This foreclosure case was the result of a bank force-placing insurance with its wholly-owned subsidiary for exorbitant profit. Our client had his own insurance with some of the best companies in the world and continued to make his timely, full payments. But the bank rejected those payments and continued to demand our client pay for insurance he did not need.
From our very first meeting, our client was adamant about his claims. He’s a retired businessman, having worked his way up from being a car washer to owning several car dealerships. He could afford his payments and kept damn good records of the entire history of his dealings with the mortgage and insurance companies.
We needed some time to review multiple issues in the case so our first filing was a motion for enlargement of time. After filing an answer, we propounded request for admissions, request for production, and interrogatories. Two months later, the bank responded late to our request for admissions and filed a motion to enlarge the time for them to respond to all our discovery. A few days later, we asked the other side how much time they needed to respond. They immediately propounded their own discovery and filed a notice that the case was ready for trial! The following day, we agreed to 35 days for them to respond to our discovery. They obtained a trial date of June 1, 2016 and Plaintiff set the deposition of our client for May 9th.
In April 2016, we worked closely with our client to respond to the bank’s discovery. During this time, we carefully reviewed several thousand pages of documents he provided in a sizable file box. While the box was organized with folders labeled by entity, the contents of those folders were not organized chronologically. It took some time to go through everything and come up with a chronology of events. In all, we extracted 186 pages which evidenced many timely, full payments had been rejected. It also showed Bank of America was on notice that adequate insurance was in place. And, most strikingly, several documents showed egregiously over-priced insurance had been force-placed by Bank of America more than once, with its wholly-owned subsidiary, Balboa. For example, in May 2012, Bank of America force-placed windstorm insurance retroactively from February 23, 2011 to February 23, 2012 with Balboa. The policy had a premium of $46,784.93. But, our client already had a policy with comparable/adequate limits during that time period with Citizens, for a premium of $3,250.
On Sunday, May 1, 2016, I sent a lengthy e-mail to opposing counsel explaining that the deposition of our client was coming up and I had still not received Plaintiff’s discovery responses as promised. For that and other reasons, we agreed to postpone our client’s deposition and seek a continuance of the June 1st trial. On May 4th, the parties appeared before the court and obtained a new trial order for August 22, 2016. The bank re-noticed our client’s deposition for July 26, 2016.
Since our client’s records appeared to substantiate his claims, I had a few strategy meetings with our team. We charted a course going forward and immediately started setting up depositions duces tecum for all the insurance companies our client used during the critical time frame. We also set up a deposition duces tecum for Bank of America, which was our client’s personal bank, to show evidence of his timely, full payments. During the time period in question (2008 to the present), our client had insurance with Citizens (windstorm), Homeowners’ Choice (windstorm), Hartford (flood), Lloyds of London (homeowners’), Universal Property and Casualty (homeowners’), and Orchid Underwriters (homeowners’). The logistics of coordinating these depositions, and getting subpoenas issued and served, required more work than usual. We also sought leave to amend our answer. While this was underway, the bank responded to our request to produce, serving us with 491 pages of documents.
By late June 2016, we served subpoenas and deposition notices on Citizens, Bank of America, Hartford, Homeowner’s Choice, Orchid Underwriters, and Universal Property and Casualty. All the depositions were set for July 6, 2016. Almost immediately after the subpoenas were served, we started receiving calls from attorneys on behalf of those entities. They wanted to know what the depositions and case were about. We explained and offered to cancel the depositions upon receipt of self-authenticating business record certifications containing the requested records.
We were able to cancel the Orchid depo on July 5th. The following day, Bank of America hand-delivered their certification and records. So that deposition was immediately canceled. During the day on July 6th, none of the other four entities appeared for their depositions but we had multiple conversations with their attorneys to make arrangements for them to get us certifications and records. We obtained certificates of non-appearances for the entities that did not show up, and eventually obtained and reviewed all the records we requested.
In all, we acquired approximately 2,200 pages of evidence. And most importantly, these proved what our client had been saying all along! He had adequate coverage. He made payments for three years after the alleged default date. And, he only stopped making payments because he reached a breaking point after over a year’s worth of timely payments were rejected. What reasonable person keeps sending money to a bank that sends the money back, and keeps trying to foreclose based on a lie anyway?
We have numerous letters from Bank of America and Bayview showing that those entities were rejecting payments. Some checks were cashed and sent back via their own check. Other times, they’d just mail our client’s checks back.
We also have letters and fax receipts showing our client provided copies of insurance policies to the servicers. These include letters from servicers acknowledging receipt and indicating that they canceled force-placed policies. But soon after, the servicers sent more letters, once again threatening to force-place due to our client “not having coverage.” It was bizarre but it made a lot more sense once we discovered that Bank of America was force-placing insurance with its own subsidiary for obscene profits. Bayview was also sending conflicting letters showing they placed, canceled, and re-placed insurance policies. This was taking place all the way up to trial.
