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Law Office of David J. Stern, P.A. v. Security National Servicing Corp.
SC06-361
THE NEXT CASE ON THE DOCKET THIS
MORNING IS THE CASE OF THE LAW
OFFICE OF DAVID STERN P.A.
VERSUS SECURITY NATIONAL.,,
>> MAY IT PLEASE THE COURT,
COUNSEL, ROBERT KLEIN, FOR THE
LAW OFFICES OF DAVID STERN.
FOR MANY, MANY YEARS, THIS
STATE, LIKE THE VAST MAJORITY OF
THE OTHER STATES IN THE UNION,
HAVE PRECLUDED ASSIGNMENTS OF
LEGAL MALPRACTICE CASES.
>> LET'S GET IN TO THE FACTS OF
THIS CASE.
AND WHY DON'T YOU -- WE ALL HAVE
READ WHAT THE DISTRICT COURT AND
WHAT THE BRIEFS SAY ABOUT THE
FACTS, BUT WHY DON'T YOU
PINPOINT WHAT YOU THINK THE
MATERIAL FACTS OF THIS
PARTICULAR SITUATION IS.
THAT ARE NOT DETERMINATIVE
WITH -- IN THE 4th DISTRICT'S
OPINION.
WHY WAS THE 4th DISTRICT WRONG
UNDER THE FACTS AS THEY --
>> I THINK FOR SEVERAL REASONS.
FIRST OF ALL, THE -- THERE WAS A
KEY ELEMENT THAT WAS PRESENT IN
THIS COURT'S DECISION IN THE
REASON WITS MATTER THAT WAS
ABSOLUTELY ABSENT IN THIS CASE
AND THAT WAS THE RELIANCE BY
THIRD PARTIES, WHICH THIS COURT
FELT WAS COMPELLING AND MADE A
POINT OF NOTING, AND IN THAT
PARTICULAR CASE, THE LEGAL
SERVICES THAT WERE PROVIDED BY
THE LAW!!!!!!!! LAW FIRM WERE DIRECTED AT
THIRD PARTIES WHO NECESSARILY
RELIED UPON THEIR WORK PRODUCT
AND THERE WAS NO ISSUE OF
CONFIDENTIAL INFORMATION BEING
DISDLOASED.
-- DISCLOSED.
IN IT PARTICULAR CASE, THERE'S
NO SUGGESTION OF THAT.
THIS WAS A ROUTINE, MORTGAGE
FORECLOSURE ACTION THAT WAS
HANDLED BY THE FIRM ON BEHALF OF
ANOTHER ENTITY AT THE TIME THAT
THE MALPRACTICE OCCURRED.
SUBSEQUENT TO THE MALPRACTICE,
IN FACT, SUBSEQUENT TO THE POINT
IN TIME WHEN A JUDGMENT WAS
ACTUALLY ENTERED, ADD!!!!!!!! ADVERSE TO THE
NOTE HOLDER, THE NOTE WAS
ASSIGNED AGAIN AND IT IS THAT
PARTY WHO NOW BRINGS THIS CLAIM.
SO THE SUGGESTION THAT THE PARTY
TOOK BY ASSIGNMENT A CAUSE OF
ACTION THAT HAD ALREADY EXISTED
ON DAMAGE THAT HAD ALREADY
ACCRUED PRIOR TO THE POINT IN
TIME WHEN THE CLAIM WAS PURSUED,
IS ENTIRELY INCONSISTENT WITH
THE NOTION THAT I BELIEVE THIS
COURT EXPRESSED IN THE LEBOWITZ
CASE WHERE YOU HAVE THAT LIMITED
ELEMENT OF RELINES AND
PRIVILEGES, THE ATTORNEY-CLIENT
PRIVILEGE IS REALLY NOT HAND
ISSUE AND THE BULK SALE OF PRO
TENSION CAUSE OF ACTIONS FORMAL
PRACTICE IS NOT AN ISSUE.
SURE.
[INAUDIBLE]
[INAUDIBLE]
[INAUDIBLE]
>> I UNDERSTAND.
AND I THINK THAT'S SOMETHING
THAT TROUBLED THE 4th DISTRICT,
I THINK THEY DEALT WITH THE
QUESTION OF IS THERE A WRONG
HERE WITHOUT A REMEDY AND I
THINK THE PROBLEM WITH THAT
REASONING IS TWOFOLD.
NUMBER ONE, THERE IS NO QUESTION
ABOUT THE FACT THAT E.M.C., THE
PARTY THAT HELD THE NOTE AT THE
TIME, COULD HAVE BROUGHT A CAUSE
OF ACTION HAD IT BEEN ADVISED
THAT IN FACT, THE SECOND ACTION
WAS UNTIMELY, THE FIRST ACTION
HAD BEEN DID YOU SAY MISSED,
AND -- DISMISSED, AND IT COULD
HAVE CEASED ALL LITIGATION AT
THAT POINT AND AGAIN OBVIOUSLY
I'M TALKING HYPOTHETICALLY, BUT
WE NEED TO ADDRESS THAT BECAUSE
OF THE SUGGESTION THAT THERE WAS
NO REMEDY AVAILABLE.
IF SOMEONE COMES INTO THE
E.M.C., A NEW GROUP OF LAWYERS
AND SAID BY THE WAY, WE'RE GOING
TO DISMISS THIS ACTION, BECAUSE
IF THE SECOND ACTION WAS FILED
UNTIMELY, THERE IS NO QUESTION
IN MY MIND E.M.C. COULD HAVE
IMMEDIATELY BROUGHT A CLAIM
AGAINST THE FIRM FOR IMPAIRING
ITS COLLATERAL, BECAUSE THE
RESPONDENT'S SEES IN ITS BRIEF
THAT AT THAT POINT IN TIME THEY
COULDN'T RECOVER ON THE
MORTGAGE, THEY COULDN'T
FORECLOSE ON THE MORTGAGE, AND
THAT THE OWNER OF THE NOTE WAS
IN RECEIVERSHIP.
IF YOU TAKE THEIR REASONING, ONE
STEP FURTHER, AND SAY THAT THE
ACTUAL CAUSE OF ACTION FOLLOWS
THE NOTE, WHICH WE DISAGREE
WITH, BUT ASSUMING FOR THE SAKE
OF ARGUMENT THAT'S TRUE, AT THE
POINT IN TIME WHEN NAMC ACQUIRED
THE NOTE, THAT'S WHEN THE CAUSE
OF ACTION ACCRUED, THAT'S WHEN
THE SUMMARY JUDGMENT WAS
ENTERED.
AND THAT'S WHEN A FINAL JUDGMENT
WAS ENTERED.
NAMC COULD HAVE TURNED AROUND AT
THAT POINT AND SUED STEARNS.
IT CHOSE NOT TO.
>> WHAT WAS THE EFFECT THEN OF
THE APPEAL THAT WAS TAKEN IN
THIS CASE?
WASN'T THE ACTION ACTUALLY FINAL
ONCE THE APPEALS COURT DECIDED
THE ISSUE?
>> THAT IS PROBABLY ONE OF THE
MOST CONFUSING ASPECTS OF THE
AVE CRUEL ISSUE IN -- ACCRUAL
ISSUE IN THIS STATE THAT YOU CAN
FIND WHEN YOU READ THE OPINION
AND THE SHORT ANSWER IS NO.
IF YOU LOOK AT THE CASE -- I
ARGUED THE VERY FIRST CASE OF
ABANDONMENT, PENNSYLVANIA
INSURANCE GUARANTEE ASSOCIATION
VERSUS PIKES AND IN THAT CASE
TOOK THE POSITION THAT UNTIL THE
APPEAL WAS ARGUED, AND UNLESS
THE APPEAL WAS PURSUED, THE
CLIENT ABANDONED THE CAUSE OF
ACTION.
