Did you know that if a lender voluntarily dismisses a foreclosure lawsuit, it could open up the lender to a claim for attorneys fees by the defendant borrower? Although this is not necessarily a new legal principle, the Florida Second District Court of Appeal recently decided a case regarding such a situation, and a little reminder never hurt anyone. The reason the lender may be subject to an attorneys fees claim from the defendant is that a voluntary dismissal dismisses the case in favor of the defendant, thereby rendering the defendant the “prevailing party” for the purposes of an award of attorneys fees. Often times this may not be a serious risk or large exposure, if the case is dismissed prior to heavily contested litigation or before the defendant files any pleading in the case. But in a situation where the defendant files pleadings in opposition, such as a motion to dismiss, affirmative defenses, or a counterclaim, the lender would be well served by seeking a joint stipulation on the voluntary dismissal, which would contain a provision in which the defendant agrees that he or she will pay for his or her own attorneys fees.
For the full opinion from the Second District Court of Appeal, click here.
My practice includes the representation of financial institutions, banks, insurance companies, business owners and other corporate clients. I have a growing and focused practice dedicated to helping financial institutions navigate the complex and expanding area of government regulation and compliance with federal and state laws. This includes working with financial institutions to prepare best practices policies, procedures, and forms, as well as advising financial institutions as to avoiding litigation. When necessary, I will also represent those same institutions in court. I enjoy keeping current with the news and issues that affect banks and financial institutions in their business, and sharing that information along with my thoughts on the issue from a legal perspective based upon my experience.
My firm, Zimmerman, Kiser, & Sutcliffe, P.A.* is a full-service law firm located in Orlando, Florida. Established in 1984 and consistently recognized as one of the largest firms in Central Florida, our firm maintains a respected reputation within the southeast U.S. business and legal community. Our more than 30 attorneys provide comprehensive legal representation in an extensive range of practice areas including corporate, tax, real estate, litigation, banking and financial institutions, structured finance, bankruptcy & creditors’ rights, estate planning & probate, and workers’ compensation.
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