, the Plaintiff asserts that it was authorized to sue on the September 1, 2008, default date because it differs from the default date alleged in the Complaint in the 2008 Foreclosure Lawsuit (August 1, 2008). However, having elected to accelerate the total amount due and owing under the Note via the Complaint in the 2008 Foreclosure Lawsuit, Plaintiff could not proceed in suing on another payment default as no future installment existed. The Plaintiff’s corporate representative explicitly testified in the deposition that acceleration occurred and that the Plaintiff treated the loan as accelerated from that time forward, even following the dismissal of the 2008 ForeclosureLawsuit. The corporate representative testified that Provident has no procedures in place to decelerate and that Provident did not take any affirmative action so as to indicate that it would accept anything less than the full amount due on the Note following acceleration . . . .

Outside of the five years rule

In ruling in our favor, the court adopted several of our arguments, including the fact that the plaintiff could not premise the second lawsuit on the particular default date alleged because the date was within the range of dates included in the first lawsuit. The court also acknowledged that the plaintiff could not sue upon the particular date of default alleged because it was literally outside of the five years immediately preceding the date of filing of the second lawsuit.

Five years is five years

The presiding judge recognized that the statute of limitations “is a purposefully inequitable legislative doctrine, intended to cut off an otherwise legally valid cause of action after a party has sat on their rights—unlike res judicata, which is an equitable judicial doctrine which should not always be enforced if it is inequitable for courts to do so. “ For that reason, “[i]f a party to a matter does not comply with the statute of limitations, it is responsible for the consequences, regardless of the fact that another party retains a benefit as a result of that non-compliance.”

The Court likened the situation to a contractor’s requirement to timely provide a homeowner with a final payment affidavit, a requirement in the area of construction lien law. The contractor’s failure to timely furnish such an affidavit entitles the owner to a dismissal of the contractor’s lien foreclosure lawsuit, “regardless of whether the contractor performed the work or the homeowner received the benefit of that work via an improvement to their property.” “Following this analogy . . . . the statute of limitations applicable to this action necessarily cuts off the Plaintiff’s right to foreclose, regardless of the fact that the Plaintiff at one point furnished funds to the Defendants.”

The Florida Five-Year Statute of Limitations Rule is Complex.

Light at the End of the Tunnel

The Third District Court of Appeal’s recent ruling in Beauvais turns the five-year statute of limitations on its head. It is not a good precedent for the borrower. However, regardless of all the bank-friendly fanfare, the statute of limitations as it applies to mortgage foreclosure actions clearly in South Florida still has a few lifelines left.

Our victory in St. Lucie, and the fact that the Beavauis opinion was, by far, not a unanimous decision (four out of ten judges dissented) reflects a pattern of judicial divisiveness over theapplicability of the statute of limitations. With that divisiveness comes the potential for more borrower-friendly rulings, like the one we recently obtained in St. Lucie.

All we can say is, hold on to your hats and do not bet the ranch on this one.

Roy Oppenheim,

From the Trenches

Supreme Court of Florida

____________

No. SC14-1265

____________

LEWIS BROOKE BARTRAM,

Petitioner,

vs.

U.S. BANK NATIONAL ASSOCIATION, etc., et al.,

Respondents.

____________

No. SC14-1266

____________

THE PLANTATION AT PONTE VEDRA,

Petitioner,

vs.

U.S. BANK NATIONAL ASSOCIATION, etc., et al.,

Respondents.

____________

No. SC14-1305

____________

GIDEON M.G. GRATSIANI,

Petitioner,

vs.

U.S. BANK NATIONAL ASSOCIATION, etc., et al.,

Respondents.

[November
3, 2016]

PARIENTE, J.

The issue before the Court involves the application of the five-year statute of

limitations to “[a]n action to foreclose a mortgage” pursuant to section 95.11(2)(c),

Florida Statutes (2012).1 The Fifth District Court of Appeal relied on this Court’s

reasoning in Singleton v. Greymar Associates, 882 So. 2d 1004 (Fla. 2004),

rejecting that the statute of limitations had expired. Because of the importance of

this issue to both lenders and borrowers, the Fifth District certified to this Court a

question of great public importance, which we have rephrased to acknowledge that

the note in this case is a standard residential mortgage, which included a

contractual right to reinstate:

DOES ACCELERATION OF PAYMENTS DUE UNDER A

RESIDENTIAL NOTE AND MORTGAGE WITH A

REINSTATEMENT PROVISION IN A FORECLOSURE ACTION THAT WAS DISMISSED PURSUANT TO RULE 1.420(B),

FLORIDA RULES OF CIVIL PROCEDURE, TRIGGER

APPLICATION OF THE STATUTE OF LIMITATIONS TO

PREVENT A SUBSEQUENT FORECLOSURE ACTION BY THE

MORTGAGEE BASED ON PAYMENT DEFAULTS OCCURRING

SUBSEQUENT TO DISMISSAL OF THE FIRST FORECLOSURE SUIT?

1. In addition to the briefs of the parties, we have also reviewed briefs submitted on behalf of the parties by the following amici curiae: the U.S. Financial Network, the Mortgage Bankers Association and the American Legal and Financial Network on behalf of Respondent and Bradford and Cheri Langworthy and the Titcktin Law Group, P.A., Baywinds Community Association, Upside Property Investment, LLC, the Florida Alliance for Consumer Protection, the Community Associations Institute, and the National Association of Consumer Advocates on behalf of Bartram.

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We have jurisdiction. See art. V, § 3(b)(4), Fla. Const.

In this case, it is uncontroverted that the borrower, Lewis Brooke Bartram,

also referred to as the mortgagor, stopped making payments on his $650,000

mortgage and note, both before and after the foreclosure action was brought and

subsequently dismissed. For the reasons set forth in this opinion, we answer the

rephrased certified question in the negative and hold, consistent with our reasoning

in Singleton, that the mortgagee, also referred to as the lender, was not precluded

by the statute of limitations from filing a subsequent foreclosure action based on

payment defaults occurring subsequent to the dismissal of the first foreclosure

action, as long as the alleged subsequent default occurred within five years of the

subsequent foreclosure action. When a mortgage foreclosure action is

involuntarily dismissed pursuant to Rule 1.420(b), either with or without prejudice,

the effect of the involuntary dismissal is revocation of the acceleration, which then

reinstates the mortgagor’s right to continue to make payments on the note and the

right of the mortgagee, to seek acceleration and foreclosure based on the

mortgagor’s subsequent defaults. Accordingly, the statute of limitations does not

continue to run on the amount due under the note and mortgage. 2

2. Our holding is consistent with the views of the excellent amici briefs submitted by the Real Property Probate & Law Section of The Florida Bar, The Business Law Section of The Florida Bar, and the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation at the request of the Third District in Deutsche Bank Trust Co. Americas v. Beauvais, 188 So. 3d

– 3 –

Absent a contrary provision in the residential note and mortgage, dismissal of the foreclosure action against the mortgagor has the effect of returning the parties to their pre-foreclosure complaint status, where the mortgage remains an installment loan and the mortgagor has the right to continue to make installment payments without being obligated to pay the entire amount due under the note and mortgage. Accordingly, we approve the Fifth District’s opinion in U.S. Bank National Association v. Bartram, 140 So. 3d 1007 (Fla. 5th DCA 2014), and answer the rephrased certified question in the negative.

FACTS AND PROCEDURAL BACKGROUND

On November 14, 2002, Petitioners Lewis Bartram (“Bartram”) and his then-wife Patricia Bartram3 (“Patricia”), purchased real property in St. Johns

County, Florida (the “Property”). Less than a year later, Patricia filed for dissolution of the couple’s marriage, which was officially dissolved on November

5, 2004. Pursuant to a prenuptial agreement the Bartrams had previously executed, the divorce court ordered Bartram to purchase Patricia’s interest in the Property.

938 (Fla. 3d DCA 2016). These amici briefs addressed the same issue presented by the rephrased certified question and limited their discussion to the terms of the standard form mortgage that is the subject of this case.

3. Gideon Gratsiani was substituted as a party by order of this Court after Gratsiani purchased Patricia Bartram’s mortgage.

– 4 –

In order to comply with the divorce court’s order, on February 16, 2005,

Bartram obtained a $650,000 loan through Finance America, LLC, secured by a

mortgage on the Property in favor of Mortgage Electronic Registration Systems,

Inc., in its capacity as nominee for Finance America (the “Mortgage”). Finance

America subsequently assigned the Mortgage to Respondent, U.S. Bank National

Association (the “Bank”), as trustee and assignee. A day later, on February 17,

2005, Bartram executed a second mortgage (the “Second Mortgage”) to Patricia as

security for a second mortgage note of $120,000.

The Mortgage was a standard residential form mortgage and required the

lender to give the borrower notice of any default and an opportunity to cure before

the mortgagee could proceed against the secured property in a judicial foreclosure

action. Specifically, paragraph 22 of the Mortgage was an optional acceleration

clause and provided that the lender was required to give the borrower notice that

failure to cure the default “may result in acceleration of the sums secured” by the

mortgagee and foreclosure of the property:

Acceleration; Remedies. Lender shall give notice to Borrower prior to acceleration following Borrower’s breach of any covenant or agreement in this Security Instrument (but not prior to acceleration under Section 18 unless Applicable Law provides otherwise). The notice shall specify: (a) the default; (b) the action required to cure the default; (c) a date, not less than 30 days from the date the notice is given to Borrower, by which the default must be cured; and (d) that failure to cure the default on or before the date specified in the notice may result in acceleration of the sums secured by this Security Instrument, foreclosure by judicial proceeding and sale of the Property. The notice shall further inform Borrower of the right to

– 5 –

reinstate after acceleration and the right to assert in the foreclosure proceeding the non-existence of a default or any other defense of Borrower to acceleration and foreclosure. If the default is not cured on or before the date specified in the notice, Lender at its option may require immediate payment in full of all sums secured by this Security Instrument without further demand and may foreclose this Security Instrument by judicial proceeding. Lender shall be entitled to collect all expenses incurred in pursuing the remedies provided in this Section 22, including, but not limited to, reasonable attorneys’ fees and costs of title evidence.

(Emphasis added).

In addition to providing optional acceleration and foreclosure as a remedy

for default, paragraph 19 of the Mortgage also granted the borrower a right to

reinstate the note and Mortgage after acceleration if certain conditions were met,

including paying the mortgagee all past defaults and other related expenses that

would be due “as if no acceleration had occurred”:

Borrower’s Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of

Borrower’s right to reinstate; or (c) entry of a judgment enforcing this

Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys’ fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting

Lender’s interest in the Property and rights under this Security

Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender’s interest in the Property and rights under this Security Instrument, and Borrower’s obligation to pay the

– 6 –

sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer’s check or cashier’s check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 18.4

(Emphasis added). The designated maturity date of the note was March 1, 2035.

On January 1, 2006, Bartram stopped making payments on the Mortgage,

and never made payments on the Second Mortgage. Around the same time,

Bartram also stopped paying homeowners’ association assessments to the

Plantation at Ponte Vedra, Inc. (the “HOA”), the homeowners’ association of the

development where the Property was located. The HOA subsequently placed a

lien on the Property for nonpayment of the HOA assessments.

On May 16, 2006, the Bank filed a complaint to foreclose the Mortgage

based on Bartram’s failure to make payments due from January of that year to the

date of the complaint. The foreclosure complaint stated that all conditions

precedent to the acceleration of the Mortgage and to the foreclosure of the

Mortgage had been fulfilled or had occurred, and declared the full amount payable

4. Paragraph 18 concerned the transfer of the mortgaged property in a real estate sale without the Lender’s “prior written consent,” and required “immediate payment in full of of all sums secured by this Security Instrument” if breached.

– 7 –

under the note and Mortgage to be due. Nearly five years later, on May 5, 2011, the foreclosure action was involuntarily dismissed after the Bank failed to appear at a case management conference.5 The Bank did not appeal the dismissal.

Following the dismissal of the foreclosure action, Bartram filed a motion to cancel the promissory note and release the lien on the mortgage. The trial court denied the motion in an order dated August 29, 2011, citing to its lack of jurisdiction in the matter since the May 5, 2011, involuntary dismissal under Rule 1.420(b) “was an adjudication on the merits and the case has been closed.”

Approximately a year later, after the dismissal of the foreclosure action and almost six years after the Bank filed its foreclosure complaint, Bartram filed a crossclaim against the Bank in a separate foreclosure action Patricia had brought against Bartram, the Bank, and the HOA. Bartram’s crossclaim sought a declaratory judgment to cancel the Mortgage and to quiet title to the Property, asserting that the statute of limitations barred the Bank from bringing another foreclosure action.6

5. The Record does not indicate what action occurred, if any, in the first foreclosure action from the date the complaint was filed in 2006 until it was dismissed in 2011.

6. On May 24, 2012, Bartram filed a motion for default against the Bank for failure to respond to his crossclaim, but the trial court never ruled on this motion.

– 8 –

Bartram then moved for summary judgment on his crossclaim. The trial court found no genuine issue as to any material fact, granted summary judgment, quieted title in Bartram, found the Bank had no further ability to enforce its rights under the note and Mortgage that were the subject matter of the Bank’s dismissed foreclosure action, and cancelled the note and Mortgage. In doing so, the trial court released the Bank’s lien on the Property. The Bank subsequently filed a motion for rehearing, and after the trial court denied the Bank’s motion, appealed to the Fifth District.

Before the Fifth District, the Bank relied on this Court’s decision in

Singleton for its position that the trial court’s dismissal “nullified [the Bank’s] acceleration of future payments; accordingly, the cause of action on the accelerated payments did not accrue and the statute of limitations did not begin to run on those payments, at least until default occurred on each installment.” Bartram, 140 So. 3d at 1009-10. The Bank acknowledged, however, that it could not seek to foreclose the Mortgage based on Bartram’s defaults prior to the first foreclosure action, but could seek foreclosure based on defaults occurring subsequent to the dismissal of the first foreclosure action. Id. at 1009. Bartram contended on appeal, joined by Patricia and the HOA, “that the cause of action for default of future installment payments accrued upon acceleration, thus triggering the statute of limitations clock to run, and because the Bank did not revoke its acceleration at any time after the dismissal, the five-year statute of limitations period eventually expired, barring the

– 9 –

Bank from bringing another suit [to foreclose the Mortgage].” Id. at 1010 (citations omitted).

The Fifth District agreed with the Bank and held that if a “new and independent right to accelerate” exists in a res judicata analysis under Singleton, 882 So. 2d at 1008, then “there is no reason it would not also exist vis-à-vis a statute of limitations issue.” Id. at 1013. The Fifth District reasoned that a “new and independent right to accelerate” would mean that each new default would present new causes of action, regardless of whether the payment due dates had been accelerated in the first foreclosure action. Id. at 1013-14. Based on Singleton, the Fifth District explained, “a default occurring after a failed foreclosure attempt creates a new cause of action for statute of limitations purposes, even where acceleration had been triggered and the first case was dismissed on its merits.” Id. at 1014. The Fifth District accordingly reversed the trial court’s judgment, remanded the case to the trial court, and certified the question of great public importance we now address.

ANALYSIS

The rephrased certified question involves a pure question of law. Therefore, the standard of review is de novo. See Christensen v. Bowen, 140 So. 3d 498, 501 (Fla. 2014). In answering the rephrased certified question, we begin by reviewing this Court’s decision in Singleton, which the Fifth District and most courts throughout the state have held to be determinative of the rephrased certified

– 10 –

question. We then discuss the cases, both state and federal, that concern successive mortgage foreclosure actions in a statute of limitations context decided after Singleton. In doing so, we examine whether our analysis in Singleton, which was decided on res judicata grounds, extends to the statute of limitations context present in this case. We then discuss the significance to our analysis, if any, of the involuntary dismissal of the foreclosure action pursuant to Rule 1.420(b) and the effect of the Mortgage’s reinstatement provision. Based on this analysis, we conclude by answering the rephrased certified question in the negative and approving the Fifth District’s decision in Bartram.

