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The ninth annual edition of Florida Legal Elite recognizes a prestigious list of esteemed attorneys chosen by their colleagues.  The lawyers listed here exemplify a standard of excellence in their profession, and by doing so have received endorsement from their peers in voting for the 2012 Florida Legal Elite. The resulting lists represent approximately 2% of the more than 67,000 active Florida Bar members who practice in Florida.

This is the second year in a row Mr. Primeau has been recognized in the Florida Legal Elite.

The Florida Supreme Court’s original opinion requiring e-service contained an effective date of July 1, 2012. A corrected opinion and correction notice were issued yesterday providing a revised effective date of September 1, 2012.

Links to the corrected opinion and the correction notice are provided below.

Corrected Opinion link: Amended e-mail service opinion with effective date of September 1, 2012

Correction Notice link: Correction notice reflecting the effective date of September 1, 2012

The Florida Bar will be providing complimentary education on the mandatory e-mail service requirements prior to the effective date.

The Post reports that at least two different companies (Fidelity Land Trust Co. and Equus Partners) are using a method to try to help underwater homeowners save their homes.

[It's a] complex legal plan that begins when you deed your home [to a trust] . . . for an average fee of $2,500.

If the trust is successful in canceling the mortgage through a quiet title action, the homeowner is still responsible for the loan debt, or note, but the trust then tries to buy that debt from the bank for pennies on the dollar.

Because the debt no longer has collateral in the form of the home, the idea is the bank will be more willing to negotiate.

Literature sent to potential clients notes there are no guarantees in the legal process, but says that an “unfavorable” outcome “has never happened.”

That article points out that many attorneys fear the homeowner could be left owing debt to their original lender while paying a fee to the trust. On top of that, every title insurance underwriter I know of refuses to issues title insurance on properties where a “quiet title” lawsuit was used in this manner to wipe out a mortgage, especially through a “default judgment.”

I understand many homeowners are desperate, but remember that the deal that sounds too good to be true almost always is. How long before we read a “sad” story about someone who didn’t really understand how this worked and lost their home using this method?

If you’re considering this type of arrangement, please discuss it with an experienced real estate attorney before signing any papers.

The good news for litigators is that your clients are going to save a lot of money on copies and postage. The bad news is that you have less than ten days familiarize yourself, your staff, and fellow attorneys with these changes and to implement new procedures to comply with the major rule changes.

I will start with two quick quotes from the opinion regarding implementation of these changes.

First, e-mail service will be mandatory for attorneys practicing in the civil, probate, small claims, and family law divisions of the trial courts, as well as in all appellate cases, when the rule amendments take effect on July 1, 2012.

Second, when the rules take effect on July 1, attorneys practicing in the criminal, traffic, and juvenile divisions [footnote omitted] of the trial court may voluntarily choose to serve documents by e-mail under the new procedures, or they may continue to operate under the existing rules. E-mail service will be mandatory for attorneys practicing in these divisions on October 1, 2013, at 12:01 a.m. (the date on which electronic filing will be mandatory in these divisions).

Those quotes probably got your attention. If so, read on. This opinion significantly changes the way pleadings are served in Florida [state court] cases. [Note: These changes do not apply to service of the initial pleading which still requires service of process under Rule 1.070. See comment to the post for further clarification.] This blog post summarizes some of the changes by quoting the significant amendment provisions, but you really need to read the opinion to understand the full impact of all of the changes. The opinion is 216 pages, so this blog post isn’t intended to serve as an exhaustive list of all of the changes.

The main change is that the Florida Supreme Court a new Florida Rule of Judicial Administration [2.516 - Service of Pleadings and Papers] which will control service of pleadings and papers (after the initial pleading) in various judicial divisions. This rule was modeled after current Florida Rule of Civil Procedure 1.080 (Service of Pleadings and Papers) and includes many of the same provisions and requirements for service.

However, new rule 2.516 provides that all documents required or permitted to be served on another party must be served by e-mail. Under subdivision (b)(1) (Service by Electronic Mail (“e-mail”)), upon appearing in a proceeding a lawyer must designate a primary e-mail address, and may designate up to two secondary e-mail addresses, for receiving service. Thereafter, service on the lawyer must be made by e-mail. The rule does permit several limited exceptions to this requirement. A lawyer may file a motion to be excused from e-mail service, demonstrating that he or she has no e-mail account and lacks access to the Internet at the lawyer’s office. [footnote omitted] Similarly, individuals who are not represented by an attorney may designate an e-mail address for service if they wish; however, pro se litigants are not required to use e-mail service. Additionally, applications for witness subpoenas and documents served by formal notice or required to be served in the manner provided for service of formal notice are not required to comply with rule 2.516.

