Posted on Wednesday, December 8, 2010
A state appeals court reversed another foreclosure Wednesday, ruling that leaving notice of a lawsuit at a homeowner's front door is not sufficient notification.
It's the latest in a string of foreclosure reversals based on flaws in documents or the legal process, as appellate courts closely scrutinize cases. Defense lawyers have decried the so-called rocket docket at the trial level, where, they contend, moving cases has taken priority over the legal rights of homeowners.
A three-judge panel of the 3rd District Court of Appeal ruled that Miami-Dade Circuit Court Judge Ronald M. Friedman erred when he refused to cancel a foreclosure judgment against Debbie Bennett after she said she had not been served with the foreclosure suit.
The lender claimed she had been served, but closer scrutiny later revealed that she had not received proper notification, according to the 3rd DCA.
Friedman allowed lender Christiana Bank and Trust to foreclosure on Bennett's North Miami home last year. Her attorney, Joseph J. Pappacoda, appealed the decision. She was allowed to stay in the home pending the appeal.
The 3rd DCA voided the final foreclosure judgment and sent the case back to the trial court.
It was the second time this week that the 3rd DCA sided with a homeowner because of servicing issues, which foreclosure defense attorneys claim are widespread.
On Tuesday, the 3rd DCA reversed the foreclosure of the home of a Miami homeowner because the guarantor of the loan in dispute said he was out of the country when the lender attempted to serve him.
In this case, Bennett told the court she did not know a foreclosure action had been filed against her until she received the copy of the final judgment in the mail in August 2009, almost nine months after Christiana Bank filed suit.
The Delaware-based bank said Bennett owed $307,000 in principal and fees.
The servicing documents filed by the lender claimed Bennett had been served on Dec. 20, 2008. According to the documents, "defendant refused to disclose military status," and the agent "asked the person spoken to if the person served is married, and I received a negative reply."
But notes attached to the documents, written by the process server, showed Bennett was never personally notified.
The server wrote that on Dec. 20 he left the papers at the door. "Saw curtains move, read aloud docs, SVP Docs at door," the server's notes said, according to the 3rd DCA opinion.
"The return [document] does not identify the name or age of any individual supposedly served," the opinion read.
"Christiana Bank argues that there is no testimony to explain what "SVP" means, but "Docs at Door" is quite self-explanatory. Curtains may move because of the wind or curious cats, and not just because some prospective defendant is attempting to avoid service."
The 3rd DCA said it's troubling that Christiana Bank and its attorneys ignored the discrepancy in the service documents and proceeded with the foreclosure.
Christiana Bank's attorney, Klarika J. Caplano of Florida Foreclosure Attorneys, did not return a call seeking comment.
Bennett's attorney, Joseph J. Pappacoda of Fort Lauderdale, also could not be reached for comment.
Improper servicing has been a major issue long ignored by some foreclosure judges in South Florida, according to critics.
This and other appeal court decisions favoring homeowners come as some of the largest foreclosure law firms in Florida are under investigation for allegedly fabricating documents and forging signatures to foreclose on behalf of residential lenders and loan servicers.
Dustin Zacks, a foreclosure defense attorney at the Ice Legal firm, said improper servicing is often obvious but that many judges have ignored the problem.
"The lenders often claim homeowners are avoiding service," he said. "But many times the processor comes at the same time, every time he attempts to serve. It's obvious the person is at work. There was one case where the description of the person served was a person in her 60s or 70s. It was obviously not my client. They served the wrong person."
Zacks said his firm also has several pending appeals based on problems with notification and hopes the recent decisions will serve as a warning to lenders and their attorneys that servicing needs to be done properly.
"They like to say this is a technical issue," he said. "But it's not. How can people defend themselves from a lawsuit if they don't know they are being sued?"
Pro-Vest LLC, the Tampa company hired by Christiana Bank to serve the foreclosure suit, claims it serves more than 2 million documents per year and uses independent contractors to perform the work. A spokesman for the company said Pro-Vest no longer uses the firm hired to serve Bennett.
The process server who attempted to serve Bennett, Christopher Mas, is named in the opinion. Reached on his cellphone, Mas said he doesn't remember the case.
"I have no idea," he said. "We get a lot of these cases. There is no way I would remember."
The 3rd DCA opinion also called attention to many of the fees the lender is charging Bennett in the final judgment and supporting affidavit filed with the court.
Charges of more than $6,400 of force-placed insurance, "forbearance interest" of more $11,300 (above the more than $14,000 in accrued interest from alleged default to the date of judgment), and "un-itemized, conflicting foreclosure expenses" were listed by Christiana Bank in an affidavit and the final judgment "without reference to the applicable provisions of the loan documents," according to the opinion.
"While we express no opinion regarding the validity or invalidity of these charges, we call them to the parties' and trial court's attention so that they can be addressed," the opinion said.
Polyana da Costa
Daily Business Review