A recent Daily Business Review story by Samantha Joseph, “In Fight for Attorney Fees ‘Prevailing Party’ Becomes Slippery Notion,” reports that foreclosure defense attorney Jeffrey H. Papell thought it was a done deal.  He’d convinced Miami-Dade Circuit Judge Monica Gordo to dismiss a bank’s case against homeowner Katherine Radosevich and had an order entitling him to attorney fees for that work.  But a new appellate court ruling unpacking the nuances of “prevailing party” means Papell will have to return to the trial court to fight for his fees.

The decision from the Third District Court of Appeal remanded the case to Gordo to determine whether Radosevich was really the winner, or had “substantially prevailed,” in light of a post-trial deal that gave the bank the litigation spoils.

The ruling turned on whether it was the homeowner or the bank who emerged victorious after Radosevich agreed to a short sale that left her with no home or proceeds.

“The appellate court is saying you can win the case on the merits, but if someone takes an appeal …. you’ve possibly lost your ability to collect fees,” Papell said.

Papell and his firm, Legal Save, represented Radosevich in a residential foreclosure suit by the Bank of New York Mellon.

The bank’s two-count complaint in June 2009 sought to foreclose on a promissory note and mortgage and reclaim a lost note. It included an attachment — a copy of an unendorsed note that listed Countrywide Home Loans Inc. as the lender, according to details in the appellate ruling.

More than a year later, the bank filed another copy of the original note — this time with documentation showing the bank had ownership of the loan prior to filing the suit. That filing included an undated blank endorsement that showed a July 21, 2009, assignment, but a May 19, 2009, effective date.

At trial, Papell challenged the credibility of a bank witness, who testified the lender lost the note. He turned the case in Radosevich’s favor by pointing out discrepancies in the two copies of the note and then succeeded on a motion for involuntary dismissal of the bank’s lawsuit.

The Bank of New York Mellon appealed to the Third DCA. While that challenge was pending, Papell filed to collect attorney fees and costs as the prevailing party under Section 57.105(7) of the Florida Statutes, and under a provision in the note and mortgage.

Before the appellate court decided the case, the bank and Radosevich agreed to sell the multimillion property through a short sale. Papell said he was not part of the arrangement, and never saw any agreement.

Karin L. Posser, N. Mark New II and William L. Grimsley of McGlinchey Stafford in Jacksonville represented the bank. They did not respond to requests for comment by press time.

The sale prompted the bank to dismiss its case before the Third DCA.

But that deal would later come back to haunt Radosevich’s lawyer, who now found the bank objecting to his fees.

The question for Gordo: Who prevailed? Was it the bank, which received about $1 million from the sale, or Radosevich, who got nothing?

Papell claimed victory.

“No matter how you slice this cake, my client won,” he said. “She was released from (debt of) $1.5 million, had the use of a multimillion-dollar home for seven years and paid no mortgage, no taxes, no insurance. … I think that’s a win.”

But the trial judge ruled for the bank.

“[BNY Mellon] received considerable proceeds in exchange for the satisfaction of the underlying mortgage and note, and Radosevich lost her home and received no proceeds from the sale,” the trial court found.

But the Third DCA called for a deeper analysis, reversing the lower court and remanding the case for an evidentiary hearing.

“While we hold that the trial court had the authority to reconsider its earlier entitlement order, and to consider whether actions and events occurring during the pendency of the prior appeal affected that earlier determination, the fact remains that the court must make such a determination based upon the record before it,” Judge Kevin Emas wrote in a unanimous decision with Judges Ivan F. Fernandez and Robert J. Luck. “In this case, the record was simply inadequate for the trial court to make such a determination.”