Subdivision (b)(1) also includes provisions addressing the time and format for e-mail service. Service by e-mail is deemed complete when the e-mail is sent. [footnote omitted] Additionally, e-mail service is made by attaching a copy of the document to be served in PDF format to an e-mail. The e-mail must contain the subject line “SERVICE OF COURT DOCUMENT” in all capital letters, followed by the case number of the relevant proceeding. The body of the e-mail must identify the court in which the proceeding is pending, the case number, the name of the initial party on each side, the title of each document served with that e-mail, and the sender’s name and telephone number. The e-mail and attachments together may not exceed 5 megabytes in size; e-mails that exceed the size requirement must be divided into separate e-mails (no one of which may exceed 5 megabytes) and labeled sequentially in the subject line.

As noted, the other subdivisions in rule 2.516 closely track the language in rule 1.080, modified to reflect the move to e-mail service. Subdivision (c) (Service; Numerous Defendants) describes procedures for service when the parties are “unusually numerous”; subdivision (d) (Filing) requires that all original documents must be filed with the court either before service on the opposing party or immediately thereafter; and subdivision (e) (Filing Defined) states that documents are deemed “filed” when they are filed with the clerk of court. Subdivisions (g) (Service by Clerk) and (h) (Service of Orders) address service of notices or other such documents by the clerk, and service of orders or judgments entered by the court, respectively. These subdivisions authorize, but do not require, the clerks and the courts to utilize e-mail service if they are equipped to do so.

In addition to new rule 2.516, we also amend the rules of procedure to delete existing provisions in the rules describing service, and add new language referencing rule 2.516.

There’s also a change to Rule 2.515 of the Rules of Judicial Administration to provide that the signature blocks on pleadings must now also include a primary email address and an optional second email address.

For most litigators, these rules take effect in less than ten days. That doesn’t give us much time to train staff on these new requirements, revise pleading forms to reflect the new signature block and “certificate of service” requirements, implement new procedures for service in accordance with rules, and file notices of email addresses in all pending cases.

The Florida Supreme Court released a separate opinion (No. SC11-399) pertaining to e-filing requirements. The implementation of that rule doesn’t start until next April, but it makes sense to familiarize yourself with its requirements before figuring out how your firm will comply with the e-mail service requirements.

This isn’t the first time Florida’s Judicial Ethics Advisory Committee dealt with the issue of judges’ use of social media and interactions with lawyers.  In a 2009 opinion, the same Committee ruled that it was not permissible for a judge to approve a lawyer who may appear before the judge as a “friend” on a social networking site such as Facebook.

The specific question before the committee in the LinkedIn inquiry was: “Whether a judge may add lawyers who may appear before the judge as ‘connections’ on the professional networking site, LinkedIn, or permit such lawyers to add the judge as their ‘connection’ on that site?” 

The inquiring judge summarized his proposed distinction between a Facebook friend and a LinkedIn connection by stating:

LinkedIn is designed for business and professional networking, and offers a profile and options to network in a business sense. Facebook, on the other hand is designed more to connect family members and personal friends. As an example that illustrates the difference, when a person wants to know where an old colleague is working now, they would use LinkedIn; when they want to find out if that same colleague is married and if they have kids, they would use Facebook.

The Committee determined that a judge can post information on Facebook and LinkedIn, but it is “the process of selection of ‘friends’ or ‘connections’ by the judge, and the fact that the names of those ‘friends’ or ‘connections’ are then communicated — often, but not always, selectively to others — that violates Canon 2B, because by doing so the judge conveys or permits others to convey the impression that they are in a special position to influence the judge.”

A close reading of the opinion is necessary since the opinion expressly states that it should not be interpreted to mean that the inquiring judge is prohibited from identifying any person as a “friend” on a social networking site. Instead, it is limited to the facts presented by the inquiring judge, related to lawyers who may appear before the judge. The opinion does not apply to the practice of listing as “friends” persons other than lawyers, or to listing as “friends” lawyers who do not appear before the judge, either because they do not practice in the judge’s area or court or because the judge has listed them on the judge’s recusal list so that their cases are not assigned to the judge.

