Korte v. US BANK NAT. ASS'N
64 So. 3d 134
| Fla. Dist. Ct. App. | 2011Background
- Korte represented borrowers in a Florida mortgage foreclosure action brought by U.S. Bank.
- Borrowers asserted TILA-related defenses; Bank moved for sanctions under section 57.105(1)(a) and (3) after defenses deemed frivolous.
- Borrowers’ counsel withdrew in Feb. 2009; sanctions proceedings occurred in 2009 with evidentiary hearings.
- Trial court found defenses frivolous, not in good faith, and filed primarily to delay final judgment; struck defenses and ordered sanctions.
- Bank sought delay damages (interest accrual) and attorney’s fees; court awarded $20,563.59 in fees and $18,682.99 in delay damages, held in registry.
- Korte appealed only the $18,682.99 delay damages; court affirmed sanctions and delay damages, with inequitable conduct doctrine allocating full attorney’s fees to Korte.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether 57.105 sanctions apply to frivolous mortgage defenses | Korte filed frivolous defenses delaying litigation. | Defense claims were asserted in good faith based on borrowers’ disclosures. | Yes; sanctions applicable for knowingly unsupportable defenses intended to delay. |
| Whether the trial court’s delay-damages award is supported by evidence | Delay damages supported by sworn testimony and LIBOR-based calculations. | Delay damages based on unsworn assertions and speculative delay. | Supported by competent, substantial evidence from hearings and LIBOR-based calculation. |
| Whether the amount of delay damages constitutes an abuse of discretion | Delays were caused by Korte’s defenses and justified delay damages. | Bank risked windfall if foreclosure would have proceeded anyway. | No abuse of discretion; funds held in registry pending further orders avoid windfall. |
| Whether the court properly imposed inequitable conduct doctrine for attorney’s fees | Inequitable conduct justified shifting full fees to Korte. | Normal fee allocation under 57.105 should apply unless inequitable conduct proven. | Inequitable conduct doctrine applied; Korte bears the full fees in addition to delay damages. |
Key Cases Cited
- Bionetics Corp. v. Kenniasty, So.3d. (Florida 2011) (section 57.105 sanctions in mortgage foreclosure context)
- Moakley v. Smallwood, 826 So.2d 221 (Fla.2002) (sanctions require specificity when based on inherent authority)
- Ferdie v. Isaacson, 8 So.3d 1246 (Fla. 4th DCA 2009) (supports specific finding of good-faith conduct for sanctions)
- Boca Burger, Inc. v. Forum, 912 So.2d 561 (Fla.2005) (sanctions standard reviewed for abuse of discretion)
- Finol v. Finol, 912 So.2d 627 (Fla.4th DCA 2005) (inherent authority sanctions require adequate factual basis)
- Bitterman v. Bitterman, 714 So.2d 356 (Fla.1998) (inequitable conduct doctrine explained)
- Rosenberg v. Gaballa, 1 So.3d 1149 (Fla.4th DCA 2009) (inequitable conduct doctrine not rendered obsolete by statutory amendments)