I. Singleton v. Greymar Associates

In Singleton, a mortgagee brought two consecutive foreclosure actions against a mortgagor. 882 So. 2d at 1005. The first foreclosure action was based on the mortgagor’s failure to make mortgage payments from September 1999 to February 2000 and “sought to accelerate the entire indebtedness against” the mortgagor. Id. & n.1. The first foreclosure action was dismissed with prejudice by the trial court after the mortgagee failed to appear at a case management conference. Id. After this involuntary dismissal, the mortgagee filed a second foreclosure action based on a separate default that occurred when the mortgagor failed to make mortgage payments starting in April 2000. Id. at 1005. The mortgagor contended that the dismissal of the first foreclosure action barred relief

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in the second foreclosure action, but the trial court rejected this argument and entered a summary final judgment of foreclosure for the mortgagee. Id.

The mortgagor appealed, and “the Fourth District affirmed the circuit court’s decision, finding that ‘[e]ven though an earlier foreclosure action filed by appellee was dismissed with prejudice, the application of res judicata does not bar this lawsuit. The second action involved a new and different breach.’ ” Id. (citing Singleton v. Greymar Assocs., 840 So. 2d 356, 356 (Fla. 4th DCA 2003)). Singleton petitioned this Court for jurisdiction, citing an express and direct conflict with Stadler v. Cherry Hill Developers, Inc., 150 So. 2d 468 (Fla. 2d DCA 1963). Id.

Stadler also involved two successive foreclosure actions where the first foreclosure action had been dismissed with prejudice. 150 So. 2d at 469. The mortgagee brought a second foreclosure action that was identical except for alleging a different period of default. That action was successful, and the mortgagor appealed. The Second District reversed the judgment of foreclosure entered on the basis of res judicata and concluded that the “election to accelerate put the entire balance, including future installments at issue.” Id. at 472. Therefore, even though different periods of default were asserted, the “entire amount due” was the same and thus the “actions are identical.” Id. Accordingly, the Second District concluded that res judicata barred the second foreclosure action. Id. at 473.

– 12 –

After analyzing the position of the two appellate courts, this Court agreed

with the Fourth District that “when a second and separate action for foreclosure is

sought for a default that involves a separate period of default from the one alleged

in the first action, the case is not necessarily barred by res judicata.” Singleton,

882 So. 2d at 1006-07. In support, we cited with approval the Fourth District’s

reasoning in Capital Bank v. Needle, 596 So. 2d 1134 (Fla. 4th DCA 1992):

Our reading of the case law set out above leads us to conclude that a final adjudication in a foreclosure action that also prays for a deficiency judgment on the underlying debt may, but does not necessarily, bar a subsequent action on the debt. For instance, if the plaintiff in a foreclosure action goes to trial and loses on the merits, we do not believe such plaintiff would be barred from filing a subsequent foreclosure action based upon a subsequent default. The adjudication merely bars a second action relitigating the same alleged default. A dismissal with prejudice of the foreclosure action is tantamount to a judgment against the mortgagee. That judgment means that the mortgagee is not entitled to foreclose the mortgage. Such a ruling moots any prayer for a deficiency, since a necessary predicate for a deficiency is an adjudication of foreclosure. There was no separate count in the Capital Bank complaint seeking a separate recovery on the promissory note alone.

Accordingly, we do not believe the dismissal of the foreclosure action in this case barred the subsequent action on the balance due on the note.

Singleton, 882 So. 2d at 1007 (quoting Capital Bank, 596 So. 2d at 1138)

(emphasis added).

Our holding in Singleton was based on the conclusion that an “acceleration

and foreclosure predicated upon subsequent and different defaults present a

separate and distinct issue” than a foreclosure action and acceleration based on the

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same default at issue in the first foreclosure action. Id. Indeed, we cited with

approval another decision of the Fourth District, Olympia Mortgage Corp. v. Pugh,

774 So. 2d 863, 866 (Fla. 4th DCA 2000), which held—contrary to the Second

District’s conclusion in Stadler—that an acceleration of debt in a mortgage

foreclosure action did not place future installments at issue. As we explained, the

unique nature of a mortgage compelled this result:

This seeming variance from the traditional law of res judicata rests upon a recognition of the unique nature of the mortgage obligation and the continuing obligations of the parties in that relationship. For example, we can envision many instances in which the application of the Stadler decision would result in unjust enrichment or other inequitable results. If res judicata prevented a mortgagee from acting on a subsequent default even after an earlier claimed default could not be established, the mortgagor would have no incentive to make future timely payments on the note. The adjudication of the earlier default would essentially insulate her from future foreclosure actions on the note—merely because she prevailed in the first action. Clearly, justice would not be served if the mortgagee was barred from challenging the subsequent default payment solely because he failed to prove the earlier alleged default.

Singleton, 882 So. 2d at 1007-08 (emphasis added).

Our recognition in Singleton that each new default presented a separate

cause of action was based upon the acknowledgement that because foreclosure is

an equitable remedy, “[t]he ends of justice require that the doctrine of res judicata

not be applied so strictly so as to prevent mortgagees from being able to challenge

multiple defaults on a mortgage.” Id. at 1008. Thus, the failure of a mortgagee to

foreclose the mortgage based on an alleged default did not mean the mortgagor had

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automatically and successfully defeated his or her obligation to make continuing

payments on the note.

II. Mortgage Foreclosure Cases Post-Singleton: Application to Statute of Limitations Context

In cases concerning mortgage foreclosure actions, since our decision in Singleton, both federal and state courts have applied our reasoning in Singleton in the statute of limitations context and have concluded that because of “the unique nature of the mortgage obligation and the continuing obligations of the parties in that relationship,” an “adjudication denying acceleration and foreclosure” does not bar subsequent foreclosure actions based on separate and distinct defaults. See id. at 1007. As the Fourth District explained, under Singleton, a “new default, based on a different act or date of default not alleged in the dismissed action, creates a new cause of action.” Star Funding Sols., LLC v. Krondes, 101 So. 3d 403 (Fla. 4th DCA 2012). That is because, as the First District has also explained, this

Court’s “analysis in Singleton recognizes that a note securing a mortgage creates liability for a total amount of principal and interest, and that the lender’s acceptance of payments in installments does not eliminate the borrower’s ongoing liability for the entire amount of the indebtedness.” Nationstar Mortg., LLC v. Brown, 175 So. 3d 833, 834 (Fla. 1st DCA 2015).

Other district courts of appeal have similarly applied our reasoning in Singleton to determine that the five-year statute of limitations did not bar a

– 15 –

subsequent foreclosure action when the mortgagee had brought an initial foreclosure action that accelerated all sums due under the mortgage and note, on that same mortgage outside the statute of limitations window. For instance, in Deutsche Bank Trust Co. Americas v. Beauvais, 188 So. 3d 938, 947 (Fla. 3d DCA 2016), the Third District concluded that because the subject mortgage’s reinstatement provision granted the mortgagor the right to avoid foreclosure by paying only the past due defaults, that “despite acceleration of the balance due and the filing of an action to foreclose, the installment nature of a loan secured by such a mortgage continue[d] until a final judgment of foreclosure [was] entered and no action [was] necessary to reinstate it via a notice of ‘deceleration’ or otherwise.”

With reasoning similar to Beauvais, in Evergrene Partners, Inc. v. Citibank, N.A., 143 So. 3d 954, 955 (Fla. 4th DCA 2014), a mortgagor challenged, on statute of limitations grounds, a second foreclosure action brought by the mortgagee when the mortgagee had voluntarily dismissed a prior foreclosure action based on a separate default. The Fourth District held that the mortgage was still enforceable because “the statute of limitations ha[d] not run on all of the payments due pursuant to the note,” specifically those payments missed after the initial alleged default. Id. In reaching this conclusion, the Fourth District relied on Singleton, and emphasized that “[w]hile a foreclosure action with an acceleration of the debt may bar a subsequent foreclosure action based on the same event of default, it does not bar subsequent actions and acceleration based upon different events of

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default.” Id. Similarly, in PNC Bank, N.A. v. Neal, 147 So. 3d 32, 32 (Fla. 1st DCA 2013), the First District held that an initial foreclosure action that sought acceleration and was dismissed with prejudice did not bar the mortgagee from

“instituting a new foreclosure action based on a different act or a new date of default not alleged in the dismissed action.”

Federal district courts in the state have also applied Singleton to dismiss claims seeking cancellation of a mortgage and note that are premised on the expiration of the statute of limitations after an initial foreclosure action that sought acceleration was dismissed. In Dorta v. Wilmington Trust National Ass’n, No. 5:13-cv-185-Oc-10PRL, 2014 WL 1152917 (M.D. Fla. Mar. 24, 2014), the mortgagor brought an action seeking cancellation of the mortgage based on the expiration of the statute of limitations where the mortgagee previously accelerated payments and brought a foreclosure action that was ultimately dismissed without prejudice more than five years prior. Id. at *1-2. In dismissing the mortgagor’s complaint, the federal district court held that even when the initial foreclosure action is dismissed without prejudice, “where a mortgagee initiates a foreclosure action and invokes its right of acceleration, if the mortgagee’s foreclosure action is unsuccessful for whatever reason, the mortgagee still has the right to file later foreclosure actions . . . so long as they are based on separate defaults.” Id. at *6.

Similarly, in Torres v. Countrywide Home Loans, Inc., No. 14-20759-CIV, 2014 WL 3742141, at *1 (S.D. Fla. July 29, 2014), the federal district court

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dismissed a complaint that sought a declaration that the statute of limitations barred foreclosing on a mortgage after a prior foreclosure action where the mortgagee had sought acceleration of the note that had been dismissed. Relying on Singleton, the court noted that “each payment default that is less than five years old creates a basis for a subsequent foreclosure or acceleration action.” Id. at *4; see also Romero v. SunTrust Mortg., Inc., 15 F. Supp. 3d 1279 (S.D. Fla. 2014) (holding that the installment nature of the note remained in effect after dismissal of a foreclosure action where the mortgagee had sought acceleration); Kaan v. Wells Fargo Bank, N.A., 981 F. Supp. 2d 1271 (S.D. Fla. 2013) (same).

We agree with the reasoning of both our appellate courts and the federal district courts that our analysis in Singleton equally applies to the statute of limitations context present in this case. As the Fifth District concluded, “[i]f a ‘new and independent right to accelerate’ exists in a res judicata analysis, there is no reason it would not also exist vis-à-vis a statute of limitations issue.” Bartram, 140 So. 3d at 1013. This conclusion follows from our prior reasoning that a

“subsequent and separate alleged default created a new and independent right in the mortgagee to accelerate payment on the note in a subsequent foreclosure action.” Singleton, 882 So. 2d at 1008. Therefore, with each subsequent default, the statute of limitations runs from the date of each new default providing the mortgagee the right, but not the obligation, to accelerate all sums then due under the note and mortgage.

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Consistent with the reasoning of Singleton, the statute of limitations on the balance under the note and mortgage would not continue to run after an involuntary dismissal, and thus the mortgagee would not be barred by the statute of limitations from filing a successive foreclosure action premised on a “separate and distinct” default. Rather, after the dismissal, the parties are simply placed back in the same contractual relationship as before, where the residential mortgage remained an installment loan, and the acceleration of the residential mortgage declared in the unsuccessful foreclosure action is revoked.

III. Significance of an Involuntary Dismissal and Reinstatement Provision

Having reaffirmed our prior holding in Singleton and the application of its reasoning to a statute of limitations context, we finally consider whether the type of dismissal of a foreclosure action has any bearing on our analysis and the effect of the Mortgage’s reinstatement provision. In this case, the first foreclosure action was dismissed pursuant to Florida Rule of Civil Procedure 1.420, which provides for involuntary dismissals, and is the rule upon which the rephrased certified question is premised. Involuntary dismissal of a legal action by a court under Rule 1.420(b) terminates a court’s jurisdiction over that action and may be with or without prejudice. A dismissal under Rule 1.420(b) operates as an adjudication on the merits as long as the dismissal was not for “lack of jurisdiction or for improper venue or for lack of an indispensable party,” neither of which were a basis for the trial court’s dismissal of the Bank’s foreclosure action in this case.

– 19 –

The Fifth District determined that the involuntary dismissal was with prejudice but concluded that “the distinction is not material for purposes” of the statute of limitations analysis. See Bartram, 140 So. 3d at 1013 n.1. We agree. While a dismissal without prejudice would allow a mortgagee to bring another foreclosure action premised on the same default as long as the action was brought within five years of the default per section 95.11(2)(c), critical to our analysis is whether the foreclosure action was premised on a default occurring subsequent to the dismissal of the first foreclosure action. As the federal district court in Dorta reasoned, “if the mortgagee’s foreclosure action is unsuccessful for whatever reason, the mortgagee still has the right to file subsequent foreclosure actions—and to seek acceleration of the entire debt—so long as they are based on separate defaults.” 2014 WL 1152917 at *6 (emphasis added). Accord Espinoza v. Countrywide Home Loans Servicing, L.P., No. 14-20756-CIV, 2014 WL 3845795, at *4 (S.D. Fla. Aug. 5, 2014) (finding the issue of whether the initial foreclosure action was dismissed with or without prejudice a distinction that was “irrelevant” to its analysis of whether acceleration of a mortgage note barred a subsequent foreclosure action brought outside the statute of limitations period).

Whether the dismissal of the initial foreclosure action by the court was with or without prejudice may be relevant to the mortgagee’s ability to collect on past defaults. However, it is entirely consistent with, and follows from, our reasoning in Singleton that each subsequent default accruing after the dismissal of an earlier

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foreclosure action creates a new cause of action, regardless of whether that dismissal was entered with or without prejudice.

Our conclusion is buttressed by the reinstatement provision of the Residential Mortgage that by its express terms granted the mortgagor, even after acceleration, the continuing right to reinstate the Mortgage and note by paying only the amounts past due as if no acceleration had occurred. Specifically, the reinstatement provision in paragraph 19 of Bartram’s form residential mortgage gave Bartram “the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of . . . (c) entry of a judgment enforcing this Security Instrument,” as long as Bartram “(a) pa[id] the Lender all sums which then would be due under this Security Instrument and Note as if no acceleration had occurred.”

Under the reinstatement provision of paragraph 19, then, even after the optional acceleration provision was exercised through the filing of a foreclosure action—as it was in this case—the mortgagor was not obligated to pay the accelerated sums due under the note until final judgment was entered and needed only to bring the loan current and meet other conditions—such as paying expenses related to the enforcement of the security interest and meeting other requirements established by the mortgagee-lender to ensure the mortgagee-lender’s interest in the property would remain unchanged—to avoid foreclosure. “Stated another way, despite acceleration of the balance due and the filing of an action to foreclosure,

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the installment nature of a loan secured by such a mortgage continues until a final judgment of foreclosure is entered and no action is necessary to reinstate it via a notice of ‘deceleration’ or otherwise.” Beauvais, 188 So. 3d at 947. Or, as the

Real Property Law Section of the Florida Bar has explained, “[t]he lender’s right to accelerate is subject to the borrower’s continuing right to cure.” Brief for The Real

Property Probate & Trust Law Section of the Florida Bar at 8, Beauvais, 188 So. 3d 938 (Fla. 3d DCA 2016), 2015 WL 6406768, at *8. In the absence of a final judgment in favor of the mortgagee, the mortgagor still had the right under paragraph 19 of the Mortgage, the reinstatement provision, to cure the default and to continue making monthly installment payments.