THE CASES THAT HAVE COME DOWN
SINCE HAVE SAID THAT ONLY HOLDS
TRUE IF THE ERROR WAS -- OR THE
DAMAGE WAS CAUSED BY JUDICIAL
ERROR, AND THERE ARE MANY CASES
WHICH WE'VE SOOUTED IN OUR
BRIEF -- CITED IN OUR BRIEF THAT
SAY YOU'RE NOT REQUIRED TO TAKE
AN APPEAL.
>> BUT SINCE THEY DID, AND IF
THEY HAD GOTTEN RELIEF OUT OF
THE APPELLATE COURT, YOU
WOULDN'T HAVE THIS ACTION AT ALL
AND SO I'M STILL LOOKING AT
THIS -- THIS WAS AN ONGOING
SITUATION.
THE ACTION WAS DISMISSED IN THE
SUMMARY PROCEEDINGS, THE APPEAL
WAS TAKEN, MAYBE THERE COULD
HAVE BEEN RELIEF IN THE APPEAL
PROCESS.
SO WHY DON'T WE HAVE TO WAIT
UNTIL THEN?
>> AND CERTAINLY THAT
POSSIBILITY EXISTS, BUT THE CASE
LAW IN FLORIDA IS THERE ARE
DOZENS OF CASES DEALING WITH
DOWNSTREAM PERSONS WHO ARE
CAUSED HARM BY A LAWYER'S
NEGLIGENCE.
UNINTENDED THIRD PARTY
BENEFICIARIES AND THE COURTS
HAVE INVARIABLY SAID, THAT'S
UNFORTUNATE, BECAUSE PRIVITY IS
PRIVITY, BECAUSE WE NEED TO
RECOGNIZE THE SANCTITY OF THE
ATTORNEY-CLIENT RELATION SHOP,
AND IF SOME PERSON ON DOWN THE
ROAD IS HARMED, --
>> BUT ISN'T THE RELATIONSHIP
REALLY THE ATTORNEY HAS THE
RELATIONSHIP WITH THE HOLDER OF
THE NOTE?
>> AT THE TIME THAT HE PURSUED
THE CLAIM, CERTAINLY.
>> AND THROUGHOUT THE LITIGATION
HERE, IT WAS THE HOLDER OF THE
NOTE THAT REALLY HAD THE
INTEREST IN THE LITIGATION, AN
EVEN THOUGH WE END UP WITH SOME
THIRD HOLDER OF THE NOTE DOWN
THE LINE, IT SEEMS TO ME THAT
UNLESS THE PERSON HAS ALL OF
THESE INTERESTS THAT GOES WITH
THE NOTE, INCLUDING THE CAUSES
OF ACTION, THAT WE'RE --
>> BUT THAT PRESUMES THAT THE
CAUSE OF ACTION FLOWS WITH THE
NOTE.
AND MY POINT SIMPLY IS, IT'S THE
HARM THAT GENERATES THE RIGHT OF
ACTION.
WHAT'S TROUBLING, YOU KNOW, SOME
OF THE JUSTICES IS THE NOTION
THAT NAMC DIDN'T BRING THE
ACTION AND SIMPLY ASSIGNED THE
NOTE.
NAMC HAD HAND ABSOLUTE RIGHT OF
ACTION AT THAT POINT IN TIME.
AND THE FACT THAT IT DIDN'T
PURSUE AND ASSIGN WHAT WAS THEN
AND I'VE REFERRED TO IN THE
BRIEF, AS A WORTHLESS NOTE, AND
UNDERSTAND, THESE ARE BULK
SALES, THESE ARE NOT SINGLE
NOTE.
THIS IS PART OF A BULK SALES
TRANSACTION, SO THEY ASSIGN A
NOTE ON A CLAIM THAT HAS ALREADY
BEEN RULED TO BE EFFECTIVELY NO
GOOD ON THAT ONE PARTICULAR NOTE
AND AT THAT POINT M TIME
SECURITY COMES TO IT PRESUMABLY
LIKE ANY OTHER PURCHASER HAVING
DONE DUE DILIGENCE, THERE IS ON
THE RECORD A SUMMARY JUDGMENT
AGAINST THEM ON THAT NOTE, SO AT
A MINIMUM, THERE IS A DIMINISHED
VALUE TO THAT NOTE.
[INAUDIBLE]
>> SURE.
[INAUDIBLE]
>> I THINK IT'S THWARTED IN A
DRAMATIC WAY.
IN TWO WAYS.
NUMBER ONE, THE ATTORNEY-CLIENT
PRIVILEGE.
IF YOU LOOK AT EACH AND EVERY
CASE SAVE ONE AND THAT'S THE
CASE OUT OF RHODE ISLAND THAT
ARE CITED BY ALL THE CASES THAT
SAY THERE ARE MAJORITY CASES
THAT ALLOW THE ASSIGNMENT OF A
CAUSE OF ACTION FOR LEGAL
MALPRACTICE, IN EACH AND EVERY
ONE OF THEM, THERE WAS A
ONE-ON-ONE ASSIGNMENT BY THE
PARTY THAT HELD THE
ATTORNEY-CLIENT RELATIONSHIP TO
THE PARTY THAT BOUGHT THE CAUSE
OF ACTION WITH EITHER AN EXPRESS
UNDERSTANDING THAT THERE WAS AN
ONGOING OR A POTENTIAL CAUSE OF
ACTION FOR LEGAL MALPRACTICE, SO
THERE'S A KNOWING WAIVER ON THE
PART OF THE CLIENT OF ANY
ATTORNEY-CLIENT PRIVILEGE.
>> WELL UNDER THIS CASE, I MEAN,
I'M LOOKING AT THE POLE AT THIS
REASONS -- POLICY REASONS THAT
WERE EXPRESSED IN CAPLAN, IT
SEEMS TO ME THAT A MORTGAGE
FORECLOSURE IS THE LEAST OF
ANYTHING THAT INVOLVES THIS --
IT'S MERELY A JUDICIAL
ACCOUNTING, DID YOU OWE, DID YOU
PAY?
AND THAT DOES NOT INVOLVE THE
KINDS THINGS THAT WERE INVOLVED
FOR EXAMPLE IN A
CONFIDENTIAL-TYPE RELATIONSHIP
THAT AN ATTORNEY AND A CLIENT
WOULD HAVE IN YOUR MEDICAL
MALPRACTICE CLAIMS FOR EXAMPLE
THAT YOU DEAL WITH.
AND IN OTHER TYPES OF CLAIMS,
AND THAT'S WHAT TROUBLES ME, IS
CAPLAN SAYS THIS IS WHY, YOU
KNOW, WE'RE DOG THIS, AND ALSO,
WHEN YOU'RE TALKING ABOUT
FLOWING IN THE SAME -- ALONG THE
SAME LINES OF WHAT YOU'RE
SELLING, SEEMS TO ME THAT'S ALL
PART OF IT, AS YOU GO THROUGH.
WHATEVER IS CONNECTED WITH THAT
MORTGAGE, THAT'S WHAT I'M
TROUBLED WITH, I THINK YOU'RE
HEARING ACROSS THE BOARD WITH
CAPLAN.
>> I THINK YOU PUT YOUR FINGER
ON PART OF THE PROBLEM.
IT'S WHAT YOU'RE SELLING.
ARE WE GOING TO CREATE A
MARKETPLACE FOR LEGAL
MALPRACTICE CASES BUT LET ME
STAY WITH THE LITIGATION
INCIDENT JUST FOR ONE MOMENT AND
THEN I WANT TO GIVE YOU OTHER
EXAMPLES.
I'M HANDLING A PIECE OF MORTGAGE
FOES CLOAR USE -- FORECLOSURE
LITIGATION FOR MY CLIENT.
MY CLIENT GIVES ME INCORRECT
INFORMATION ON THE MORTGAGOR, MY
CLIENT FAILS TO GIVE ME HAND
APPROPRIATE ADDRESS, I FILE IN
THE WRONG JURISDICTION.
