Party Notice: 6654 NW 27 AVENUE LLC V PINCUS CAPITAL LLC

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                                Filing # 103508701 E-Filed 02/18/2020 04:57:09 PM

IN THE CIRCUIT COURT OF THE
15" JUDICIAL CIRCUIT

PALM BEACH COUNTY, FLORIDA ;

 

Case No. 50-2017-CA-013348-XXXX-MB (AD)
6654 NW 27 AVENUE LLG, a Florida limited liability company,

Plaintiff/Counter-Defendant,
Vv.

PINCUS CAPITAL LLC, a Delaware limited liability company,
MARK BENUN, an individual,

Defendants/Counter-Plaintiffs,

THE BANYANS AT BROKEN SOUND PROPERTY OWNERS?
ASSOCIATION, INC., a Florida not-for-profit corporation,
COUNTRY CLUB MAINTENANCE ASSOCIATION, INC., a
Florida not-for-profit corporation, Unknown Parties in Possession,
if living, and all Unknown Parties claiming by, through, under or
against the above named Defendant(s), who are not known to be
dead or alive, whether said Unknown Parties may claim an interest

as Spouse, Heirs, Devisees, Grantees or Oiner Ciaiiiaiits,

Defendants,
v.

LAWRENCE SHAPIRO, an individual,.

A Aditinnal Canntar-Nefendant

AUGUOnaL COU Cac aee,,

/
PLAINTIFF/COUNTER-DEFENDANTS’ CLOSING ARGUMENT IN
SUPPORT OF MOTIONS FOR ATTORNEYS’ FEES AS SANCTIONS
PURSUANT TO FLORIDA STATUTES §§ 57.105(1) AND (2)

The Plaintiff/Counter-Defendants, 6654 NW 27 AVENUE LLC (“6654”) and
LAWRENCE SHAPIRO (“Shapiro”) (collectively, the “Plaintiff/Counter-Defendants”),
pursuant to the court’s directive at the evidentiary hearing on January 29, 2020 on their Motion
for Attorneys’ Fees and Costs as Sanctions Pursuant to Florida Statutes §§ 57,105(1) and (2) as
to Certain Counterclaims and Defenses (filed 61/67/19) and their Motion for Atiomeys’ Fees and

Costs as Sanctions Pursuant. to Florida Statutes §§ 57.105(1) and (2) as to Certain Affirmative

CHEN. MADARA DEAGCU AAIINITY FI CUADARID DARY AI cRY AniMomMnnn Aas.£7-nA NA
TILCY. PALIVEDOAUN UVUUINIT, CL, ONARUIN EA. DUUN, ULENN, UZ 1orzucu U4.01 U7 FIDefenses (filed 01/08/19) (collectively, the “57.105 Motions”), hereby submit their closing
argument in support of their entitlement to attorneys’ fees and delay damages under Florida
Statutes § 57.105! and state:

INTRODUCTION

On December 11 and 12, 2018, the Plaintiff/Counter-Defendants, through their

undersigned attorneys, served the Defendants/Counter-Plaintiffs, PINCUS CAPITAL LLC
(“Pincus”) and MARK BENUN (“Mr. Benun”) (collectively, the “Defendants/Counter-
Plaintiffs”), through their attorney at the time, STUART ZOBERG, ESQ. (“Mr. Zoberg”), with
the two 57.105 Motions, respectively, warning them that there was no factual or legal support for
several counterclaims and affirmative defenses they had asserted in their Answer, Affirmative
Defenses and Amended Counterclaim? and providing them with 21 days within which to
withdraw those particular claims and defenses.

Thereafter, the Defendants/Counter-Plaintiffs and their attorney, Mr. Zoberg, refused to
withdraw the challenged counterclaims and affirmative defenses during the statutory safe harbor
period, thereby exposing themselves to liability for attomeys’ fees-and delay damages as

sanctions under Florida Statutes § 57,105.

! While the Plaintiff/Counter-Defendants also requested costs in their 57.105 Motions, they
hereby withdraw that request for costs based on the prevailing case law that a party can only
recover attorneys’ fees and delay damages, but not costs, as sanctions under Florida Statutes §
57.105(1) and (2).

2 On October 2, 2018, the Defendants/Counter-Plaintiffs filed their Answer, Affirmative
Defenses and Amended Counterclaim as an exhibit to their Motion to Amend Counterclaim. On
October 11, 2018, the court entered its Agreed Order wherein it deemed that pleading filed
(except as to punitive damages).

3 There was discussion at the January 29, 2020 hearing that Mr. Zoberg may have tried to further
amend his clients’ Answer, Affirmative Defenses and Counterclaim to drop some of the

BA kets Liners thant atinmnt avian if mada wae wall havand the
TrIVOIOUS GELENSES AMG COUMLETCIaINS; MOWEVET, Wal aticiipt, CVen i Maal, Was Weu vvyure uw
21-day safe harbor period, nor did he ever follow through to obtain an order approving the filing
of any such further amended pleading. Thus, 6654 was forced to defend against the original

frivolous filings all the way through summary judgment and/or trial.

