Florida court finds for bank in major foreclosure case

NEW YORK Fri Feb 8, 2013 9:29pm EST

NEW YORK (Reuters) - Florida's highest court has ruled a homeowner cannot re-open a voluntarily dismissed foreclosure case despite allegations that the bank falsified documents, giving a win to banks in a closely watched ruling that could have affected thousands of cases in a state hit hard by the foreclosure crisis.

The Florida Supreme Court had been asked to decide whether banks accused of using fraudulent documents to file foreclosure lawsuits could dismiss the cases, and then later re-file them with different paperwork.

The case involves a foreclosure brought against homeowner Roman Pino in 2008 by Bank of New York Mellon Corp (BK.N), the trustee for the security that owned his loan. The mortgage was serviced by Bank of America (BAC.N).

Pino asked the court to dismiss the case, arguing that the documents filed by the bank and its attorneys had been fraudulently backdated. The case stems from the robo-signing scandal, in which banks and law firms allegedly signed off on foreclosure documents without verifying their accuracy.

The documents in Pino's case had been signed by an employee of the now-defunct David Stern law firm, one of the biggest foreclosure law firms in the country.

Before the court could rule, BNY Mellon voluntarily dismissed the case. The foreclosure was later re-filed, using different documents. Pino's lawyer asked the court to re-open the first case, saying the bank should not have been allowed to bring the same case when it committed fraud the first time around.

Before the case reached the Florida Supreme Court, Pino and BNY Mellon reached a confidential settlement. The high court decided to hear the case anyway to address what it said was a key policy question that has vexed courts across the state - whether or not voluntary dismissals can be reversed when there is an allegation of fraud.

On Thursday, the Florida Supreme Court decided that it could not, unless the plaintiff - in this case, the bank - had obtained some kind of affirmative relief, and the dismissal had kept the fraud from being remedied by the court.

However, the court acknowledged the "multiple abuses that can occur from fraudulent pleadings," and asked Florida's bar association to review civil litigation rules to determine if changes should be made to address the issue.

A lawyer for Pino, Amanda Lundergan of the Ice Firm, said she believed the ruling "will have the unintended effect of encouraging underhanded tactics" by plaintiffs in foreclosure and other cases.

A spokesman for BNY Mellon, Kevin Heine, declined to comment. Bank of America did not immediately return a request for comment Friday evening.

The case has been closely watched by banks and homeowners. An unfavorable ruling for the banks could have exposed them to severe financial liability in the state.

(Reporting by Jessica Dye; Editing by Gary Hill)

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Comments (2)
TheHutMaster wrote:
Boy oh Boy. I too watched this case very closley. The judges behavior was appauling. We MUST fire these egotistical corrupt hacks that parade around like we MUST respect them. Well, the silly black robe (and their silly little hammer) will not stop us from holding them for TREASON.

We, The People, are beyond over this and now we MUST take matters into OUR hands. These HACK judges must understand, they work for us. Their egos just wrote them their exit papers. We are here, we are awake, and we are comming.

Feb 09, 2013 10:25am EST  --  Report as abuse
CharlesReed wrote:
Here the problem that exist is that these cases having sumitted to the court fraudulent documentation in order to foreclose and now are dropping the cases, does not have any thing with law enforcement investigating and referring it to be prosecuted.

The reason America is still dealing with this crisis is the failure of the Justice System that allowed the banks to get away with crime. You cannot have Docx President Lorraine Brown cop a plead, where she is admitting to 1 million forged assignment and think that banks ever acted lawfully.

The noway that a individual guilty of millions of the same thing should hold the same weight of homeowners never involved in any crimes.

Feb 09, 2013 7:22pm EST  --  Report as abuse
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