Country Place Cmty. Ass'n, Inc. v. J.P. Morgan Mortg. Acquisition Corp.

• Decision Date: 29 December 2010
• Docket Number: No. 2D10-569.,2D10-569.
• Citation: Country Place Cmty. Ass'n, Inc. v. J.P. Morgan Mortg. Acquisition Corp., 51 So. 3d 1176 (Fla. App. 2010)
• Parties: COUNTRY PLACE COMMUNITY ASSOCIATION, INC., Appellant, v. J.P. MORGAN MORTGAGE ACQUISITION CORP., Appellee.
• Court: Florida District Court of Appeals

51 So.3d 1176

COUNTRY PLACE COMMUNITY ASSOCIATION, INC., Appellant,

v.J.P. MORGAN MORTGAGE ACQUISITION CORP., Appellee.

No. 2D10-569.

District Court of Appeal of Florida, Second District.

Dec. 29, 2010.

Leslie M. Conklin, Clearwater, for Appellant.

No appearance for Appellee.

WALLACE, Judge.

Country Place Community Association, Inc., appeals the circuit court's order denying its motion for attorney's fees under section 57.105(1), Florida Statutes(2008).Country Place moved for an award of attorney's fees against J.P. Morgan Mortgage Acquisition Corp. after the circuit court dismissed J.P. Morgan's mortgage foreclosure action filed against Country Place and several other defendants.¹The circuit court denied the motion for attorney's fees because J.P. Morgan could still prevail in a new foreclosure action.But the circuit court should have assessed attorney's fees under the statute against J.P. Morgan for asserting an unsupportable claim even though J.P. Morgan may prevail if the action is refiled.For this reason, we reverse the circuit court's denial of attorney's fees to Country Place.

I.THE FACTS AND PROCEDURAL BACKGROUND

J.P. Morgan filed an action against several defendants—including Country Place, a lienholder—to foreclose a mortgage on a residence located in Hillsborough County.J.P. Morgan included in its complaint a count seeking the reestablishment of a lost note.The lender named in the copy of the note and mortgage attached to the complaint was First Franklin Financial Corporation.The mortgage designated Mortgage Electronic Registration Systems, Inc., as the mortgagee.J.P. Morgan did not attach to its complaint any evidence of an assignment of either the note or the mortgage in its favor.When J.P. Morgan filed the action, no assignment of the mortgage in its favor had been recorded in the public records of Hillsborough County.

Country Place answered the complaint and asserted the defense that J.P. Morgan lacked standing to bring the action because it did not own the note and mortgage.During the pendency of the foreclosure action, J.P. Morgan never produced any evidence that it owned the note and mortgage that were the subject of the proceeding.As a result of its failure to respond to requests for admissions propounded to it by Country Place, J.P. Morgan admitted that it had no evidence to show that it owned or possessed the note and mortgage on the date it filed the mortgage foreclosure action.J.P. Morgan never sought relief from the effect of its failure to respond to the requests for admissions.

Country Place moved for summary judgment based on J.P. Morgan's inability to demonstrate that it owned or possessed the note and mortgage when the action was filed.J.P. Morgan did not file any affidavits in opposition to Country Place's motion or otherwise respond to it.In fact, J.P. Morgan's counsel failed even to attend the hearing.After the hearing, the circuit court entered a final summary judgment dismissing the mortgage foreclosure action without leave to amend.In the order granting the summary judgment, the circuit court also directed: "A new suit must be filed."J.P. Morgan did not either move for rehearing of the summary judgment or take an appeal from it.

Country Place had previously served, but did not file, a copy of its motion for attorney's fees on J.P. Morgan in accordance with the safe harbor provision of section 57.105(4).After its receipt of a copy of the motion, J.P. Morgan neither withdrew its complaint nor took any steps to address the issue of its standing to maintain the foreclosure action.Upon the entry of the summary judgment in its favor, Country Place timely moved for an award of attorney's fees under section 57.105(1).Based on J.P. Morgan's admitted lack of standing to maintain the action when it was filed, Country Place argued that J.P. Morgan and its attorneys knew or should have known that their action was unsupportable.

At a hearing on Country Place's motion for attorney's fees, an attorney appeared for J.P. Morgan and announced that he had in his possession "the original note and mortgage evidencing that we have a validly endorsed note in which [J.P. Morgan] does have the standing to bring forth this action."²The circuit court informed counsel for J.P. Morgan that he would need to file a new foreclosure action.The circuit court then heard arguments on the issue of Country Place's entitlement to attorney's fees under section 57.105(1).In addition, the circuit court took evidence and heard arguments concerning the amount of a reasonable fee for Country Place's attorney.

After the hearing, the circuit court entered a written order denying Country Place's motion.On the issue of entitlement, the circuit court ruled:

[J.P. Morgan's]counsel argues that there should be no entitlement to fees at [J.P. Morgan's] expense because it still has a viable cause of action, and already obtained a default, against the primary defendant, Ricardo Barranco.[J.P. Morgan] holds the subject mortgage and note and is entitled to foreclose its note and mortgage as against all defendants, including [Country Place].