In late July, I prepared for one of our client’s depositions. This included a lengthy meeting with him. But, on July 26th, the day the deposition was supposed to take place, the bank’s lawyer abruptly canceled. On that same day, the Court granted us leave to amend our answer and struck the trial set for August 22nd.
The plaintiff propounded more discovery. They asked for our documents related to the property insurance and “trial documents.” In all, they propounded four requests for production for “trial documents.” We responded to each request providing thousands of pages. Rather than providing duplicates, we referenced service of prior responses but not once, did they ask only for an update or supplement. Going through this quantity of documents in order to respond to each request took a significant amount of time.
In September 2016, the bank reset our client’s deposition for October 17, 2016. This was the third time it had been set.
In October, we filed a Notice of Intention to Offer Evidence Under Florida Statutes sections 90.902(11) and 90.803(6)(a) and (c). This allows us to use business record certifications to admit evidence instead of having to call record custodians to the witness stand. We also served six certifications with their attachments on opposing counsel and spent more time preparing for our client’s deposition. Based on all the evidence we acquired, we realized it would be best to amend our response to interrogatory seventeen, which asked us to describe what actions our client took to retain the property. So, we created and served a spreadsheet to provide a better answer. Our client’s deposition finally went forward as scheduled. But despite all our preparation, and despite the bank’s lawyer knowing that this case centered on unclean hands and improperly force-placed insurance, their lawyer did not ask a single question about the insurance and payment issues. The deposition took less than an hour.
In November 2016, the bank filed a bizarre objection to our notice of intent to offer evidence via self-authenticating business records certifications. We later filed a Second Notice of Intent (for an amended certificate from Orchid Underwriters), a Motion to Special Set Trial, a Supplemental Response to Plaintiff’s Request for Production Regarding Property Insurance, and a Request for Judicial Notice. The judicial notice request was for a press release from Bank of America which evidenced that Balboa was a subsidiary during the critical time frame. We planned to make this our first exhibit to help show the bank’s motive to force-place was based on its desire to make outrageous profits. On November 22nd, a case management conference and hearing on the bank’s objection to our notice of intent was heard. The objection was overruled and the motion to special set was denied due to the Court not being able to schedule a special set foreclosure trial at that time. But, the Judge did set trial on a regular foreclosure docket for May 31, 2017.
Around this time, we realized it would probably be best if we retained an expert general contractor to opine on the replacement value of the home. We wanted to be able to prove that our client’s coverage was adequate. We also began our efforts to prepare for trial. (Getting through over 2,200 pages of exhibits with our elderly client was no easy task.) By mid-May, we found our expert witness. We had a couple of phone calls and two face-to-face meetings with him.
In May 2017, we prepared extensively for trial and had several conferences with our client. We filed a supplemental witness list listing our general contractor expert, and we asked the Court to take judicial notice of the county property appraiser records to further support the adequacy of our client’s insurance coverage. Despite our prior requests, Plaintiff served us with 385 pages of trial exhibits the day before trial.
Then, on the day of trial, opposing counsel asked for a continuance. First, he objected to our late witness disclosure. And I’ll never forget what he said next: “Additionally, Your Honor, the Plaintiff is reviewing the Defendant’s records that have been provided in discovery regarding lender-placed insurance and there is a possibility that there is a significant adjustment in what we’re claiming is the debt. And, rather than go forward on potentially — well, we’ll just call it stale information, not wrong, Plaintiff would ask, given that the Court has trial, and it appears to be special set, and Mr. Rosen and I will take at least a day, but efficiency would ask that you just roll us to the [next] docket. . . .” (emphasis added). The Judge interjected and continued the trial to December 12, 2017.
Stale, by definition, is outdated. The debt was not outdated like an old check. It was just flat out wrong. It seemed opposing counsel admitted his client wrongfully force-placed insurance, which wreaked havoc on the accuracy of the pay history. (Reviewing the pay history, in this case, was very challenging. We have seen hundreds of pay histories and this one was like no other. There were giant unspecified credits and debits. Our client’s payments were added and subtracted, as were entries for insurance payments. It was impossible to follow.) I added the bank lawyer’s comments to my notes and prepared to use it at the next trial.
What happened next—or rather what didn’t happen—is indicative of how banks and their lawyers often handle foreclosure cases. Despite acknowledging in open court that the Plaintiff had a “significant” problem in its case, the bank and its lawyers did not dismiss, seek to withdraw, or eagerly try to settle. They just kept pushing forward for over a year more, in an effort to take our client’s house. (Of course, this caused him to incur significantly more attorneys’ fees and costs as well.)
In November 2017, we again sought leave to amend our answer. We fixed two standing affirmative defenses to clarify that we are not attacking whether there is a contractual relationship but only whether the bank is in possession of a properly indorsed note. We also withdrew numerous affirmative defenses, amended our request for relief, and fixed a typo. The bank moved for a continuance of trial by claiming, among other things, that the parties were working on loss mitigation and a deed-in-lieu. This was not true. So, we filed a verified response to dispute their claims. On November 20, 2017, the Court granted our motion for leave to amend and struck the December 12, 2017 trial. The next month, trial was reset for June 19, 2018.
