Wednesday, June 29, 2011

Korte v. US Bank National Association

et al, No. 4D09-4285, June 8, 2011, Fourth District Court of Appeal, Palm Beach County

Brian Korte, Esquire appealed trial court’s award of sanctions under §57.105 against him and his firm for filing unsupported affirmative defenses

Appellate court found statute applicable in mortgage foreclosure cases to sanction defendants/or their counsel for asserting defenses know or should know not supported but assert for primary purpose of delay

Foreclosure case filed March, 2008

Korte filed answer, affirmative defenses alleging that lender failed to provide borrowers with TILA disclosures

Lender served Korte with unfiled motion for sanctions, advising would file in 21 days if not withdrawn

Motion for sanctions filed in court file December, 2008, Korte withdrew as attorney in February, 2009

Lender deposed Korte and borrower: Korte did not investigate defenses

Borrower stated never received copy of defenses or of motion for sanctions, never discussed with Korte

Borrower testified received TILA disclosures

Korte did not appear at hearing on motion for sanctions

Trial court found defenses frivolous, primarily for delay, not acting in good faith

Court awarded fees, accrued interest for delay

Court sanctions $20,563.59 ($18,682.99 accrued interest) against Korte only instead of splitting with client

Korte appealed finding of bad faith, but appellate court noted trial court’s specific findings

Korte appealed award of accrued interest as unsupported by evidence

Appellate court noted lender representative submitted original note showing interest rate into court, representative testified about calculation

Example of appellate courts correcting the excesses of defense bar, trial court judges

Lender/servicer counsel will be more pro-active in addressing similar cases