Motion for Clarification: Pino vs Bank of New York Mellon
Banks have become brazen in their efforts to commit fraud to bury transgressions that resulted in complete and total failure to properly record and convey land titles at the time of securitization. Until recent periods courts have accepted their affidavits as being true – and proper sworn documents of fact. Judges are becoming increasingly aware and frustrated with repeated attempts by banks and servicers filing false and untrue documents to claim ownership to homes they do not own.
Ice Legal reached out to a District Court of Appeal of the State of Florida for an Order of Clarification regarding a recent case filing. Their request has been granted on March 30, 2011 and will be handed up to their state Supreme Court. We should hope they arrive at sound and wise conclusions that are based on principles of justice over political concerns.
The heart of the case put forth is one where B of NY Mellon filed fraudulent mortgage foreclosure documents before the court. In this instance they failed to attach a copy of any document of assignment. When the court discovered the fraud B of NY Mellon put forth a voluntary dismissal – essentially claiming no harm, no foul. Five months later the bank brought forth an identical action for foreclosure with a new assignment – dated after their voluntary dismissal. The replaced assignment – based solely on the date it was recorded – would thus be a fraudulent representation for proof of ownership of Ice Legal client’s note.
I present a condensed copy giving the key points of their motion and notations from the circuit court judges who granted the motion below. I contend that putting forth fraudulently dated mortgage assignments as proof of ownership for loans granted via securitizations, or documents of assignment dated AFTER a first notice of default has been issues, is not uncommon. It may be more common than uncommon! If you are involved in similar litigation I suggest you read the summary and then the full text of their motion. After you have read the full text read it again. And then read it again!
THE BANK OF NEW YORK MELLON,
[March 30, 2011]
ON MOTION FOR CLARIFICATION
We grant the motion for clarification, withdraw our previously issued opinion and substitute the following in its place.
The defendant in a mortgage foreclosure action filed by BNY Mellon appeals a trial court’s denial of his motion under Florida Rule of Civil Procedure 1.540(b) to vacate a voluntary dismissal. The notice was filed after the defendant moved for sanctions against the plaintiff for filing what he alleged was a fraudulent assignment of mortgage. Because the notice of voluntary dismissal was filed prior to the plaintiff obtaining any affirmative relief from the court, we affirm the trial court’s order.
BNY Mellon commenced an action to foreclose a mortgage against the defendant. The mortgage attached to the complaint specified another entity, Silver State Financial Systems, as lender and still another, Mortgage Electronic Registration Systems, as mortgagee. The complaint alleged that BNY Mellon owned and held the note and mortgage by assignment, but failed to attach a copy of any document of assignment.At the same time, it alleged the original promissory note itself had been “lost, destroyed or stolen.” The complaint was silent as to whether the note had ever been negotiated and transferred to BNY Mellon in the manner provided by law.(1)
The defendant initially sought dismissal for failure to state a cause of action, arguing that in light of the claim of a lost instrument, the absence of an assignment of mortgage was a critical omission. BNY Mellon responded by amending the complaint only to attach a new unrecorded assignment, which happened to be dated just before the original pleading was filed.
In response to this amendment, defendant moved for sanctions. He alleged that the newly produced document of assignment was false and had been fraudulently made, pointing to the fact that the person executing the assignment was employed by the attorney representing the mortgagee, and the commission date on notary stamp showed that the document could not have been notarized on the date in the document. The defendant argued that the plaintiff was attempting fraud on the court and that the court should consider appropriate sanctions, s u c h as dismissal of the action with prejudice.
Concurrent with the filing of this motion, the defendant scheduled depositions of the person who signed the assignment, the notary, and the witnesses named on the document — all employees of Florida counsel for BNY Mellon — for the following day. Before the scheduled depositions, BNY Mellon filed a notice of voluntary dismissal of the action.
Five months later, BNY Mellon refiled an identical action to foreclose the same mortgage. The new complaint no longer claimed the note was lost and attached a new assignment of mortgage dated after the voluntary dismissal. In the original, dismissed action, the defendant filed a motion under rule 1.540(b), seeking to strike the voluntary dismissal in the original action on the grounds of fraud o n the court and for a dismissal of the newly filed action as a consequent sanction, requesting an evidentiary hearing. The trial court denied the motion without an evidentiary hearing, essentially holding that, because the previous action had been voluntarily dismissed under rule 1.420, the court lacked jurisdiction and had no authority to consider any relief under rule 1.540(b).