Accepting Bartram’s argument that the installment nature of his contract terminated once the mortgagee attempted to exercise the mortgage contract’s optional acceleration clause—ignoring the existence of the mortgage’s reinstatement provision—would permit the mortgagee only one opportunity to enforce the mortgage despite the occurrence of any future defaults. As we cautioned in Singleton, “justice would not be served if the mortgagee was barred from challenging the subsequent default payment solely because he failed to prove the earlier alleged default.” 882 So. 2d at 1008. Following to its logical conclusion Bartram’s argument that acceleration of the loan was effective before final judgment in favor of the mortgagee-lender in a foreclosure action would mean that the mortgagor-borrower would owe the accelerated amount after the

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dismissal, effectively rendering the reinstatement provision a nullity, and—in most cases—leading to an unavoidable default.

IV. This Case

Here, the Bank’s first foreclosure action was involuntarily dismissed, and therefore there was no judicial determination that a default actually occurred. Thus, even if the note had been accelerated through the Bank’s foreclosure complaint, the dismissal of the foreclosure action had the effect of revoking the acceleration. By the express terms of the reinstatement provision, if, in the month after the dismissal of the foreclosure action, Bartram began to make monthly payments on the note, the Bank could not have subsequently accelerated the entire note until there were future defaults. Once there were future defaults, however, the Bank had the right to file a subsequent foreclosure action—and to seek acceleration of all sums due under the note—so long as the foreclosure action was based on a subsequent default, and the statute of limitations had not run on that particular default.

There have been many claims of unfair and predatory practices by banks and mortgage holders in the aftermath of the financial crisis that shook the country, and in particular, Florida. See, e.g., Pino v. Bank of N.Y., 121 So. 3d 23, 27 (Fla.

2013) (discussing allegations of fraudulent backdating of mortgage assignments); see also In re Amends. to Fla. Rules of Civ. Pro.—Form 1.996, 51 So. 3d 1140 (Fla. 2010) (noting the necessity for verification of ownership of the note or right

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to enforce the note in a foreclosure action because of “recent reports of alleged document fraud and forgery in mortgage foreclosure cases”). Some of these claims have included allegations that mortgage holders have precipitously sought foreclosure even though the mortgagor missed only one or two payments and attempted to cure their defaults. In this case, quite the opposite is true. Bartram raised no defense as to the terms of the Mortgage and note itself. His sole claim is that the Bank lost the right to seek foreclosure of the Mortgage based on distinct defaults that occurred subsequent to the dismissal of the initial foreclosure complaint.

After Bartram defaulted on the Mortgage, the Bank, in accordance with the terms of the mortgage contract, notified Bartram that failure to cure his past defaults would result in acceleration of the sums due under the mortgage and judicial foreclosure. When Bartram failed to cure the past defaults, the Bank filed its foreclosure complaint and exercised the optional acceleration clause. Yet, the reinstatement provision of the Mortgage afforded Bartram the opportunity to continue the installment nature of the loan by curing the past defaults. Until final judgment was entered in favor of the Bank, Bartram was not obligated to pay the accelerated loan amount. Dismissal of the foreclosure action therefore returned the parties to their pre-foreclosure complaint status. In considering the law, the facts, and equity, Bartram’s position simply has no validity.

CONCLUSION

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The Fifth District properly extended our reasoning in Singleton to the statute of limitations context in a mortgage foreclosure action. Here, the Bank’s initial foreclosure action was involuntarily dismissed. Therefore, as we previously explained in Singleton, the dismissal returned the parties back to “the same contractual relationship with the same continuing obligations.” 882 So. 2d at 1007.

Bartram and the Bank’s prior contractual relationship gave Bartram the opportunity to continue making his mortgage payments, and gave the Bank the right to exercise its remedy of acceleration through a foreclosure action if Bartram subsequently defaulted on a payment separate from the default upon which the Bank predicated its first foreclosure action. Therefore, the Bank’s attempted prior acceleration in a foreclosure action that was involuntarily dismissed did not trigger the statute of limitations to bar future foreclosure actions based on separate defaults.

Accordingly, we approve the Fifth District’s decision in Bartram and answer the rephrased certified question in the negative.

It is so ordered.

LABARGA, C.J., and QUINCE, CANADY, and PERRY, JJ., concur. POLSTON, J., concurs in result.

LEWIS, J., concurs in result only with an opinion.

NOT FINAL UNTIL TIME EXPIRES TO FILE REHEARING MOTION, AND

IF FILED, DETERMINED.

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LEWIS, J., concurring in result only.

I am troubled by the expansion of Singleton v. Greymar Associates, 882 So. 2d 1004 (Fla. 2004), to potentially any case involving successive foreclosure actions. Other courts in this State have already broadly applied Singleton—a decision involving res judicata and dismissal with prejudice—to cases that were either dismissed for lack of prosecution or voluntarily dismissed by the note-holder, as well as to cases that concern the statute of limitations, without careful consideration of the procedural distinctions of each case. E.g., In re Anthony, 550 B.R. 577 (M.D. Fla. 2016); Dorta v. Wilmington Tr. Nat’l Ass’n, 2014 WL 1152917 (M.D. Fla. 2014); Romero v. Suntrust Mortg., Inc., 15 F. Supp. 3d 1279 (S.D. Fla. 2014); Kaan v. Wells Fargo Bank, N.A., 981 F. Supp. 2d 1271 (S.D. Fla. 2013); Evergrene Partners, Inc. v. Citibank, N.A., 143 So. 3d 954 (Fla. 4th DCA 2014); see also In re Rogers Townsend & Thomas, PC, 773 S.E.2d 101, 105-06 (N.C. Ct. App. 2015) (relying on Singleton in a case involving previous voluntary dismissals and the statute of limitations). Today’s decision will only continue that expansion, which I fear will come at the cost of established Florida law and Floridians who may struggle with both the costs of owning a home and uncertain behavior by lenders. I therefore respectfully concur in result only.

At its narrowest, Singleton simply held that “when a second and separate action for foreclosure is sought for a default that involves a separate period of default from the one alleged in the first action, the case is not necessarily barred by

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res judicata.” 882 So. 2d at 1006-07 (emphasis supplied). However, as has been

noted elsewhere, Singleton left several matters unanswered:

[T]he Supreme Court omitted explanation of 1) what constitutes a valid new default after the initial round of default, acceleration, foreclosure filing, and dismissal; 2) how the fact-finder below determines that a valid new default has occurred; and 3) what conditions constitute valid new default, including whether the lender must reinstate the original note and mortgage terms in the interim or serve a second notice of intent to accelerate. Moreover, the court in no way addressed the effect of the involuntary dismissal on the statute of limitations.

Andrew J. Bernhard, Deceleration: Restarting the Expired Statute of Limitations in

Mortgage Foreclosures, Fla. B.J., Sept.-Oct. 2014, at 30, 32. Given the procedural

posture of this matter and the relatively sparse record before this Court, the

decision today fails to address evidentiary concerns regarding how to determine the

manner in which a mortgage may be reinstated following the dismissal of a

foreclosure action, as well as whether a valid “subsequent and separate” default

occurred to give rise to a new cause of action. See Singleton, 882 So. 2d at 1008.

Instead of addressing these concerns, the Court flatly holds that the dismissal

itself—for any reason—“decelerates” the mortgage and restores the parties to their

positions prior to the acceleration without authority for support. Majority op. at 3.

In this case, there is no evidence contained in the record before this Court to

show whether the parties tacitly agreed to a “de facto reinstatement” following the

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dismissal of the previous foreclosure action.7 Further, despite the assumption of the majority of the Court to the contrary, the mortgage itself did not create a right to reinstatement following acceleration and the dismissal of a foreclosure action. The contractual right to reinstatement under the terms of this mortgage existed only under specific conditions,8 which do not appear to have been satisfied in the

7. Moreover, the precise nature of the dismissal in this case is even more uncertain than the mortgage in Beauvais, which was dismissed without prejudice. See Deutsche Bank Tr. Co. Americas v. Beauvais, 188 So. 3d 938, 964 (Fla. 3d DCA 2016) (Scales, J., dissenting). The trial court below dismissed the first foreclosure action after indicating that it had informed the parties that “[f]ailure of the parties . . . to appear in person [at the case management conference] may result in the case being dismissed without prejudice.” Order of Dismissal, U.S. Bank Nat’l Ass’n v. Bartram, No. CA06-428 (Fla. 7th Cir. Ct. May 5, 2011) (emphasis added). However, the trial court’s order did not explicitly state whether this dismissal was with or without prejudice. Id. (“The Complaint to Foreclose Mortgage . . . is hereby dismissed.”). Further complicating the matter, the Fifth District below stated that this dismissal was with prejudice, but summarily determined “that the distinction is not material for purposes of the issue at hand.” U.S. Bank Nat’l Ass’n v. Bartram, 140 So. 3d 1007, 1013 n.1 (Fla. 5th DCA 2014).

8. The mortgage note provides the following right to reinstatement:

Borrower’s Right to Reinstate After Acceleration. If Borrower meets certain conditions, Borrower shall have the right to have enforcement of this Security Instrument discontinued at any time prior to the earliest of: (a) five days before sale of the Property pursuant to any power of sale contained in this Security Instrument; (b) such other period as Applicable Law might specify for the termination of Borrower’s right to reinstate; or (c) entry of a judgment enforcing this Security Instrument. Those conditions are that Borrower: (a) pays Lender all sums which then would be due under this Security Instrument and the Note as if no acceleration had occurred; (b) cures any default of any other covenants or agreements; (c) pays all expenses incurred in enforcing this Security Instrument, including, but

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record before this Court. Parties, particularly those as sophisticated as the banks

and other lenders that routinely engage in such litigation, should be required to

present evidence that the mortgage was actually decelerated and reinstated, rather

than require our courts to fill in the blank and assume that deceleration

automatically occurred upon dismissal of a previous foreclosure action.

Instead, I find myself more closely aligned with the dissenting opinion of

Judge Scales in Beauvais, 188 So. 3d at 954 (Scales, J., dissenting). A majority of

the en banc Third District Court of Appeal reached the same conclusion as the

majority of this Court does today regarding very similar facts. By contrast, Judge

Scales, joined by three of his colleagues, raised several concerns that arise from the

not limited to, reasonable attorneys’ fees, property inspection and valuation fees, and other fees incurred for the purpose of protecting

Lender’s interest in the Property and rights under this Security

Instrument; and (d) takes such action as Lender may reasonably require to assure that Lender’s interest in the Property and rights under this Security Instrument, and Borrower’s obligation to pay the sums secured by this Security Instrument, shall continue unchanged. Lender may require that Borrower pay such reinstatement and expenses in one or more of the following forms, as selected by Lender: (a) cash; (b) money order; (c) certified check, bank check, treasurer’s check or cashier’s check, provided any such check is drawn upon an institution whose deposits are insured by a federal agency, instrumentality or entity; or (d) Electronic Funds Transfer. Upon reinstatement by Borrower, this Security Instrument and obligations secured hereby shall remain fully effective as if no acceleration had occurred. However, this right to reinstate shall not apply in the case of acceleration under Section 18.

See majority op. at 6-7.

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conclusion that a mortgage is automatically decelerated and reinstated following

the dismissal of a foreclosure action for any reason.

First, Judge Scales pointed out that the mortgage in Beauvais, like the

mortgage in this case, created the borrower’s right to reinstatement only under

specific conditions, which did not include dismissal of a prior foreclosure action.

Id. at 956-57 (“Neither the note nor the mortgage contain any provision reinstating

the installment nature of the note if, after acceleration, a lender foreclosure action

is dismissed.”). Further reviewing the clear terms of the mortgage, Judge Scales

explained that the mortgage ceased to be an installment contract upon the exercise

of the lender’s right to acceleration. Id. at 961-62. Thus, the conclusion that a

court’s dismissal of a foreclosure action itself can end acceleration and reinstate

the mortgage ignores basic principles of Florida contract law:

The majority opinion rewrites the parties’ note and mortgage to create a reinstatement provision—i.e., reinstating the installment nature of the note, as if acceleration never occurred, upon any dismissal of any lawsuit—that the parties did not include when drafting their documents. Singleton does not say this; the parties’ contract documents certainly do not say this; and Florida law is repugnant to the majority’s insertion of a provision into the parties’ private contract that the parties themselves most assuredly omitted. [FN. 23]

[FN.
23]: Brooks v. Green, 993 So. 2d 58, 61 (Fla. 1st DCA 2008) (holding that a court is without authority to rewrite a clear and unambiguous contract between parties).

Id. at 963.

– 30 –

Moreover, Judge Scales cogently explained that the overbroad construction of Singleton will undermine its limited holding. Singleton indicated that “an adjudication denying acceleration and foreclosure” should not bar a successive foreclosure predicated upon a “subsequent and separate alleged default.” 882 So.

2d at 1007, 1008. Yet, under the majority decisions of the Third District and this Court, any dismissal of a foreclosure action can support a successive foreclosure action. See Beauvais, 188 So. 3d at 963-64 (Scales, J., dissenting). The form dismissal in Beauvais should not constitute an “adjudication denying acceleration and foreclosure,” which could, at least according to Singleton, restore the parties to their respective pre-acceleration positions. Id. at 964 (quoting Singleton, 882 So. 2d at 1007). In light of the even more vague dismissal at issue in this case, I agree with Judge Scales’ warning that “[w]e should be reluctant to hold that a trial court’s form dismissal order visits upon the borrower and lender a host of critical, yet unarticulated, adjudications that fundamentally change the parties’ contractual relationship and are entirely unsupported by the existing law or by the record below.” Id. at 965.

Finally, the expansion of Singleton’s holding that res judicata “does not necessarily” bar the filing of successive foreclosure actions to the statute of limitations ignores critical distinctions between these two doctrines, at a serious cost to the statute of limitations and the separation of powers. As long recognized in this State, res judicata is a doctrine of equity not to “be invoked where it would

– 31 –

defeat the ends of justice.” Id. at 967 n.31 (citing State v. McBride, 848 So. 2d 287, 291 (Fla. 2003); Aeacus Real Estate Ltd. P’ship. v. 5th Ave. Real Estate Dev.,

Inc., 948 So. 2d 834 (Fla. 4th DCA 2007)); see also Singleton, 882 So. 2d at 1008 (citing deCancino v. E. Airlines, Inc., 283 So. 2d 97, 98 (Fla. 1973)). However,

“equity follows the law”; therefore, equitable principles are subordinate to statutes enacted by the Legislature, including the statute of limitations. May v. Holley, 59 So. 2d 636 (Fla. 1952); Beauvais, 188 So. 3d at 967-68 (Scales, J., dissenting)

(citing Dobbs v. Sea Isle Hotel, 56 So. 2d 341, 342 (Fla. 1952); Cragin v. Ocean & Lake Realty Co., 133 So. 569, 573-74 (Fla. 1931)). This untenable extension of an equitable, judicial doctrine into an area of law expressly governed by legislative action veers perilously close to violating the separation of powers. Nonetheless, the majority opinion of this Court fails to recognize these concerns and justifies the imposition of Singleton’s equitable focus onto the statute of limitations by simply reviewing the decisions of federal and Florida courts that have reached this same conclusion without acknowledging the critical distinctions between res judicata and the statute of limitations.

I recognize the concern raised by this Court and others regarding the need to avoid encouraging delinquent borrowers from abusing the lending process by remaining in default after an initial foreclosure action is dismissed. See Singleton, 882 So. 2d at 1008; see also Fairbank’s Capital Corp. v. Milligan, 234 Fed. Appx. 21, 24 (3d Cir. 2007) (relying on Singleton and seeking to avoid “encourag[ing] a

– 32 –

delinquent mortgagor to come to a settlement with a mortgagee on a default in

order to later insulate the mortgagor from the consequences of a subsequent

default”). Nonetheless, these legitimate policy concerns should not outweigh the

established law of this State. In light of the narrow holding of Singleton, I fear that

its expansion today to a case involving a previous dismissal (presumably) without

prejudice and no clear reinstatement of the mortgage terms in either the note or the

facts of this limited record will lead to inequitable results. Just as the courts should

not encourage mortgage delinquency, so too should they avoid encouraging lenders

from abusing Florida law and Floridians by “retroactively reinstating” mortgages

after many of those lenders initially slept on their own rights to seek foreclosures.