THERE ARE ANY MANNER OF
COMMUNICATION THAT IS CAN OCCUR
BETWEEN A CLIENT AND THE NOTE
HOLDER THAT COULD CAUSE THE
LAWYER TO DO SOMETHING
INAPPROPRIATE.
THE LAWYER HAS A RIGHT TO DEFEND
HIMSELF.
AM I GOING TO BE ALLOWED TO
DISCLOSE MY CLIENT'S CONFIDENCES
AS PART OF MY DEFENSE WHEN THAT
CLIENT MAY BE THREE CLIENTS
REMOVED DOWNSTREAM AT THE TIME
THAT I COMMITTED THIS
MALPRACTICE, HAS NO IDEA THAT
I'M ABOUT TO DISCUSS ALL OF
THESE COMMUNICATIONS THAT MAY
PROVIDE ME WITH DEFENSES IN THIS
CASE.
[INAUDIBLE]
>> AND THAT'S WHERE I SAY YOU'VE
GOT TO LOOK AT ALL OF THE CASES
THAT HAVE ALLOWED ASSIGNABILITY.
IN EACH AND EVERY ONE F THOSE
CASES, THEY -- EVERY ONE OF THEM
TOUCHES ON THAT ISSUE, BECAUSE
EVER 1 IS CONCERNED ABOUT THAT
ISSUE.
EVERY ONE OF THOSE CASES SAY WE
UNDERSTAND THAT THE
ATTORNEY-CLIENT RELATIONSHIP IS
CRITICAL.
BUT TO THE EXTENT THAT YOU HAVE
KNOWINGLY GIVEN UP YOUR RIGHT TO
THAT CLAIM THROUGH THE
ASSIGNMENT OR IN THE CASE OF A
TRUSTEE, THAT HE NOW STANDS IN
THE SHOES OF THE FORMER CLIENT,
WE DON'T HAVE THOSE CONCERNS.
THAT'S NOT WHAT YOU'VE GOT HERE
WHEN YOU'VE GOT A BULK SALE OF
NOTES.
>> LET ME ASK YOU THIS.
I HAVE A THRESHOLD QUESTION ON
THE ISSUE OF HOW WE GOT THIS
CASE.
THIS IS HERE ON EXPRESS AND
DIRECT CONFLICT WITH CAPLAN?
>> IT IS.
>> WHAT TROUBLES ME IS THAT I
THINK YOU CAN CONCEDE THAT THE
4!!
4th DISTRICT ALLOWED ITS
OPINIONS, QUOTES OUR OPINION IN
CAPLAN, CITES IT SEVERAL TIMES
AND APPARENTLY TRIED VERY HARD
TO APPLY OUR DECISION.
HOW CAN WE FIND EVEN IF WE
DISAGREE WITH THE RESULTS THAT
THE 4th DISTRICT REACHED, HOW
CAN WE SAY THE OPINION EXPRESSLY
AND DIRECTLY CONFLICTS WITH
CAPLAN WITH CLEARLY THE 4th!!!!!!
4TH D.C.A. WAS TRYING TO APPLY
IT IN THE BEST MANNER IT COULD?
>> WELL AND THEY CERTAINLY WERE.
BUT I THINK, UNLESS I'M GROSSLY
MISREADING YOUR OPINION IN THE
WAY IT WAS CRAFTED AND -- IF YOU
LOOK AT THE WAY, YOU KNOW, THE
VERY FIRST PARAGRAPH OF THE
OPINION THAT YOU DRAFTED, YOU
TALKED SPECIFICALLY ABOUT THE
FACT THAT IN A CONTEXT WHERE THE
LAWYER'S WORK PRODUCT WAS
TARGETED AT THIRD PARTIES, THOSE
CONCERNS DON'T APPLY.
THE ISSUES OF CONFIDENTIALITY
DON'T APPLY.
THE ISSUES OF THE PUBLIC POLICY
CONCERNS DON'T APPLY, AND THE
LAWYER HAS NO RIGHT TO ALLEGE AS
A PUBLIC POLICY BASIS AGAINST
THE ASSIGNMENT.
THE ISSUE THAT THERE'S SOME KIND
OF AN ATTORNEY-CLIENT RELATION
SHOP THAT'S GOING TO BE
BREACHED, MORE IMPORTANTLY, THE
CONFIDENTIALITY.
THEY MAY HAVE TRIED TO FOLLOW
THE DICTATES OF LEBOWITZ, I JUST
DON'T THINK THEY WERE
SUCCESSFUL.
TO THE CONTRARY, I THINK THEY'VE
OPENED UP THE DOOR TO ANY MANNER
OF CLAIMS WHICH -- AND I WANTED
TO GET BACK TO THAT POINT WITH
JUSTICE LEWIS, WHAT HAPPENS IF
THEY BUY A BULK SALE OF NOTES,
AS WAS DONE HERE, AND THE NOTE
HOLDERS, THE NEW NOTE HOLDER
COMES IN AND REVIEWS ALL OF THE
NOTE FILE TO DETERMINE HOW MANY
INCLUDE COLLATERAL THAT WAS NOT
PROPERLY PERFECTED OR SECURITY
INTERESTS?
CAN THEY ALL BRING CLAIMS?
WHAT HAPPENS IF THEY DETERMINE
THAT THEY HAVE 18 NOTES OUT OF
THE 100 WHERE THERE WERE FILED
IN THE WRONG JURISDICTION?
CAN THEY BRING CLAIMS?
ACCORDING TO THIS DESOMETHING'S,
ANY AND ALL MANNER OF THOSE
TYPES OF CLAIMS WOULD BE
AVAILABLE, SO AS A PURCHASER, A
DOWNSTREAM PURCHASER OF BULK
SALES, I COULD LITERALLY TAKE
THEM, TURN THEM OVER TO A LAW IF
YOU REMEMBER FOR REVIEW, -- LAW
FIRM FOR REVIEW, NO MATTER WHO
HAD THEM ORIGINALLY AND GO
THROUGH THEM HAND SEE IF THERE
WERE FILING DEFECTS OR ANYTHING
ELSE ALONG THOSE LINES.
>> AND WHAT WOULD BE WRONG WITH
BRINGING A CLAIM, IF THERE ARE
FILING DEFECTS OR OTHER PROBLEMS
WITH THE NOTES THAT WERE THE
DIRECT RESULT OF ATTORNEY
INACTION OR INATTENTION OR
WHATEVER?
>> IT WOULD PLAY HAVOC WITH THE
ATTORNEY-CLIENT RELATIONSHIP AND
GIVE RISE -- YOU WANT TO TALK
ABOUT A MARKETPLACE, JUSTICE
QUINCE.
IF YOU THOUGHT OF THE WAY THESE
NOTES ARE BUNDLED AND SOLE, THIS
IS A COMMON COMMERCIAL PRACTICE.
THESE COMPANIES BUY NOTES THAT
ARE ALREADY IN DEFAULT, WHERE
THEY HAVEN'T BEEN ABLE TO
RECOVER FROM THE BORROWERS.
THEY'RE BUYING DISCOUNTED
BUNDLES AT PENNIES ON THE
DOLLARS.
TENS OF THOUSANDS OF THEM AT A
TIME.
YOU NOW TURN THEM OVER --
>> I GUESS MY PROBLEM WITH THAT
IS THE PERSON WHO ORIGINALLY HAD
THE NOTE, COULD HAVE BROUGHT
THAT KIND OF ACTION, ASSUMING
THAT WHATEVER THE DEFECT IS, WAS
THE RESULT OF SOME KIND OF
MALPRACTICE.
SO WHY WOULDN'T THE NEXT PERSON
WHO BOUGHT THE NOTE BE ABLE TO
MAKE THAT SAME ASSERTION?
>> AND I THINK THAT'S THE!!!!!!!! THE
CEREBUS CASE.
