Consumer Finance

Carlton Fields Jorden Burt has extensive experience counseling and representing banks, finance companies, lenders and other financial service industry clients in state, federal and bankruptcy court litigation, and arbitration.

Consumer Finance Litigation
We have developed a uniquely effective, efficient, and seamless approach to handling consumer finance litigation for our banking and servicer clients. It provides value by removing the burden of case administration from them, and imposing controls on the process and costs. Additionally, we are able to view the big picture, continually assessing our clients’ reputational and portfolio-level risks. We understand which matters are suitable for settlement or appeal, and which are not, based on their broader implications. Our method includes the following components:

Agreed-Upon Pricing and Staffing
We offer various staffing and pricing options for clients to meet their internal budget and case management needs. Typically, we manage matters using a three-category system that classifies matters as category one: agreed upon fixed fee per matter; category two: hourly defined budget (hourly with advance agreement on fee and cost parameters); or, category three: matters with national scope and exposure such as class actions or other matters involving portfolio level operational or reputational risk. These same categories apply to appellate matters. They enable our clients to predefine costs, and avoid surprises.

Team Approach
To assist clients in managing matters, we have a dedicated case assignment clerk who performs firmwide intake on all consumer finance matters through a referral email box (or via secure web portal). Once a matter is referred to Carlton Fields Jorden Burt, it is referred within the firm to a dedicated office team leader who performs an immediate case review and then assigns the matter to an appropriate attorney for preliminary analysis. For client convenience, we provide a statewide assignment map so that at all times, clients have the ability to situate their matters within one of Florida’s 67 counties, and to determine the relevant Carlton Fields Jorden Burt office and team leader. This firmwide system creates a single point of contact for case referral and intake as well as a means for the client to obtain quick and accurate information on the referred matter.

Escalation Criteria
Many matters come to us after collections or foreclosure counsel have encountered issues with them. Based on our assessment of each matter, we make an impartial recommendation to our clients regarding its appropriate handling and category assignment based on predefined contractual criteria such as the amount of real exposure, likelihood of trial, and the scope of reputational or portfolio-wide risk. If a matter does not rise to a level that requires our services, we say so—and offer to monitor it if needed. Additionally, once we have effectively addressed the reasons for the referral, we return the matter to the counsel who initially handled it so they can complete their assignment at their typically low fixed fee.

Portfolio Level and Reputational Risk
A key element of our services is our ongoing work with our clients to limit or eliminate portfolio level and reputational risk. We accomplish this by continually offering in-person, teleconference, and video conference training on issues such as deposition preparation and trial testimony, affidavit preparation, and verification compliance. We also offer one-on-one training for first-time witnesses including senior management. Our goal is to provide each person presented to the public as the face of the client with the tools and skills to accurately and effectively communicate our client’s position, as well as the strength of their company policies and procedures.

We also provide guidance on when, how, and whether to press an emerging issue. In Florida, each trial court, appellate court, and federal district court has its own idiosyncrasies and personalities. We help our clients make strategic decisions based on our insider’s knowledge of these courts. This ensures that the right issue is presented in the right place at the right time. Our ultimate goal is to either obtain results with positive portfolio-wide impact, or avoid decisions that may result in adverse consequences that extend beyond the single matter.

