As discussed today in the Daily Business Review (see article below), the Third District Court of Appeals criticized a Miami Dade circuit judge for extending a foreclosure by one month. In essence, the Court reversed the judge’s opinion by stating that a courtroom is no place for compassion!

While it is inappropriate for an attorney to criticize the appellate court for possibly being uncompassionate, it is fair to say that a good foreclosure defense will go a long way in preventing a judge from having to attempt to be compassionate. Rather the Rules of Civil Procedure, the Florida Constitution, and the idea that the bank comes to the foreclosure with unclean hands will go a lot further than begging the court for mercy.

Typically circuit court judges were permitting extensions of foreclosure dates in order for homeowners to be able to complete a mortgage modification or a short sale. Ironically enough, if the banks didn’t drag their feet in approving short sales and approving modifications, the judges would never have been put in this terribly uncomfortable position in the first place.

Thus, in an ironic twist, we thank the appellate court for further justifying what we do every day and that is to defend homeowners with legitimate legal defenses in a foreclosure. The banks have done enough things incorrectly that will provide a trial judge an opportunity to delay a sale, should they want to, through the use of appropriate legal arguments.

The only unfortunate aspect of the appellate court’s ruling is that unrepresented clients will now be further churned and spit through a process that is only accelerating because of the increased workflow and reduction in court staff due to budget cuts. It is ironic that the bank even brought this action to the appellate court but it was through abuse by the homeowner that ultimately frustrated the bank in pursuing this appeal. Frankly, I would always prefer to have a strong legal argument than to beg for compassion from the court. So now you know the truth, don’t ever expect judges to be compassionate– even if it was their true desire.

From deep in the trenches,

Roy Oppenheim

Foreclosure Cases Appeal court takes judge to task for ‘benevolence’

October 06, 2009

By: Susannah A. Nesmith

Benevolence and compassion” have no place when it comes to setting foreclosure sales, a state appellate court ruled in a stern order.

The 3rd District Court of Appeal judges said they “thoroughly disapprove” of a decision by Miami-Dade Circuit Judge Valerie Manno Shurr to give an extra month to a couple trying to sell their home before a foreclosure sale, Senior Judge Alan R. Schwartz wrote for the panel last week.

Manno Shurr declined to comment on the decision, citing judicial rules that prohibit her from talking about specific cases. But in court, she made her position clear.

“People are having a hard time now. They are having a difficult time. Everybody knows it. Businesses are failing. People are losing money in the stock market. You know, unemployment is high,” Manno Shurr said. “Everybody knows that we are in a bad time right now, and I hate to see anybody lose their home.”

The appellate court found her reasoning flawed and said her decision granting extra time was “an abuse of discretion in the most basic sense of that term” because the bank had a right to the sale.

Several attorneys expressed outrage over the opinion but declined to go on the record, saying it could potentially be detrimental to them to openly criticize the judge or the court.

Mike Christiansen of Mastriana & Christiansen, a Fort Lauderdale attorney who has practiced real estate law for more than 30 years, was surprised by the tone of Schwartz’s remarks.

“It’s astounding to me, in the extraordinary times in which we find ourselves, that the court did not assert strong leadership and support the simple notion of compassion in cases where people and families are losing their homes,” he said.

“Compassion is what distinguishes a robotic application of the law from real justice. And justice is what we should — and do — expect from judges.”

Barry Simons of the Law Office of Barry L. Simons in Miami, attorney for Joseph and Blanca Doyle, declined to comment on the ruling against his clients.

Charles M. Rosenberg, attorney for Republic Federal Bank, said his client decided to appeal Manno Shurr’s decision in part because the bank felt Miami-Dade trial judges “needed some guidance.”

“With all of the foreclosures being filed in this county, we thought that the trial judges needed some guidance from the court of appeal on under what circumstances they could grant extensions because it’s very common for people to run into court at the last minute asking for extensions,” he said.

With the foreclosure sale of the Doyle home scheduled for the day after the opinion was published, the appellate court’s ruling had little practical impact other than to chastise the judge and provide some guidance.

“Although we thus thoroughly disapprove of the order, in view of the fact that the postponed sale is due to take place within a short time of this decision, no useful purpose will be served by formally quashing the order or ordering the sale to take place on an earlier date with all the procedural complications which would then result,” Schwartz wrote, stressing, “There are to be no further postponements of the sale.”

Judges David Gersten and Barbara Lagoa concurred.

More than 100,000 open foreclosure cases are in Miami-Dade, according to Clerk of the Courts Harvey Ruvin. Many are taking years to resolve.

In the Doyles’ case, the bank filed suit to foreclose on their 8,300-square-foot home in Pine-crest in January 2008 and got a $2.5 million foreclosure judgment in November, according to records.

The case was delayed when the Doyles filed for bankruptcy, but a federal judge tossed their case as frivolous. The Doyles were barred from filing another bankruptcy case for six months, and the extension Manno Shurr granted got them past that date.

“The immediate reason we filed was because of their abuse of the bankruptcy system,” said Rosenberg, a Carlton Fields shareholder in Miami. “We understand that the court should have discretion to grant extensions, but there has to be some reason for doing it.”

The Doyles did not file a second bankruptcy petition, and the house sold at auction Thursday. Rosenberg’s firm submitted a $1.3 million bid on property with an assessed value of $2.64 million.

Foreclosure attorneys were predictably divided on the opinion. Attorneys specializing in defending homeowners were concerned that it takes away judicial discretion and leaves homeowners already in financial straits even more vulnerable to the whims of lenders. Those who represent banks said it would help them deal with homeowners who are abusing the process.

Peter Ariz, a South Miami solo practitioner who represents homeowners, said extensions often are necessary because the banks he deals with won’t negotiate mortgage modifications quickly.

“The judges here have really been the only ones defending the consumers because they’ve allowed the borrowers the time to negotiate,” he said. “There’s a lack of compassion on the other end when it comes to the lenders.”

“I deal with banks that delay the modification process for months before finally offering a modification that actually raises the homeowner’s payments,” he said. “And then they file a foreclosure while they’re negotiating the modification. That’s just unconscionable.”

On the other hand, lender attorney Zoe Krikorian of Weisenfield & Associates in Miami hopes the ruling will speed Miami-Dade foreclosure cases.

“If there are legitimate reasons — people really trying to modify the loan, or they have a valid contract for a short sale — that’s one thing,” she said. “But many times, it’s just a delay tactic so people can stay in their houses longer without paying.”

She said the earliest sale date she could get for foreclosure judgments issued now is next April. And it often takes months to get a judgment after a case is filed. Plus, lenders usually wait for several months of missed payments before filing foreclosure suits.

“When we reset a sale, think about it. They’ve already had as long as two years since they stopped paying,” she said.

Miami-Dade civil judges “are each carrying dockets of three to four thousand foreclosure cases,” chief civil administrative Judge Jennifer Bailey said by e-mail.

“As a result of the explosion of foreclosures, judges are routinely confronted by emergency motions, and each judge tries to do justice in the case before him or her according to the law and equity.”