Bank of New York Mellon (the Bank), Bank of America (BANA), Carrington Mortgage Services (Carrington), and the Bank’s attorney (Callahan) all petitioned the Third DCA for relief from an order to show cause issued by Judge Butchko (Miami Dade County circuit judge) in what the Third DCA described as “a straightforward mortgage foreclosure case.” Carrington Mortgage Services, LLC v. Nicolas, 3D21-1300, 2021 WL 5499732, at *1 (Fla. 3d DCA Nov. 24, 2021).
The Bank obtained a final judgment of foreclosure in October 2020.[i] In May 2021, one day before the scheduled foreclosure sale, the borrower (Nicolas) moved to set aside the final judgment based on alleged fraud.[ii] Nicolas claimed, based on expert testimony from a “Certified Fraud Examiner,” that the current loan servicer was BANA, not Carrington.[iii] Ostensibly, this was relevant based on testimony offered at trial. An employee of Carrington, Bryan Heifner, offered conflicting testimony that “Carrington took over as the loan servicer in 2017.” Judge Butchko suspended the hearing for 30 days so the parties could conduct additional discovery on the issue.
Just four days later, while the matter remained suspended, Nicolas moved for an order to show cause why the Bank, BANA, Carrington and Callahan “should not be held in criminal contempt for perjury for asserting that Carrington took over as loan servicer.” Nicolas supported his motion with an affidavit from his “expert” fraud examiner. BANA filed an opposing affidavit attesting BANA transferred the servicing rights to Carrington in 2017. BANA attached a copy of an agreement signed by both BANA and Carrington officials, dated October 2, 2017, confirming the transfer.
“Nevertheless…two business days after Nicolas filed her motion for order to show cause, and without directing any response from Petitioners or holding a hearing” Judge Butchko granted Nicolas’ motion. The show cause order required the Petitioners to show cause why they “should not be held in indirect criminal contempt” and sanctioned with jail time, adjudication or and/or probation for their fraud on the court. The Petitioners sought a writ from the Third DCA prohibiting Judge Butchko from proceeding with the contempt hearing and quashing the show cause order.[iv] The Petitioners also requested the Third DCA reassign the matter to another judge upon remand.[v]
The Third DCA granted all the relief requested by the Petitioners. Acknowledging that prohibition was an extraordinary remedy, the Court explained it was warranted here where Judge Butchko committed “gross error” by escalating a “narrow factual dispute” over the correct servicer to a “charge of perjury…” The Court noted the show cause order failed to identify “the author, date, or content of the charged perjury.”[vi] The Court elaborated, “with some curiosity” that Judge Butchko even failed to include Bryan Heifner, the person who ostensibly committed the perjury, in the group charged with perjury.
Lastly, the Court elaborated that Judge Butchko’s inclusion of the Bank’s attorney as a “defendant-contemnor” threatened to create “a chilling effect on practitioners that reverberates beyond the boundaries of the instant case.”[vii] The Court explained “[i]t is not a crime for a lawyer to present his or her client’s side of a case.” The Court, relying on one of its prior holdings[viii], concluded “the profound nature of the trial court’s error” is demonstrated by the fact “virtually every evidentiary hearing would give rise to numerous direct contempts against the witnesses for the losing side, and the orderly resolution of matters…seriously disrupted.”
The Court also agreed with the Petitioners that recusal of Judge Butchko was justified based on her comments which questioned the credibility of the bank’s witnesses and her “actions in issuing an order to show cause.”[ix] The Court explained, based on this record, “reasonably prudent” lawyers and litigators could properly surmise they would not receive a fair hearing before Judge Butchko. The Court issued the writ of prohibition, quashed the order to show cause, prohibited Judge Butchko from presiding over future proceedings in the matter, and remanded the case for assignment before another judge.
[i] Nicolas, at *1.
[ii] Nicolas, at *1-2.
[iii] Nicolas, at *2. Future references and quotations to this case are to the same citation until indicated otherwise.
[iv] Nicolas, at *5.
[v] Nicolas, at *4. Future references and quotations to this case are to the same citation until indicated otherwise.
[vi] Nicolas, at *3.
[vii] Nicolas, at *4. Future references and quotations to this case are to the same citation until indicated otherwise.
[viii] The Court quoted the majority opinion in Emanuel v. State, 601 2d 1273 (Fla. 4th DCA 1992).
[ix] Nicolas, at *4-5.