IF THAT ASSIGNMENT HAD BEEN MADE
WITH FULL KNOWLEDGE OF THE FACT
THAT THAT CLAIM EXISTED, AND
THAT CLIENT SAID, I'M GOING TO
TAKE $50 ON MY $100, BECAUSE MY
NEW LAWYERS TOLD ME THIS CLAIM
IS DEAD, AND I HAVE NO
COLLATERAL, IF YOU WANT TO GO
AFTER THE LAWYER, THAT'S OK WITH
ME, THEN THERE'S A KNOWING
WAIVER OF ATTORNEY-CLIENT
PRIVILEGE.
TO SUGGEST THAT THIS KIND OF
THING JUST FOLLOWS BULK SALES AS
AUTOMATICALLY, I THINK DOES
TREMENDOUS VIOLENCE TO THE
ATTORNEY-CLIENT RELATIONSHIP AND
IT GIVES ALL OF THE PEOPLE
THAT -- AND PARTICULARLY THE
ORIGINAL CLIENT OR THE CLIENT
WHO EXISTED AT THE TIME, WHO
EITHER HASN'T SUSTAINED ANY
DAMAGE, SO HE HAD NO CLAIMS,
WE'RE NOW GIVING A RIGHT OF
ACTION TO PEOPLE THAT HAD NO
ATTORNEY-CLIENT RELATIONSHIP,
WE'RE NOT INTENDED THIRD PARTY
BENEFICIARIES AND CREATE THIS
HORRIFIC MARKETPLACE, AND THIS
IS NOT -- NOT, YOU KNOW,
SOMETHING THAT'S BEYOND
IMAGINATION, WHERE YOU CAN
LITERALLY HAVE A NEW REASON TO
BIEP THESE NOTES IN BULK,
BECAUSE YOU CAN SHIP THEM OUT
AND HAVE THEM ALL REVIEWED FOR
OTHER POTENTIAL CLAIMS THAT THE
CLIENT THEMSELVES DIDN'T WISH TO
PURSUE.
>> LET'S GO BACK TO, YOU'RE
TALKING ABOUT THE
CONFIDENTIALITY ISSUES.
WELL, CERTAINLY IN CONNECTION
WITH THESE PLACEMENT OFFERINGS,
THERE IS AN INITIAL
ATTORNEY-CLIENT RELATION SHOP,
AND THAT THAT CAN BE VERY, VERY
IMPORTANT.
SO I MEAN, IT'S DESTROYED AND
CAPLAN HAS TAKEN THAT -- THERE
ARE THINGS THAT OVERRIDE THAT,
AND -- SO HERE, AS JUSTICE
QUINCE WOULD QUESTION, HOW ABOUT
IF THE DAMAGE HAS NOT OCCURRED
YET.
YOU HAVE THE ATTORNEY-CLIENT
RELATIONSHIP, THAT HAS BEEN HEY
SIGNED, BUT THE DAMAGE HASN'T
OCCURRED, SO THERE IS NO CAUSE
OF ACTION UNTIL IT'S IN THE
HANDS OF ANOTHER PARTY, BECAUSE
THAT WHEN THE HARM OCCURS, SO IT
SEEMS TO ME HAS IF YOU'RE TAKING
A REEGD OF -- I'M NOT SURE IF
I'M SAYING THIS CORRECTLY,
CAPLAN, THAT CASE WITH THE LONG
DISCUSSION OF CAUSES OF ACTION
AND ASSIGNABILITY AND WHAT'S
OCCURRED DOESN'T VIOLATE THE
PRINCIPLES THAT ARE DISCUSSED
THERE.
HELP ME UNDERSTAND THAT.
>> I DO BELIEVE IT DOES.
AND AGAIN, I HAVE TO GO BACK TO
THE ISSUE OF THE ANALOGY IN
CAPLAN WHICH WAS DISCUSSED AT
GREAT LENGTH, TO THE DECISION IN
THE KPMG CASE AND THEN GOING
BACK TO THE PRIOR CASE.
THE PRIMARY RATIONALE, AS I
UNDERSTOOD CAPLAN, FOR THAT
DESOMETHING'S, AND
UNFORTUNATELY, I WAS CIRCLING
THE ERROR -- THE AIR IN ATLANTA
AT THE TIME THE ORAL ARGUMENT
WAS GOING, I WAS ON MY WAY HERE
AS ONE OF CO-COUNSEL ON THAT
MATTER, I NEMP GOT TO HARING IT,
MY NAME -- I NEVER GOT TO ARGUE
IT, MY NAME IS ON THE OPINION,
BUT WHEN YOU LOOK AT THAT CASE
AND YOU LOOK AT THE LENGTHY
DISCUSSION OF THE REASONS FOR
THE DECISION, IT IS A STEP --
THE NEXT LOGICAL STEP FROM WHAT
I READ OF THE OPINION, THE NEXT
EVOLUTIONARY STEP FOLLOWING
KPMG.
IN KPMG, THIS COURT TALKED ABOUT
THE FACT THAT AUDITORS HAVE AN
INDEPENDENCE FROM THEIR CLIENTS,
THEY STAND APART FROM THEIR
CLIENTS AND THAT THE INFORMATION
THAT THEY'RE IMPARTING TO THE
PUBLIC IS INTENDED TO BE RELIED
UPON BY THE PUBLIC.
SO THIS COURT THEN DETERMINED IN
LEBOWITZ THAT IT IS LOGICAL TO
ALLOW AN ASSIGNMENT, AND IT
DOESN'T DO JUSTICE, DO VIOLENCE
TO THE NOTION OF THE
ATTORNEY-CLIENT RELATIONSHIP,
WHERE THE VERY INFORMATION THAT
IS BEING SUED UPON WAS DESIGNED
TO BE TRANSMITTED TO THE PUBLIC
AND DESIGNED TO PROMOTE THE
PUBLIC'S RELIANCE ON THAT
INFORMATION.
NONE OF THOSE ELEMENTS EXIST
HERE.
>> I PROEHLIZE THAT YOU'VE --
REALIZE THAT YOU'VE USED YOUR
TIME, BUT I'M CONCERNED ABOUT
YOUR ANSWER TO JUSTICE LEWIS'
QUESTION NOW BECAUSE I'M AFRAID
THAT OPENS UP, YOU KNOW, ANOTHER
ISSUE AT LEAST TO ME, IN TERMS
OF THE GIFT BRINGING OF THESE
CLAIMS, AND THAT IS --
LEGITIMATE BRINGING OF THESE
CLAWMS AND THAT IS CLEARLY ON
ITS FACE, ONE OF THE THINGS WE
SEE HERE IS SORT OF THE
CHRONOLOGICAL ASSIGNMENT THAT
WE'RE REALLY GETTING FAR
DISTANT, YOU KNOW, FROM THE
ORIGINAL CLIENT.
NEVERTHELESS, IN THE COMMERCIAL
MARKET THAT WE HAVE HERE, IT
CERTAINLY IS POSSIBLE THAT YOU
COULD BE 10 ASSIGNMENTS DOWN THE
ROAD, FOR ALL LEGITIMATE
BUSINESS ASSIGNMENTS FOR FULL
VALUE, YOU KNOW, WITHOUT
DISCOUNTS, AND THAT THE MORTGAGE
WENT RIGHT ALONG, BUT WE'RE 25
YEARS DOWN THE ROAD AND NOW A
FORECLOSURE ACTION IS BROUGHT,
AND STILL WITH HIGH VALUES AND
FOR THE FIRST TIME, THE WORK OF
THE LAWYER IS DISCOVERED.
TO HAVE BEEN A FLAW THAT
PREVENTS PEOPLE FROM GETTING
FULL VALUE OF WHAT THEY THOUGHT.
SO WE'VE GOT THE DIRECT EFFECT,
THE LAWYER'S MALPRACTICE NOT
BEING FELT INTO A NUMBER OF --
UNTIL A NUMBER OF ASSIGNMENTS
LATER, LEGITIMATE LIVE.
I'M CONCERNED THAT YOU'RE
SAYING, WELL, SO WHAT.
