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Claimants in Foreclosure Case Missed Deadline to Claim Attorney Fees, Tenth Circuit Rules - U.S. v. Springer

November 25, 2011

As Redlands foreclosure defense attorneys, we were interested to see a case involving foreclosure after a criminal tax matter rather than a civil foreclosure. In United States v. Springer, Lindsey Springer's Oklahoma home went into foreclosure after his unpaid tax assessment was reduced to judgment. Springer refused to pay income taxes between 1990 and 1995, and is known in the community of people who believe the income tax is illegal. He has a long history of wrangling with the federal courts. (A footnote to this case notes that he is subject to limitations on pro se filings; his attorney was suspended from the Tenth Circuit.) Parties who held a mortgage on the home filed cross-claims for an award of attorney's fees from Springer, and this award was granted in part. In this decision, the Tenth Circuit reversed.

In the underlying criminal action, the Tenth Circuit had separately upheld a foreclosure on Springer's real property by the IRS. The debts leading to this are complicated but include the unpaid taxes from 1990 to 1995. The real estate actually belongs to the SLCA Family Trust, but the courts found the foreclosure valid with Springer as nominee. In addition to the co-trustee for that trust, other cross claimants are two other family trusts, four individuals and the clerk of Creek County, Okla. They participated in the underlying cases, and filed in court for an award of attorney fees and expenses from Springer. The magistrate judge in that case recommended a partial award of $10,576.56 out of an request for $35,411.16, and the district court upheld it after a de novo review. Springer appealed.

Of the five arguments Springer made on appeal, the Tenth Circuit was able to dismiss three right away because they were arguments against the merits of the cross-claimants' case. That decision had already been made by the Tenth Circuit, the court said, and it declined to revisit the issue. However, the court found the fourth issue dispositive. Springer argued that the cross-claimants waited too long to seek their fee award -- nearly six months after the relevant judgment. He made this issue before the magistrate judge, but the lower courts and the cross-claimants never addressed it. Furthermore, the cross-claimants declined to file a brief in this appeal, the court noted. Thus, the court found that there was nothing at all in the record to show why they waited to file their appeal. Under the circumstances, it said, it must conclude that the district court abused its discretion. Thus, it reversed the fee award and remanded with directions to deny the request as untimely.

Our Anaheim foreclosure defense lawyers are happy to say that we're not in the position of defending people who decline to pay their taxes for political reasons. However, we routinely defend people who are facing foreclosure for more prosaic reasons -- most often because their financial difficulties were compounded by a mortgage servicer that broke the law in its haste to foreclose. California homeowners enjoy several rights that are often ignored in foreclosures. Lenders must at least offer an opportunity to discuss alternatives before foreclosing, which may not happen if the foreclosure is fast-tracked. If the homeowner applies for a HAMP loan modification and meets all the qualifications, the lender may not deny it arbitrarily or for trumped-up reasons. And California homeowners have the right to sue lenders who make predatory loans, which includes loans where terms were not disclosed and those negotiated in a language different from the language of the contract. As Long Beach foreclosure defense attorneys, we help these clients protect themselves in a court of law.

Howard Law, P.C., represents clients who are fighting to hold on to their homes despite a seeming rush to foreclose by the loan servicer. To learn more or discuss your case with an experienced lawyer, call us at 1-800-872-5925 or send us a message through our website.

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