See Bernhard, supra, at 27. Therefore, I concur in result only.

Application for Review of the Decision of the District Court of Appeal – Certified Great Public Importance

Fifth District – Case No. 5D12-3823

(St. Johns County)

Kendall B. Coffey, Jeffrey B. Crockett, and Daniel Frederick Blonsky of Coffey Burlington, P.L., Miami, Florida; Dineen Pashoukos Wasylik of Dineen Pashoukos Wasylik, P.A., Tampa, Florida; Thomas R. Pycraft, Jr. of Pycraft Legal Services, LLC, Saint Augustine, Florida; and Michael Alex Wasylik of Ricardo & Wasylik, PL, Dade City, Florida,

for Petitioner Lewis Brooke Bartram

Paul Alexander Bravo of P.A. Bravo, Coral Gables, Florida,

for Petitioner Gideon M.G. Gratsiani

– 33 –

Joel Stephen Perwin of Joel S. Perwin, P.A., Miami, Florida,

for Petitioner The Plantation at Ponte Vedra, Inc.

Michael Darren Starks and Kelly Overstreet Johnson of Baker, Donelson, Bearman, Caldwell & Berkowitz, PC, Orlando, Florida; William Power McCaughan, Stephanie N. Moot and Karen Poy Finesilver of K&L Gates LLP, Miami, Florida; and David R. Fine of K&L Gates LLP, Harrisburg, Pennsylvania,

for Respondent U.S. Bank National Association

Lynn Drysdale of Jacksonville Area Legal Aid, Inc., Jacksonville, Florida; Thomas A. Cox of The National Consumer Law Center, Portland, Maine; J.L. Pottenger, Jr. of Jerome N. Frank Legal Services Organization, New Haven, Connecticut; and James C. Sturdevant of The Sturdevant Law Firm, San Francisco, California,

for Amici Curiae National Association of Consumer Advocates, The National Consumer Law Center, and The Jerome N. Frank Legal Services Organization

Steven Michael Siegfried, Nicholas David Siegfried, and Nicole Reid Kurtz of Siegfried, Rivera, Hyman, Lerner, De La Torre, Mars & Sobel, P.A., Coral Gables, Florida; and Todd L. Wallen of The Wallen Law Firm, P.A., Coral Gables, Florida,

for Amicus Curiae Community Associations Institute

John Granville Crabtree, George Richard Baise, Jr., and Brian Carson Tackenberg of Crabtree & Associates, P.A., Key Biscayne, Florida; Alice Maria Vickers of Florida Alliance for Consumer Protection, Tallahassee, Florida; Kimberly Laura Sanchez of Community Legal Services of Mid-Florida, Orlando, Florida; Sarah Elizabeth Mattern of Brevard County Legal Aid, Inc, Rockledge, Florida; and Peter P. Sleasman of Florida Legal Services Inc., Newberry, Florida,

for Amici Curiae Florida Alliance for Consumer Protection, Brevard County Legal Aid, and Consumer Umbrella Group of Florida Legal Services

Andrew David Manko and John Stewart Mills of The Mills Firm, P.A., Tallahassee, Florida,

for Amici Curiae Upside Property Investment, LLC, Signature Land, Inc., Upside Property Enterprises, Inc., and The Lynne B. Preminger Living Trust

– 34 –

Major Best Harding and John R. Beranek of Ausley McMullen, Tallahassee, Florida; and John Russell Hargrove of Hargrove Pierson & Brown P.A., Boca Raton, Florida,

for Amicus Curiae Baywinds Community Association, Inc.

Peter David Ticktin, Timothy Richard Quinones, and Kendrick Almaguer of The Ticktin Law Group, P.A., Deerfield Beach, Florida,

for Amici Curiae Bradford and Cheri Langworthy, and The Ticktin Law Group, P.A.

Robert Rex Edwards and Jessica Pierce Quiggle of Robertson, Anschutz & Schneid, PL, Boca Raton, Florida; Melissa A. Giasi and Richard Slaughter McIver of Kass Shuler, P.A., Tampa, Florida; Shaib Yariel Rios and Curtis James Herbert of Brock and Scott PLLC, Fort Lauderdale, Florida; Andrea Rachael Tromberg of Gladstone Law Group, P.A., Boca Raton, Florida; Elizabeth Redchuk Wellborn of Elizabeth R. Wellborn, P.A., Deerfield Beach, Florida; Michelle Garcia Gilbert and Jennifer Lima-Smith of Gilbert Garcia Group, P.A., Tampa, Florida,

for Amicus Curiae American Legal and Financial Network

Robert Mark Brochin, Joshua Charles Prever, and Brian Michael Ercole of Morgan, Lewis & Bockius LLP, Miami, Florida,

for Amicus Curiae Mortgage Bankers Association

David William Rodstein of Padula Hodkin, PLLC, Boca Raton, Florida,

for Amicus Curiae US Financial Network

– 35 –

How Laws Become Statutes in Florida

Copyright 14 September 2016 by Bob Hurt. All rights reserved.

A correspondent recently wrote me asking for help to get the court to declare Florida statute unconstitutional because it does not contain the “Be it enacted” clause.  I answer with a clarification regarding a statute dear to my heart – the one requiring public employees to swear an oath to support the constitutions of the US and Florida.

The law constitutes a vehicle for creating, changing, and destroying statutes. Let us look at how the current Florida Constitution Article III grants the Legislature authority.

SECTION 6.Laws.Every law shall embrace but one subject and matter properly connected therewith, and the subject shall be briefly expressed in the title. No law shall be revised or amended by reference to its title only. Laws to revise or amend shall set out in full the revised or amended act, section, subsection or paragraph of a subsection. The enacting clause of every law shall read: “Be It Enacted by the Legislature of the State of Florida:”.

Accordingly, the Legislature enacts laws using the proper language “be it enacted” and records them in one of the chapters of laws, identified by year and chapter number.  The enactment authorizes creation, addition, deletion, or repeal of corresponding text in statutes.  Statutes exist in an arrangement of chapters relating to various topics.  The laws changing the statutes specify the statutes upon which they operate and provide the exact wording for deletion (by lining through deleted text) or addition (by underlining added text) to those statutes.  The statutes then contain a history note identifying the source laws, including the section number, and the Law year and chapter number.

With respect to the loyalty oaths and related statutes about the flouting of which I raised such a stink in my 2006 article Loyalty Oaths in Florida, the Supreme Court justices asked the Legislature to modify the law to make better sense. The legislature responded in Laws 2007-30 and 2011-40 which modified 876.05-876.10, the main loyalty oath statute and most if not all of the statutes that reference it.  In particular, they moved to the candidate statute the oath statute provision requiring candidates to swear the oath.

Notice the history note of the two post-article changes, one in 2007 and one in 2011:

876.05 Public employees; oath.

(1) All persons who now or hereafter are employed by or who now or hereafter are on the payroll of the state, or any of its departments and agencies, subdivisions, counties, cities, school boards and districts of the free public school system of the state or counties, or institutions of higher learning, except candidates for federal office, are required to take an oath before any person duly authorized to take acknowledgments of instruments for public record in the state in the following form:

I,  , a citizen of the State of Florida and of the United States of America, and being employed by or an officer of   and a recipient of public funds as such employee or officer, do hereby solemnly swear or affirm that I will support the Constitution of the United States and of the State of Florida.

(2) Said oath shall be filed with the records of the governing official or employing governmental agency prior to the approval of any voucher for the payment of salary, expenses, or other compensation.

History.—s. 1, ch. 25046, 1949; s. 22, ch. 83-214; s. 55, ch. 2007-30; s. 77, ch. 2011-40.

 

The most recent of those changes came from this Laws of Florida document posted on the web at http://laws.flrules.org/2011/40, from which I provide the following excerpt. It shows the beginning of the law which contains a summary of all the statutes and text it changed, added, deleted, or repealed, followed by the enactment language, followed by 80 sections showing the specific changes including the references to 876.05 and 876.07, followed by the end of the law.  The document comprises 88 pages.

CHAPTER 2011-40

Committee Substitute for

Committee Substitute for House Bill No. 1355

An act relating to elections; amending s. 97.012, F.S.; expanding the list of responsibilities of the Secretary of State when acting in his or her capacity as chief election officer; amending s. 97.021, F.S.;

amending s. 876.05, F.S.; deleting a requirement for all candidates for public office to record an oath to support the Constitution of the United States and of the State of Florida; repealing s. 876.07, F.S., relating to a requirement that a person make an oath to support the Constitution of the United States and of the State of Florida in order to be qualified as a candidate for office; providing for severability of the act; providing effective dates.

Be It Enacted by the Legislature of the State of Florida:

Section 1. Subsection (16) is added to section 97.012, Florida Statutes, to read:

Section 77. Subsection (1) of section 876.05, Florida Statutes, is amended to read:

876.05 Public employees; oath.—

(1) All persons who now or hereafter are employed by or who now or hereafter are on the payroll of the state, or any of its departments and agencies, subdivisions, counties, cities, school boards and districts of the free public school system of the state or counties, or institutions of higher learning, and all candidates for public office, except candidates for federal office, are required to take an oath before any person duly authorized to take acknowledgments of instruments for public record in the state in the following form:

I, ……, a citizen of the State of Florida and of the United States of America, and being employed by or an officer of …… and a recipient of public funds as such employee or officer, do hereby solemnly swear or affirm that I will support the Constitution of the United States and of the State of Florida.

Section 78. Section 876.07, Florida Statutes, is repealed.

Section 79. If any provision of this act or its application to any person or circumstance is held invalid, the invalidity does not affect other provisions or applications of the act which can be given effect without the invalid provision or application, and to this end the provisions of this act are severable.

Section 80. Except as otherwise expressly provided in this act, this act shall take effect upon becoming a law.

Approved by the Governor May 19, 2011.

Filed in Office Secretary of State May 19, 2011.

I searched for all instances of 876.05, the loyalty oath statute.  The law mentions it 7 times.  The following appears on page 56:

Section 51. Paragraph (b) of subsection (4) of section 105.031, Florida Statutes, is amended to read:

105.031 Qualification; filing fee; candidate’s oath; items required to be filed.—

(4) CANDIDATE’S OATH.—

(b) All candidates for judicial office shall subscribe to an oath or affirmation in writing to be filed with the appropriate qualifying officer upon qualifying. A printed copy of the oath or affirmation shall be furnished to the candidate by the qualifying officer and shall be in substantially the following form:

State of Florida

County of ……

Before me, an officer authorized to administer oaths, personally appeared …(please print name as you wish it to appear on the ballot)…, to me well known, who, being sworn, says he or she: is a candidate for the judicial office of ……; that his or her legal residence is …… County, Florida; that he or she is a qualified elector of the state and of the territorial jurisdiction of the court to which he or she seeks election; that he or she is qualified under the constitution and laws of Florida to hold the judicial office to which he or she desires to be elected or in which he or she desires to be retained; that he or she has taken the oath required by ss. 876.05-876.10, Florida Statutes; that he or she has qualified for no other public office in the state, the term of which office or any part thereof runs concurrent to the office he or she seeks; and that he or she has resigned from any office which he or she is required to resign pursuant to s. 99.012, Florida Statutes; and that he or she will support the Constitution of the United States and the Constitution of the State of Florida.

Notice that while striking 876.05-876.10 from the candidate’s oath, the law added separate language with the same effect as that struck.  So the legislators are not idiots, are they?  They agree that candidates should swear to support the constitution.

Please look this law up for yourself and share it with your inmates in a lecture.  They need to know how government PROPERLY creates and changes laws and statutes and how it documents them for the public to read. Show them this letter if you wish.

Remember that the law is based on reason, logic, and common sense.  Stay away from patriot myth mongers who make irrational, illogical, false, and unsupported claims about the law and legal processes.  Look up the law and related court opinions for yourself, and read them carefully before accepting someone else’s strange-sounding ideas about their wording or meaning. Learn the law.  Become disposed to using it. No substitute exists for knowing the law.

# # #

Loyalty Oaths and Jury Powers

Here is a research article I wrote a decade ago:

~ 22: LAW – LOYALTY OATHS IN FLORIDA.PDF

A state prison inmate wrote me for help proving that the legislature did not properly enact the Florida statutes because of omitting the Be It Enacted clause. I wrote today this in response. Any comments?

Dear Antonio:

It seems clear to me that you do not understand how the Florida Legislature creates laws and statutes, so I shall explain. The legislature enacts laws using the proper language “be it enacted” and records them in one of the chapters of laws, identified by year and chapter number. The enactment authorizes severance of the laws into statutes according to topic category. The laws changing the statutes specify the statutes upon which they operate and provides the exact wording for deletion or addition to those statutes. The statutes then contain a footnote identifying the source laws, including the section number, and the Law year and chapter number.

With respect to the loyalty oaths about which I raised such a stink, the Supreme Court justices asked the Legislature to modify the law to make better sense. The legislature responded in Law 2011-40 which modified 876.05-876.10, the main loyalty oath statute and all. In particular, they removed the provision requiring candidates to swear the oath.

Notice the history and the two changes since I wrote my Loyalty Oaths in Florida paper, one in 2007 and one in 2011:

The most recent of those changes came from this Laws of Florida document posted on the web: http://laws.flrules.org/2011/40.

The law document contains a summary of all the statutes it changed, added, or deleted, followed by the enactment language followed by the specific changes, as above.

I searched for all instances of 876.05, the loyalty oath statute. The law mentions it 7 times. Here is one of them.

Notice that while striking 876.05-876.10 from the candidate’s oath, the law added separate language with the same effect as that struck. So the legislators are not idiots, are they? They agree that candidates should swear to support the constitution BEFORE getting elected.

And here we have the change to 876.05 and 876.07:

Please look this law up for yourself and share it with your inmates in a lecture. They need to know how government PROPERLY creates and changes laws and statutes and how it documents them for the public to read. Show them this letter if you wish.

Remember that the law is based on reason, logic, and common sense. Stay away from patriot myth mongers who claim secured party creditor status, claim all law is commercial or in admiralty, advocate harassing officials with spurious civil liens and administrative process, advocate passing false financial instruments, such as birth certificate bonds based on non-existent treasury direct accounts, or promote wrongful use of IRS tax forms. These people get others thrown in prison (just ask around and you will find plenty in a federal prison).

Now I’ll mention a bit of news. A few months ago, Terry Trussell of Dixie County got convicted of numerous counts of violating 843.0855 by issuing a presentment as foreman of a “common law grand jury.” Common sense says the government will NEVER allow people to establish their own grand juries, and if people do that, and issue presentments, they will go to prison for impersonating government officials. But I know of no law making the grand jury (see chapter 905) part of government, albeit the chief judge, the clerk, the bailiffs, and the state attorney have intimate involvement.

In pondering the danger “people’s” grand juries present to government, I decided to start researching the Florida Constitutions, and I wrote the results at my blog here:

https://bobhurt.blogspot.com/2016/07/why-government-destroyed-jury-powers.html

I noticed that ante-bellum juries had more powers than post-bellum juries. Petite juries determined law as well as fact, and grand juries investigated and presented or indicted on all felonies. Furthermore, crime victims could hire private attorneys to prosecute the accused. After the civil war that changed dramatically. Now 2 states don’t even have grand juries, and in Florida they investigate only capital crimes. Petite juries determine only facts, but not the law. As I contemplated the reasons for this, I realized that the governments of the states simply did not trust the electorate any more. Why? Because the 15th Amendment gave Negroes and other non-whites the right to vote, and therefore to sit on juries. Negroes then committed many crimes, just as they do now, only worse, because of low average intelligence and bad decision-making. Government leaders apparently believed that Negroes on juries would acquit members of their race regardless of guilt. So they stripped juries of some powers. And so it remains. The 19th and 26th Amendments gave voting rights to women and children, so the situation has become even worse. I proposed a solution: deny voting rights to irresponsible people regardless of race, gender, or age. One measure of responsibility is graduating from high school. Another is having adequate knowledge of the constitutions. Another is self-sufficiency. Another is mental maturity.

