Third District Reverses Final Judgment of Foreclosure Entered in Favor of Homeowners

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HSBC v. Buset, 43 Fla. L. Weekly D305 (Fla. 3d DCA 2018)

In Buset, the Third District reversed a foreclosure judgment entered in favor of the homeowner, and directed that judgment be entered for the bank.

In 2005, the Buset family obtained a loan from Fremont Investment & Loan. The lender packaged the note with other notes for securitization. Securitization is the process of pooling mortgages and other contractual debt for resale to third-party investors. The notes contained an undated and unsigned endorsement. Eventually, the homeowners defaulted on the loan.

At trial, the homeowners called one witness, a New York attorney named Kathleen Cully, Esq. who gave both legal and personal opinions about the note claiming that the note was not negotiable; the lender lacked standing; and the pooling agreement was violated due to an improper endorsement. The trial court relied heavily on the expert testimony and found for the homeowners. The lender appealed.

The Third District ruled that the trial court erred when Cully’s testimony regarding legal issues was admitted as expert testimony because experts should not be allowed to testify on purely questions of law. The Third District held that expert testimony is inadmissible when it concerns a question of law because the determination of legal issues should be resolved by a trial judge through assistance of counsel.

Additionally, the trial court erred in ruling that the note was not negotiable because it did not follow controlling precedent regarding negotiable instruments. For a note to become non-negotiable, the note must expressly incorporate the terms of the mortgage not just reference it. This note only referenced the mortgage, and did not apply the terms of the mortgage. Therefore, the note remained a negotiable instrument.

The trial court also erred in ruling that the lender did not having standing. The trial court determined the lender lacked standing because there was an incomplete chain of endorsements. Foreclosure cases are based on the person’s entitlement to enforce the instrument, not the ownership of the instrument. Since the note had a blank endorsement, it became bearer paper which made it negotiable by a simple transfer to the Bank. Therefore, the lender had standing to bring the foreclosure claim.

Lenders and homeowners have competing interests in foreclosure proceedings. Having the right counsel to guide you through the legal process, while making sure your rights are protected is essential. If you or someone you know need to initiate a foreclosure proceeding or be defended in such a proceeding, please contact the lawyers at Kahn & Resnik, P.L. Our lawyers proudly serve all of Florida and will fully represent your legal needs. Call us now at 954-321-0176 to set up a consultation.

Third District Reverses Slander of Title Dismissal Between Aventura Homeowners and Developers

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Two Island Development Corp. v. Clarke, 2018 WL 522200 (Fla. 3d DCA Jan. 24, 2018)

This dispute arose between luxury residential homeowners in Aventura, Florida and the developers of a sixteen-story two-tower condominium building. After the homeowners filed three different lawsuits, the developers filed a lawsuit which the trial court dismissed. Ultimately, the developers appealed and the Third District reversed the trial court’s dismissal of the slander of title claim. The Third District also reversed the dismissal of the Williams Island residents.

The dispute involves three islands connected by one road; Williams Island, South Island, and North Island. In 2013, the homeowners of the South Island approved a Shared Maintenance Association Plan and the Easement, Operating, and Development Agreement (EODA) with the North Island. Furthermore, when the Williams Island residents purchased their properties, there was an expressed agreement titled, “Agreement Not to Object.” This agreement stated that there would be no objection to development on the North Island. Relying on the EODA and the Williams Island agreements, the developers began construction of the two towers on the North Island.

In response to the development, residents of Williams Island and the South Island began protesting, filed for temporary injunctions, lobbying city officials and allegedly obstructing a settlement. In addition, the South Island residents refused to assist the developers in obtaining a permit for an additional sidewalk. The developers argued that this constituted a breach of contract. These actions allegedly led to delays in the developers obtaining permits, buyers backing out of purchases, loss of potential customers and damages to the developers’ reputation.

In due course, the developers sued for breach of covenant; specific performance; and breach of the duty of good faith and fair dealing; against the South Island residents. In addition, the developers sued both the South Island residents and Williams Island residents for tortious interference. The developers also sued certain individual residential homeowners who lived on the South Island for slander of title. After the trial court’s oral ruling, but before the final order was entered, the developers voluntarily dismissed the Williams Island residents as defendants. The trial court’s order dismissed with prejudice both the Williams Island residents and the South Island residents. The trial court also held that the South Island residents were not bound by the EODA because they did not sign the agreement. The developers appealed the dismissal of the slander of title and argued that the dismissal of the Williams Island residents was improper because there was already a voluntary dismissal of a record.

The Third District found that the trial court erred in dismissing the Williams Island Defendants. Under Florida Rule of Civil Procedure 1.250(b), a party may be dropped by an adverse party in the same manner provided for a voluntary dismissal. Therefore, the plaintiffs had a right to drop some or all of the defendants in the case. Since the dismissal of the Williams Island residents was before the trial court entered the final ruling, the court could not dismiss the Williams Island residents as an adjudication of the case.

