TALLAHASSEE, Fla. (AP) _ Parties in a Florida mortgage foreclosure lawsuit focusing on allegations of tainted documents will get their day in the Florida Supreme Court even though neither side wants it.
A sharply divided high court on Thursday refused a request by borrower and lender alike to dismiss the Palm Beach County case. They had sought the dismissal after agreeing to settle the case before the justices could hear it.
In a 4-3 opinion, the majority justices wrote that the borrower's appeal was too important to dismiss, as it raises a question that “transcends the individual parties to this action because it has the potential to impact the mortgage foreclosure crisis throughout this state.''
That question is whether a trial judge can penalize a party for committing a “fraud on the court'' if that party voluntarily dismisses the case before it's resolved. Two lower courts said they cannot. The high court next will consider arguments on that issue.
The majority wrote that judges and litigants also need guidance from the Supreme Court and that the legal issue has implications beyond mortgage cases.
Florida's collapsing real estate market has resulted in thousands of foreclosures, but officials have turned up many instances of fraudulent and erroneous filings.
They include documents bearing the signatures of so-called “robo-signers'' _ people hired to sign foreclosure papers in assembly line fashion without necessarily knowing what's in them.
Those findings resulted in civil and criminal investigations, the collapse of two major foreclosure law firms and the temporary shutdown of foreclosure filings by many lenders.
The high court's ruling came in a foreclosure filed by the Bank of New York Mellon. The defendant, Roman Pino, alleged the bank filed a forged document to deceive the court. He asked the judge to penalize the bank by denying it any right to foreclose on the mortgage.
The judge denied his request because the bank had voluntarily dismissed the complaint. The 4th District Court of Appeal affirmed that decision but asked the Supreme Court to rule on the issue, certifying it as a “question of great public importance.''
Pino appealed but then joined the bank in asking the Supreme Court to dismiss the case after they settled.
Chief Justice Charles Canady acknowledged in his dissent that the high court has on occasion rejected a stipulation for dismissal, but he argued that retaining jurisdiction before both sides have submitted written briefs is unprecedented.
The ruling will force the parties to argue a case that neither side wants to pursue, Canady noted.
“They should not be dragooned into litigating a matter that is no longer in controversy between them simply because this court determines that an issue needs to be decided,'' Canady wrote.
Justices Ricky Polston and Peggy Quince concurred with Canady's dissent.
The majority justices, though, wrote it's Canady's interpretation that goes against precedent. They said it would require the high court to recede from past decisions that denied dismissals in similar circumstances.
They also noted Pino filed an initial brief before the settlement although the bank had not.