2On January 29, 2020, the court held an evidentiary hearing on entitlement only on the
57.105 Motions. Although Pincus and Mr. Benun, personally or through counsel, failed to
appear at the hearing, thereby waiving any argument they might have had in opposition to the

Plaintiff/Counter-Defendants’ entitlement to attorneys’ fees and delay damages as sanctions
against them, 6654 announced it was only seeking sanctions against Mr. Zoberg. Mr. Zoberg
and his own attorney appeared at the hearing and argued against the imposition of sanctions
under § 57.105 against him. However, through Mr. Zoberg’s testimony, it became clear that,
during the entire course of this case, he had simply relied on Mr. Benun’s outlandish suggestion
that there existed some sort of “side agreement” between the parties, without any evidence of
same, and his own personal valuation of the property subject to foreclosure, without any
professional appraisal of same, as grounds for the majority of his clients’ counterclaims and
affirmative defenses, which included purported violations of Florida’s Consumer Collections
Practices Act (FCCPA), Florida Statutes Chapter 687 (unlawful usury and loansharking), Florida
Statutes Chapter 494 (SAFE Mortgage Licensing Act), Florida Statutes § 697.05 (balloon note
language), fraud, material breach, lack of standing and unclean hands on the part of the
Plaintiff/Counter-Defendants, all without any basis in fact or law.

Based on the evidence before the court and the points and authorities set forth herein, the
court should enter an order granting the 57.105 Motions as to entitlement against the
Defendants/Counter-Plaintiffs and Mr. Zoberg and scheduling a hearing on the 57.105 Motions
as to amount.

FLORIDA STATUES § 57.105

Florida Statutes § 57.105 provides, in pertinent part:

(i) Upon the court’s initiative or motion of any party, ine couit snait
award a reasonable attorney’s fee, including prejudgment interest, to be paid to

the prevailing party in equal amounts by the losing party and the losing party’s
attorney on any claim or defense at any time during a civil proceeding or action in

3which the a finds that the losing party or the losing party’s attorney knew or

TT Tam that ~ alates nu dofonco whon initially nvocontod to th
SHOild Have KiGwi thal & Claim oF Gejense when Initially presented te

at any time before trial:

 

 

(a) Was not supported by the material facts necessary to establish the
claim or defense; or :

(b) Would not be supported by the application of then-existing law to
those material facts.

(2) At any time in any civil proceeding or action in which the moving
party provides by a preponderance of the evidence that any action taken by the
opposing party, including, but not limited to, the filing of any pleading or part
thereof, the assertion of or response to any discovery demand, the assertion of any
claim or defense, or the response to any request by any other party, was taken
primarily for the purpose of unreasonable delay, the court shall award damages to
the moving party for its reasonable expenses incurred in obtaining the order,
which may include attorney’s fees, and other loss resulting from the improper
delay...

(4) A motion by a party seeking sanctions under this section must be
served but may not be filed with or presented to the court unless, within 21 days
after service of the motion, the challenged paper, claim, defense, contention,

allegation, or denial is noi withdrawn or appropriaiely correcied.

[emphasis added]

In short, Florida Statutes § 57.105(1) provides for an award of attorneys’ fees “if

evidence establishes that the party or attorney knew or should have known that the claim or

defense was (a) not supported by material facts or (b) not supported by the application of existing

law.” Gahn v. Holiday Property Bond, Ltd., 826 So, 2d 423, 426 (Fla. 2" DCA 2002).

Moreover, Florida Statutes § 57.105(2) “provides for sanctions against parties and

counsel who interpose frivolous defenses or pursue litigation for the purposes of unreasonable

delay.” Infiniti Employment Solutions, Inc. v. MS Liquidators of Arizona, LLC, 204 So. 3d 550,

552 (Fla. 5 DCA 2016).

Indeed, it is an abuse of discretion to deny attorneys’ fees when warranted under Florida

Statutes § 57.105. Paul v. Avrahami, 216 So. 3d 647, 650 (Fla. 4" DCA 2017) (holding that §

57.105(1) “requires that the trial court ‘shall’ award attorneys’ fees”). [emphasis added]

4In Korte y. US Bank National Association, 64 So. 3d 134 (Fla. 4"* DCA 2011), the court
confirmed that Florida Statutes § 57.105 applies to defendants and their attorneys in foreclosure
actions:

Here, we affirm that section 57.105 is applicable in mortgage foreclosure actions
to sanction defendants and/or their counsel for asserting defenses which they
know or should know are not sunported by the material facts of the case, but are
nonetheless asserted for the primary purpose of delaying the entry of a final
judgment. Furthermore, those who assert such knowingly unsupportable defenses
may find themselves liable not just for a portion of the opposing party’s attorney’s
fees, but also for other losses that a trial court finds resulted from the improper

delay. 64 So. 3d at 135.

