Miami-Dade Circuit Judge Beatrice Butchko. Photo: J. Albert Diaz/ALM.

An unsigned appellate court decision erased Miami-Dade Circuit Judge Beatrice Butchko's move to sanction U.S. Bank N.A. after she found discovery violations in a foreclosure case.

The Third District Court of Appeal panel of Judges Thomas Logue, Norma Lindsey and Fleur Lobree basically found nothing to like about Butchko's April 15 order, which replaced a January order imposing sanctions of $300 a day against the lender.

The court listed eight case citations and quoted liberally from them in its three-page order. The panel said U.S. Bank's petition was "well-taken for three reasons," and found Butchko was resorting to sanctions "for failing to produce documents it has not previously been ordered to produce."

As an example, Butchko's order listed the need to produce screenshots showing the dates original notes were uploaded into U.S. Bank's records. Her orders on sanctions tracked back to a discovery order she issued in August 2018.

The panel concluded loan ownership documents requested by Miami Springs homeowner Raul Zayas were irrelevant, since the lender pleaded standing as the noteholder.

Miami attorney Bruce Jacobs, who represents Zayas, said he planned to request a rehearing before the appellate court. Summarizing his sanctions request, he said U.S. Bank attorneys said the bank didn't have access to Zayas' records, Butchko ordered them to prove that, they refused and appealed.

"Judge Butchko was squarely within the law to force U.S. Bank to present documents and witnesses to prove otherwise. The Third DCA had no evidence in the record to rule U.S. Bank had no access to the records," Jacobs said. "We filed a motion for sanctions because U.S. Bank entered an agreed order in another case acknowledging they have a protocol to get records from prior servicers." 

There was no comment by deadline from the bank's attorneys at Akerman, William Heller in Fort Lauderdale, who handled the appeal, and Jeffery Robin in Miami, who appeared before Butchko.

The 2005 loan on the $450,000 Zayas house purchase was bundled in a mortgage-backed securities pool with U.S. Bank as the trustee.

When the Zayas foreclosure lawsuit was filed in 2014, the bank said he owed $338,639 in mortgage, interest, late charges and other costs on the two-story house. Realtor.com lists the 1,546-square-foot house, built in 1947, in a short sale for $428,600.

Jacobs has handled foreclosure defense work for more than a decade, and the Third District Court of Appeal referred him to the Florida Bar in April for possible sanctions for criticizing the court in a brief filed in a Bank of New York Mellon case

The issues raised in the Zayas case track back to the foreclosure crisis and the resulting robo-signing scandal, which alleged widespread fraud among mortgage servicers and lenders after loans were bundled by Wall Street as investment vehicles.

The chain of title to underlying property was often lost, and robo-signers allegedly whipped through court papers saying they reviewed loan documents, without actually performing the task.

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Miami Judge Issues Order to Show Cause Against US Bank for Flouting Discovery Order