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Sunday, May 19, 2024 | Back issues
Courthouse News Service Courthouse News Service

Bank of America May Owe Lawyers $11 Million

(CN) - A Plantation, Fla., law firm can seek $11 million in unpaid legal fees for its work on Bank of America foreclosure cases, a federal judge ruled.

The Law Offices of David J. Stern says it was the legal counsel for Bank of America's Florida residential foreclosure cases across the state, employing some 1,200 attorneys and support staff at its peak.

Plantation, Fla., is one hour north of Miami in Broward County.

Stern's 11-count complaint claims that Bank of America and its corporate parent owe more than $1.9 million, while BAC Home Loans Servicing owes more than $8.7 million.

The BAC tally reflects that work that Stern allegedly performed for Countrywide Home Loans, which Bank of America bought in 2008 and merged with its loan-servicing operation.

Stern says it entered into a written contract with Countrywide in 2003 and entered into two oral contracts with Bank of America for legal services.

Exhibits to the complaint include the written contract and hundreds of pages of billing totals.

Bank of America moved to dismiss 10 of Stern's 11 claims, claiming that the breach-of-contract claim against BAC is the only viable allegation because it relies on a written contract.

It also says Florida's Statute of Frauds bars enforcement of oral contracts because the firm cites at least two years of work, yet never memorialized the oral contract with a written document.

U.S. District Judge Federico Moreno disagreed since the statute bars indefinite oral contracts that necessarily require more than one year of work.

"Nothing in Plaintiff's allegations indicates that the parties' understanding was that the contract would extend beyond a year," Moreno wrote. "The court does not find the Statute of Frauds bars plaintiff's claim for breach of oral contract because the plaintiff alleges that it fully performed under the oral contract."

Moreno also disagreed that the open-account claims should be thrown out as duplicative of the breach-of-contract claims. "The Plaintiff met the requirements of both the Florida forms and the federal forms to state a claim for open account," the nine-page decision states.

As to the account-stated claims, Bank of America said it never agreed to pay the amount due.

But Moreno said, "This simply is not the case."

"The amended complaint alleges that defendants agreed to the balance and did not object to the statements," he wrote. "Accordingly, the court finds the plaintiff sufficiently states a claim for account stated."

Moreno also rejected the bank's assertion that the quantum-meruit claim is invalid because the law firm has claims for breach of an oral agreement.

"The court finds plaintiff is entitled to plead this alternative theory of recovery and denies the motion to dismiss," Moreno wrote.

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