The committee considered a California opinion which concluded that it is permissible for a judge to accept a lawyer as a Facebook “friend” or LinkedIn “contact” if that lawyer may appear before the judge. The California committee further concluded that a judge may not approve the lawyer, or have a lawyer as a friend or contact, if the lawyer has a case pending before the judge. The Florida committee deemed that approach to be too difficult to administer, as it “contemplates a judge constantly approving, deleting, and reapproving lawyers as ‘friends’ or ‘connections’ as their cases are assigned to, and thereafter concluded or removed from, a judge.”

In Pino, the Bank of New York filed a foreclosure lawsuit against Mr. Pino.  Mr. Pino’s lawyers challenged a document created by the bank’s lawyers (Law Offices of David J. Stern) and sought to question employees about the document’s veracity.  On the eve of the depositions, the bank voluntarily dismissed the case thereby blocking the court’s ability to address any sanctions.  [Under the Florida Rules of Civil Procedure, the court effectively loses jurisdiction over a case once it is voluntarily dismissed by the plaintiff.]  Pino’s lawyers sought to block the bank from re-filing the case, which it did several months later.  The trial court denied the request and Mr. Pino appealed to the Fourth District Court of Appeal.  The Fourth DCA certified the issue to the Florida Supreme Court.  In an interesting twist, the parties settled their dispute, but the Supreme Court still wanted to receive briefs and hear argument due to the importance of the issue.

Some of the questioning by the justices focused on the harm to Mr. Pino.  For example, Chief Justice Charles Canady posed this question to Amanda Lundergan, Mr. Pino’s lawyer, “What it seems like to me, you’re just looking for a ‘gotcha’ to get out of the mortgage.  Am I wrong?”

The bank’s argument was that voluntary dismissals in foreclosure cases should be treated the same as any other civil case and that rule changes aimed at voluntary dismissals in foreclosures could have far-reaching effects.

We have not had problems.  This is, because it’s a mortgage foreclosure case, because there are a lot of those cases, it has attracted a lot of attention. But I think we have to look at this in the universe of general civil litigation. And this has not been a problem in general civil litigation. – Bruce Rogow, lawyer for BNY

Mr. Rogow’s point is well taken, but he overlooks the obvious.  Fraudulent filings in have not been a widespread problem in “general civil litigation,” but they do remain a very real (and widespread) problem in foreclosure cases.  The issues of robo-signing and fraudulent documents in residential mortgage foreclosure cases have been widely reported yet it continues to happen.

The underlying consideration should be preserving the integrity of the judicial system and the lawyers who are officers of the courts.  The existing rule structure provides an opportunity for unscrupulous banks or lawyers to submit fraudulent paperwork in the hopes of getting away with it.  When it appears the scheme didn’t work, they can simply dismiss the case and get a do-over.  Our judicial system should not let that happen.  We have a special rule of civil procedure for the verification of complaints which only applies in mortgage foreclosure cases.  Why shouldn’t there be a similar special rule for voluntary dismissals in foreclosure cases?

The Supreme Court took the first step towards limiting this fraud by requiring verification of foreclosure complaints.  However, much of the robosigning and fraud occurs in affidavits filed much later in the case.  The next step should be to allow the trial courts to retain jurisdiction after a voluntary dismissal in a foreclosure case, upon a proper showing, to consider sanctions against lawyers and lenders who submit fraudulent documents to the courts. Thus, it is still too early to determine what the Court will ultimately decide.

Court watchers will tell you not to read too much into the questioning by the justices.  The justices’ feelings can’t be assumed simply from their questioning, and the written opinion often reaches a completely different result than one would assume from the questions asked at the hearing.

We will post another blog on this issue once the Supreme Court issues its opinion.

For more background on the Pino case, here are links to articles in the Bradenton Herald and Palm Beach Post. You can also read the appellate briefs here.

Congratulations to John C. Primeau for recently being recertified by the Florida Bar as a specialist in real estate law.

Board certification recognizes attorneys’ special knowledge, skills, and proficiency in various areas of law and professionalism and ethics in practice.  It is a voluntary program for lawyers, approved by The Florida Supreme Court and administered by The Florida Bar.  Certification is the highest level of evaluation by The Florida Bar of the competency and experience of attorneys in the areas of law approved for certification.  Certified attorneys are the only lawyers allowed to identify themselves as “Florida Bar Board Certified,” as “specialists” or “experts” in a particular practice area.  Certification establishes standards for a lawyer’s education and competency, and the Florida Bar grants board certification only to lawyers who have been evaluated for experience and expertise in a particular area of law.  Only seven percent of eligible Florida Bar members are board certified.

Mr. Primeau became board certified in real estate law in 2001 and has been recertified twice since then.

