Florida’s Fourth District Court of Appeal reversed a trial court’s denial of reciprocal attorney’s fees to borrowers who were sued for foreclosure after the bank voluntarily dismissed the action.
The bank in Venezia v. JP Morgan Mortg. Acquisition Corp., No. 4D18-1278 (Fla. Dist. Ct. App. May 22, 2019) filed a foreclosure complaint alleging it was entitled to enforce the note as the holder because it had physical possession of the note endorsed in blank. It also alleged it was entitled to fees under the note and mortgage. The borrowers, in response, raised standing as an affirmative defense and also asserted they were entitled to attorney’s fees.
After the bank voluntarily dismissed its case without prejudice, the borrowers moved for attorney’s fees pursuant to the mortgage and section 57.105(7) of the Florida Statutes which makes unilateral attorneys’ fees provisions reciprocal and that by the dismissal they were the prevailing parties. The bank opposed the motion, arguing that appellants could not recover fees because they denied the bank was a party to the contract rather than proving the bank was a party to the contract. The trial court denied the motion for fees.
The trial court’s decision was reversed on appeal. Under section 57.105(7), unilateral attorney’s fees provisions in a contract are deemed reciprocal. The entitlement to fees under section 57.105(7) applies when the party seeking fees prevails and is a party to the contract containing the fee provision. Where a motion for attorney’s fees is based on a prevailing-party provision of a document, the fact that a contract never existed precludes an award of attorney’s fees.
The reviewing court acknowledged Florida case law holding that where a borrower wins on a lack of standing argument in a foreclosure, the borrower is not entitled to fees because the finding implies no contract existed between the parties, which would entitle one to recover attorney’s fees in the first place.
But where, as here, when the bank voluntarily dismisses a foreclosure where the borrower has asserted that standing was absent, the borrower can recover fees under section 57.105(7) because the standing issue was never litigated. Thus, the trial court never made a finding that the bank or the borrower were not parties to the contract.Download Related Document