Representative Consumer Finance Matters
Reported Decisions

  • City of Palm Bay v. Wells Fargo Bank, N.A., 2013 WL 2096257 (Fla. May 16, 2013). The Florida Supreme Court held that municipalities lack authority to give their own code enforcement liens priority over previously recorded mortgage liens. The court determined that the legislature has adopted a statutory scheme for the priority of rights with respect to interests in real property and that, by attempting to deviate from that scheme, a municipal ordinance that gives municipal liens super-priority over previously recorded mortgages is invalid. The decision will have wide impact. For example, the City of Palm Bay had pointed to more than 80 similar ordinances statewide, all of which are invalid under the decision.
  • Foley v. Wells Fargo Bank, N.A., 2012 WL 4829124 (S.D. Fla.). This is a decision of first impression on the issue of what actions trigger notice obligations under the 2009 amendments to the Truth in Lending Act, 15 U.S.C. 1641(g). The Federal District Court found that an assignment of mortgage to the servicer in compliance with MERS rules and Freddie Mac’s guidelines, does not trigger TILA’s new notice requirements.
  • Holcomb v. Federal Home Loan Mortgage Corp., 2011 WL 5080324 (S.D. Fla.). This is a decision of first impression on whether an investor can be held vicariously liable for a servicer’s failure to comply with a borrower’s request for information under TILA section 15 U.S.C. 1641(f)(2), as amended in 2009. The Federal District Court found that TILA does not provide for vicarious liability.
  • Holcomb v. Federal Home Loan Mortgage Corp. (2), 2012 WL 718814 (S.D. Fla.).  This is one of the few reported decisions that applies and analyzes TILA rescission rights in instances where a same lender refinance transaction occurred.  The Federal District Court ruled in our favor finding that the borrower had requested complete rescission when only a partial “new money” rescission was permitted by TILA.
  • Korte v. U.S. Bank Nat. Ass’n, 64 So. 3d 134 (Fla. 4th DCA 2011). This is a decision of first impression on the issue of whether pre-judgment sanctions can be imposed against a borrower and her counsel for prosecuting frivolous claims and defenses for the purpose of delay. The Appellate Court held that where a borrower or her counsel engage in delay tactics, the trial court may order pre-judgment delay damages in the form of interest, attorney’s fees, and costs, to be deposited into the Registry of the Court, pending the outcome of the case.  This decision has had a substantial deterrent effect on borrowers engaging in delay tactics to avoid foreclosure.
  • Brake v. Wells Fargo Financial System Florida, Inc., 2011 WL 6412430 (M.D. Fla.). This decision exemplifies the “kitchen sink” approach to claims typically brought against lenders and servicers. The decision provides a detailed analysis and examination of these claims before adopting our argument for dismissing the fraud, negligence, promissory estoppel and National Housing Act claims.
  • U.S. Bank Nat. Ass’n v. Paiz, 68 So. 3d 940 (Fla. 3d DCA 2011). This decision presents a detailed analysis and review of the law application to post-trial motions seeking to overturn foreclosure judgments. The appellate court adopted our analysis as to what facts and allegations are necessary to provide a basis for setting aside a foreclosure judgment.
  • Brook v. Chase Bank (USA), N.A., 2012 WL 6053964 (M.D. Fla.).  In this case, a district court affirmed a bankruptcy court’s judgment awarding Florida Consumer Collections Act (“FCCPA”) damages and attorneys’ fees to the bankruptcy trustee but held that the recovery was subject to a set-off in the amount of a money judgment the bank had obtained against the debtor prior to bankruptcy. This decision is significant because it dramatically limits exposure to FCCPA claims since in nearly all instances the borrower owes significantly more to the lender than the FCCPA judgment. The district court affirmed this ruling on appeal, noting that the bankruptcy court did not abuse its discretion in upholding Chase’s set off defense.

Other representative consumer matters

  • Defended multinational bank card issuer in several consumer cases alleging violations of FCRA and FCBA
  • Defended several class actions alleging claims based on lender placed credit insurance
  • Defended several class actions alleging TCPA violations
  • Defended national class action alleging violations of FDCPA
  • Defended national payment posting class action against international credit card bank
  • Represented local and national indirect retail consumer motor vehicle finance lenders in general litigation, consumer bankruptcy litigation, and in defense of consumer claims for alleged violations of the TCPA, FCCPA, and other consumer protection laws
  • Counsel indirect auto lenders on dealer agreements, guaranties, retail installment contracts, and compliance with TCPA, FCCPA, FDCPA, FCRA