WE'RE FAR REMOVED AND THE LAWYER
HAD NO RESPONSIBILITY TO THAT
FIVE, SUCTION,!!!!!!!!!!!!!!!!!! SIX, SEVEN, EIGHT TIMES.
>> AS THE COURTS IN ALL 50
STATES.
THERE'S ALL KINDS OF PEOPLE WHO
MAY BE IMPACTED BY A LAWYER'S
NEGLIGENCE AT SOME POINT, BUT
THE NOTION --
>> I MEAN, LAWYERS ARE WELL
AWARE OF THE FACT, AS YOU SAID
HERE, WHEN YOU KEEP DESCRIBING
THE MARKETPLACE, THAT NOT ONLY
IS THIS DONE, IT'S ALMOST
ROUTINE BUSINESS PRACTICE.
THE LAWYER KNOWS THAT ONCE HE
DOES THAT, THAT THIS PARTICULAR
ENTITY THAT HE'S DOING SOMETHING
FOR IS GOING TO ASSIGN, YOU KNOW99!!!!!!
KNOW, RIGHT OUT THAT THAT'S THE
PRACTICE.
>> BUT IN THIS CASE, JUSTICE
ANSTEAD, THERE IS NO QUESTION OF
THAT, REGARDLESS OF THE
ASSIGNMENT AND THIS IS WHERE WE
GET BACK TO THE ORIGINAL NOTION
OF WHAT HE WAS DOING IN THIS
CASE.
THERE'S NO QUESTION THAT
REGARDLESS OF THE ASSIGNMENT,
NAMC HAD FILED A LAWSUIT, IF
THEY FILED ONE TOMORROW AND SAID
WE SOLD THIS LOAN AT A DISCOUNT,
BECAUSE WE KNEW OUR COLLATERAL
WAS IMPAIRED, THEY'D HAVE A
RIGHT OF ACTION.
>> WELL, YOU'RE TALKING ABOUT A
PARTICULAR CASE.
>> THEY WERE THE CLIENT.
>> WE'VE GONE WELL OVER.
>> WE'RE WELL OVER, BUT IF YOU
CAN MAKE SURE YOU CAN GET A
CAPSULE ANSWER TO JUSTICE
ANSTEAD'S QUESTION.
>> I THINK THE ATTORNEY-CLIENT
RELATIONSHIP HAS ALWAYS BEEN
PARAMOUNT IN THOSE KINDS OF
CASES WHERE THERE'S HARM TO
UNINTENDED PARTIES THAT ARE NOT
THE LAWYER'S CLIENT AT THE TIME
OF THE MALPRACTICE.
THAT LAW HAS NOT CHANGED
ANYWHERE THAT I KNOW OF.
BUT EXCEPT FOR THIS NEW NOTION
OF ASSIGNING CLAIMS.
>> THANK YOU.
>> GOOD MORNING, YOUR HONOR.
NANCY GREG!!!!!!!!!! GREGOIRE SUPPORT THE
RESPONDENT, SECURITY NATIONAL.
>> ISN'T MR. KLEIN CORRECT WHEN
HE SAYS OUR DECISION IN CAPLAN
WAS EXTREMELY NARROW AND
ESSENTIALLY SAID THAT ATTORNEYS
PREPARING PRIVATE PLACEMENT
MEMORANDA ARE IN THE SIMILAR
SITUATION TO ACCOUNTANTS
CONDUCTING AUDITS AND THAT'S WHY
WE SAID, THIS IS LIKE A KPMG
CASE, THIS IS LIKE A -- WE'RE
NOT GOING TO EXPAND NOW THE
ASSIGNABILITY OF LEGAL
MALPRACTICE CLAIMS TO EVERYBODY,
BUT THIS IS SO SIMILAR TO AN
ACCOUNTANT, THAT IT WOULD REALLY
BE UNFAIR TO DRAW AN ARTIFICIAL
DISTINCTION IN THESE KINDS OF
CASES?
>> THAT'S CORRECT, YOUR HONOR,
THAT'S WHAT THIS COURT SAID IN
CAPLAN, BUT AS THE 4th D.C.A.
CORRECTLY CONSTRUED CAPLAN, WHAT
THE CAPLAN COURT WAS ALSO, AT
LEAST INDICATING, WAS THAT THERE
WAS NOW NO LONGER IN THE STATE
OF FLORIDA AN ABSOLUTE
PROHIBITION TO THE ASSIGNMENT OF
LEGAL MALPRACTICE CLAIMS.
THE RATIONALE FOR THAT IN CAPLAN
WAS THE FACT THAT THERE WAS THE
FORESEEABILITY THAT THERE WOULD
BE RELIANCE AT SOME POINT DOWN
THE LINE ON THE WORK THAT WAS
DONE.
THIS CASE HAS THE SAME EXACT
PRONG.
>> BUT HOW DOES THE ATTORNEY
REPRESENTING THE MORTGAGEEE I
THINK IT IS, IN MORTGAGES,
ANTICIPATE THAT SOMEWHERE DOWN
THE LINE, THIS -- THIS NOTE IS
GOING TO BE ASSIGNED AND
SOMEBODY ELSE IS GOING TO HAVE
IT AND THEREFORE HE'S
RESPONSIBLE NOT ONLY TO THIS
MORTGAGEE BUT TO SOME OTHER
ASSIGNEE OF THE MORTGAGE?
>> I THINK COUNSEL FOR STERN
ACKNOWLEDGED THAT THESE ARE
COMMONLY -- THESE MORTGAGES ARE
LIKE FLEET FINANCING THAT ARE
PASSED FROM LENDER TO LENDER TO
LENDER.
THEY'RE FACTORED OUT COMMONLY.
>> SO THEN THAT WOULD HAPPEN
WITH ALL KINDS OF CONTRACTS THAT
ARE ENGAGED IN -- THAT ARE LATER
ASSIGNED TO SOMEBODY ELSE,
SOMETIMES LEASES ARE ASSIGNED
FROM ONE LESSOR TO ANOTHER
LESSOR, THEN ARE ATTORNEYS THEN
GOING TO BE LIABLE TO THE
ASSIGNEE OF LEASES?
>> THAT COULD BE, YOUR HONOR.
AT SOME FUTURE CASE, AT SOME
FUTURE TIME, BUT THE COURT ISN'T
ASKED TO DECIDE THAT TODAY HAND
THE COURT USUALLY DECIDES ON THE
FACTS BEFORE IT AND AS NARROWLY
AS POSSIBLE TO DO JUSTICE.
>> HOW ABOUT THE FACTS BEFORE
US, DON'T WE HAVE AN ASSIGNEE
HERE THAT'S ON FULL NOTICE
BEFORE THEY HAVE TALK THE
ASSIGNMENT -- THEY TAKE THE
ASSIGNMENT OF THESE ASSETS AND
HOW FAR DOWN THE LINE AND HOW
BAD CAN IT GET BEFORE AN
ASSIGNEE DOESN'T FAIL TO
RECOGNIZE THAT THEY'RE KNOWINGLY
BUYING A PIG AND A POKE,
INCLUDING THE REASON THAT IT'S
TAKING THE POKE, LAWYER
MISCONDUCT WAY BACK HERE AND YET
STILL SAY, WELL, I DON'T CARE,
THE FLORIDA SUPREME COURT SAID
AT ONE TIME THAT WE MAY BE PART
OF THAT TRAIL, MY GOSH, HOW MANY
TRANSACTIONS WERE THERE IN THIS
CASE?
>> WELL, THE ONES THAT COUNTED
FOR US, YOUR HONOR, WERE FOUR.
IT WENT FROM ONE MORTGAGEEE TO
ANOTHER TO ANOTHER AND THEN TO
SECURITY NATIONAL.
>> AND AT THE TIME SECURITY
NATIONAL BOUGHT IT, IT WAS --
THE LOAN WAS IN DEFAULT, SO IT
WAS HEAVILY DISCOUNTED VALUE
FROM ORIGINAL VALUE AT THAT
TIME, SUIT HAD BEEN FILED, AND
THE MORTGAGE HAD BEEN DETERMINED
TO BE UNENFORCEABLE ON THE
PROPERTY AT THE TIME YOUR CLIENT
PURCHASED THE NOTE AND MORTGAGE,
CORRECT?