You might work with your fellow inmates to propose legislation that will repair the electorate, making it more responsible, and then to restore jury powers and the right of private prosecution of criminal defendants. Point out to your associates that many people sit in prison because of their politics (including substance abuse), not because they actually hurt anyone. Properly empowered juries would prevent such wrongful incarcerations. But that will not happen till we have a responsible electorate, will it? So, how do you make the electorate responsible?

If that project doesn’t interest you, you might use your time to memorize the Florida Evidence Code (chapter 90 and 92, Florida Statues) and the Florida Rules of Civil Procedure, Criminal Procedure, Appellate Procedure, and Judicial Administration.

Remember that “good luck” happens when preparation meets opportunity.

I sincerely wish you Good Luck in your adventures of discovery,

Bob Hurt

Sanctions Pummel Neil Garfield Legal Theories

Neil Garfield’s frivolous filings and bogus legal theories have already cost at least one client, Zdislaw Maslanka, a wad of attorney fees in an utterly frivolous action to get his house free even though he remained current in his mortgage payments.  As the below docket entries show, the Florida 4th District appellate panel affirmed the 17th Circuit’s dismissal of the case and ordered Maslanka to pay the attorney fees of the two mortgage creditors that he sued.

  • 4D14-3015-Zdzislaw E. Maslanka v. Wells Fargo Home Mortgage and Embrace Home Loans
05/12/2016 Affirmed ­ Per Curiam Affirmed  
05/12/2016 Order Granting Attorney Fees­Unconditionally ORDERED that the appellee Embrace Home Loans Inc.’s September 2, 2015 motion for attorney’s fees is granted. On remand, the trial court shall set the amount of the attorney’s fees to be awarded for this appellate case. If a motion for rehearing is filed in this court, then services rendered in connection with the filing of the motion, including, but not limited to, preparation of a responsive pleading, shall be taken into account in computing the amount of the fee
05/12/2016 Order Granting Attorney Fees­Unconditionally ORDERED that the appellee Wells Fargo Home Mortgage’s September 3, 2015 motion for attorneys’ fees is granted. On remand, the trial court shall set the amount of the attorneys’ fees to be awarded for this appellate case. If a motion for rehearing is filed in this court, then services rendered in connection with the filing of the motion, including, but not limited to, preparation of a responsive pleading, shall be taken into account in computing the amount of the fee.

Federal Rules of Civil Procedure Rule 11 (See Below) allows the court to award attorney fees to the party against whom a litigant files frivolous (unsupported or nonsensical) motions.

34 States have embraced FRCivPro Rule 11 in their own rules of civil procedure, but Florida embraced it in Florida Statute 57.105 (See Below).  It requires the attorney propounding the unsupported motion to pay one half of the sanction cost and the attorney’s client to pay the other half.  That has raised the hackles of a lot of attorneys who claim it chills their willingness to mount an aggressive advocacy on behalf of the client.  Obviously, lawmakers see overaggressiveness as vexatious, and they decided, finally, to punish the lawyer for it.

Mortgage loan creditors have begun to get sick and tired of dealing with mindless litigation by idiotic practititoners like Neil Garfield.

Johnson v. BANK OF NEW YORK MELLON, Dist. Court, WD Washington 2016

I write now to show a case in point (full text of opinion below).  Lajuana Locklin Johnson, a TILA rescission mortgagor,  provoked the ire of a USDC judge in Washington State by filing a notice of rescission 10 (TEN!) years after consummation of the loan (obviously following Neil Garfield’s ridiculous strategy) when the TILA statute of repose window closes after 3 years.  She knew she had no case, but filed it anyway in a silly and misguided effort to get a free house.  So, the judge spanked her.

Oh, and she claimed she relied on the clear meaning of the SCOTUS Jesinoski opinion to do it. She claimed SCOTUS meant one can send notice of rescission after 3 years, but the high court actually meant the borrower with a valid TILA rescission claim may sue after 3 years.  Incidentally, the Minnesota USDC ruled in July 2016 that Jesinoski had no TILA rescission case because he and his wife had written an acknowledged receipt of the proper TILA disclosures. Jesinoski claimed he had invested over $800,000 in the case, much of which came from attorney fees.

Well, first Judge James L. Robart ordered Lajuana and her attorney Smith to show cause why he shouldn’t sanction them under Rule 11 for bringing an utterly hopeless TILA rescission action she knew would fail.  And in that order he berated attorney Jill J. Smith of Natural Resource Law Group, PLLC, for filing the action in spite of having filed and been sanctioned for one or more prior frivolous actions like Lajuana’s.  Smith idiotically claimed the table-funding meant the loan had never been consummated and so the statute of repose could not have tolled.  But she did not explain how Lajuana could rescind a non-consummated loan.

The judge said this about the essential argument Smith (taken directly from Garfield) propounded:

Excerpt from opinion

Ms. Smith indicates that on October 6, 2005, Ms. Johnson “entered into what she thought was a mortgage loan to purchase” property. (OSC Resp. at 1.) At oral argument, Ms. Smith argued that if the loan was never funded then the loan was never consummated.[3] However, Ms. Smith conceded at oral argument that the relevant parties signed the loan paperwork, money was transferred to the sellers of the house, and Ms. Johnson took possession of the property. These facts unarguably give rise to a contract under Washington Law. See Keystone, 94 P.3d at 949; see also Grimes, 340 F.3d at 1009-10. Ms. Smith nonetheless argued that the loan was unconsummated at that juncture based on the manner in which it was funded and the subsequent history of the loan.

Ms. Smith’s protestations in her response and at oral argument that the loan was table-funded[4] (id. at 4-5) and her account of the history of the loan subsequent to its consummation (OSC at 2-4) are both irrelevant to her allegation that “the loan was never consummated” (Compl. ¶ 13). Despite being afforded numerous opportunities to do so, Ms. Smith has failed to provide any legal authority—or even a cogent argument— supporting the proposition that the type of funding or subsequent transfers of a loan impact whether the loan was consummated.[5] (See, e.g., OSC Resp. at 5 (“One of the questions at issue is that if a party is merely an originator and NOT a lender or creditor, is there some theory where a loan contract could be considered consummated? If Plaintiff’s loan was a table-funded loan, the answer must be `no.'”).) Nor has Ms. Smith pointed to any further evidence providing “information and belief” that “the subject loan was never consummated.” (Compl. ¶ 13.)

The foregoing analysis leads the court to conclude that Ms. Smith’s factual allegation that “the loan was never consummated” and the legal theories underpinning that allegation violate Rules 11(b)(2) and 11(b)(3).[6] See Fed. R. Civ. P. 11(b)(2) (requiring that “the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law”); Fed. R. Civ. P. 11(b)(3) (requiring that “factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery”). The court analyzes the appropriate sanctions below.

Then, Judge Robart ordered these sanctions:

(1) No more than 30 days after the date of this order, Ms. Smith and the Natural Resource Law Group must jointly pay sanctions of $10,000.00 to the court;

(2) No more than 30 days after the date of this order, Ms. Smith and the Natural Resource Law Group must fully reimburse Ms. Johnson for any attorneys’ fees or costs paid by Ms. Johnson in conjunction with this case and file certification with the court that they have done so; and

(3) The court dismisses the complaint with prejudice.

I would raise yet another point about this case.  The above excerpt provided that “Ms. Smith indicates that on October 6, 2005, Ms. Johnson “entered into what she thought was a mortgage loan to purchase” property…  Ms. Smith conceded at oral argument that the relevant parties signed the loan paperwork, money was transferred to the sellers of the house, and Ms. Johnson took possession of the property.”

I fail to see how TILA rescission can apply at all to a purchase money loan.

12 CFR Part 1026.23(f) “Exempt transactions.  The right to rescind does not apply to the following:  1. A residential mortgage transaction.” (“Residential mortgage transaction means a transaction in which a mortgage, deed of trust, purchase money security interestarising under an installment sales contract, or equivalent consensual security interestis created or retained in the consumer‘s principal dwelling to finance the acquisition or initial construction of that dwelling.”)

See the whole opinion below.

And let this be a lesson to Neil Garfield Klingons (those who cling to his every utterance:

Heed Neil Garfield at your peril!

 

FRCivPro Rule 11. Signing Pleadings, Motions, and Other Papers; Representations to the Court; Sanctions

(a) Signature. Every pleading, written motion, and other paper must be signed by at least one attorney of record in the attorney’s name—or by a party personally if the party is unrepresented. The paper must state the signer’s address, e-mail address, and telephone number. Unless a rule or statute specifically states otherwise, a pleading need not be verified or accompanied by an affidavit. The court must strike an unsigned paper unless the omission is promptly corrected after being called to the attorney’s or party’s attention.

(b) Representations to the Court. By presenting to the court a pleading, written motion, or other paper—whether by signing, filing, submitting, or later advocating it—an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances:

(1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation;

(2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law;

(3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and

(4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

(c) Sanctions.

(1) In General. If, after notice and a reasonable opportunity to respond, the court determines that Rule 11(b) has been violated, the court may impose an appropriate sanction on any attorney, law firm, or party that violated the rule or is responsible for the violation. Absent exceptional circumstances, a law firm must be held jointly responsible for a violation committed by its partner, associate, or employee.

(2) Motion for Sanctions. A motion for sanctions must be made separately from any other motion and must describe the specific conduct that allegedly violates Rule 11(b). The motion must be served under Rule 5, but it must not be filed or be presented to the court if the challenged paper, claim, defense, contention, or denial is withdrawn or appropriately corrected within 21 days after service or within another time the court sets. If warranted, the court may award to the prevailing party the reasonable expenses, including attorney’s fees, incurred for the motion.

(3) On the Court’s Initiative. On its own, the court may order an attorney, law firm, or party to show cause why conduct specifically described in the order has not violated Rule 11(b).

(4) Nature of a Sanction. A sanction imposed under this rule must be limited to what suffices to deter repetition of the conduct or comparable conduct by others similarly situated. The sanction may include nonmonetary directives; an order to pay a penalty into court; or, if imposed on motion and warranted for effective deterrence, an order directing payment to the movant of part or all of the reasonable attorney’s fees and other expenses directly resulting from the violation.

(5) Limitations on Monetary Sanctions. The court must not impose a monetary sanction:

(A) against a represented party for violating Rule 11(b)(2); or

(B) on its own, unless it issued the show-cause order under Rule 11(c)(3)before voluntary dismissal or settlement of the claims made by or against the party that is, or whose attorneys are, to be sanctioned.

(6) Requirements for an Order. An order imposing a sanction must describe the sanctioned conduct and explain the basis for the sanction.

(d) Inapplicability to Discovery. This rule does not apply to disclosures and discovery requests, responses, objections, and motions under Rules 26 through37.

 

Florida Statute
57.105 Attorney’s fee; sanctions for raising unsupported claims or defenses; exceptions; service of motions; damages for delay of litigation.

(1) Upon the court’s initiative or motion of any party, the court shall award a reasonable attorney’s fee, including prejudgment interest, to be paid to the prevailing party in equal amounts by the losing party and the losing party’s attorney on any claim or defense at any time during a civil proceeding or action in which the court finds that the losing party or the losing party’s attorney knew or should have known that a claim or defense when initially presented to the court or at any time before trial:

(a) Was not supported by the material facts necessary to establish the claim or defense; or
(b) Would not be supported by the application of then-existing law to those material facts.
(2) At any time in any civil proceeding or action in which the moving party proves by a preponderance of the evidence that any action taken by the opposing party, including, but not limited to, the filing of any pleading or part thereof, the assertion of or response to any discovery demand, the assertion of any claim or defense, or the response to any request by any other party, was taken primarily for the purpose of unreasonable delay, the court shall award damages to the moving party for its reasonable expenses incurred in obtaining the order, which may include attorney’s fees, and other loss resulting from the improper delay.

(3) Notwithstanding subsections (1) and (2), monetary sanctions may not be awarded:

(a) Under paragraph (1)(b) if the court determines that the claim or defense was initially presented to the court as a good faith argument for the extension, modification, or reversal of existing law or the establishment of new law, as it applied to the material facts, with a reasonable expectation of success.
(b) Under paragraph (1)(a) or paragraph (1)(b) against the losing party’s attorney if he or she has acted in good faith, based on the representations of his or her client as to the existence of those material facts.
(c) Under paragraph (1)(b) against a represented party.
(d) On the court’s initiative under subsections (1) and (2) unless sanctions are awarded before a voluntary dismissal or settlement of the claims made by or against the party that is, or whose attorneys are, to be sanctioned.
(4) A motion by a party seeking sanctions under this section must be served but may not be filed with or presented to the court unless, within 21 days after service of the motion, the challenged paper, claim, defense, contention, allegation, or denial is not withdrawn or appropriately corrected.
(5) In administrative proceedings under chapter 120, an administrative law judge shall award a reasonable attorney’s fee and damages to be paid to the prevailing party in equal amounts by the losing party and a losing party’s attorney or qualified representative in the same manner and upon the same basis as provided in subsections (1)-(4). Such award shall be a final order subject to judicial review pursuant to s. 120.68. If the losing party is an agency as defined in s. 120.52(1), the award to the prevailing party shall be against and paid by the agency. A voluntary dismissal by a nonprevailing party does not divest the administrative law judge of jurisdiction to make the award described in this subsection.
(6) The provisions of this section are supplemental to other sanctions or remedies available under law or under court rules.
(7) If a contract contains a provision allowing attorney’s fees to a party when he or she is required to take any action to enforce the contract, the court may also allow reasonable attorney’s fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract. This subsection applies to any contract entered into on or after October 1, 1988.
History.s. 1, ch. 78-275; s. 61, ch. 86-160; ss. 1, 2, ch. 88-160; s. 1, ch. 90-300; s. 316, ch. 95-147; s. 4, ch. 99-225; s. 1, ch. 2002-77; s. 9, ch. 2003-94; s. 1, ch. 2010-129.

57.115 Execution on judgments; attorney’s fees and costs.

(1) The court may award against a judgment debtor reasonable costs and attorney’s fees incurred thereafter by a judgment creditor in connection with execution on a judgment.

(2) In determining the amount of costs, including attorney’s fees, if any, to be awarded under this section, the court shall consider:

(a) Whether the judgment debtor had attempted to avoid or evade the payment of the judgment; and
(b) Other factors as may be appropriate in determining the value of the services provided or the necessity for incurring costs in connection with the execution.
History.s. 13, ch. 87-145.

 

LAJUANA LOCKLIN JOHNSON, Plaintiff,
v.
BANK OF NEW YORK MELLON, et al., Defendants.

Case No. C16-0833JLR.United States District Court, W.D. Washington, Seattle.

August 10, 2016.Lajuana Locklin Johnson, Plaintiff, represented by Jill J. Smith, NATURAL RESOURCE LAW GROUP PLLC.

ORDER ISSUING SANCTIONS AND DISMISSING CASE

JAMES L. ROBART, District Judge.

I. INTRODUCTION

This matter comes before the court sua sponte. Previously, the court ordered Jill J. Smith of the Natural Resource Law Group, PLLC, counsel for Plaintiff Lajuana Locklin Johnson, to show cause why the court should not sanction her pursuant to Federal Rule of Civil Procedure 11. (OSC (Dkt. # 3); see alsoCompl. (Dkt. # 1).) The court then ordered Ms. Smith to appear, and she presented argument on July 28, 2016, on why the court should not issue sanctions. Having considered the written and oral arguments of counsel, the appropriate portions of the record, and the relevant law, and considering itself fully advised, the court DISMISSES this case WITH PREJUDICE and SANCTIONS Ms. Smith as described more fully herein.