Tn

  

ts v. PNC Bank, N.A., 263 So. 3d 119 (Fla. 5 DCA 2018), the court also
sanctioned mortgage foreclosure defendants for asserting defenses without supporting evidence:

The trial court awarded the sanctions because Appellants and their counsel
persisted in asserting a defense that they knew or should have known was not
supported by facts or law... there was no evidence to support that claim.... The
trial court determined that Appellants’ defense was implausible, frivolous, and
that their refusal to withdraw the defense... was unsupportable. Specifically, the
trial court found that Appellants’ defense was not supported by any documentary
evidence and that the testimony of [Appellant] was internally inconsistent and not
credible..,. [T]he trial court included... its specific finding that “[Appellants’
attorney] and his clients should have known... that the Defendants’ endorsed note
defense was not supported by the material facts and contradicted by
overwhelming evidence.” Accordingly, the trial court found PNC was entitled to
section 57.105 sanctions... for having to litigate and defend against the “endorsed
note” defense.... [T]he trial court further stated, “The defense should have been
withdrawn upon the realization that it was not supportable and was, in fact,
frivolous.” 263 So. 3d at 120-22.

FRIVOLOUS CLAIMS AND DEFENSES
In this case, in deciding the 57.105 Motions, the court should “separately evaiuate” each
of the counterclaims and affirmative defenses referenced therein. Infiniti Employment Solutions,
204 So. 3d at 553-54 (citing Airtran Airways, Inc. y. Avaero Noise Reduction Joint Venture, 858
So. 2d 1232, 1233 (Fla. 5"" DCA 2003) (“the trial court should have separately evaluated each of
the three affirmative defenses and determined at what point ‘defense activity became

unsupported””)).This case, just like Gahn, Infiniti, Paul, Korte and Roberts, is a clear-cut case for
sanctions under Florida Statutes § 57.105. The Defendants/Counter-Plaintiffs had “no excuse for
failing to withdraw” the challenged claims and defenses, especially when the Plaintiff/Counter-
Defendants “repeatedly warned” that each of them could not be supported by facts or law.’ Paul,
216 So, 3d at 651,

Then, long after the § 57.105 safe harbor period had expired, each of the
Defendants/Counter-Plaintiffs’ challenged counterclaims and affirmative defenses were
dismissed, one by one, either by the court on summary judgment upon its specific finding that
there was absolutely “no evidence” to support the claim or defense, or by the
Defendants/Counter-Plaintiffs, themselves, on the eve of trial, just like the defendant in Infiniti
Employment Solutions, 204 So. 3d 550.

From the time Mr. Zoberg and his clients filed their Answer, Affirmative Defenses and
Amended Counterclaim on October 2, 2018 (and, for some counterclaims and affirmative
defenses, from the time they filed their initial Answer, Affirmative Defenses and Counterclaim
on February 20, 2018), one thing was clear — Mr. Zoberg and his clients had pursued their
frivolous claims and defenses therein “primarily for the purpose of unreasonable delay,” thereby
stringing this case along for years so as to enable Mr. Benun to reside rent-free in the home for
close to 24 months, and therefore warranting an award of not just attorneys’ fees, but also delay
damages, against them.

In particular, as set forth in the 57.105 Motions, the Defendants/Counter-Plaintiffs should
have withdrawn the following counterclaims and affirmative defenses they had asserted without
any basis in fact or law:

«The undersigned testified (in narrative form) at the January 29, 2020 hearing that he

“repeatedly” warned Mr. Zoberg that his defenses and counterclaims lacked any merit and that
he should heed those warnings and pare down those pleadings. Each time, Mr. Zoberg refused.

6© Count III of Amended Counterclaim — Breach of Florida’s Consumer Collections

Denntinas Ant (DOOD A).
Piacuces Ace Wer ay,

e Count VI of Amended Counterclaim — Fraud;

© Count VII of Amended Counterclaim — Violation of Florida Statutes Chapter 687
(Unlawful Usury and Loansharking);

First Affirmative Defense — Violation of Florida Statutes Chapter 687 (Unlawful

Usury and Loansharking);

¢ Second Affirmative Defense — Violation of Florida Statutes Chapter 494 (SAFE
Mortgage Licensing Act);

e Third Affirmative Defense — Violation of Florida Statutes § 697.05 (Balloon Note
Language);

e Fourth Affirmative Defense — Lack of Standing;
Fifth Affirmative Defense — Material Breach of Note and Morigage;

© Sixth Affirmative Defense — Unclean Hands.
As required and contemplated by the court in Infiniti Employment Solutions, 204 So. 3d

550, the Plaintiff/Counter-Defendants will address each of the foregoing claims and defenses

separately herein.

Count IT of Amended Counterclaim —
Breach of Florida’s Consumer Collections Practices Act (FCCPA)

The Defendants/Counter-Plaintiffs asserted this counterclaim in their initial Answer,
Affirmative Defenses and Counterclaim and then again in their Answer, Affirmative Defenses

and Amended Counterclaim, wherein they claimed:

[A]ll or part of the debt sought to be collected is void, 6654 and Shapiro know
same, and therefore the... FCCPA is plainly violated... 6654 communicated the
debt to a “Lawrence Shapiro” who was alleged to be an aggressive debt collector
and the purchaser of the loan.... [T]he implication of 6654 was that this
Lawrence Shapiro might also “use or threaten force or violence” to collect the
loan... which is a violation... 6654 implied that absent payment, she would
reveal certain personal details of Mr. Benun to his cellmate. In short, 6654 and
Shapiro conspired to violate and did violate the FCCPA through one or more of
the violations set forth above. (Am. C-Claim §f 51-61).

