High court limits judges' power to reopen casesRobert Morris
Reaching beyond the foreclosure case presented, the Florida Supreme Court held that trial courts cant reinstate a civil lawsuit that the plaintiff voluntarily dismissed without prejudice, only to dismiss it with prejudice as a sanction, unless the plaintiff obtains affirmative relief to the detriment of the defendant.
Roman Pino was admittedly in default on his mortgage when the Bank of New York sued him in October of 2008. What was initially perceived to be a narrow issue in his case has proven to take on much greater significance, reaching beyond foreclosures to all civil cases in the state.
When BNY filed its complaint, it failed to mention or attach any document showing whether Pinos lender ever negotiated or transferred the note. Pino filed a motion to dismiss for failure to state a cause of action.
Next, BNY filed an amended complaint with an adjustable rate note and an assignment of mortgage, which traced an unbroken chain back to the lender. But the assignment was executed 20 days before Pino was sued. To Pino, those facts called into question whether BNYs allegations were well-founded.
Pinos attorney then initiated discovery designed to lay the foundation for a motion for sanctions. Once parties are notified of the impending motion, the clock begins on the 21-day safe-harbor period to withdraw purportedly frivolous claims.
Rather than risk having its case dismissed with prejudice and having to pay Pinos attorney fees, BNY filed a notice of voluntary dismissal before the end of the safe harbor period.
Five months later, BNY filed a second lawsuit against Pino. This time the attachment to the complaint showed an assignment that was executed during the time period between the two lawsuits.
Convinced fraud was afoot, Pino filed, under the caption of the first lawsuit, a motion to strike BNYs notice of voluntary dismissal and requested the trial court to dismiss the complaint with prejudice. If granted, the trial court in the second case would be divested of jurisdiction. That didnt happen.
Pino appealed to the Fourth DCA. It affirmed the trial courts dismissal, agreeing that BNY had not obtained any affirmative relief to the detriment of Pino prior to filing its voluntary dismissal a fact Pino conceded even if it benefited by not having the details of its alleged fraud aired in open court.
The Fourth DCA certified the question to the Florida Supreme Court to make sure it reached the right decision, given the inordinate number of foreclosure cases potentially affected.
BNY and Pino settled after the Florida Supreme Court accepted jurisdiction over their case and both parties stipulated that they wanted their case dismissed.
But the Supreme Court said the certified question was more important than their case and retained jurisdiction over the dissent of Justice Peggy A. Quince and now-Chief Justice Ricky Polston.
The court observed that Florida Rule of Civil Procedure 1.420(a)(1) confers on plaintiffs a broad right and time period to dismiss lawsuits. Unlike the days of courts of equity, trial courts have no discretion or authority and must allow dismissal.
Of course, there are exceptions. Fraud is one. Under Florida Rule of Civil Procedure 1.540(b), fraud justifies relief from final judgments including a voluntary dismissal without prejudice.
The court focused on the ordinary meaning of "relieve," as it appears in the rule. Without some sort of "pain, distress, anxiety, need, etc.," there is no need for relief. Such is the case without an adverse ruling.
Pino similarly failed to persuade the court that the trial courts inherent authority could justify the result he sought. Such authority to dismiss with prejudice is proper in ongoing cases, but the opposite reopening cases as a sanction isnt true.
The court rounded out its decision, one that is certain to be a widely-cited for years to follow, by aligning rule 57.105 with its federal analogue.
Writing for the court, Justice Pariente emphasized that the decision does not take away a trial courts power to sanction fraudulent conduct. The proper vehicle, however, is Florida Statute 57.105: If the plaintiff doesnt voluntarily dismiss or withdraw the pleading within 21 days of a defendants request for sanctions, the defendant can file a motion for sanctions and the trial court will continue to have jurisdiction.
The court also took the opportunity to request the Civil Procedure Rules Committee to review and recommend possible changes to rule 1.110(b) to alleviate abuses from fraudulent pleadings in foreclosure actions.