>> IT WAS A NONPERFORMING LONE
LOAN.
THE RECORD SHOWS THE DOCUMENTS
THAT WERE ATTACHED TO THE
PLEADINGS FILED, THIS WAS A
NONPERFORMING LOAN, ABSOLUTELY.
>> DO YOU AGREE OR DISAGREE THAT
YOUR CLIENT KNEW OR SHOULD HAVE
KNOWN OF THE STATUS OF THE LOAN,
OTHER THAN SIMPLY
NONPERFORMANCE?
>> KNEW THAT IT WAS A
NONPERFORMING LOAN.
WHETHER IT KNEW IT WAS IN
LITIGATION IS NOT IN THE RECORD,
JUSTICE, AND ANY DISCOUNT IS
ALSO NOT IN THE RECORD.
I THINK WE CAN -- FROM A COMMON
SENSE POINT OF VIEW, PRESUME
THAT IT'S A NONPERFORMING LOAN.
IT HAD BEEN TO BE DISCOUNTED AT
SOME POINT, BUT THAT'S --
>> BUT I GUESS MY QUESTION AND
MY CONCERN IS ON THE MARKETPLACE
OF THE MALPRACTICE ACTION, IS IF
THERE'S A COMPLETELY DIFFERENT
IN THE FACTORING OF THE PRICE, I
WOULD ASSUME OF THE NOTE AND
MORTGAGE, IF YOU HAVE A MORTGAGE
THAT HAS BEEN DETERMINED TO BE
OF NO ENFORCEABILITY.
>> VERSUS A MORTGAGE OF NO
ENFORCEABILITY PLUS A
MALPRACTICE ACTION TIED TO IT.
IN THE MARKETPLACE, I WOULD
ASSUME THEY WOULD CARRY
DIFFERENT VALUES.
>> LET ME RESPOND LIKE THIS THIS
WENT OUT ON SUMMARY JUDGMENT AT
THE TRIAL COURT LEVEL.
THE 4th DISTRICT WENT EXPRESSLY
OUT OF ITS WAY TO SAY THAT THERE
IS NO RECORD OF ANY DISCOUNTS.
CAN WE FROM A COMMON SENSE
PERSPECTIVE PRESUME THERE WAS A
DISCOUNT, BECAUSE THIS WAS A
NONPERFORMING LOAN WITH AN ORDER
GRANTING SUMMARY JUDGMENT, FINAL
JUDGMENT HADN'T BEEN ENTERED AT
THE TIME IT WAS ASSIGNED TO
SECURITY NATIONAL.
CAN WE PRESUME THERE WAS A
DISCOUNT?
PROBABLY WE CAN, BUT FOR
PURPOSES OF SUMMARY JUDGMENT,
SHOULD WE HAVE PRESUME THERE WAS
A DISCOUNT?
NO, WE SHOULDN'T.
>> CAN WE JUST FOLLOW ONE STEM
FURTHER WITH THAT QUESTIONING.
IS THERE AUTHORITY THAT GOES TO
THE ISSUE WITH REGARD TO
PERFORMANCE, OR THE VALUE OF
WHATEVER THAT IS, AND THE RIGHT
TO ASSIGN?
OR WHAT IS ASSIGNED?
IS THERE AUTHORITY THAT TOUCHES
THAT, THAT SAYS NO, YOU CAN'T
ASSIGN ONE OR YES, YOU CAN.
>> IN FLORIDA, NOTES AND
MORTGAGES ARE ASSIGNABLE,
PERIOD, AND -- IT'S A
MARKETPLACE TRANSACTION.
>> HOW ABOUT OTHERS, ARE THERE
OTHER STATES THAT WOULD SAY YOU
CANNOT ASSIGN FOR THE QUESTIONS
THAT WERE JUST PROPOUNDED TO
YOU?
>> NOT OF WHICH I'M AWARE AND IN
FACT IN THE THREE CASES, IN THE
THREE OUT OF STATE CASES WHICH
SECURITY NATIONAL RELIED, THERE
WERE ASSIGNMENTS OF QUESTIONABLE
VALUE BECAUSE THERE WAS THIS
INFECTION AT SOME POINT BEFORE
OF THE ASSIGNMENT.
>> LET ME JUST -- LET ME ASK THE
REVERSE OF THE QUESTION THAT
JUSTICE ANSTEAD ASKED OPPONENT,
AND THAT IS, IF THESE
ASSIGNMENTS CONTINUE ALONG FOR
15, 20 YEARS, AND THE LAWRP
HAS -- LAWYER HAS IN A SENSE,
GOTTEN OUT OF THE PICTURE AND
THERE'S DISCOVERED TO BE A
DEFECT, THAT CAUSE OF ACTION
AGAINST THE LAWYER THAT WAS IN
EXISTENCE, BUT UNDISCOVERED
CONTINUE?
>> IF THE DAMAGE DOESN'T OCCUR
UNTIL THAT LATER POINT IN TIME,
THN!!!!!!!!THEN I JUSTICE, DON'T SEE THAT
AS INDISTINGUISHABLE FROM
MEDICAL MALPRACTICE WHERE THAT
HAPPENS.
>> ONE DISTINCTION I GUESS IS
THAT THE LEGISLATURE HAS SAID IN
MEDICAL MALPRACTICE CONTEXT,
THAT HERE THE LAWYER EXPOSES THE
LAWYER WHO WORKED ON THESE
MORTGAGES TO UNLIMITED LIABILITY
AS FAR AS TIME IS CONCERNED.
IN OTHER WORDS, THIS REPUBLIC
MIND ME OF THE OLD COMP
SITUATION IN WHICH YOU COME
BACK, MAKE A CLAIM 20 YEARS
LATER?
IF YOU THINK THAT'S POSSIBLE --
THERE'S NO -- THE LAWYERS BETTER
BE AWARE OUT THERE THAT THEY'VE
GOT TO KEEP THEIR TAIL ON
INSURANCE.
>> THE SAME IS TRUE WITH
PRENUPS, POST KNOPS, DRAFTING.
THE SIGN OUTSIDE THE DOOR SAYS
COME SHARE WITH US OUR VISION OF
JUSTICE AND I SUGGEST THAT FOR
LAWYERS TO -- AND THIS IS ONE
THE PUBLIC POLICY CONCERNS, AND
I KNOW, I'M ARGUING TWO LAWYERS
AGAINST PROTECTION FOR LAWYERS,
BUT TO PROTECT LAWYERS AGAINST
THIS MALPRACTICE, WHERE THE
ENTITY THAT IS HARMED IS AT THE
END OF THIS ERA OF TIME CAN --
>> THE DIFFERENCE WITH A PRENUP
HAND THOSE THINGS IS THE FACT
THAT THERE IS -- YOU'RE STILL
DEALING WITH THE PERSON WHO YOU
HAD AN ATTORNEY-CLIENT
RELATIONSHIP WITH.
AND IN THE SCENARIO THAT JUSTICE
ANSTEAD HYPOTHETICAL OUT LUNE,
THAT PERSON HAS LONG SINCE GONE
AWAY.
AS HAVE YOU, THE LAWYERS.
YOU'RE DEALING WITH SOMEBODY 20
YEARS DOWN THE ROAD.
HAS NOTHING TO DO WITH EITHER
ONE OF YOU.
>> ONE OF THE THINGS THAT I
TRIED TO EXPLAIN IN MY BRIEF IS
THAT THERE WERE TWO REASONS THAT
WE ARGUED TO THE 4th DISTRICT
THAT THE SUMMARY JUDGMENT AT THE
TRIAL COURT SHOULD BE
OVERTURNED.
AND ONE WAS THAT HERE THERE IS
THE ATTORNEY-CLIENT RELATION
SHOP.