The Piaintifi/Counter-Defendanis served their 57.105 Motion of Deceiver 11, 2018,

stating that there was no evidence to support their allegation that the Plaintiff/Counter-Defendants used or threatened to use force or violence, or instructed anyone else to do so, in the
collection of a consumer debt, nor their allegation that the Plaintiff/Counter-Defendants

disclosed any information affecting Mr. Benun’s reputation.

After hearing argument on the Plaintiff/Counter-Defendants’ Motion for Summary

Tudoment, and reviewing all the record evidence (or lack thereof), which included anything and

yuuginent, Ge TOY

everything the Defendants/Counter-Plaintiffs had at their disposal to submit in support of this
claim, the court entered its Order Granting Motion for Partial Summary Judgment as to Count IIT
of Amended Counterclaim on September 24, 2019, wherein it found:

Defendant/Counter-Plaintiff is unable, based on the record evidence, to establish a
claim for breach of the [FCCPA]. There is no record evidence to support the
claim that Plaintiff/Counter-Defendants used or threatened force or violence in the
collection of a consumer debt. Defendants have not set forth any record evidence
that Plaintiff/Counter-Defendants instructed anyone to use or threaten to use force
or violence in the collection of a consumer debt. Defendants also have not set
forth any record evidence at summary judgment that Plaintiff/Counter-Defendants
attempted to collect a consumer debt that they knew were illegitimate...

Defendants have not set forth any record evidence to support a claim under
section 559.72(5) of the FCCPA. As set forth in Plaintiff/Counter-Defendants’
Motion for Partial Summary Judgment, Defendants have not presented any record
evidence to suggest that Plaintiff/Counter-Defendants made any unlawful
disclosures regarding the funds owed to [Plaintiff]. There is also no record
evidence that any alleged disclosures adversely affected Defendant Mark Benun’s

reputation.

Based on the court’s own clear finding that there was no evidence, thus no basis in fact or
law, to support this counterclaim, Mr. Zoberg’s continued pursuit of it on behalf of the
Defendants/Counter-Plaintiffs after being served with the subject 57.105 Motion is certainly
sanctionable under Florida Statutes § 57.105.

Count VI of Amended Counterclaim —
Fraud

The Defendants/Counter-Plaintiffs asserted this counterclaim in their Answer,

Affirmative Defenses and Amended Counterclaim, wherein they claimed:6654 concocted a scheme to hide the unlawful and criminal loan sharking by

 

Hes, wmartanca that nurnarted ta claim a higher mv
Creating a Morigage wat purporea to Cam a magne pr

rate, but which was a sham to hide the higher interest rate.... Plaintiff committed
additional fraud when she then claimed the loan was transferred to a gangster to
try and convince Benun to pay. (Am. C-Claim {ff 87-90).

   

The Plaintiff/Counter-Defendants served their 57.105 Motion on December 11, 2018,

stating that there was no evidence to satisfy the materialitv, reliance or damage elements

stating
necessary to establish fraud.
After hearing argument on the Plaintiff/Counter-Defendants’ Motion for Summary

Judgment, and reviewing all the record evidence (or lack thereof), which included anything and

everything the Defendants/Counter-Plaintiffs had at their disposal to submit in support of this
claim, the court entered its Order Granting Motion for Partial Summary Judgment as to Count VI
of Amended Counterclaim on September 24, 2019, wherein it found:

Count VI of the Amended Counterclaim alleges a fraud claim against 6654 and
Lawrence Shapiro. Paragraphs 86-89 of the fraud claim is predicated on the
argument that the loan was usurious. As this Court by separate Order has
dismissed the usury counterclaim, the fraud counterclaim set forth in paragraphs
86-89 is also subject to dismissal by summary judgment.

The remaining allegation of fraud in the Amended Counterclaim is that 6654 and
Lawrence Shapiro committed fraud when 6654, through [Deana] Clark, falsely
told Defendant Mark Benun that the loan was transferred to a gangster in order to
try and convince Mr. Benun to pay back the loan to 6654...

Mr. Benun presented no admissible record evidence that the misrepresentation
was material or that there was justifiable reliance. The statement regarding the
transfer of the loan to Mr. Shapiro did not satisfy the element of materiality
because the statement had no legal impact on Mr. Benun’s obligation to pay the
loan. Similarly, there is no record evidence presented at summary judgment as to
any justifiable reliance on the misrepresentation. Mr. Benun admitted in his
deposition that he was making monthly payments under the promissory note and
his monthly payment obligations were the same, whether he made the payments
to 6654 or to Lawrence Shapiro.