The Third District also found that the trial court erred in the dismissal of the slander action. To state a claim for slander of title, a party must make a false and malicious statement, oral or written, must be made to disparagement a person’s title to real or personal property causing special damages. It was alleged that the individual defendants in the case made false and malicious statements to potential buyers about the planned development, as well as, published the false statements, causing loss of sales and reduced marketability. The Third District found that the developers had stated a cause of action for slander of title and reversed the trial court’s order dismissing the claim.

Slander of title and breached contract claims involve complex legal issues. Having the right counsel to guide you through the legal process, while making sure your rights are protected is essential. If you or someone you know has a slander of title claim, breach of contract or breach of covenant claim, please contact the lawyers at Kahn & Resnik, P.L. Our lawyers proudly serve all of Florida and will guide you through every step of the legal process. Call us now at 954-321-0176 to set up a consultation.

When the Sale of a Cemetery Unearths a Claim for Breach of Fiduciary Duty

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DFG Group, LLC. v. Heritage Manor of Memorial Park, Inc., 2018 WL 527013 (Fla. 4th DCA Jan. 24, 2018)

In DFG Group, the Fourth District reversed a final judgment awarding attorney’s fees as damages in a lawsuit involving the sale of a cemetery.

The owners of Heritage Manor Memorial Park retained a law firm to assist them with the sale of the cemetery. What the sellers didn’t know was the same firm also represented the buyers. After the sale, the sellers discovered that the law firm received a $100,000 kickback. The sellers filed a lawsuit against the buyers and the attorney defendants for intentional misrepresentation, willful non-disclosure, breach of contract, civil theft, conspiracy to breach fiduciary duty, and aiding and abetting breach of fiduciary duty. The attorney defendants settled. As to the buyers, the jury found that the sellers were entitled to damages compromised of the attorneys’ fees, costs for the transaction and punitive damages. The buyers moved for judgment notwithstanding the verdict, arguing that the attorney’s fees were not a proper element of damages.

The Fourth District agreed with the buyers and found that the trial court did not apply the correct measure of damages, causing fundamental error. Fundamental error can occur when a party recovers damages they are not entitled to. When recovering damages in a tort claim, the goal is to place the party back to the position they were in before the injury occurred. In this case, the jury found that there was no difference between the sale price and the fair market value price at the time of sale. Therefore, the seller did not suffer a loss. Moreover, since the seller did not suffer a loss, attorney’s fees could not be part of the damages. Additionally, the seller was not entitled to punitive damages because to obtain punitive damages there had to be a compensatory damages award.

Real estate transactions occur every day. A buyer and seller want to avoid a breach of the contract or a misrepresentation arising during the transaction. Having the right counsel to guide you through the legal process, while making sure your rights are protected is important. If you or someone you know has a breach of contract claim or requires legal representation as a buyer or seller in a commercial or residential real estate transaction, please contact the lawyers at Kahn & Resnik, P.L. Our lawyers proudly serve all of Florida and will fully represent your legal needs. Call us now at 954-321-0176 to set up a consultation.

 

Court of appeals dismissal of defamation lawsuit by former coach for Miami Dolphins

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Turner v. Wells, 2018 WL 456955 (11th Cir. 2018)

In Turner, the United States Court of Appeals for the Eleventh Circuit, upheld the District Court’s decision to dismiss a defamation case, involving a former coach for the Miami Dolphins.

In 2013, Jon Martin, a player for the Miami Dolphins, left the team mid-season and checked himself into a hospital for psychological treatment. Martin later explained that he left the team due to persistent taunting. The National Football League (NFL) hired the New York law firm of Paul, Weiss and partner Theodore Wells, Esq., to investigate the taunting allegations. Mr. Wells’ investigation concluded that both the players and Coach Turner had been bullying Martin and the persistent harassment did cause him to leave the team. Furthermore, the report stated that the players and coaches enabled the bullying. Five days after the report was released the Dolphin’s fired Coach Turner. Mr. Turner filed a defamation case against the defendant. The defendant law firm, argued that the report consisted of opinions which are not actionable and the complaint misstated the report.

To prove defamation under Florida law, a party must establish that (a) defendant knowingly or recklessly made a false statement of fact, was defamatory and (b) the statement was published causing actual damages. If a statement is considered pure opinion, it is not actionable, whereas certain statements of fact are. A statement of fact is one that can be proven true or false. A true statement is one which can’t be proven false and is protected against defamation.

Furthermore, Coach Turner was a public figure who failed to plead actual malice. To prove actual malice, the plaintiff must prove that the defendant made the statement with knowledge that the statement was false, or with reckless disregard of whether it was false or not. The Eleventh Circuit agreed that the alleged defamatory statements in the report were not actionable. The Court also determined that Coach Turner failed to adequately plead actual malice.

Defamation cases adversely impact someone’s reputation. Having the right counsel to guide you through the legal process, while making sure your rights are protected is essential. If you or someone you know has a defamation claim or has been sued for defamation, please contact the lawyers at Kahn & Resnik, P.L. Our lawyers proudly serve all of Florida and will guide you through every step of the legal process. Call us now at 954-321-0176 to set up a consultation.