Florida Supreme Court Holds Borrower is Entitled to Attorney’s Fees Despite Bank’s Failure to Prove Standing at the Inception of the Case

On December 31, 2020, in Page v. Deutsche Bank Trust Company Americas, No. SC19-1137, the Florida Supreme Court quashed the Fourth DCA’s ruling that the borrower was not entitled to attorney’s fees due to the bank's failure to prove standing, and approved the decisions made in Madl v. Wells Fargo Bank, N.A., 244 So. 3d 1134 (Fla. 5th DCA 2017) and Harris v. Bank of New York Mellon, 2018 WL 6816177 (Fla. 2d DCA 2018). 
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In Page, the lower court held that the bank did not prove standing at the time the complaint was filed, but did establish standing at trial. The Fourth DCA ruled that the borrower who successfully argues that the bank lacked standing at the time the suit was filed cannot rely on the contract to obtain attorney’s fees under Fla. Stat. section 57.105(7). 

The Fourth DCA in Page certified conflict with the Fifth DCA’s decision in Madl and the Second DCA’s decision in Harris. Both Madl and Harris held that a prevailing borrower is entitled to attorney’s fees if it is established that plaintiff became subject to the unilateral fee provision in the contract. In other words, if plaintiff lacks standing at the time the suit was filed, but subsequently establishes standing at trial, then the borrower is entitled to attorney’s fees under section 57.105(7). By contrast, in Page, the Fourth DCA did not give weight to the fact that the plaintiff subsequently established standing at trial.  

In their analysis, the Florida Supreme Court first looked at the plain meaning of Fla. Stat. section 57.105(7), and determined that the results in Madl and Harris were correct. The Supreme Court reiterated that the statute contains two clauses: 1) the existence of a fee provision in the contract. The statutory language requires the plaintiff and defendant to not be strangers to the contract; and 2) a party to the contract prevailed. 

In Page, the Supreme Court held the record established the plaintiff and defendant were parties to the contract due in part to Plaintiff proving standing at the time of trial. The Court further clarified that there is nothing within section 57.105(7) that requires plaintiff and defendant to be parties to the contract on the date the complaint was filed. Since the plaintiff subsequently established standing at trial and the borrower prevailed as a party to the contract which contained a fee provision, the Court determined both clauses of section 57.105(7) were satisfied. 

How does this impact foreclosure cases in Florida? 

The initial Fourth DCA ruling that a borrower is not entitled to fees if the bank failed to prove standing either at the time the complaint was filed or at the time of trial is quashed. If plaintiff’s standing is established during the foreclosure case, then a prevailing borrower is entitled to attorney’s fees pursuant to Fla. Stat. 57.105(7). However, if the plaintiff fails to prove standing at any point in the case and it cannot be established that the plaintiff and defendant were parties to the contract, then an award for attorney’s fees is unlikely.  

If you have any questions regarding this ruling and the impact of this case on your portfolio then please do not hesitate to contact the Padgett Law Group.