Based on the court’s own clear finding that there was no evidence, thus no basis in fact or

law, to support this counterclaim, Mr. Zoberg’s continued pursuit of it on behalf of theDefendants/Counter-Plaintiffs after being served with the subject 57.105 Motion is certainly

sanctionable under Florida Statutes § 57.105.

Count VII of Amended Counterclaim —
Violation of Chapter 687 (Unlawful Usury and Loansharking)

The Defendants/Counter-Plaintiffs asserted this counterclaim in their Answer,

Affirmative Defenses and Amended Counterclaim, wherein they claimed:
The loan violates Chapter 687 and is void and illegal. 6654 concocted a scheme
to hide the unlawful and criminal loan sharking by creating a mortgage that

purported to claim a higher principle and a lower interest rate, but which was a
sham to hide the higher interest rate. (Am. C-Claim §{ 96-97).

The Plaintiff/Counter-Defendants served their 57.105 Motion on December 11, 2018,
stating that the subject note, mortgage, agreement and addendum, on their face, were not
usurious, specifically provided that the interest therein could not exceed the maximum allowed

by law, contained an integration clause, provided that they could not be modified except in

writing and were all signed by Mr. Benun.

After hearing argument on the Plaintiff/Counter-Defendants’ Motion for Summary
Judgment, and reviewing all the record evidence (or lack thereof), which included anything and
everything the Defendants/Counter-Plaintiffs had at their disposal to submit in support of this
claim, the court entered its Order Granting Motion for Partial Summary Judgment as to Count
VII of Amended Counterclaim on September 24, 2019, wherein it found:

Simply put, it is uncontroverted that the purchase price for the property, the
principal amount to be financed and the rate of interest thereon, are all set forth in
clear and unambiguous language in multiple documents executed by Mr. Benun.
It is also uncontroverted that the documents signed by Mr. Benun provide that the
terms of the agreement and all obligations thereunder cannot be varied by the
parties, absent a subsequent written agreement. Accordingly, this counterclaim is
wholly without merit, as Mr. Benun has produced no record evidence of a
subsequent written agreement. Mr. Benun has not come forward with any
admissible record evidence sufficient to suggest that the ioan is usurious.

10Based on the court’s own clear finding that there was no evidence, thus no basis in fact or
law, to support this counterclaim, Mr. Zoberg’s continued pursuit of it on behalf of the
Defendants/Counter-Plaintiffs after being served with the subject 57.105 Motion is certainly

sanctionable under Florida Statutes § 57.105.

First Affirmative Defense —
First Affirmative Detense

Violation of Chapter 687 (Unlawful Usury and Loansharking) ~
The Defendants/Counter-Plaintiffs asserted this counterclaim in their initial Answer,
Affirmative Defenses and Counterclaim and then again in their Answer, Affirmative Defenses

and Amended Counterclaim, wherein they claimed:

 

Unlawful usury and loan sharking. The loan violates Chapter 687 and is void
and illegal... Plaintiff sold the home to Defendant and took back a mortgage that
is blatantly usurious, illegal and void under Florida law because the true rate of
interest exceeds twenty five percent and constitutes loan sharking per [Chapter]
687.

The Plaintiff/Counter-Defendants served their 57.105 Motion on December 11, 2018,
stating that the subject note, mortgage, agreement and addendum, on their face, were not
usurious, specifically provided that the interest therein could not exceed the maximum allowed

by law, contained an integration clause, provided that they could not be modified except in

writing and were all signed by Mr. Benun.
The court entered its Order Granting Motion for Partial Summary Judgment as to Count
VII of Amended Counterclaim on September 24, 2019, wherein it found:

Simply put, it is uncontroverted that the purchase price for the property, the
principal amount to be financed and the rate of interest thereon, are all set forth in
clear and unambiguous language in multiple documents executed by Mr. Benun.
It is also uncontroverted that the documents signed by Mr. Benun provide that the
terms of the agreement and all obligations thereunder cannot be varied by the
parties, absent a subsequent written agreement. Accordingly, this counterclaim is
wholly without merit, as Mr. Benun has produced no record evidence of a
subsequent written agreement. Mr. Benun has not come forward any
admissible record evidence sufficient to suggest that the loan is usurious.

 

11Then, on the eve of trial, the Defendants agreed to withdraw this defense in the parties’

Amended Joint Pretrial Stipulation (filed 10/07/19), wherein they stated:

Based on the court’s rulings on Counts Ill, IV, VI and VII of the Amended
Counterclaim, Pincus and Benun cannot prevail on their first affirmative defense
(unlawful usury and loansharking) since that defense is based on allegations that
the loan is unlawful and usurious under Florida Statutes Chapter 687 (Interest and

Usury). Ag such, there are ne issues to be tried as to their first affirmative

usuryy, 220 Suc, unere Gro NO

 

defense.
Based on the court’s own clear finding that there was no evidence, thus no basis in fact or

law, to support this affirmative defense, and the Defendants/Counter-Plaintiffs’ own last-minute

 

a e eve of trial, Mr. Zoberg’s continued pursuit of it on behalf of
the Defendants/Counter-Plaintiffs after being served with the subject 57.105 Motion is certainly
sanctionable under Florida Statutes § 57.105.