II. BACKGROUND

On June 6, 2016, Ms. Smith filed a complaint on behalf of Ms. Johnson seeking to enforce and obtain damages pertaining to her purportedly rescinded loans. (Compl.) The rescission notices that Ms. Johnson attached to her complaint make clear that she sent those notices more than a decade after executing the loans. (See Rescission Notices (Dkt. # 1-1).) The Truth in Lending Act (hereinafter, “TILA”), 15 U.S.C. § 1635 et seq., permits rescission of certain loans but includes a three-year statute of repose. Jesinoski v. Countrywide Home Loans, Inc., ___ U.S. ___, 135 S. Ct. 790, 792-93 (2015)(“The Truth in Lending Act gives borrowers the right to rescind certain loans for up to three years after the transaction is consummated.”).

Having presided over several of Ms. Smith’s TILA rescission cases that feature substantially similar complaints to the one in this case, the court researched Ms. Smith’s other filings in this district. (See OSC at 5-6 (collecting cases).) Ms. Smith has filed a troubling series of such cases.[1] The Honorable Thomas S. Zilly sanctioned Ms. Smith $5,000.00 plus over $10,000.00 in attorneys’ fees after ordering Ms. Smith to show cause regarding how binding Supreme Court caselaw does not foreclose her claim and receiving no response.Johnson v. Nationstar Mortg. LLC, et al., No. C15-1754TSZ, Dkt. ## 35, 41. The claim in Johnson v. Nationstar strongly resembles Ms. Johnson’s untimely effort to rescind pursuant to TILA in this case.

In light of this backdrop, the court stayed this case and ordered Ms. Smith to show cause no later than July 7, 2016, why the court should not issue sanctions pursuant to Federal Rule of Civil Procedure 11. (OSC at 8-10.) The court indicated that it was specifically considering sanctioning Ms. Smith and Ms. Johnson by “dismissing this case, issuing monetary sanctions against Ms. Smith, and requiring Ms. Smith to file a copy of this order each time she files a new case in federal court.” (Id. at 9.) Ms. Smith failed to file a timely response to the court’s order to show cause. (See Dkt.) The court therefore ordered Ms. Smith to appear on July 28, 2016, for an in-court sanctions hearing. (7/18/16 Min. Ord. (Dkt. # 4) at 1-2.)

On July 27, 2016, almost three weeks after her response was due and the day before the sanctions hearing, Ms. Smith filed a response to the order to show cause. That response states the facts of the case as Ms. Smith sees them but without reference to any affidavit or other verified source. (OSC Resp. (Dkt. # 5) at 1-4.) In addition, Ms. Smith attempts to address some of the specific considerations the court ordered her to respond to in its prior order. (Id. at 5-6.) However, she makes no reference to any of the prior cases she has filed in this court or “the Ninth Circuit and Supreme Court cases cited” in the order to show cause. (See OSC at 9 (“Ms. Smith’s response to this order must address how Ms. Johnson’s claims, as stated in the complaint, comply with Rule 11(b)(2) in light of Nieuwejaar, Green Tree, the other cases in this District identified above, and the Ninth Circuit and Supreme Court cases cited therein. Finally, Ms. Smith must address what “information and belief” she has that Ms. Johnson’s loan in this case “was never consummated.”); see generally OSC Resp.)

Ms. Smith appeared in court on July 28, 2016, and defended the factual allegations and legal theory underpinning Ms. Johnson’s claim. (7/28/16 Min. Entry (Dkt. # 6).) In general terms, Ms. Smith argued that circumstances surrounding the loan, such as the manner in which it was funded, make it questionable whether the loan was ever consummated. If the loan was never consummated, she reasons, the three-year statute of repose never began and therefore never expired.

The matter of Rule 11 sanctions is now before the court.

III. ANALYSIS

A. Legal Standard

Federal Rule of Civil Procedure 11 governs sanctions of the type issued herein. Rule 11(b) provides in full:

By presenting to the court a pleading, written motion, or other paper— whether by signing, filing, submitting, or later advocating it—an attorney or unrepresented party certifies that to the best of the person’s knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: (1) it is not being presented for any improper purpose, such as to harass, cause unnecessary delay, or needlessly increase the cost of litigation; (2) the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law; (3) the factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery; and (4) the denials of factual contentions are warranted on the evidence or, if specifically so identified, are reasonably based on belief or a lack of information.

Fed. R. Civ. P. 11(b). In its June 22, 2016, order, the court placed Ms. Smith on notice and allowed her to respond regarding potential violations of Rules 11(b)(2) and 11(b)(3).

B. Violations of Rule 11

Ms. Johnson alleges that “[u]pon information and belief, the subject loan was never consummated.” (Compl. ¶ 13.) This conclusory allegation appears intended to circumvent TILA’s three-year statute of repose, which begins upon consummation of the loan.[2] See 15 U.S.C. § 1635(f) (“An obligor’s right of rescission shall expire three years after the date of consummation of the transaction or upon the sale of the property, whichever occurs first. . . .”);Jesinoski, 135 S. Ct. at 792-93. At the hearing, Ms. Smith argued that if the loan was never consummated, the three-year statute of repose has not begun, has not expired, and therefore the rescission is timely.

In the numerous opportunities the court has afforded Ms. Smith to provide a factual basis for this allegation, she has provided none. Ms. Smith has also provided no evidence of any legal or factual “inquiry” that she performed, and accordingly the court can only determine whether the inquiry was “reasonable under the circumstances” based on the allegations and arguments that Ms. Smith has advanced in opposition to the frivolity of Ms. Johnson’s claim. Fed. R. Civ. P. 11(b).

Under TILA, “[c]onsummation means the time that a consumer becomes contractually obligated on a credit transaction.” 12 C.F.R. § 226.2(a)(13); see also Grimes v. New Century Mortg. Corp., 340 F.3d 1007, 1009 (9th Cir. 2003). “Under the Official Staff interpretation, state law determines when a borrower is contractually obliged.” Grimes, 340 F.3d at 1009 (citing 12 C.F.R. § 226, Supp. 1 (Official Staff Interpretations), cmt. 2(a)(13)); see also id. at 1010 (applying California law to determine whether a California loan was consummated for purposes of TILA). In Washington, “for a contract to form, the parties must objectively manifest their mutual assent” to “sufficiently definite” contractual terms. Keystone Land & Dev. Co. v. Xerox Corp., 94 P.3d 945, 949 (Wash. 2004). In addition, “the contract must be supported by consideration to be enforceable.” Id. (citing King v. Riveland, 886 P.2d 160, 164 (Wash. 1994)).

Ms. Smith indicates that on October 6, 2005, Ms. Johnson “entered into what she thought was a mortgage loan to purchase” property. (OSC Resp. at 1.) At oral argument, Ms. Smith argued that if the loan was never funded then the loan was never consummated.[3] However, Ms. Smith conceded at oral argument that the relevant parties signed the loan paperwork, money was transferred to the sellers of the house, and Ms. Johnson took possession of the property. These facts unarguably give rise to a contract under Washington Law. See Keystone, 94 P.3d at 949; see also Grimes, 340 F.3d at 1009-10. Ms. Smith nonetheless argued that the loan was unconsummated at that juncture based on the manner in which it was funded and the subsequent history of the loan.

Ms. Smith’s protestations in her response and at oral argument that the loan was table-funded[4] (id. at 4-5) and her account of the history of the loan subsequent to its consummation (OSC at 2-4) are both irrelevant to her allegation that “the loan was never consummated” (Compl. ¶ 13). Despite being afforded numerous opportunities to do so, Ms. Smith has failed to provide any legal authority—or even a cogent argument— supporting the proposition that the type of funding or subsequent transfers of a loan impact whether the loan was consummated.[5] (See, e.g., OSC Resp. at 5 (“One of the questions at issue is that if a party is merely an originator and NOT a lender or creditor, is there some theory where a loan contract could be considered consummated? If Plaintiff’s loan was a table-funded loan, the answer must be `no.'”).) Nor has Ms. Smith pointed to any further evidence providing “information and belief” that “the subject loan was never consummated.” (Compl. ¶ 13.)

The foregoing analysis leads the court to conclude that Ms. Smith’s factual allegation that “the loan was never consummated” and the legal theories underpinning that allegation violate Rules 11(b)(2) and 11(b)(3).[6] See Fed. R. Civ. P. 11(b)(2) (requiring that “the claims, defenses, and other legal contentions are warranted by existing law or by a nonfrivolous argument for extending, modifying, or reversing existing law or for establishing new law”); Fed. R. Civ. P. 11(b)(3) (requiring that “factual contentions have evidentiary support or, if specifically so identified, will likely have evidentiary support after a reasonable opportunity for further investigation or discovery”). The court analyzes the appropriate sanctions below.

C. Appropriate Sanctions

Rule 11(d) limits sanctions to “what suffices to deter repetition of the conduct or comparable conduct by others similarly situated.” Fed. R. Civ. P. 11(d). Ms. Smith’s actions in this case demonstrate that the previous sanctions she incurred—dismissal with prejudice, $11,972.50 in attorneys’ fees payable by her client, and a $5,000.00 sanction payable to the court—constituted insufficient specific deterrence. See Johnson v. Nationstar, No. C15-1754TSZ, Dkt. ## 35, 41-43. The court finds it appropriate to impose greater monetary sanctions payable by Ms. Smith and her law firm and dismiss the case with prejudice.[7] The court accordingly issues the following sanctions:

(1) No more than 30 days after the date of this order, Ms. Smith and the Natural Resource Law Group must jointly pay sanctions of $10,000.00 to the court;

(2) No more than 30 days after the date of this order, Ms. Smith and the Natural Resource Law Group must fully reimburse Ms. Johnson for any attorneys’ fees or costs paid by Ms. Johnson in conjunction with this case and file certification with the court that they have done so; and

(3) The court dismisses the complaint with prejudice.

IV. CONCLUSION

Based on the foregoing analysis, the court DISMISSES the case WITH PREJUDICE and SANCTIONS Ms. Smith as described above.

[1] See Pelzel v. GMAC Mortg. Grp., LLC, No. C16-5643RBL, Dkt. # 1 (filing a complaint on July 20, 2016, which alleges that “[u]pon information and belief, the subject loan was never consummated” and appears to suffer the same legal and factual deficiencies as this case); Elder v. Pinnacle Capital Mortg. Corp., et al., No. C16-5355RBL, Dkt. ## 1, 1-1 (filing a complaint on May 13, 2016, which is nearly identical to the complaint in this case and seeks to rescind a loan pursuant to TILA without providing a date for that loan); Velasco, et al. v. Mortg. Elec. Registration Sys., Inc., et al., No. C16-5022RBL, Dkt. # 30 (dismissing a claim for enforcement of TILA rescission filed more than six years after the date of the rescission notice on res judicata grounds); Maxfield v. Indymac Mortg. Servs., et al., No. C16-0564RSM, Dkt. # 3 (filing a complaint on April 19, 2016, which is nearly identical to the complaint in this case and seeks to rescind a loan pursuant to TILA without providing a date for that loan); Jenkins, et al. v. Wells Fargo Bank, N.A., No. 16-0452TSZ, Dkt. # 1 (filing a complaint on March 31, 2016, which is nearly identical to the complaint in this case and seeks to rescind a loan pursuant to TILA without providing a date for that loan); Burton, et al. v. Bank of Am., et al., No. C15-5769RBL, Dkt. # 20 at 5 (citing Jesinoski, 135 S. Ct. at 792) (“The Supreme Court’s Jesinoskidecision— quoted by the Burtons—reiterates that while the three year limitation period may not apply to the commencement of an action, it absolutely applies to the time frame for sending a rescission notice. . . . The Burtons’ loan was consummated in 2005. Their conditional right to rescind expired in 2008—seven years before they sent the notice upon which this action relies. . . .”);Johnson v. Green Tree Servicing, LLC, et al., No. C15-1685JLR, Dkt. # 22 at 8-9 (dismissing the case and rejecting the arguments that TILA “rescission is effective upon mailing, regardless of when mailing occurs” and that “the court cannot presume consummation until after discovery is conducted on the matter”); Stennes-Cox v. Nationstar Mortg., LLC, et al., No. C15-1682TSZ, Dkt. # 15 at 3-5 (rejecting the plaintiff’s arguments based on Jesinoski and Paatalo and dismissing with prejudice her claim seeking to rescind a loan eight years after consummation); Nieuwejaar, et al. v. Nationstar Mortg. LLC, et al., No. C15-1663JLR, Dkt. ## 22 at 6-7 (“Plaintiffs also attempt to address the timeliness issue by raising the possibility that the loan was never consummated. . . . Plaintiffs’ complaint contains no allegations regarding the failure to establish a contractual obligation. . . . Thus, Plaintiffs have not pleaded facts that allow the court to reasonably infer that Plaintiffs’ notice of rescission was effective. . . .” (internal citations omitted)), 28 at 7 (“Moreover, despite the court’s guidance that Plaintiffs must allege facts about the loan transaction before the court can infer a problem with consummation . . ., Plaintiffs’ second amended complaint does not contain a single factual allegation to suggest the subject loan was never consummated. . . . Thus, Plaintiffs again fail to allege facts from which the court can infer that their May 2015 notice of rescission was timely.” (internal citations omitted)).

[2] In Nieuwejaar, the plaintiffs—also represented by Ms. Smith—”attempt[ed] to address the timeliness issue by raising the possibility that the loan was never consummated.” Nieuwejaar, Dkt. # 22 at 6. However, the plaintiffs’ original complaint “contain[ed] no allegations regarding the failure to establish a contractual obligation,” and the court accordingly dismissed that complaint with leave to amend. Id. at 7-8. The plaintiffs’ amended complaint added the same conclusory allegation that Ms. Johnson alleges in this case—that “[u]pon information and belief, the subject loan was never consummated.” Id., Dkt. # 24 ¶ 12. In dismissing the amended complaint with prejudice, the court unequivocally indicated to the plaintiffs that this allegation is insufficient:

[L]ike their original complaint, Plaintiffs’ second amended complaint makes no factual allegations about consummation of the subject loan. . . . Plaintiffs’ only allegation about consummation is that “[u]pon information and belief, the subject loan was never consummated.” . . . That statement is a legal conclusion, which is not entitled to a presumption of truth. . . . At this stage, the court considers the factual allegations in the complaint in the light most favorable to Plaintiffs. . . . However, as the court explained in its previous order of dismissal, Plaintiffs must actually allege facts that, if true, would support their claims. . . . The court still cannot infer a problem with consummation because Plaintiffs still have not pleaded any facts to support such an inference.

Id., Dkt. # 28 at 7 (internal citations omitted).

These events occurred before Ms. Smith filed the instant case on behalf of Ms. Johnson. (SeeCompl.) Ms. Smith’s troubling inability or unwillingness to heed the court’s prior ruling further demonstrates that Ms. Smith is engaged in progressively more frivolous efforts at pleading around TILA’s period of repose despite lacking a factual basis for her allegations.

[3] This court has previously rejected this argument by Ms. Smith. See Johnson v. Green Tree Servicing, LLC, No. C15-1685JLR, 2016 WL 1408115, at *4 n.9 (W.D. Wash. Apr. 6, 2006) (“Ms. Johnson’s only challenge to consummation suggests that `if the loan was never actually funded, but was part of a hedge fund investing scheme . . . then the loan was never consummated, for example.’ This hypothetical fails to support a plausible inference that the subject loan was not consummated because Ms. Johnson does not connect her hypothetical situation with specific allegations about the subject loan.” (alteration in original) (internal citations omitted)).

[4] “In a table-funded loan, the originator closes the loan in its own name, but is acting as an intermediary for the true lender, which assumes the financial risk of the transaction.” Easter v. Am. W. Fin., 381 F.3d 948, 955 (9th Cir. 2004).

[5] Ms. Smith’s argument regarding consummation is also inconsistent with her theory of the case. If the subject loan was never consummated, Ms. Johnson need not bring “an enforcement action of the rescission notice.” (OSC Resp. at 1.)

