Lying to the court is not enough for dismissal for fraud

Somebody got lucky.  The foreclosure action was dismissed with prejudice as a sanction for fraud upon the court.  The homeowner’s counsel in a motion to dismiss stated that Wells Fargo as Trustee made false allegations in its complaint as to its identity and existence, lacked standing and capacity to sue, conducted trust business illegally (violated Florida Statute 660.27).  The trial court agreed with the homeowner’s counsel.

But the court of appeal reversed.  Inartful pleadings, inconsistent testimony, and even lying to the court by a witness are insufficient to support a dismissal for fraud upon the court.  Assertions in a motion to dismiss complaint do not provide an evidentiary basis for finding fraud upon the court, which must be proven “by clear and convincing evidence”.  Capacity and standing are affirmative defenses, and the issue is not properly before the court at the pre-answer stage of the litigation.,10&case=5856054118144303604&scilh=0

This is what it takes to have the case dismissed with prejudice

The two transcripts in this foreclosure case involving HSBC and its servicer, Ocwen Loan Servicing, show a full bouquet of fraud upon the court. The case has everything: “lost and found note”, an attorney’s notice of filing the found original note without actually filing any such note, affidavit of lost mortgage signed by somebody that nobody knows who she is, deposition of Scott Andersen, Ocwen’s V.P., who “delegated” the signing of assignments of mortgage in favor his employer as if he was V.P. of MERS, to his employees, whose names he forgot, the deposition of Ocwen’s notary public who also forgot whose signatures she was actually notarizing as if they were Scott Andersen’s.

But I will dare say this is more or less what happens in each and every foreclosure case. And so, this is not why I want you to read these transcripts, if you can. I want you to see, in a nutshell, how difficult it was and what it took the homeowner’s attorney to get a dismissal of the case with prejudice, despite all the fraud. I guess, after reading the transcripts, you will need to ask yourself: can I do this? But you also have to realize that only select attorneys can do this for you. Those who have the skills, the knowledge, but most important of all, those who will spare no time and effort fighting for you.

Dismissal with prejudice for fraud

Various case law holds that allegations of fraud and misrepresentation should be specified with particularity and precision; they cannot be just legal conclusions. The latest opinion on that matter came out of the 4th DCA recently. See Vilvar v. Deutsche Bank Trust. Co.

Fraud in general is hard to prove because you need to prove intent. But if you are successful, the prize is very high – dismissal with prejudice. When the case is dismissed without prejudice, it means the bank can come back at any time. And they do, often. After all, what it takes is just to pay another filing fee and a flat fee of around $1200 to new attorneys. Certainly it makes sense for the bank to pay that in an effort to get the home worth $100,000, or maybe $500,000. That’s exactly why the homeowner should fight for his home. Because so much is at stake.

But when the case is dismissed with prejudice, it means the bank cannot come back. At least that’s what everybody thought. But a precedent popped up recently where the court held that a dismissal with prejudice does not necessarily bar a subsequent foreclosure action. See Singleton v. Greymar Associates.,10&case=10589960193331016153&scilh=0

It does not mean the bank will necessarily come back. But they will know they can. Their attorneys will tell them. There is a technical issue, though. When a case is dismissed with prejudice, the original note and mortgage that had been filed with the clerk, is not released. So, first they need to grab the note and mortgage from the clerk. And they need a court’s order for that. How likely is the judge who dismissed the case with prejudice in the first place, to give them the note back?

Still, it’s a never ending battle. And still, it’s a battle worth fighting.