Second Affirmative Defense —
Violation of Chapter 494 (SAFE Mortgage Licensing Act)

The Defendants/Counter-Plaintiffs asserted this counterclaim in their initial Answer,
Affirmative Defenses and Counterclaim and then again in their Answer, Affirmative Defenses
and Amended Counterclaim, wherein they claimed:

Violation of Chapter 494, Loan is illegal... [T]he Secure and Fair

Enforcement for Mortgage Licensing Act (“SAFE Act”)... required all loan

originators to apply through and be registered with the national system... Simply

put, and without limitation, the Plaintiff does not have the required approval to

issue loans, and the loan was issued in violation of Chapter 494.

The Plaintiff/Counter-Defendants served their 57.105 Motion on December 12, 2018,
stating that the lender in this case, 6654, was not a “loan originator” nor “mortgage broker,” as
those terms are defined in Chapter 494, and, even if it were, its failure to register as such would

not affect, nor provide a defense to, the validity or enforceability of the subject note and

mortgage.

12Then, on the eve of trial, the Defendants agreed to withdraw this defense in the parties’

Amended Joint Pretrial Stipulation (filed 10/07/19), wherein they stated:
Pincus and Benun hereby withdraw their second affirmative defense (violation of
Florida Statutes Chapter 494 (Secure and Fair Enforcement for Mortgage
Licensing Act)). As such, there are no issues to be tried as to their second
affirmative defense.
Based on the Defendants/Counter-Plaintiffs’ own last-minute acknowledgment that there
were no issues to be tried on this affirmative defense and their resulting withdrawal of same on
the eve of trial, Mr. Zoberg’s continued pursuit of it on behalf of the Defendants/Counter-

P the subiect 57.105 Motion is certainly sanctionable under

 

Florida Statutes § 57.105.

Third Affirmative Defense —
Violation of Fla. Stat. § 697.05 (Balloon Note Language)

The Defendants/Counter-Plaintiffs asserted this counterclaim in their initial Answer,

Affirmative Defenses and Counterclaim and then again in their Answer, Affirmative Defenses
and Amended Counterclaim, wherein they claimed:

Violation of Balloon note mortgage statute... [T]he borrowers paid all
payments, but could not pay the balloon, and “Lender” refuses to re-negotiate the

illegal deal, or accept continued payments as required by [Section] 697.05 of the
Florida Statutes (assuming for sake of argument only that the loan is not illegal
usury). More specifically, Chapter 697 requires certain balloon note language to
be in certain mortgages, and the required language is not present here.

The Plaintiff/Counter-Defendants served their 57.105 Motion on December 12, 2018,
stating that the requirements of Fla. Stat. § 697.05 did not apply to the mortgage in this case, as it
was clearly a “first mortgage” and a “mortgage granted by a purchaser to a seller pursuant to a
written agreement to buy and sell real property.”

Then, on the eve of trial, the Defendants agreed to withdraw this defense in the parties’

Amended Joint Pretrial Stipulation (filed 10/07/19), wherein they stated:

13Pincus and Benun hereby withdraw their third affirmative defense (violation of

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be tried as to their third affirmative defense.

  

Based on the Defendants/Counter-Plaintiffs’ own last-minute acknowledgment that there
were no issues to be tried on this affirmative defense and their resulting withdrawal of same on
the eve of trial, Mr. Zobero’s continued pursuit of it on behalf of the Defendants/Counter-
Plaintiffs after being served with the subject 57.105 Motion is certainly sanctionable under

Florida Statutes § 57.105.

Fourth Affirmative Defense —
Lack of Standing

The Defendants/Counter-Plaintiffs asserted this counterclaim in their initial Answer,
Affirmative Defenses and Counterclaim and then again in their Answer, Affirmative Defenses

and Amended Counterclaim, wherein they claimed:

Lack of Standing... Plaintiff actually called Defendant, and notified him that
Mr, Lawrence Shapiro now owns the note, and provided Defendant with the
attached Exhibit A [Notice of Sale of Mortgage Loan]. Similarly, Plaintiff (by
and through Deana Clark, the human owner of Plaintiff) called Defendant and
verbally attempted to intimidate Defendant that Mr. Shapiro would take
aggressive action to collect the note, and that Defendant better pay because Mr.
Shapiro would collect through any and all means, and that regardless she no
longer held any interest in the note. In any event, plainly the above demonstrates
that Plaintiff no longer holds the note and no longer has any standing to enforce it.

The Plaintiff/Counter-Defendants served their 57.105 Motion on December 12, 2018,
stating that the subject note, itself, named 6654 as the payee and, moreover, the Verified
Complaint confirmed that 6654 owned and held the note at the time of filing of this action.

