• Florida Appellate Court Holds That Borrower Does Not Waive Right to Attorneys’ Fees When Claim Is Not Pled in Motion to Dismiss Foreclosure Action
  • June 13, 2011 | Author: Stephanie A. Broder
  • Law Firm: Hinshaw & Culbertson LLP - Jacksonville Office
  • In Nudel v. Flagstar Bank, FSB, et al., 2011 WL 1878127 (4th Dist. May 18, 2011), the Florida Fourth District Court of Appeals held that defendant homeowner was entitled to recover attorneys’ fees as a prevailing party in a mortgage foreclosure action under Fla. Stat. § 57.105(7) (2009), after the court dismissed the case without prejudice upon the homeowner’s motion to dismiss.

    Plaintiff bank sued the homeowner to foreclose a mortgage. Under the mortgage, the bank was entitled to recover reasonable attorneys’ fees and costs incurred in the foreclosure proceedings. The borrower was thus entitled to recover fees and costs as well under Section 57.105(7), which provides:

    If a contract contains a provision allowing attorney’s fees to a party when her or she is required to take any action to enforce the contract, the court may also allow reasonable attorney’s fees to the other party when that party prevails in any action, whether as plaintiff or defendant, with respect to the contract.

    The homeowner moved to dismiss the complaint for lack of standing, as the nominee for the original lender had not assigned the subject mortgage to the bank until after the complaint was filed. The court granted the motion to dismiss without prejudice and the homeowner moved for fees and costs under the subject mortgage’s fee provision.

    The circuit court denied the motion for fees and costs, accepting the bank’s argument that the homeowner had waived entitlement to fees as she had not sought them in her motion to dismiss. The Florida Supreme Court, in Stockman v. Downs, 573 So. 2d 835 (Fla. 1991), had set forth the general rule that attorneys’ fees must be pled or they are deemed waived. Later, the Court, in Green v. Sun Harbor Homeowner’s Ass’n, 730 So. 2d 1261, 1263 (Fla. 1998), explained that the pleading requirement referred only to complaints, answers and counterclaims. Thus, the Fourth Circuit Court of Appeals held that the homeowner had not waived her entitlement to seek fees as she was not required to have pled entitlement to fees in a motion to dismiss. Furthermore, the homeowner was considered the prevailing party pursuant to section Fla. Stat. § 57.105(7), even though the suit was dismissed without prejudice. This is the case even in circumstances where a plaintiff subsequently refiles the same lawsuit and ultimately prevails.