* Ruling could have affected thousands of cases in Florida
* Bank accused of false papers can drop foreclosure, reopen
using other papers
By Jessica Dye
NEW YORK, Feb 8 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, the
trustee for the security that owned his loan. The mortgage was
serviced by Bank of America.
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
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.