After conducting the trial in this matter, including taking witness testimony and
documentary evidence, hearing argument of counsel and reviewing anything and everything the

Defendants/Counter-Plaintiffs had at their disposal to submit in support of this defense, the court

entered its Final Judgment, wherein it found:

14The Court has considered the Borrowers’ affirmative defense that 6654 lacks

2 tha Nate and freanlace the Mortaace and reiecte that defense
Ue NGI AG 1OTeCSE Ue wvsOM gage anG

for the reasons stated by the Court on the record. (Final Judgment).

 
 

[T]here's really no credible evidence that has been presented to refute standing.
And all the evidence that's been presented to the Court, quite frankly, the Court
finds the evidence clear and convincing that 6654 does have standing in this case.
And therefore, at least as to the defense that there is lack of standing, the Court
does not agree and finds that standing has heen established. (Excerot of Trial

GOS Moe agre:

Transcript, page 4, lines 1-9).

 

Based on the court’s own clear finding that there was no evidence, thus no basis in fact or
law, to support this affirmative defense, Mr. Zoberg’s continued pursuit of it on behalf of the

Defendants/Counter-Plaintiffs after being served with the subject 57.105 Motion is certainly

 

sanctionable under Florida Statutes § 57.105.

Fifth Affirmative Defense —
Material Breach of Note and Mortgage

The Defendants/Counter-Plaintiffs asserted this counterclaim in their initial Answer,
Affirmative Defenses and Counterclaim and then again in their Answer, Affirmative Defenses

and Amended Counterclaim, wherein they claimed:

Material Breach. Plaintiff breached first as in addition to all payments made by
the Defendant pursuant to the note, Defendant also pre-paid certain management

fees to Plaintiff, which Plaintiff was obligated to pay management of the
homeowners association. Plaintiff breached first by failing to do so.

The Plaintiff/Counter-Defendants served their 57.105 Motion on December 12, 2018,
stating that the Defendants, in fact, knew that 6654 had indeed paid the homeowners’ association
all management fees it had collected from them and, in any event, any such failure to do so
would not be considered a material breach by 6654.

On the eve of trial, the Defendants agreed to withdraw this defense in the parties’
Amended Joint Pretrial Stipulation (filed 10/07/19), wherein they stated:

Pincus and Benun hereby withdraw their fifth affirmative defense (material

breach of Note and Mortgage for failure to timely pay management fees to the
POA). As such, there are no issues to be tried as to their fifth affirmative defense.

15Danad an the Nafandante/Canntar_Plaintiffe’ awn la
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were no issues to be tried on this affirmative defense and their resulting withdrawal of same on
the eve of trial, Mr. Zoberg’s continued pursuit of it on behalf of the Defendants/Counter-

Plaintiffs after being served with the subject 57.105 Motion is certainly sanctionable under

Florida Statutes § 57.105.

Sixth Affirmative Defense —
Unclean Hands

The Defendants/Counter-Plaintiffs asserted this counterclaim in their initial Answer,
Affirmative Defenses and Counterclaim and then again in their Answer, Affirmative Defenses

and Amended Counterclaim, wherein they claimed:

Unclean Hands.... For all of the reasons set forth in the above affirmative
defenses, and the answers to Plaintiff's complaint, incorporated herein by
reference, the action in equity is barred by unclean hands.... Plaintiff attempted
to avoid usury laws by inflating the principle mortgage amount.... Moreover,
Plaintiff's loan is in violation of Chapter 494 of the Florida Statutes because
Plaintiff is not appropriately licensed. In addition, Plaintiff called Defendant to
advise him that “he better pay” because she sold the loan to a Lawrence Shapiro
who would aggressively collect it through whatever means necessary. In
addition, Plaintiff breached the mortgage prior to any arguable breach by
Defendant by failing to pay amounts required to the association management

company.

The Plaintiff/Counter-Defendants served their 57.105 Motion on December 11, 2018,
stating that there was no truth to nor factual support for their unclean hands defense for the same
reasons they could not support their claims and defenses of breach of FCCPA, fraud and
usury/loansharking.

On the eve of trial, the Defendants agreed to withdraw this defense, except as it related to
the Notice of Sale of Mortgage Loan, in the parties’ Amended Joint Pretrial Stipulation (filed
10/07/19), wherein they stated:

Pincus and Benun hereby withdraw their sixth affirmative defense (unclean
hands) except as it specifically relates to the Notice of Sale of Mortgage Loan,

16ie, Whether 6654’s equitable claims are barred based on its transmittal of the

a af Qala Af Martanaa T aan and urhathar
Notice of Sale of Mortgage Loan and whether 6654 has standing and is entitled to

enforce the Note and foreclose the Mortgage. (Amended Pretrial Stipulation).

 

 

After conducting the trial in this matter, including taking witness testimony and

documentary evidence, hearing argument of counsel and reviewing anything and everything the

in sunnort of this defense, the court

Nefandante/Connter-Plaintiffe had at their disnosal to subm

 

entered its Final Judgment, wherein it found:

The Court has considered the Borrowers’ affirmative defense that 6654’s

equitable claims are barred by the doctrine of unclean hands as it specifically

relates to the Notice of Sale of Mortgage Loan... and rejects that defense for the
reasons stated by the Court on the record. (Final Judgment).

