Dusk falls over the Florida Supreme Court building Jan. 31, 2011, in Tallahassee. Photo: Phil Sears/Special to the Daily Business Review

A divided Florida Supreme Court on Friday ruled on a closely watched case concerning attorney fees that elicited about a dozen amicus briefs—some claiming far-reaching implications on contract law and deals involving assets assigned from one owner to the next.

The high court sided with borrower Marie Ann Glass, who was seeking attorney fees from plaintiff Nationstar Mortgage LLC after the dismissal of a foreclosure suit against her.

The question before the justices was whether the plaintiff's voluntary dismissal of an appeal provided Glass with a basis for considering herself the prevailing party, able to seek appellate attorney fees.

Florida's Fourth District of Appeal previously had ruled for Nationstar, in part, because of the strength of Glass' own arguments.

Glass had argued Nationstar—a successor plaintiff pursuing an in rem action that determines ownership of property—was not party to the mortgage contract, and therefore lacked legal standing to bring a foreclosure suit against her. She won on that argument, but it came back to haunt her when she sought to recoup court expenses under that same contract. The Fourth DCA ruled that because Nationstar was not a party to the underlying deal, it owed no legal fees under provisions in that contract.

Get more background on the litigation here: Attorney Fee Debate Heats Up as Florida Supreme Court Accepts Case

But a divided Florida Supreme Court disagreed, reversing the Fourth DCA's decision.

“Because our case law is clear that a voluntary dismissal of an appeal renders the opposing party the prevailing party for the purpose of appellate attorney fees, and because Nationstar maintained its right to enforce the reverse mortgage contract in its appeal until the dismissal, we quash the decision below,” Justice Peggy Quince wrote for the majority, with Justices Barbara Pariente, R. Fred Lewis and Jorge Labarga concurring.

The decision went a step further, suggesting the appellate court had focused on the wrong issue: Glass' success in dismissing Nationstar's claim, as opposed to her entitlement to fees after the plaintiff voluntarily dismissed its suit.

“Additionally, we write to address the mischaracterization of the procedural history of this case by the district court,” Quince wrote.

Here's the full Florida Supreme Court opinion: 

Wrong Issue

Glass' attorneys welcomed the ruling.

“What this opinion does is it restores the right under the statute to get attorneys' fees upon a voluntary dismissal,” said defense counsel Amy L. Fischer of The Cunningham Law Firm in West Palm Beach.

The case drew observers from across the state, including Davie-based foreclosure defense attorney Michael J. Wrubel, who feared the Fourth DCA ruling in Glass v. Nationstar Mortgage would leave him unable to collect fees for years of work.

Now, Wrubel finds hope in the high court's dicta in two sentences of the majority's opinion: that the appellate court had focused on the wrong issue.

“It remains to be seen, but with those last two sentences, lawyers are going to have a lot of ammunition,” Wrubel said. “With future litigation there's a reasonable probability that … appellate courts may recede from their prior opinions.”

Read more: How a Florida Supreme Court Case Could Affect Attorney Pay

Justice Ricky Polston disagreed with majority. He found the high court lacked the constitutional authority to review the case in the first place, because there was no prerequisite conflicting appellate decisions that warranted the litigation reaching the state's highest court. Chief Justice Charles T. Canady and Justice Alan Lawson joined Polston in the dissent.

Nationstar's attorney, Marc James Ayers of Bradley Arant Boult Cummings in Birmingham, Alabama, did not immediately respond to a request for comment by press time.

Meanwhile, Glass' counsel, F. Malcolm Cunningham Jr., noted that the lower court had rejected his client's request for fees, despite no motion in opposition from Nationstar.

“It took us totally by surprise,” he said of the Fourth DCA ruling. “The Florida Supreme Court restored that right to  attorneys' fees in the event that the debtor prevails.”

 

Related stories:

Can He Say That? Frustrated Attorney Asks, 'What's Wrong With the Third DCA?'

In Fight for Attorney Fees, Broward Attorney Blasts Court