[6] In previous cases before the court, Ms. Smith has advanced a different—but equally frivolous—legal theory in support of her clients’ untimely TILA rescission actions. In Nieuwejaar, Dkt. # 14 at 4-6, for instance, Ms. Smith argued that Jesinoski vitiates the three-year statute of repose imposed by TILA. According to this theory, irrespective of the timeliness or legal effect of an obligor’s notice of rescission, sending such notice triggers a 20-day period in which the lender must respond; otherwise the loan is deemed rescinded. Id. Ms. Smith supported that argument by taking out of context the Supreme Court’s statement that the right to rescind under TILA is effective upon providing notice to the creditor. Id. at 4 (“Justice Scalia made a point of repeating that the rescission was effective by operation of law on the date that it was mailed and pointed out that the statute makes no distinction between disputed and undisputed rescissions — they are all effective when mailed.”). However, as Judge Zilly made clear in sanctioning Ms. Smith, “because plaintiff’s attempt at rescission was void ab initio, there was no obligation for defendants to file a suit challenging the attempted rescission.” Johnson v. Nationstar Mortg., Dkt. # 35 at 4; see also Jesinoski, 135 S. Ct. at 791 (“The Truth in Lending Act gives borrowers the right to rescind certain loans for up to three years after the transaction is consummated. The question presented is whether a borrower exercises this right by providing written notice to his lender, or whether he must also file a lawsuit before the 3-year period elapses.”).

When confronted with Jesinoski at the hearing, Ms. Smith fell back on the factually unsupported and legally frivolous consummation argument described above. The consummation argument represents only the most recent permutation of Ms. Smith’s futile efforts to maintain frivolous, untimely TILA rescission claims in federal court.

[7] The court liberally considers granting amendment. See Fed. R. Civ. P. 15(a). However, after affording Ms. Smith numerous opportunities to persuade the court otherwise, the court concludes that Ms. Johnson’s case is based on frivolous legal theories. Accordingly, the court finds that amendment would be futile. See Greenspan v. Admin. Office of the U.S. Courts, No. 14cv2396 JTM, 2014 WL 6847460, at *11 (N.D. Cal. Dec. 4, 2014) (citing Saul v. United States, 928 F.2d 829, 843 (9th Cir. 1991)) (“While leave to amend is to be freely given under [Federal Rule of Civil Procedure] 15(a), the court denies the motion [to amend] because . . . amendment is futile under the legal theories asserted in the proposed [amended complaint].”).

In addition, the court considered requiring Ms. Smith to file a copy of this order with each new TILA-based complaint she files in this District. (See OSC at 9.) However, because that sanction could prejudice Ms. Smith’s present and future clients, the court declines to impose that sanction at this time.

 

Emergency Motion to Dismiss for Violation of Speedy Trial Rights

Someone wrote this Florida motion, and many people wrongfully incarcerated without a hearing, sometimes for YEARS, have filed it and won their freedom as a result.

Download the file, with an associated order here:

https://archive.org/details/EmergencyMotionToDismissForViolationOfSpeedyTrialRight

Also read this or this.

Florida Supreme Court Disciplines Scammer Neil Garfield

I have explained and complained for years that Neil Garfield functions like the pied piper of foreclosure defense and then does not deliver what clients need because he depends on a business model that requires lawyers knowingly to lead clients into the jaws of foreclosure by only PRETENDING to defending them while charging them monthly fees that ought to go to mortgage payments.

Now, as the Supreme Court of Florida has pointed out (see below news story), Garfield has practiced bilking his clients by overcharging, not delivering what clients pay for, not returning money, stonewalling, and so on. I consider that the tip of the iceberg because as the Maslanka case documents prove, Garfield submits frivolous nonsense that end up with his clients getting ordered to pay opposing counsel’s legal fees. And he has given clients and readers who foolishly hang on his every word terribly wrong ideas about the meaning of the 2015 SCOTUS opinion in the Jesinoski TILA Rescission case.

Sorry, Neil, but I believe the Florida Supremes should disbar you, and clients like Maslanka should sue you for legal malpractice. You never should have come out of retirement for you have cost truth-hungry mortgagors in default millions in lost real estate because you never taught them how to what you don’t know: attack the validity of the loan transaction, not of the foreclosure.

http://www.jaxdailyrecord.com/showstory.php?Story_id=548048

Why Government Destroyed Jury Powers and How to Restore Them

Introduction to Destruction of Jury Powers in Florida

The destruction of jury powers and the citizen’s power of private prosecution of criminals began in Florida with the dumbing down of the electorate after the Civil War. I personally consider the cause of that destruction as the liberation of Negroes and granting to them of equal rights as well as suffrage that would entitle them to sit on juries.

Modern political correctness dictates that I should never make such statements that seem to insult Negroes, but I insist on an honest discussion of the matter for the purpose of devising a solution that will restore jury powers.

I shall not attempt to prove that our republic’s governments constitute a monumental example of destruction of constitutional ideals through refusal to enforce the Bill of rights, through porous borders, deficit budgets, growing national debt, incessant no-win foreign wars, invitations to saboteur and terrorist refugees to settle in our nation, and massive election fraud, to name just a few problems. I consider those truths as self-evident. But I do assert that those government problem exists because of an array of problems with the electorate that descend from terrible (not just bad) parenting, including procreation out of wedlock, procreation by ignorant, irresponsible, and stupid parents, terrible education and training of children at home, and utter paucity of spousal training for people intending to cohabit or marry.

Let me share my perspective with you about a serious aspect of this problem: our petite and grand jury systems.

I discovered from a study of the Florida constitutions since the first one in 1838, nearly a decade after the publication of the first Florida Statutes in 1829 when Florida was a mere territory (1821, after Stonewall Jackson virtually stole Florida from Spain and England), an evolution in jury powers, not by proscription, but by mere mention.

Why this change? Because of the liberation of and suffrage by Negroes, to begin with, and it has become worse over the years. Arguably the justification for emasculating juries intensified with the 19th, and even more greatly the 26th Amendments, which granted suffrage to women and children over 18 respectively. You might even argue that the 13th, 14th, 15th, 19th, and 26th Amendments dumbed down the electorate so severely that nobody in his right mind in government could possibly allow juries to have the powers to protect the colossal increase in criminals the nation has suffered since the civil war.

How did those Amendments dumb down the electorate?

The average IQ of US Negroes today is around 85, the level needed to graduate from a normal 1960’s era high school. That means one half of them lack the cognitive ability to graduate. I imagine, but have no statistics to prove it, that Negroes at the time of the Civil War 150 years ago had a lower IQ, owing somewhat to poorer diets, poorer education, but mostly to limited miscegenation with Caucasians and other races, compared to today’s willy-nilly miscegenation. Now US Negroes are about 18% Caucasian. I don’t know the percentage 150 years ago. But I do know that the majority of productive Caucasians considered Negroes generally as stupid people, and that opinion, memorialized in TV shows like Amos and Andy, remained true when I was a child in the early 1950’s.

Take note that the US today contains about 80 million people warranting the appellation of “stupid” (IQ below 85) – 33 million Caucasians, 22 million Negroes, and 25 million Hispanics. The stupid comprise 25% of the population. That would not seem like too much of a problem in government, but unfortunately, most of them older than 18 can vote. That causes a huge problem because they can sit on juries, work in government, and help elect charlatans and fools to public office.

Prior to the Civil War, states limited suffrage to free Caucasian men of means. So, stupid people simply did not get the right to vote. After the Civil War, the 15the Amendment gave Negro men voting rights, albeit many states encumber voters with poll tax and other means of preventing Negroes from voting. But NONE of those measures prevented them from sitting on juries.

This, of course, bothered the Caucasians in government immensely. They could visualize Negroes on juries liberating fellow Negroes prosecuted for crimes just because of the defendant’s race, and without regard to evidence of guilt. And that would encourage more crime by Negroes. It must have driven the Caucasians crazy to contemplate such an outrage. We saw an example of such outrage in the OJ Simpson trial where Negro and other jurors embraced Johnny Cochran’s phony and simplistic “If it doesn’t fit you have to acquit” aphorism. Another jury in a civil trial determined that OJ has slaughtered his former wife and her boyfriend.

Foreseeing just such insanity as the acquittal of OJ Simpson, the powerful in Florida’s post-Civil-War government devised ways of stripping juries of their powers in order to minimize such predictable anomalies as the OJ Simpson acquittal. They changed the Florida Constitution’s language regarding petit and grand juries. They removed the petit jury’s power to judge the law, they removed the grand jury’s power to control overaggressive prosecution of non-capital felonies, and they gave much more power to prosecutors outside the reach of grand juries.

As a consequence, the grand jury has become severely hamstrung in protecting the citizenry against outrageous attacks and rights deprivations by government operatives. Bailiffs and the State Attorney stand guard over the jury room to both protect jurors and to prevent the citizens from presenting evidence of crimes, especially government operative crimes, to the jurors.

Back to the question of how the amendments dumbed down the electorate…

The 19th Amendment finally gave suffrage to women in August 1920, 41 years after Senator Sargent introduced it to Congress in 1878. The women argued that they have intelligence roughly equal to men’s. But the vast majority of women lived in subservience to men, particularly husbands, and few worked in professions or had much interest in politics. Their main interests had to do with owning and controlling their own real estate and money, and in relief from abusive or drunken husbands who beat them or squandered family money on boozing and gambling. But I believe that granting them voting rights effectively dumbed down the electorate because government imposed no measure of responsibility on them. And the huge female support for Socialist power brokers Barack Obama and Hillary Clinton underscore the validity of that concern.

The 26th Amendment gave suffrage to children over 18 in March 1971, based on the theory that if 18-year-olds could go to war and die in service of the nation, at least they should have the right to vote against such a terrible fate. I suppose Congress did not think it relevant that children’s brains have not become fully formed till age 25, that actuarial statistics prove conclusively that people under 25 cause the bulk of automobile accidents, presumably because of their impulsiveness, inexperience generally with life’s viscissitudes – in a word, their immaturity. Furthermore, they neglected to note that young people in the military have mature, higher ranking officers and non-commissioned officers figuratively standing on their necks to keep them in order 24/7. That impulsiveness and immaturity makes children under 21 BAD voters.

Solution

I personally want to see the Florida Constitution restore those old powers of juries to judge law as well as fact and to control prosecution of ALL felonies. I also want the Constitution to make it easier for citizens confidentially to present evidence of crimes to grand jurors without interference by bailiffs or state attorneys.

At the same time, I want the constitution to establish standards for suffrage in addition to those that presently exist. Electors and government employees should, without exception, should read and write English with high school graduate efficiency, know the constitutions of the US and the State fairly well, have a high school diploma, live financially self-sufficiently alone or within a family unit, and not subsist on government welfare. These requirements will restore integrity to the electorate and government. The best way to enforce those requirements: require all who would swear an oath to support the constitutions first to answer correctly 80 out of 100 constitution competency test questions in a formal examination. High school graduation should require it.

I personally believe the Constitution should require a minimum of 2 years of active military service and 2 years of part time militia service prior to registration as a voter. The Constitution should proscribe suffrage to people under 25 years of age, aliens, felons, mental incompetents, the stupid, welfare recipients, people who cannot pass the constitution competency test as above, people who have not graduated from high school, people who cannot read and write English with high school graduate proficiency, and people who are not financially self-sufficient.

As an alternative to such high standards for any kind of suffrage, those who don’t qualify to vote might enjoy suffrage with 1/100 or 1/1000 of a vote, and those who do qualify might have 1 vote, 10 votes, or 100 votes, depending on their advancements financially, educationally, artistically, or professionally. Such scaling of suffrage gives the incentive of greater electoral influence to those who contribute more to an advanced civilization.

As to the terrible prices the USA and its productive people pay for having 25% of the population in the incurable condition of stupidity (crime, welfare abuse, infrastructure burdens, lost productivity, government pandering)… it should become a crime to infect an innocent baby with the lifelong debilitating disease of stupidity. Governments should deal with that the same way they deal with car/truck crash fatalities – prevent it by requiring preventive measures (like seat belts that prevent many injuries from crashes). This prevention will eventually dramatically reduce the percentage of stupid people in the population. After all, only the stupid don’t know that stupidity nearly always has a genetic cause, and contraception in prospective stupid parents, by any necessary means, constitutes the only feasible prevention.

Bottom line, prudent people in government will not let the feckless destroy the functioning of their machinery of governing. Nor should they. The clamor for voting rights for irresponsible people caused government officials to reduce jury powers because they knew the irresponsibles would destroy the proper functioning of juries. In order to restore those powers, the voters MUST BECOME RESPONSIBLE. I have outlined some fairly simple, if difficult, ways to accomplish that. I say the time has come to progress in that direction.

Evidence

Back to the core point, I imagine you feel curious as to just HOW the Florida Constitution’s crafters engineered the destruction of jury powers. So, I have provided exhibits from all of the Florida Constitutions showing the specific text that contains the words jury, juror, juries, indict, indictment, present, presentment.

See for yourself the emasculation of jury powers, and organize to implement my suggestions above that will restore those powers to newly responsible electors and government employees who won’t abuse those powers.

Exhibits from the Florida Constitutions

The 1838 Constitution

The original constitution did not mention grand juries, but did mention their function, issuing indictments and presentments. It acknowledged that petite juries decided issues of law as well as fact. It acknowledged that grand juries may prohibit prosecution for any crime.

Section 6. That the right of trial by jury shall forever remain inviolate.

Section 10. That in all criminal prosecutions, the accused hath a right to be heard by himself or counsel, or both; to demand the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor; and in all prosecutions by indictment or presentment a speedy and public trial, by an impartial jury of the County or District, where the offense was committed; and shall not be compelled to give evidence against himself.

Section 15. That in all prosecutions and indictments for libel, the truth may be given in evidence; and if it shall appear to the jury that the libel is true, and published with good motives and for justifiable ends, the truth shall be a justification; and the jury shall be the judges of the law and facts.

Section 16. That no person shall be put to answer any criminal charge, but by presentment, indictment or impeachment.

Section 15. The style of all process shall be “the State of Florida,” and all criminal prosecutions shall be carried on in the name of the State of Florida, and all indictments shall conclude, “against the peace and dignity of the same.”

Section 22. The Governor and all civil officers shall be liable to impeachment for any misdemeanor in office: but judgment in such cases shall not extend further than to removal from office, and disqualification to hold any office of honor, trust, or profit under this State; but the parties shall nevertheless be liable to indictment, trial, and punishment according to law.

The 1861 Constitution did likewise

Section 6. That the right of trial by jury shall forever remain inviolate.

Section 10. That in all criminal prosecutions, the accused hath a right to be heard by himself or counsel, or both; to demand the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor; and in all prosecutions by indictment or presentment, a speedy and public trial by an impartial jury of the county or district where the offense was committed; and shall not be compelled to give evidence against himself.

Section 15. That in all prosecutions and indictments for libel, the truth may be given in evidence; and if it shall appear to the jury that the libel is true, and published with good motives and for justifiable ends, the truth shall be a justification; and the jury shall be the judges of the law and the facts.

Section 16. That no person shall be put to answer any criminal charge but by presentment, indictment or impeachment.

Section 26. Officers shall be removed from office for incapacity, misconduct, or neglect of duty; and where no special mode of trial is provided by the Constitution, the General Assembly shall pass a law providing the mode in which such trials shall be had, which shall be before a jury and in the Circuit Court.

Section 27. The General Assembly shall have power to create special tribunals for the trial of offenses committed by slaves, free negroes and mulattoes; and until the General Assembly otherwise provides, there is hereby created a Court in each county, which shall consist of two Justices of the Peace, and twelve citizens, being qualified Jurors of the county, who shall have power to try all cases of felony committed in their county by slaves, free negroes and mulattoes. A majority of said Court may pronounce judgment, and all trials before it shall be had upon the statement of the offense in the warrant of arrest, and without presentment or indictment by a Grand Jury. The Sheriff of the county shall act as the ministerial officer of said Court, and the citizens who, with the Justices, are to compose the same, shall be selected by said Justices and summoned to attend by the Sheriff; and appeals from the judgment of said Court shall be had to the Circuit Court of the county upon an order made by the Judge thereof, upon an inspection of the record of the trial, full minutes of which shall be made by the said Justices, and such appeal, when allowed, shall operate as a supersedeas of the judgment.

