A Critical Examination of Glass v. Nationstar Under Contract Principles.

AuthorFarach, Manuel
PositionBusiness Law

Unless one behaves like a quantum particle, one cannot be in two places at once. And unless one disregards contract law, one cannot have a contract enforceable by one party but not the other. Mutuality of obligation is the essence of bilateral contracts; contracts either exist enforceable by both parties or they do not exist at all. It is on this point that Glass v. Nationstar Mortgage, LLC, No. SC17-1387 (Fla. Jan. 4, 2019), either fails traditional contract analysis or heralds a new form of contract. There are arguments on both sides whether Glass represents an unwise approach or merely a balancing of interests, but this article analyzes the more fundamental question of whether Glass survives traditional contract analysis.

Background of Case

Glass is a mortgage foreclosure dispute, unique only in the sense that a reverse mortgage and not a traditional declining balance mortgage was at issue. The loan went into default due to nonpayment of taxes, and Nationstar (the successor in interest to original obligee Countrywide) filed suit. (1) The case was decided on motions to dismiss with "chain of title," i.e., the argument that plaintiff Nationstar could not enforce the mortgage because it was not the proper party in interest and, thus, did not have a contract with Glass, being one of the principal defenses raised. (2) Glass filed three trial court motions to dismiss, all of which were granted with the last motion being granted with prejudice. The trial court did not set forth the basis or bases upon which it dismissed with prejudice and did not make a finding whether plaintiff Nationstar was the proper party in interest. (3)

Notwithstanding her arguments that Nationstar was not the proper party in interest, Glass filed a motion for attorneys' fees under the contractual reciprocity provisions of F.S. [section]57.105(7) (2014), arguing she was entitled to attorneys' fees under the same mortgage she claimed Nationstar could not enforce. The trial court agreed, and Nationstar filed an appeal (4) but dismissed the appeal after briefing was completed. (5) Glass again filed a motion for attorneys' fees, this time for appellate fees. (6) The Fourth District Court of Appeal denied Glass' motion for fees, re-reviewed the case en banc, and again issued an opinion denying Glass' motion for fees. (7) Glass sought discretionary review in the Florida Supreme Court based on conflict jurisdiction.

Analysis of Majority Opinion

The Florida Supreme Court granted review under Fla. Const. art. V, [section]3(b) (3), the conflict basis of the court's jurisdiction. (8) The court ruled 4-3 in favor of Glass, with the majority basing its opinion on the rule that dismissal of an appeal by an appellant renders the appellee the prevailing party. Additionally, the majority held that Nationstar was liable for Glass' attorneys' fees due to Nationstar's argument that it was entitled to enforce the mortgage against Glass notwithstanding her claim there was no contract between the parties. (9) The majority opinion did not state the precise nature of the conflict, but instead chose to immediately dive into its analysis of the Fourth District's opinion. The dissent, on the other hand, focused on jurisdictional issues. (10)

The majority begins by citing Thornber v. City of Fort Walton Beach, 568 So. 2d 914 (Fla. 1990), for the proposition that "when a plaintiff voluntarily dismisses an action, the defendant is the prevailing party." (11) This is a well-supported proposition. It is the next step in the process, however, where the majority begins to falter in its analysis.

Specifically, the majority contends the Fourth District erred by "opin[ing] that [F.S. [section]]57.105(7) precluded an award of attorney's fees because Glass prevailed in having Nationstar's complaint dismissed." (12) In the eyes of the majority, the Fourth District Court of Appeal misunderstood the basis of the trial court's dismissal and also failed to address Glass' request for appellate attorneys' fees. The majority then turns to Bank of New York Mellon Trust Co. v. Fitzgerald, 215 So. 3d 115 (Fla. 3d DCA 2017), a case cited by the Fourth District in support of its opinion, and states the present case is different because the trial court in Fitzgerald specifically ruled the lender lacked standing, while the trial court in this case did not make such a finding. The majority does not, however, mention it was impossible to determine from the trial court order of dismissal whether a contract existed between Nationwide and Glass.

The majority dealt with this issue by stating that "[e]ven if the trial court's dismissal [in Glass] was based on lack of standing, it was not based on a finding that Nationstar did not hold the note but on a finding that Nationstar's complaint was legally insufficient for failure to properly demonstrate the chain of title." (13) In the eyes of the majority, the allegation by a plaintiff that it is contractually bound with a defendant does not bind the defendant to her obligations under the contract but binds the plaintiff to its obligations under the same contract.

This is where the majority first fails in its analysis. Florida law is clear that a holder of a note can enforce the note regardless of recorded assignments. (14) And even failing proper assignments, the "mere delivery of a note and mortgage, with intention to pass the title, upon proper consideration, will vest the equitable interest in the person to whom it is so delivered." (15) And of course, "person entitled to enforce" a note is a...

To continue reading

Request your trial

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT