All entries for August 2016

Unclean Hands and Fraudulent Mortgage Loan Applications

Borrowers facing foreclosure are often scared, confused, and under extreme stress.  The dream of the modern American family—ownership of a home—is in jeopardy for them.  Some borrowers are also angry; whether with themselves, with the lender, or with someone else.  In certain cases, this anger is justified, as has been made clear by a wave of mass or class actions in recent years against lenders for fraudulent or otherwise deceitful or predatory lending practices. 

However, in some cases, that anger may not be entirely justified—as in the case of Wells Fargo Bank, N.A. v. Williamson, where the borrowers sought to have the court dismiss the lender’s foreclosure action on the basis of allegations that the lender’s “loan consultant” falsified certain portions of the loan application, including the borrower’s liquid assets, monthly income, and ownership of other real property. (199 So. 3d 1031 (Fla. 4th DCA 2016). 

However, as the court astutely observed, the borrower either knew or should have known (and perhaps could not have been unaware) of those overstatements.  Though the borrower claimed to have not read any of the documents and that she did not know of the false statements, the record seems to indicate she was fully aware of how much she was borrowing, how much she was required to make in payments, and the other essential terms of the loan. 

As the court decided, the facts in this case could not prevent the lender from foreclosing an otherwise valid and enforceable note on the property.   As for those borrowers with misplaced anger over being approved for loans they should have known they could not afford, they will have to take responsibility for those loans even if the bank was complicit in helping the borrowers get into a loan above their means.  If they fail to take responsibility on their own, the court will not likely allow them avoid it for long.

If you are facing a foreclosure or need help understanding your closing documents or loan, please reach out to the transactional attorneys at Icard Merrill, who have helped thousands of people complete the purchase or sale of homes. 

Isolated Rule Violation and Good Faith Error in Unemployment Claims

In another lesson to employers and human resources management, a recent decision once again highlights the importance of documentation when it comes to challenging unemployment compensation claims by employees purportedly terminated for cause.

The court in Williams v. City of Winter Haven, essentially provided employers with a mandate with respect to documentation, finding that “an isolated rule violation based on a good faith error in judgment does not amount to misconduct that would justify a refusal of benefits.”  41 Fla. L. Weekly D1657 (Fla. 2d DCA July 15, 2016).  This stems from the court’s interpretation of the term “misconduct” as defined by section 443.036(29), Florida Statutes.

Employers should read this pronouncement from the court to mean that an employer must show evidence (read: documents) that the employee undertook multiple violations of a known policy.  How do employers show this?  Employers should have proof in writing (by email or signature list) of receipt of a copy of a written policy, written evidence of coaching, corrective action, or other employee feedback for the problem employee showing how they were made aware of the policy and how their conduct was violating it, and at least one or more follow up documented corrective action discussions with the employee prior to termination.

Employers should keep in mind, “[t]he unemployment compensation statute must be liberally construed in favor of the claimant, and the “‘disqualification provisions, being remedial in nature, are to be narrowly construed.’” Id., quoting Davidson v. AAA Cooper Transp., 852 So. 2d 398, 401 (Fla. 3d DCA 2003).  The final takeaway from this notation by the court is that employers would be best served by implementing a thorough (and legally appropriate) interview and hiring process to screen applicants as well as a robust training and coaching program designed to bring in great applicants, train them for success, and retain them.   This will be far more cost effective (and operationally sound) than perfecting the challenge process for unemployment claims. 

For answers to your questions about unemployment compensation, sound human resources strategies under Florida and Federal law, or other questions about employment, speak Icard Merrill’s highly-qualified employment attorneys today.

Limiting the Reach of Financial Discovery Against Non-Parties in Divorce

In what seems to be an unfortunately common practice in divorce actions, the former wife in a recently decided Florida divorce case sought and was initially granted by the trial court permission to get personal financial information regarding her three adult children with the former husband. Inglis v. Casselberry, 41 Fla. L. Weekly D1651 (Fla. 2d DCA July 15, 2016).

In Inglis, the former wife wanted to get to the bottom of trust distributions to both the former husband and to his three adult children from a trust that distributed to all four.  However, in a decision underscoring an important protection for families of the parties to divorce, the Second District Court of Appeals determined that Article I, section 23, of the Florida Constitution protected a person's right to privacy in their finances unless it could be shown with evidence and allegations that there was some basis to believe the material sought was likely to have a bearing on the case directly.   

This decision might help reinforce protections for families which are too commonly dragged into divorce litigation--often out of spite or in an effort to try to uncover private financial information with no real bearing on the divorce itself.   If you have questions about your rights in a divorce or about your rights as a non-party to a divorce from whom information is sought, contact the outstanding divorce attorneys of Icard Merrill today. 

Court Orders Should Be Taken Seriously: Indirect Criminal Contempt

For those that need a reminder (including attorneys) that court orders are no laughing matter and should be taken very seriously, look no further than the recent case of Haas v. State decided in the Second District.  196 So. 3d 515, 523 (Fla. 2d DCA 2016).  

In Haas, attorneys for one of the parties were alleged to have retained certain confidential files and to have filed certain confidential files without ensuring they were filed under seal.  This conduct arguably violated the trial court's order as to confidentiality, so the court set a hearing to investigate further.  The two attorneys at issue were found guilty of indirect criminal contempt for violating the court's order in filing documents without ensuring they were under seal and for retaining copies of certain documents.

The holding of the Second DCA, which reversed the finding of guilt as to indirect criminal contempt, included the following that; "[f]or a person to be held in contempt of a court order, the language of the order must be clear and precise, and the behavior of the person must clearly violate the order" . . . [a] trial court cannot make a finding of contempt for violation of a court order based upon its intent in issuing the order when the court's 'intent was not plainly expressed in the written order' . . . [i]n other words, a finding of contempt for violating a court order cannot be based upon something the order does not say."  (internal citations omitted).

It should be noted that the applicable standard for indirect criminal contempt--like any criminal matter--remains "beyond a reasonable doubt."  However, it was, for a time, likely an extremely unsettling prospect to have been found guilty of a crime of contempt and fined (the opposing attorney sought jail time for the two attorneys--raising serious questions about the working relationship between those two firms) before the judgment was overturned.  

This holding should also serve as notice to courts and to attorneys drafting proposed orders for the Court to ensure they are clear and explicit in the instructions and requirements that go into the order if compliance is to be ensured by potential contempt proceedings.

For those that take court orders lightly, beware that civil sanctions are not the only remedy out there for judges to ensure people take their proclimations seriously.