According to the Florida Attorney General’s official press release, the settlement generally releases civil claims related to robo-signing, other foreclosure-related abuses, and loan origination misconduct, but it provides no release of criminal claims or of claims related to mortgage securitization.

So what does this mean for Florida homeowners and Florida’s housing market? That remains to be seen. According to the press release, Florida’s share of the total monetary benefits under the settlement will be approximately $8.4 billion.

• Florida borrowers will receive an estimated $7.6 billion in benefits from loan modifications, including principal reduction, and other direct relief.
•  Approximately $170 million will be available for cash payments to Florida borrowers who lost their home to foreclosure from January 1, 2008, through December 31, 2011, and suffered servicing abuse.
•  The value of refinanced loans to Florida’s underwater borrowers would be an estimated $ 309 million.
•  The state will receive a direct payment of $350 million.

Sounds like a lot of money, but how soon can we expect to see any actual relief? My prediction is that we won’t anytime soon. The Tampa Bay Times is reporting that at least one of the banks seems to agree.

‘The immediate results are not going to be all that pleasant,’ said Mark Vitner, an economist with Wells Fargo. His bank is one of the biggest lenders in Florida as well as a participant in the settlement. ‘The amount of foreclosures will actually increase and there will be some additional downward pressure on home prices.’

According to the Tampa Bay Times article, here’s how the settlement will be carried out:

• Because of the complexity of the agreement — the second-largest civil settlement in U.S. history next to 1998′s tobacco industry deal — federal officials said borrowers will not immediately know if they are even eligible. And the timetable for a payout is lengthy.
• Over the next 30 to 60 days, negotiators will pick an administrator to handle logistics of the settlement and to monitor compliance.
• Then it will take another six to nine months for the administrator, the attorneys general of 49 states (Oklahoma did not participate) and the mortgage servicers to identify which homeowners would qualify for immediate cash payments, principal reductions and refinancing. Those eligible will receive letters.
• The settlement will be executed over the next three years.

Reaction to the settlement is mixed. Here are links to a few good articles which take a critical look at the settlement – huffingtonpost.com, firedoglake.com, and nakedcapitalism.com – 12 Reasons You Should Hate the Mortgage Settlement.

My predictions are:

• Florida homeowners are not going to be unhappy about this settlement a year from now.
• Those who lost their homes to robosigned (i.e., fraudulent or forged) documents are not getting their homes back and a check for a few hundred or a few thousand isn’t going to make them feel better about the experience.
• It’s going to be an uphill battle for anyone to actually receive the cash payments.
• The principal reductions and refinances are going to be just as frustrating and difficult to obtain as loan modifications are today.
• Even though the settlement doesn’t release the bankers from criminal liability, don’t hold your breath waiting to see any criminal prosecutions. If there are more than a handful, I will be shocked.

Check back here in a few weeks for a follow-up article once the actual settlement document is available.

I previously blogged here about the Florida Supreme Court’s termination of the statewide mandatory mediation program for residential foreclosures.  The new Administrative Order provides that circuit chief judges of each circuit may “adopt or employ any measures permitted by statute or court rule to manage pending and new residential mortgage foreclosure cases, including referral of cases to mediation on a case-by-case basis pursuant to section 44.102, Florida Statues, and Florida Rule of Civil Procedure 1.700(a).”

Broward County’s Chief Judge (Hon. Peter Weinstein), the Administrative Civil Judge (Hon. Jack Tutor), and the Foreclosure Division Judge (Hon. Marina Garcia-Wood) are considering different options for a new foreclosure mediation program.  To their credit, they were open to hearing recommendations from the various participants in the foreclosure mediation process before making a final decision.

The BCBA’s Real Property Section invited Judge Garcia-Wood and a cross-section of plaintiff and defense foreclosure attorneys, HOA/condo attorneys, and mediators to discuss the problems with the RMFM mediation program and suggestions to improve the foreclosure mediation process.  Following introductory comments by each attendee, the different groups met separately and discussed mediation issues from their perspective and offered a series of suggestions to improve the process.   Some excellent ideas were exchanged, and there was actually quite a bit of common ground among the various participants.  Judge Garcia-Wood appreciated the suggestions and is going to factor them into the decision making process for the new mediation program.

Special thanks to Gary M. Singer, Esq. (BCBA Real Property Section Chair) for inviting me to co-moderate the event with him.

I will post an update on this blog when the Seventeenth Judicial Circuit implements the new foreclosure mediation Administrative Order.