-- RELATIONSHIP.
SECURITY NATIONAL WAS STERN'S
CLIENT.
THIS COURT COULD DRAFT JUST AS
IN CAPLAN AND KPMG COULD CRAFT A
VERY NARROW DECISION THAT ALLOWS
FOR THIS CONCERN OF YOURS,
JUSTICE WELLS, WHILE DOES
JUSTICE FOR THE END USER.
>> HET ME SPEAK AS TO THE JUST
TOSS ISSUE.
-- TO THE JUSTICE ISSUE.
IT GOES TO THE PROXIMATE CAUSE
MAYBE AND THE DAMAGE.
BUT THE DAMAGE OCCURRED IN THIS
CASE WHEN THE ACTION WAS
DISMISSED IN PART.
THE REAL DAMAGE WHEN THE FINAL
JUDGMENT WAS ENTERED BY THE
TRIAL COURT, CORRECT?
>> THE NEGLIGENCE OCCURRED WITH
THE DISMISS HALL.
THE DAMAGE OCCURRED WHEN THE
SECOND D.C.A. AFFIRMED THE FINAL
JUDGMENT THAT THE TRIAL COURT
HAD ENTERED AGAINST SECURITY
NATIONAL.
>> SO IT'S YOUR POSITION THAT
THERE WAS NO CAUSE OF ACTION
AVAILABLE TO MANC UNTIL THE
FINAL JUDGMENT WAS ENTERED?
>> THAT'S EXACTLY RIGHT.
>> JUSTICE PARIENTE HAD A
QUESTION.
[INAUDIBLE]
>> THERE'S BB A --
>> WHAT THEY PAID IS THEIR
DAMAGE.
>> BUT THEN THAT WOULDN'T BE AN
ASSIGNMENT, THEN YOU HAVE YOUR
OWN CLAL.
IF THEY'RE THE ASSIGNEE OF THE
CLAIM, WHY WOULDN'T THEY HAVE
THE ASSIGNOR'S DAMAGES --
>> BECAUSE IN A COMMERCIAL
CONTEXT, THE ASSIGNMENT IS FOR
VALUE.
EACH ONE OF THESE MORTGAGES, AS
IT'S ASSIGNED, IS ASSIGNED A
VALUE, AND IT MAY BE A
DISCOUNTED VALUE AND IT MAY NOT
BE A DISCOUNTED VALUE AND THAT'S
NOT IN THE RECORD.
>> JUSTICE PARIENTE.
[INAUDIBLE]
>> THAT WAS THE FIRST QUESTION.
THE SECOND QUESTION GOES TO
PUBLIC POLICY --
[INAUDIBLE]
>> I THINK THAT IT'S A DUAL
ANSWER.
FIRST, THERE MUST BE, IN A CASE
LIKE THIS, WHERE STERN CONTINUED
AS LAWYER ALL ALONG, THE
ATTORNEY-CLIENT PRIVILEGE
TRAVELED FROM MORTGAGEE TO
MORTGAGEE AND THAT'S CERTAINLY
THE VAI NARROW CONTEXT -- VERY
NARROW CONTEXT HERE, BUT SECOND,
MORE BROADLY VIEWING THIS, IF AN
ASSIGNOR ASSIGNS ALL RIGHTS
ATTENDANT TO A CONTRACT, A
MORTGAGE, TO AN ASSIGNEE, THEN
THERE IS A PRESUMPTION.
I DISAGREE THAT IT HAS TO BE
EXPLICITLY STATED THAT I'M ALSO,
YOU KNOW, ASSIGNING THE
ATTORNEY-CLIENT PRIVILEGE.
OR WAIVING.
THERE IS A PRESUMPTION THAT IF
YOU HAVE ALL RIGHTS ATTENDANT TO
THIS ENTITY, VEHICLE, WHATEVER
IT IS, YOU ALSO HAVE THE RIGHT
TO KNOW WHAT HAPPENED.
[INAUDIBLE]
>> AND THAT -- YES, THAT IS
CORRECT, JUSTICE, AND THAT'S
WHAT HEADLAND AND RICHTER AND
CYBRUS DECIDED.
[INAUDIBLE]
[INAUDIBLE]
>> I THINK IF NEMC HAD
TERMINATED STERN AT THAT POINT
AND SUED FOR MALPRACTICE, STERN
WOULD HAVE HAD AN EXCELLENT
DEFENSE THAT EMC HAD NOT PURSUED
ITS APPELLATE REMEDY AS IT WAS
OBLIGATED TO DO UNDER BLOOMBERG
AND WAS BARRED FROM PURSUING A
MALPRACTICE CLAIM.
AND THAT'S THE -- THAT'S THE
WHOLE RATIONALE BEHIND THE 4th!!!!!!
4TH D.C.A.'S OPINION.
[INAUDIBLE]
[INAUDIBLE]
>> AND THAT'S WHAT YOUR HONOR
SAID IN BLOOMBERG.
TO GIVE THE ATTORNEY AN
OPPORTUNITY TO CURE THE DEFECT
FIRST BEFORE YOU PURSUE THE
ATTORNEY.
THE 4th D.C.A. SAID IF STERN'S
ARGUMENT ON THIS, YOU COULD HAVE
SUED THEN, YOU DIDN'T HAVE TO
TAKE AN APPEAL, IS ACCEPTED AT
THIS TIME, IT MAKES STERN'S
ARGUMENT TO THE 2nd D.C.A.
BORDERLINE FRIVOLOUS, BECAUSE TO
THE 2nd D.C.A., STERN ARGUED
VIGOROUSLY THAT THE FINAL
JUDGMENT AGAINST THE MORTGAGEEE
WAS INCORRECT.
>> LET'S ME ASK YOU A QUESTION
THAT ALSO ARISES OUT OF THE
CONTEXT OF SOME OF THESE CASES,
AND THAT IS THAT WHEN WE HAVE
EXTENDED, OK, RIGHTS OR BEEN
FITS TO THIRD PARTIES OR
COLLATERAL PARTIES OR OF WHAT!!!!!!!!
WHAT, -- OR WHATEVER, ALMOST
IMPLICIT IN OUR REASONING IS THE
INNOCENCE OF THIRD PARTIES.
HOW DOES THAT FACTOR IN THIS
CASE IN TERMS OF THE KNOWLEDGE
OF YOUR CLIENT WITH REFERENCE TO
THE STATE?
OR HEALTH OF THIS MORTGAGE AT
THE TIME?
DOES YOUR CLIENT FALL INTO THIS
CATEGORY OF BEING INNOCENT
PURCHASER OF ASSIGNEE OF THIS
MORTGAGE?
>> ONE OF THE REASONS THAT
FLORIDA COURTS ARE CHERRY ABOUT
SUMMARY JUDGMENT IS QUESTIONS
LIKE THOSE REMAIN UNANSWERED.
>> SO AS FAR AS WHAT YOUR CLIENT
KNEW AT THE TIME, THE RECORD IS
CLOSED --
>> THE 4th D.C.A. EMPHASIZED
THAT THERE IS NOTHING IN THE
RECORD THAT SUGGESTS THAT ANY
ONE OF THE ASSIGNEES KNEW WHAT
WAS GOING ON.
SHOULD THEY HAVE?
MAYBE THEY SHOULD HAVE, BUT
THAT'S NOT THE KIND OF QUESTION
THAT SHOULD BE ANSWERED ON
SUMMARY JUDGMENT.
>> AND THERE'S NO INFORMATION
ABOUT THAT IN HOUR RECORD?
>> NOTHING WHATSOEVER, JUSTICE.
>> A 14 DATIONAL QUESTION AND
I'M CONCERNED THAT --
FOUNDATIONAL QUESTION AND I'M
CONCERNED THAT YOU'VE CONCEDED
AWAY YOUR CAUSE OF ACTION THIS
MORNING.
EUROPE SIGNIFICANCE HAS SAID
THAT CAPLAN DOESN'T SAKE US
WHERE THIS CASE IS.