Section 2. All offenses against the militia laws shall be tried by Court Martial or before a court and jury, as the General Assembly may direct.

The 1865 Constitution

See here that the grand jury may prohibit prosecution of ANY criminal charge and petite jury judges law and facts.

Section 6. That the right of trial by jury shall forever remain inviolate.

Section 10. That in all criminal prosecutions, the accused hath a right to be heard by himself or counsel, or both; to demand the nature and cause of the accusation; to be confronted with the witnesses against him; to have compulsory process for obtaining witnesses in his favor; and in all prosecutions by indictment or presentment, a speedy and public trial by an impartial jury of the county or district where the offense was committed; and shall not be compelled to give evidence against himself.

Section 15. That in all prosecutions and indictments for libel, the truth may be given in evidence; and if it shall appear to the jury that the libel is true, and published with good motives, and for justifiable ends, the truth shall be a justification; and the jury shall be the judges of the law and facts.

Section 16. That no person shall be put to answer any criminal charge, but by presentment, indictment or impeachment, except in such cases as the Legislature shall otherwise provide: but the Legislature shall pass no law whereby any person shall be required to answer any criminal charge involving the life of the accused, except upon indictment or presentment by a Grand Jury.

Section 2. All offenses against the Militia laws shall be tried by Court Martial, or before a court and jury, as the General Assembly may direct.

Section 2. In all criminal proceedings founded upon injury to a colored person, and in all cases affecting the rights and remedies of colored persons, no person shall be incompetent to testify as a witness on account of color; in all other cases, the testimony of colored persons shall be excluded, unless made competent by future legislation. The jury shall judge the credibility of the testimony.

Section 3. The Jurors of this State shall be white men, possessed of such qualifications as may be prescribed by law.

The 1868 Constitution.

The federal government forced Florida to scrap the 1865 Constitution and make changes related to Negroes. Wikipedia: “Florida became subject to the military authority of the federal government in 1867. Pursuant to an Act of Congress, General John Pope, Commander of the 3rd Military District, issued an order on April 8, 1867, dividing the 39 counties of the State into 19 districts for the election of delegates to a convention to frame a new State Constitution. The Constitution had to conform with the Federal Constitution and with the 13th and 14th Amendments. The Convention met in Tallahassee on January 20, 1868. As the Convention began its functions, bitter factions were formed, and only under after federal government intervention was the Convention brought under control. The Convention reconvened on February 18, 1868, and Horatio Jenkins, Jr. was elected President. The Constitution was adopted by the people of Florida in May 1868. It conferred electoral franchise upon “male persons” instead of “white male persons” as by the 1865 Constitution. With its acceptance by the federal military authorities, the State of Florida was recognized as being restored to the Union, and its Senators and Representatives were admitted to Congress.

GONE: the provision in previous Constitutions that jurors may judge the law and facts!

GONE: the grand jury power to prohibit prosecutions of misdemeanor crimes. And grand jury does not initiate presentment against impeachable officers. Furthermore, only “registered” voters without a criminal history could serve as jurors. I consider these changes a direct backlash against Congress for allowing Negroes their freedom and their incipient right to vote, the issue which had rattled legislators across the south and became a terrifying reality in February 1870 with the ratification of the 15th Amendment.

Section 3. The right of trial by jury shall be secured to all and remain inviolate forever; but in all civil cases a jury trial may be waived by the parties in the manner to be prescribed by law.

Section 8. No person shall be tried for a capital or otherwise infamous crime, except in cases of impeachment, and in cases of the militia when in active service in time of war, or which the State may keep, with the consent of Congress, in time of peace, and in cases of petit larceny, under the regulation of the Legislature, unless on presentment and indictment by a grand jury; and in any trial, by any court, the party accused shall be allowed to appear and defend in person and with counsel, as in civil actions. No person shall be subject to be twice put in jeopardy for the same offense, nor shall be compelled in any criminal case to be a witness against himself, nor be deprived of life, liberty, or property without due process of law; nor shall private property be taken without just compensation.

Section 9. Every citizen may fully speak and write his sentiments on all subjects, being responsible for the abuse of that right, and no law shall be passed to restrain or abridge the liberty of speech or the press. In all criminal prosecutions and civil actions for libel the truth may be given in evidence to the jury, and if it shall appear that the matter charged as libelous is true, but was published for good motives, the party shall be acquitted or exonerated.

Section 29. The Assembly shall have the sole power of impeachment, but a vote of two-thirds of all the members present shall be required to impeach any officer; and all impeachments shall be tried by the Senate. When sitting for that purpose, the senators shall be upon oath or affirmation, and no person shall be convicted without the concurrence of two-thirds of the senators present. The Chief Justice shall preside at all trials by impeachment, except in the trial of the Chief Justice, when the Lieutenant Governor shall preside. The Governor, Lieutenant Governor, members of the Cabinet, justices of the Supreme Court, and judges of the circuit court shall be liable to impeachment for any misdemeanor in office; but judgment in such cases shall extend only to removal from office and disqualification to hold any office of honor, trust, or profit under the State; but the party convicted or acquitted shall nevertheless be liable to indictment, trial, and punishment according to law. All other officers who shall have been appointed to office by the Governor, and by and with the consent of the Senate, may be removed from office upon the recommendation of the Governor and consent of the Senate, but they shall nevertheless be liable to indictment, trial, and punishment according to law for any misdemeanor in office; all other civil officers shall be tried for misdemeanor in office in such manner as the Legislature may provide.

Section 12. Grand and petit jurors shall be taken from the registered voters of the respective counties.

Section 17. The Legislature shall not pass special or local laws in any of the following enumerated cases; that is to say, regulating the jurisdiction and duties of any class of officers, or for the punishment of crime or misdemeanor; regulating the practice of courts of justice; providing for changing venue of civil and criminal cases; granting divorces; changing the names of persons; vacating roads, town plats, streets, alleys, and public squares; summoning and empaneling grand and petit juries, and providing for their compensation; regulating county, township, and municipal business; regulating the election of county, township, and municipal officers; for the assessment and collection of taxes for State, county, and municipal purposes; providing for opening and conducting elections for State, county, and municipal officers, and designating the places of voting; providing for the sale of real estate belonging to minors or other persons laboring under legal disabilities; regulating the fees of officers.

Section 23. No person who is not a qualified elector of this State, or any person who shall have been convicted of bribery, forgery, perjury, larceny, or other high crime, unless restored to civil rights, shall be permitted to serve on juries.

The 1885 Constitution

Remember that women still could not serve on juries, but Negroes could. Grand Jury still has power to present for any felony (but not misdemeanors). The impartial petite jury requirement could serve to keep Negroes out of juries in trials of Negroes. Here, though the Constitution seriously interferes with the traditional role of the grand jury by empowering prosecutors. Nevertheless it suggests that the grand jury can indict officers the governor removes. Indictment implies information by the prosecutor requesting the indictment.

Section 3. The right of trial by jury shall be secured to all, and remain inviolate forever.

Section 10. No person shall be tried for a capital crime or other felony, unless on presentment or indictment by grand jury, except as is otherwise provided in this Constitution, and except in cases of impeachment, and in cases in the militia when in active service in time of war, or which the State, with the consent of Congress, may keep, in time of peace.

Section 11. In all criminal prosecutions the accused shall have the right to a speedy and public trial, by an impartial jury, in the county where the crime was committed, and shall be heard by himself, or counsel, or both, to demand the nature and cause of the accusation against him, to meet the witnesses against him face to face, and have compulsory process for the attendance of witnesses in his favor, and shall be furnished with a copy of the indictment against him.

Section 13. Every person may fully speak and write his sentiments on all subjects, being responsible for the abuse of that right, and no laws shall be passed to restrain or abridge the liberty of speech or of the press. In all criminal prosecutions and civil actions for libel the truth may be given in evidence to the jury, and if it shall appear that the matter charged as libelous is true, and was published for good motives, the party shall be acquitted or exonerated.

Section 28. All offenses triable in said Court shall be prosecuted upon information under oath, to be filed by the prosecuting attorney, but the grand jury of the Circuit Court for the county in which said Criminal Court is held may indict for offenses triable in the Criminal Court. Upon the finding of such indictment the Circuit Judge shall commit or bail the accused for trial in the Criminal Court, which trial shall be upon information.

Section 29. No private property nor right of way shall be appropriated to the use of any corporation or individual until full compensation therefor shall be first made to the owner, or first secured to him by deposit of money; which compensation, irrespective of any benefit from any improvement proposed by such corporation or individual, shall be ascertained by a jury of twelve men in a court of competent jurisdiction, as shall be prescribed by law.

Section 38. The number of jurors for the trial of causes in any court may be fixed by law but shall not be less than six in any case.

Section 29. The House of Representatives shall have the sole power of impeachment; but a vote of two-thirds of all members present shall be required to impeach any officer; and all impeachments shall be tried by the Senate. When sitting for that purpose the Senators shall be upon oath or affirmation, and no person shall be convicted without the concurrence of two-thirds of the Senators present. The Senate may adjourn to a fixed day for the trial of any impeachment, and may sit for the purpose of such trial whether the House of Representatives be in session or not, but the time fixed for such trial shall not be more than six months from the time articles of impeachment shall be preferred by the House of Representatives. The Chief Justice shall preside at all trials by impeachment except in the trial of the Chief Justice, when the Governor shall preside. The Governor, Administrative officers of the Executive Department, Justices of the Supreme Court, and Judges of the Circuit Court shall be liable to impeachment for any misdemeanor in office, but judgment in such cases shall extend only to removal from office and disqualification to hold any office of honor, trust or profit under the State; but the party convicted or acquitted shall nevertheless be liable to indictment, trial and punishment according to law.

Section 15. All officers that shall have been appointed or elected, and that are not liable to impeachment, may be suspended from office by the Governor for malfeasance, or misfeasance, or neglect of duty in office, for the commission of any felony, or for drunkenness or incompetency, and the cause of suspension shall be communicated to the officer suspended and to the Senate at its next session. And the Governor, by and with the consent of the Senate, may remove any officer, not liable to impeachment, for any cause above named. Every suspension shall continue until the adjournment of the next session of the Senate, unless the officer suspended shall, upon the recommendation of the Governor, be removed; but the Governor may reinstate the officer so suspended upon satisfactory evidence that the charge or charges against him are untrue. If the Senate shall refuse to remove, or fail to take action before its adjournment, the officer suspended shall resume the duties of the office. The Governor shall have power to fill by appointment any office, the incumbent of which has been suspended. No officer suspended who shall under this section resume the duties of his office, shall suffer any loss of salary or other compensation in consequence of such suspension. The suspension or removal herein authorized shall not relieve the officer from indictment for any misdemeanor in office.

Section 20. The Legislature shall not pass special or local laws in any of the following enumerated cases: that is to say, regulating the jurisdiction and duties of any class of officers, except municipal officers, or for the punishment of crime or misdemeanor; regulating the practice of courts of justice, except municipal courts; providing for changing venue of civil and criminal cases; granting divorces; changing the names of persons; vacating roads; summoning and empaneling grand and petit juries, and providing for their compensation; for assessment and collection of taxes for State and county purposes; for opening and conducting elections for State and county officers, and for designating the places of voting; for the sale of real estate belonging to minors, estates of decedents, and of persons laboring under legal disabilities; regulating the fees of officers of the State and county; giving effect to informal or invalid deeds or wills; legitimizing children; providing for the adoption of children; relieving minors from legal disabilities; and for the establishment of ferries.

1968 Constitution

This Constitution completed the destruction of Grand Jury powers to prohibit prosecution except in capital cases. It also makes no provision for petit juries to judge law as well as facts.

Section 15. Prosecution for Crime; Offenses Committed by Children.

(a) No person shall be tried for capital crime without presentment or indictment by a grand jury, or for other felony without such presentment or indictment or an information under oath filed by the prosecuting officer of the court, except persons on active duty in the militia when tried by courts martial.

(b) When authorized by law, a child as therein defined may be charged with a violation of law as an act of delinquency instead of crime and tried without a jury or other requirements applicable to criminal cases. Any child so charged shall, upon demand made as provided by law before a trial in a juvenile proceeding, be tried in an appropriate court as an adult. A child found delinquent shall be disciplined as provided by law.

Section 16. Rights of Accused. In all criminal prosecutions the accused shall, upon demand, be informed of the nature and cause of the accusation against him, and shall be furnished a copy of the charges, and shall have the right to have compulsory process for witnesses, to confront at trial adverse witnesses, to be heard in person, by counsel or both, and to have a speedy and public trial by impartial jury in the county where the crime was committed. If the county is not known, the indictment or information may charge venue in two or more counties conjunctively and proof that the crime was committed in that area shall be sufficient; but before pleading the accused may elect in which of those counties he will be tried. Venue for prosecution of crimes committed beyond the boundaries of the state shall be fixed by law.

Section 22. Trial by jury. The right of trial by jury shall be secure to all and remain inviolate. The qualifications and the number of jurors, not fewer than six, shall be fixed by law.

Section 11. Prohibited Special Laws. (a) There shall be no special law or general law of local application pertaining to: (5) petit juries, including compensation of jurors, except establishment of jury commissions;

Section 9. Criminal Courts of Record.(5) Indictment and Information. All offenses triable in said court shall be prosecuted upon information under oath, to be filed by the prosecuting attorney, but the grand jury of the circuit court for the county in which said criminal court is held may indict for offenses triable in the criminal court. Upon the finding of such indictment the circuit judge shall commit or bail the accused for trial in the criminal court, which trial shall be upon information.

Section 12. Juvenile Courts; Establishment; Jurisdiction; Judge; Officers; Procedure. The legislature shall have power to create and establish juvenile courts in such county or counties or districts within the state as it may deem p roper, and to define the jurisdiction and powers of such courts and the officers thereof, and to vest in such courts exclusive original jurisdiction of all or any criminal cases where minors under any age specified by the legislature from time to time are accused, including the right to define any or all offenses committed by any such persons as acts of delinquency instead of crimes; to provide for the qualification, election or selection and appointment of judges, probation officers and such other officers and employees of such courts as the legislature may determine, and to fix their compensation and term of office; all in such manner, for such time, and according to such methods as the legislature may prescribe and determine, without being limited therein by the provisions in this constitution as to trial by jury in Sections 3 and 11 of the Declaration of Rights, as to the use of the terms “prosecuting attorney” and “information” in Section 10 of the Declaration of Rights, as to election or appointment of officers in Section 27 of Article III, as to jurisdiction of criminal cases in Sections 6, 7, 9, and 11 of this Article, as to original jurisdiction of the interests of minors in Section 6 of this Article, and as to style of process and prosecuting in the name of the state in Section 20 of this Article, or other existing conflicting provisions of this constitution

Section 22. Juries. The number of jurors for trial of causes in any court may be fixed by law but shall not be less than six in any case.

Section 7. Suspensions; Filling Office during Suspensions. (c) By order of the governor any elected municipal officer indicted for crime may be suspended from office until acquitted and the office filled by appointment for the period of suspension, not to extend beyond the term, unless these powers are vested elsewhere by law or the municipal charter.

SECTION 12. Discipline; removal and retirement.— (a) JUDICIAL QUALIFICATIONS COMMISSION.—A judicial qualifications commission is created. (5) The commission shall have access to all information from all executive, legislative and judicial agencies, including grand juries, subject to the rules of the commission. At any time, on request of the speaker of the house of representatives or the governor, the commission shall make available all information in the possession of the commission for use in consideration of impeachment or suspension, respectively.