The dissent is certainly correct that a court possesses the authority to protect judicial integrity in the litigation process. However, the cases cited in support of a court exercising such authority all involved the court granting a motion for involuntary dismissal where the plaintiff had engaged in deceitful conduct during a still pending case. See Ramey v. Haverty Furn. Co., 993 So. 2d 1014, 1020 (Fla. 2d DCA 2008); McKnight v. Evancheck, 907 So. 2d 699, 700 (Fla. 4th DCA 2005); Morgan v. Campbell, 816 So. 2d 251, 253 (Fla. 2d DCA 2002). In each of those proceedings, the defendant moved for the sanction of dismissal of an ongoing proceeding based upon “fraud on the court.” That term has been described as follows:
A “fraud on the court” occurs where it can be demonstrated, clearly and convincingly, that a party has sentiently set in motion some unconscionable scheme calculated to interfere with the judicial system’s ability impartially to adjudicate a matter by improperly influencing the trier or unfairly hampering the presentation of the opposing party’s claim or defense.
We conclude that this is a question of great public importance, as many, many mortgage foreclosures appear tainted with suspect documents. The defendant has requested a denial of the equitable right to foreclose the mortgage at all. If this is an available remedy as a sanction after a voluntary dismissal, it may dramatically affect the mortgage foreclosure crisis in this State. Accordingly we certify the following question to the Florida Supreme Court as of great public importance:
DOES A TRIAL COURT HAVE JURISDICTION AND AUTHORITY
UNDER RULE 1.540(b), Fla. R. Civ. P., OR UNDER ITS INHERENT
AUTHORITY TO GRANT RELIEF FROM A VOLUNTARY DISMISSAL
WHERE THE MOTION ALLEGES A FRAUD ON THE COURT IN THE
PROCEEDINGS BUT NO AFFIRMATIVE RELIEF ON BEHALF OF THE
PLAINTIFF HAS BEEN OBTAINED FROM THE COURT?
GROSS, C.J., STEVENSON, TAYLOR, MAY, DAMOORGIAN, CIKLIN, GERBER, LEVINE and
CONNER, JJ., concur.
HAZOURI, J., recused.
POLEN, J., dissents with opinion.
POLEN, J., dissenting.(3)
[sic: Arguments in the motion for clarification continue: ]
Rule 1.540(b)(3) provides:
“On motion and upon such terms as are just, the court may relieve a party … from a final judgment, decree, order, or proceeding for … fraud (whether … intrinsic or extrinsic), misrepresentation, or othermisconduct of an adverse party.”
The fact that the fraud exception applied in Select Builders is now commonly recognized as valid under Miller v Fortune Insurance is seen in the following exposition on the subject from the standard Florida legal encyclopedia:
“In exercising its inherent power to protect its integrity, the trial court is authorized to reinstate a matter and retains jurisdiction over the cause, in order to prevent a fraud on the court, where it appears the plaintiff has perpetrated fraud upon th e court to obtain a voluntary dismissal. The original jurisdiction over the dismissed cause first acquired continues for the purpose of entertaining and deciding all appropriate proceedings brought to reopen the case, either by means of an independent equity suit directed against the fraudulently induced order or judgment to have it set aside or by means of a direct motion filed in the case itself praying that the order of dismissal be vacated and the cause returned to the docket of pending cases.”
In opposing defendant’s motion for relief under rule 1.540(b), BNY Mellon relies on Bevan v. D’Alessandro, 395 So. 2d 1285 (Fla. 2d DCA 1981). There the court recognized the fraud exception to the voluntary dismissal rule but held it inapplicable where plaintiff did not obtain any relief and the act of filing the voluntary dismissal did not actually rise to the level of a fraud on the court.6 BNY Mellon argued that, similarly, it had obtained no relief or benefit at that point in the action from the filing of the revised assignment. In denying defendant’s motion for relief under rule 1.540(b), the trial judge appeared to rely heavily on Bevan and that argument of BNY Mellon. Curiously neither Bevan nor BNY Mellon makes any attempt to argue why, as a matter of simple jurisprudence, courts should be precluded from scrutinizing the use of a voluntary dismissal after a n unsuccessful attempt to deceive, mislead or defraud a court by producing and filing spurious documents and instruments on which to base a claim in suit.