I THOUGHT I HEARD YOU SAY THAT
CAPLAN WAS NOT ON POINT.
BUT THE 4th DISTRICT SAID THE
SIGNIFICANCE OF CAPLAN IS NOT A
NARROW POINT, PERTAINING TO THE
ATTORNEY-CLIENT PRIVILEGE, BUT
RATHER A MORE BROAD VIEW THAT
THE DOOR IS NOW OPEN TO
ASSIGNMENT OF LEGAL MALPRACTICE
ACTIONS INCEPTIONAL CASES WHICH
DO NOT FULLY IMPLICATE THE CORE
POLICY CONCERNS UNDERLYING THE
GENERAL RULE, SO IS CAPLAN WRONG
OR IS CAP -- IS CAPLAN BROAD OR
SPECIFIC?
>> CAPLAN OPENED THE DOOR.
THE NARROW HOLDING OF CAPLAN IS
THAT YOU CAN SUE AN ACCOUNTANT
FOR AUDITING IN A PUBLIC
CONTEXT.
THE BROADER VIEW OF CAPLAN --
>> IT'S NOT BASED ON THE POLICY
CONCERNS AS EXPRESSED BY THE 4th99!!!!
4TH DISTRICT, SO YOU DISAGREE
WITH THE 4th DISTRICT OPINION?
>> NO, JUSTICE, I DON'T.
CAPLAN SAID THE EXCEPTIONAL
CASES ARE NOT NOW BARRED BY THE
ANTI-ASSIGNMENT LAW.
>> SO IT IS BROADER HE THEN.
>> WE'RE ARGUING THAT THIS IS
ONE OF THOSE EXCEPTIONAL CASES.
AND THE 4th DISTRICT WENT -- YOU
KNOW, THE PRIMARY REASON FOR THE
ANTI-ASSIGNMENT RULE IS THE
PUBLIC POLICY CONCERNS, THE
MARKETPLACE CONCERNS, AND THE
CONFIDENTIALITY CONCERN.
THE 4th DISTRICT ANALYZED EACH
ONE OF THE PUBLIC POLICY
CONCERNS AND IT DOESN'T EXIST
HERE, AND THAT'S WHY WE ARGUED,
ON THE JURIES DUCKSAL LEVEL, WE
ARGUED THAT THERE WAS NO
CONFLICT FOR THIS COURT, THAT
THE COURT SHOULDN'T ACCEPT
CONFLICT.
>> WELL, IF CAPLAN IS REALLY A
VERY NARROW POINT, WHY IS CAPLAN
NOT MISHEY PLIED BY THE 4th
DISTRICT HERE?
>> BECAUSE, IN CAPLAN, YOUR
DISSENT, CHIEF JUSTICE, SAID WE
SHOULDN'T GO THERE --
>> WE HAVE.
WE DID.
>> EXACTLY, YOU DID.
WHAT CAPLAN SAID IS THERE IS NOW
A CRACK THROUGH WHICH
EXCEPTIONAL CASES MY TRAVEL FOR
A COURT TO DETERMINE WHETHER
THIS IS AN EXCEPTIONAL CASE.
THE TRIAL COURT DIDN'T DO THAT
HERE.
THE TRIAL COURT APPLIED KPMG,
WHICH THE COURT SPECIFICALLY
RECEDED FROM IN CAPLAN, TO SAY
NO, YOU JUST -- AND THE COURT
WAS TROUBLE BY THAT.
THE COURT SAID I ESSENTIALLY
DON'T THINK THIS IS THE RIGHT
RESULT, BUT I FEEL THAT I'M
BOUND, AND AT THE 4th LEVEL, WE
HAD ASKED FOR A STAY PENDING
ISSUANCE OF THE DECISION IN
CAPLAN BECAUSE WE KNEW THAT
CAPLAN WAS GOING TO HAVE SOME
EFFECT ON THIS CASE, AND IN
FACT, IT HAS.
WE BELIEVE THAT THE 4th
DISTRICT'S OPINION IS ABSOLUTELY
CONSISTENT WITH CAPLAN.
>> IF YOU WOULD BRING YOUR
ARGUMENTS TO A CONCLUDE.
>> FOR THAT REASON WE
RESPECTFULLY REQUEST THAT THE
COURT APPROVE THE 4th D.C.A.
OPINION.
ALL TARNIVELY THAT THE COURT --
ALTERNATIVELY THAT THE COURT
FIND THAT IT WAS WITHOUT
CONFLICT RESOLUTION IN THE FIRST
PLACE.
>> IF YOU COULD SAY CONCISELY
WHAT YOU NEED TO SAY.
>> REALLY JUST TWO POINTS.
BOTH OF THEM GO TO THE -- ONE
GOES TO THE MARKETPLACE ISSUE.
IF SOMEONE IS DISCOUNTING AND A
PARTY THAT PURCHASES RECEIVES A
DISCOUNTED PRICE AND THAT
DISCOUNT IS WHOLLY OR IN PART
DUE TO THE FACT THAT THE
COLLATERAL HAS BEEN IMPAIRED,
THAT PERSON HAS A CAUSE OF
ACTION, AND NOBODY HAS ADDRESSED
THE POINT THAT NAMC NIP COULD
COME IN HERE HAND SAY WE SOLD
THIS PARTICULAR NOTE AT A
DISCOUNT BECAUSE OF THE FACT
THAT THERE WAS A SUMMARY
JUDGMENT ENTERED AGAINST US AND
WE DIDN'T WANT TO PURSUE IT.
>> DOESN'T REALLY GO TO THE
ASSIGNABILITY ISSUE, IT GOES TO
DAMAGES OR SOME OTHER ASPECT,
DOESN'T IT?
>> IT GOES TO THE NOTION THAT
THERE WAS NO CAUSE OF SOME%%--ppOTHER ASPECT.%%--pp>> IT GOES TO THE NOTION%%--ppTHERE WAS NO CAUSE OF ACTION%%--ppCOULD BE ASSERTED UNTIL THE%%--ppAPPEAL WAS OVER.%%--ppTHEY HAD A RIGHT ACTION%%--ppINVESTED AT THAT THE POINT%%--ppIF YOU LOOK AT THE DECISION%%--ppWE CITED IN OUR BRIEF.%%--ppOUR CASE SHOULD KNOT%%--ppREQUIRED TO SUFFERS A LOSS%%--ppAND ATTRIBUTES LOSS TO LEGAL%%--ppMALPRACTICE TO DETERMINE%%--ppFINE APPELLATE%%--ppDETERMINATION.%%--ppTHEY HAD A RIGHT OF ACTION.%%--pp>> THANK YOU VERY MUCH.%%--ppFOR THIS VERY INTERESTING%%--ppPROBLEM.%%--ppEXCELLENT ARGUMENTS.%%--ppI WOULD LIKE TO TAKE%%--ppOPPORTUNITY THIS MORNING TO%%--ppWELCOME TO THE COURT, THE%%--ppSTUDENTS FROM THE LEGAL%%--ppBUSINESS, ENVIRONMENTAL%%--ppCLASS AT FLORIDA A&M%%--ppUNIVERSITY.%%--ppWE'RE GLAD YOU'RE HERE.%%--ppWE COAL YOU.%%--ppWE INVITE YOU BACK FROM TO%%--ppTIME.%%--ppI DON'T KNOW WHETHER THIS%%--ppMEANS YOU ONLY DEAL WITH%%--ppBUSINESS CASES THAT INVOLVE%%--ppENVIRONMENTAL ISSUES AS.%%--ppTHIS MORNING WAS A BUSINESS%%--ppKIND OF CASE AND I THINK IT%%--ppWAS VERY APPROPRIATE.%%--ppFOR YOU TO BE HERE.%%--ppSO WE WELCOME YOU.%%--ppPLEASE COMEBACK.%%--ppWE'LL TAKE OUR MORNING%%--ppRECESS.%%--pp>> > PLEASE RISE