This Court agrees with [J.P. Morgan] and determines, as a matter of law, that [Country Place] is not entitled to the claimed attorney's fees under the fee-shifting provisions of Chapter 57.

Although its ruling on the issue of entitlement made it unnecessary to address the issue of amount, the circuit court also found that the amount of a reasonable attorney's fee for Country Place's counsel would be $6945.³This appeal followed.

II.THE STANDARD OF REVIEW

Generally speaking, our standard of review of an order denying a motion for attorney's fees and costs under section 57.105(1) is abuse of discretion.SeeGahn v. Holiday Prop. Bond, Ltd.,826 So.2d 423, 425-26(Fla. 2d DCA2002)(citingDep't of Transp. v. Kisinger Campo & Assocs.,661 So.2d 58, 59(Fla. 2d DCA1995)).But where, as in this case, the circuit court's determination of entitlement to attorney's fees is based on a conclusion of law concerning the interpretation of a statute or contractual provision, we employ a de novo standard of review.SeeGibbs Constr. Co. v. S.L. Page Corp.,755 So.2d 787, 790(Fla. 2d DCA2000);Ware v. Land Title Co. of Fla., Inc.,582 So.2d 46, 46-47(Fla. 2d DCA1991);Stevens v. Zakrzewski,826 So.2d 520, 521(Fla. 4th DCA2002).

III.DISCUSSION

We begin our discussion by noting that J.P. Morgan's counsel appeared at the hearing on Country Place's motion for attorney's fees and successfully argued that Country Place was not legally entitled to an award of attorney's fees under section 57.105(1).However, J.P. Morgan has failed to file a brief to assist this court in resolving the issues raised by Country Place's appeal of the circuit court's order.As this court has observed before:

Failure to file a brief places an undue burden on the appellate court and reflects an omission of appellee's responsibility to support the trial court.If the ruling of the trial court is not worthy of support, then appellee ought to confess error and join with the appellant in seeking a reversal.

Geisler v. Geisler,397 So.2d 1216, 1217 n. 1(Fla. 2d DCA1981).

Because J.P. Morgan did not own or possess the note and mortgage when it filed its lawsuit, it lacked standing to maintain the foreclosure action.SeeBank of N.Y. v. Williams,979 So.2d 347, 347(Fla. 1st DCA2008);Jeff-Ray Corp. v. Jacobson,566 So.2d 885, 886(Fla. 4th DCA1990).It follows that when J.P. Morgan filed its mortgage foreclosure action, it knew or should have known that its action was unsupported by the material facts necessary to establish the claim.So, absent some compelling reason to the contrary, Country Place was entitled to an award of attorney's fees under section 57.105(1).SeeIn re Forfeiture of: 1997 Jeep Cherokee,898 So.2d 223, 225(Fla. 2d DCA2005);Yakavonis v. Dolphin Petroleum, Inc.,934 So.2d 615, 619-20(Fla. 4th DCA2006).

The circuit court concluded that Country Place was not entitled to an award of fees under the statute because J.P. Morgan might still prevail when it filed a new foreclosure action.The circuit court's ruling would probably have been correct under the version of the statute in effect before the 1999amendments.Seech. 99-225, § 4, at 1406,Laws of Fla.Under the earlier version of the statute, the determination of a party's entitlement to fees had to be made based on the entire action.SeeRemova Pool Fence Co. v. Roth,647 So.2d 1022, 1024(Fla. 4th DCA1994)(construing the 1991 version of section 57.105(1)), superseded by statute on other grounds as stated inHeilman v. Fla. Dep't of Revenue,727 So.2d 958(Fla. 4th DCA1999).The circumstance that a portion of the action might be frivolous did not warrant an award of attorney's fees under the statute.Id.

But the 1999amendments to the statute have "lowered the bar a party must overcome before becoming entitled to attorney's fees pursuant to section 57.105, Florida Statutes."Albritton v. Ferrera,913 So.2d 5, 8(Fla. 1st DCA2005).In 1999,section 57.105(1) was amended to provide in pertinent part as follows:

Upon the court's initiative or motion of any party, the court shall award a reasonable attorney's fee to be paid to the prevailing party in equal amounts by the losing party and the losing party's attorney on any claim or defense at any time during a civil proceeding or action in which the court finds that the losing party or the losing party's attorney knew or should have known that a claim or defense when initially presented to the court or at any time before trial:

(a) Was not supported by the material facts necessary to establish the claim or defense; or

(b) Would not be supported by the application of then-existing law to those material facts.

Ch. 99-225, §§ 4, 36, at 1406, 1428,Laws of Fla.(effective Oct. 1, 1999)(emphasis added).⁴As amended, the statute authorizes "an award of attorney's fees when a claim, pleading or...