It is apparent to me that BNY Mellon actually did achieve some benefit by its dismissal. In voluntarily dismissing the case at that point, it thereby avoided the scheduled depositions of the persons who might have direct knowledge of an attempted fraud on the court. In fact, it is fair to conclude that the only purpose in dismissing was to shelter its agents from having to testify about the questionable documents. It continued to use the voluntary dismissal to stop the trial court from inquiring into the matter, arguing the absence of jurisdiction to do so.
But, in any event, I disagree with Select Builders, Bevan and Service Experts to the extent of any holding that affirmative relief or even some other benefit is necessary for relief from a voluntary dismissal filed after an attempted fraud on the court has been appropriately raised. Nothing in the logic of Miller v. Fortune Insurance allowing rule 1.540(b) to b e used to avoid a voluntary dismissal on the grounds of fraud requires that such fraud must actually achieve its purpose. The purpose served by punishing a fraud on a court does not lie in an indispensable precondition of detrimental reliance — i.e., in successfully deceiving a court into an outcome directly resulting from fraud — but in the mere effort itself to try to use false and fraudulent evidence in a court proceeding.8 As with criminal law, where the failed attempt itself is an offense punished by law,9 the power of courts to grant relief from presenting false or fraudulent evidence and imposing sanctions is not confined solely to instances when fraud directly results in an unjust, erroneous judgment.
The court rejected the argument on appeal that the attempt to defraud the court had failed and thus could escape punishment, responding:
“The failure of a party’s corrupt plan does not immunize the
defrauder from the consequences of his misconduct. When
[plaintiff] concocted the agreement, and thereafter when he and his
counsel annexed it to the complaint, they plainly thought it
material. That being so, ‘[t]hey are in no position now to dispute
its effectiveness.’ ”
So, too, BNY Mellon’s attempt to allege and file the assignment of the mortgage was undeniably based on a belief in the necessity for — and the materiality of — a valid assignment of mortgage. Defendant’s colorable showing of possible fraud in the making and filing of the assignment led to the scheduling of the depositions of those involved in making the document and the notice of depositions led directly to the voluntary dismissal to avoid such scrutiny for an attempted fraud. As Aoude forcefully makes clear, a party should not escape responsibility and appropriate sanctions for unsuccessfully attempting to defraud a court by purposefully evading the issue through a voluntary dismissal.
This issue is one of unusual prominence and importance. Recently, the Supreme Court promulgated changes to a rule of procedure made necessary by the current wave of mortgage foreclosure litigation. See In re Amendments to Rules of Civil Procedure, 44 So. 3d 555 (Fla. 2010). In approving one amendment, the court pointedly explained:
“[R]ule 1.110(b) is amended to require verification of mortgage foreclosure complaints involving residential real property. The primary purposes of this amendment are
(1) to provide incentive for the plaintiff to appropriately investigate and verify its ownership of the note or right to enforce the note and ensure that the allegations in the complaint are accurate;
(2) to conserve judicial resources that are currently being wasted o n inappropriately pleaded ‘lost note’ counts a n d inconsistent allegations;
(3) to prevent the wasting of judicial resources and harm to defendants resulting from suits brought by plaintiffs not entitled to enforce the note; and
(4) to give trial courts greater authority to sanction plaintiffs who make false allegations.”
I think this rule change adds significant authority for the court system to take appropriate action when there has been, as here, a colorable showing of false or fraudulent evidence. We read this rule change as an important refutation of BNY Mellon’s lack of jurisdiction argument to avoid dealing with the issue founded on inapt procedural arcana.
Decision-making in our courts depends on genuine, reliable evidence. The system cannot tolerate even an attempted use of fraudulent documents and false evidence in our courts. The judicial branch long ago recognized its responsibility to deal with, and punish, the attempted use of false and fraudulent evidence. When such an attempt has been colorably raised by a party, courts must be most vigilant to address the issue and pursue it to a resolution.
I would hold that the trial judge had the jurisdiction and authority to consider the motion under rule 1.540(b) on its merits and — should the court find that a party filed a false and fraudulent document in support of its claim — to take appropriate action, including (without limitation) the striking of a voluntary dismissal filed in aid of such conduct.
Appeal of a non-final order from the Circuit Court for the Fifteenth Judicial Circuit, Palm Beach County; Meenu Sasser, Judge; L.T. Case No. 50 2008 CA 031691 XXXXMB.
Enrique Nieves III and Chris T. Immel of Ice Legal, P.A., West Palm Beach, for appellant.
Nancy M. Wallace, Katherine E. Giddings and William P. Heller of Akerman Senterfitt, Tallahassee and Fort Lauderdale, for appellee.