On May 4, the Florida Court of Appeal, Fourth District, held that a borrower cannot sue a law firm for sending a letter seeking to collect attorney’s fees because the mortgage contract gave the bank the right to seek attorney’s fees from a prior foreclosure action as a condition of reinstating the loan. Previously, a trial court had awarded the borrower attorney’s fees following dismissal of a prior foreclosure action. The bank later brought a new foreclosure action against the borrower concerning the same property, and the law firm representing the bank sent the borrower a reinstatement letter requiring payment of attorney’s fees incurred by the bank in the prior foreclosure action in order to reinstate the loan. The trial court, citing a 2019 decision in U.S. Bank Trust, N.A. v. Leigh, granted summary judgment in favor of the law firm on the grounds that “the law firm was entitled to immunity under the litigation privilege because the Florida Consumer Collection Practices Act (FCCPA) claim was based on the reinstatement letter the law firm sent during the foreclosure proceedings” and because the borrower lacked standing.

On appeal, the Court of Appeal agreed with the law firm that it was entitled to collect attorney fees and costs and that the borrower lacked standing to bring his FCCPA claim. According to the Court of Appeal, a provision in the mortgage contact included language that “if the borrower defaulted and the lender accelerated the loan, the borrower would have the right to reinstate the loan if certain conditions were met.” Among these conditions was that the borrower would agree to “pay all expenses incurred in enforcing this Security Instrument, including, but not limited to, reasonable attorneys’ fees.” Applying the rationale of Leigh, the Court of Appeal found “that the law firm did not violate the FCCPA because it sought to recover a legitimate expense it was entitled to recover pursuant to a contract, that being the expense of attorney’s fees the lender incurred in the prior foreclosure action.”