Based on the Defendants/Counter-Plaintiffs’ own last-minute acknowledgment that there
were no issues to be tried on the majority of this affirmative defense and their resulting
withdrawal of same on the eve of trial, and the court’s clear finding that there was no evidence,
thus no basis in fact or law, to support the surviving portion of this affirmative defense, Mr.
Zoberg’s continued pursuit of it on behalf of the Defendants/Counter-Plaintiffs after being served

with the subject 57.105 Motion is certainly sanctionable under Florida Statutes § 57.105.

MR. ZOBERG’S ARGUMENTS REGARDING “SETOFF,”
“DOUBLE RECOVERY” AND “ELECTION OF REMEDIES”

Separately, Mr. Zoberg also argued at the January 29, 2020 hearing that he, as the
Defendants/Counter-Plaintiffs’ attorney at the time, should be entitled to a credit or “setoff”
against any attorneys’ fees to be imposed as sanctions against him for the attorneys’ fees the
court awarded against his clients in its Final Judgment of Foreclosure. However, Mr. Zoberg
clearly does not have standing to raise that argument (as only his clients would), nor would it be

applicable to the court’s determination of the Plaintiff/Counter-Defendants’ entitlement to

 

attorneys’ fees against him, as opposed to possibly ihe amouni ot

against him under § 57.105.Maranuer cineca thic award would he in the farm af canctians acai
AOLCO Yel, S1UCe UO GWaLU WOULG UG Li HIY OLE Ci Sanceure aban

 

pursuit of his clients’ frivolous claims and defenses, his arguments regarding a potential “double
recovery” or “election of remedies” are entirely misplaced. The two (2) cases on which he relies
— Villeneuve v. Atlas Yacht Sales, Inc., 483 So. 2d 67 (Fla. 4" DCA 1986), and United
Companies Financial Corporation v. Bergelson, 573 So. 2d 887 (Fla. 4" DCA 1990) — do not
address Florida Statutes § 57.105, or awards of sanctions at all, just the requirement for a party to
elect between two (or more) inconsistent remedies to “prevent a double recovery for the same
wrong,” which is clearly not the case here. Villeneuve, 483 So. 2d at 69. Directly on point, the
court, in Infiniti Employment Solutions, 204 So. 3d 550, awarded § 57.105 attorneys’ fees as
sanctions after the trial court previously awarded prevailing party attorneys’ fees to the same
party in the final judgment. Similarly, in this case, the attorney fee award against the
Defendants/Counter-Plaintiffs in the Final Judgment of Foreclosure was the result of the
Plaintiff/Counter-Defendants prevailing on their foreclosure claims against them, but the
attorney fee award against Mr. Zoberg would be the result of the imposition of sanctions against
him, personally, for his violation of Florida Statutes § 57.105. Moreover, the Final Judgment of
Foreclosure certainly does not include delay damages, which the Plaintiff/Counter-Defendants
are also seeking under Florida Statutes § 57.105(2) for Mr. Zoberg’s litigation of the frivolous
counterclaims and affirmative defenses “primarily for the purpose of unreasonable delay.” Thus,
any argument concerning an “election of remedies” or “double recovery” does not apply to the
facts of this case, and would certainly not be grounds for a denial of 6654’s request for
entitlement to § 57.105 fees and damages.
CONCLUSION
Based on the points and authorities set forth herein, the court should separately analyze

each of the counterclaims and affirmative defenses the Plaintiff/Counter-Defendants challenged

18in their 57,105 Motions, enter an order granting the 57,105 Motions as to the Plaintiff/Counter-
Defendants’ entitlement to attorneys’ fees and delay damages as sanctions under Florida Statutes

§ 57.105 as to each such claim and defense against the Defendants/Counter-Plaintiffs and Mr.

Zoberg, scheduling a hearing on the 57.105 Motions as to amount and granting such other and

further relief as the court deems just and proper.
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that a copy of the foregoing has been served via email on Jeremy

M. Zubkoff, Esa., [ieremy@flcondolaw.com|], Attorney for Stuart Zoberg, Esq., Katherine C.

Nuckolls, Esq., (knuckolls@randallkroger.com], Andrew GG. Elliott, Esq,
[aelliott@randallkroger.com] [marie@randallkroger.com], Attorneys for Country Club
Maintenance Association, Inc., and via email and U.S. mail on Mark Benun and Pincus Capital
LLC c/o Mark Benun, [markmbenun@gmail.com], 6654 NW 27th Avenue, Boca Raton, FL

33496, on February |% , 2020.

SHAPIRO, FISHMAN & GACHE, LLP
Attorneys for the Plaintif{/Counter-Defendants
2424 North Federal Highway, Suite 360

Boca Raton, Florida 33431

(561) 287-5599 (phone)

(561) 287-5589 (fax)

By:.
Ronald M. Gaché, Esq.
Florida Bar No. 699306

rgache@logs.com
Scott A. Simon, Esq.
Florida Bar No. 0088676

ssimon@logs.com

19