In February 2018, we filed an objection to the bank’s notice to use a summary trial exhibit and an objection to their request for judicial notice of court filings. By mid-June, we were gearing up for trial again. In addition to preparing to admit a large number of exhibits, we had to outline the direct examination for our client and expert witness. The bank noticed two witnesses, one from each servicer. So there was prep and research that we had to undertake for those as well.
During my trial prep meeting with our client on Thursday, June 14th, a serious problem revealed itself. Our client’s eyesight had gotten much worse. He was struggling to see and his memory had lapsed a bit too. So a few days later on Saturday, June 16th (which happened to be Father’s Day weekend), I put in almost a full day revamping the approach to our client’s direct examination. I spread out all the exhibits over the floor in my office, grouping them into logical composites. When I met with our client again on Monday, June 18th, we were breezing through his examination and the admission of evidence with a new approach. He also got some new glasses, which helped a ton. Not surprisingly, the new approach also made the presentation to the Court much more efficient and persuasive. Preparation continued that Monday, and I worked for about an hour to review everything the following morning.
When we showed up to trial on Tuesday, June 19th, the bank’s lawyer immediately pulled me aside. He whispered to me that he told his clients that he would not prosecute this case any further. His clients understood and agreed. He then told me that if the case was called, he would take a voluntary dismissal. Which is what he did, both on the record and in writing. A witness from one of the servicers approached me in open court and told me that he told the higher-ups to dismiss this case for months, but they would not listen.
We timely filed a motion to seek fees and costs so that our firm and our client could be made whole. When we asked the bank’s lawyer if they would agree to an order granting entitlement, I was not that surprised to find out that they wanted a special set hearing to contest this. Once again, as a result of their over-litigious tactics, our client incurred more fees and costs. We gathered numerous certified copies, filed a request for judicial notice, and prepared extensively for the hearing. The bank’s main contention was that we were not the prevailing party. As part of that preposterous argument, the bank’s lawyer misrepresented the law and facts. The Court granted entitlement and set a hearing for a later date to determine the amount. (We ended up settling the fees and costs just before that hearing.)
The bank’s lawyers, in this case, are what we consider “escalation counsel.” They generally do not get involved in cases unless the bank has some concerns. And from what I can tell based on the way they operate, their lawyers are expected to be extremely litigious and difficult. To give some context on this point, this particular firm has sought to take my clients’ depositions in every foreclosure case I’ve had with them even though there is almost never a good-faith basis to do so. They always propound the same ridiculous discovery. For example, some of the interrogatories they propounded here (and in every other case I’ve had with them) ask:
“Are you paying your attorney a monthly fee to remain in the property during this action?”
“What do to [sic] feel is the best result you could achieve in this lawsuit?” (The same typo is in every single interrogatory I’ve seen from them. Even though I once pointed this out, they have still not fixed it.)
“Has your attorney guaranteed any result in this lawsuit? If so [sic] what was that result?”
“What triggered your decision to purchase the subject property?”
“Did you hire a realtor to assist to purchase the property?”
“Did you hire an attorney to review the loan documents? If not [sic] why?”
“Did you have the opportunity to review the loan documents?”
As usual, they made mountains of extra work in this case. They made numerous requests for the same documents. They set three depositions of my client but never asked him a single question about the merits of the case when the deposition finally took place. They litigated the case for over a year after the bank lawyer admitted in open court that their client’s position had significant problems. And, due to the bank’s lawyer not telling me a few days before trial that his client was going to voluntarily dismiss, I had to work through a lot of Father’s Day weekend. Even the way the bank’s lawyer voluntarily dismissed was troubling. He was only going to dismiss if the case was called to trial. He waited to announce until he was sure we were going to get reached. If the case was passed that day for any reason, he would have continued to litigate.
In most cases, these bank lawyers take numerous outlandish positions, not supported by law. But unfortunately, in foreclosure courts, they have gotten away with this in hundreds of cases.
In another case with this firm, one of their lawyers took a blatantly frivolous position to try to deny my client’s entitlement to fees. That too resulted in a ton of unnecessary work. The bank eventually lost their argument. During the hearing to determine the amount of fees, the presiding judge quoted Roco Tobacco (USA), Inc. v. Florida Div. of Alcoholic Beverages, 934 So. 2d 479, 482 (Fla. 3d DCA 2004) stating, “[b]ecause [the bank] and its counsel took legal positions and actions to be litigious and, in effect, ‘invited [my client] to dance,’ they should now be bound by the consequences of those actions.” The judge found I was entitled to every penny of the hourly rate I was seeking in that case.
Thankfully, we helped save this client’s home and helped him recover his attorneys’ fees and costs. And, since this case I am pleased to report that this particular firm, and another “escalation” firm we had a similar case with, have been less litigious, more reasonable, and more eager to cut deals to help our clients achieve their goals.
If you or someone you know is facing foreclosure or improper debt collection, feel free to give us a call at 855-55-ROSEN.
Let the Law Offices of Evan M. Rosen serve you!