It's been nearly four years since David J. Stern's high-profile disbarment, but the fallout from his massive foreclosure fraud continues in Florida courts.

In the latest development, investors suing Stern for fraud have come out on the losing end, after a state appellate court found the doctrine of res judicata barred claims previously raised in a failed federal court action.

"A party cannot sit idly and watch a court of competent jurisdiction decline to hear a dispute, and later try to assert the same claims in a different forum," Fourth District Court of Appeal Judge Jeffrey Kuntz wrote in a decision issued last week.

Stern was a high-profile plaintiff's lawyer once known as Florida's "foreclosure king." His Plantation-based firm represented some of the nation's largest lenders and mortgage servicers, and became heavily entangled in the national subprime mortgage crisis that crushed Florida's real estate sector. He claimed to have handled more than 100,000 cases during the housing market collapse, including more than 70,000 in 2009 alone.

Stern's law firm made up to $260 million annually, according to an American Bar Association tally reported January 2014. At its height, it employed about 1,200 attorneys and paralegals to push through lenders' suit in assembly-line fashion.

The firm would later cut 560 of these jobs in one round of layoffs after its biggest clients, including Freddie Mac, terminated its services. It finally imploded after an opposing lawyer in some of those suits, Palm Beach Gardens foreclosure defense attorney Thomas Ice, spotted fraudulent paperwork in Stern's court filings, and testified to uncovering notary fraud and 40 backdated debt assignments.

Stern maintained his innocence during his ethics trial, saying he was a victim of "human error" on the part of his employees. But Palm Beach County Court Judge Nancy Perez, acting as referee for the Florida Supreme Court, recommended his disbarment in 2013.

News of the allegations against Stern and his businesses spurred multiple lawsuits, including the one still playing out in Broward County.

The plaintiffs, Philadelphia Financial Management of San Francisco LLC and Blue Lion Master Fund L.P., were investors in the Stern law firm's publicly traded subsidiary, DJSP Enterprises Inc., a British Virgin Islands corporation based in Planatation that handled its back-office operations. They sued Stern, DJSP Enterprises, DJSP's former chief financial officer Kumar Gursahaney and investor Gary Curson for fraud and negligent misrepresentation, for allegedly duping them into the investment.

U.S. District Senior Judge William Zloch dismissed the case twice for failing to meet pleading standards in the Private Securities Litigation Reform Act, and the Eleventh Circuit upheld his decision.

In state court, the plaintiffs claimed Zloch's dismissal of their second federal lawsuit was not an adjudication on the merits. But the Fourth DCA disagreed, finding the federal court rulings "precluded the investors from proceeding with the same claims in state court."

"The investors clearly knew of the existence of diversity jurisdiction, as they themselves asserted it in their complaint," Kuntz wrote for the Fourth DCA. "Yet they abandoned it in opposition to the defendant's motion to dismiss and on appeal."

Sharon Kegerreis and Lara O'Donnell Grillo of Berger Singerman in Miami represented DJSP Enterprises.

Stern's lawyers were Spencer A. Tew and Jeffrey A. Tew of Rennert Vogel Mandler & Rodriguez in Miami.

Dennis A. Nowak and Caitlin M. Trowbridge of Rumberger Kirk & Caldwell in Miami were counsel for Gursahaney.

Attorneys from Cuneo Gilbert & LaDuca in Maryland and Washington, D.C., worked with counterparts at Shepherd Finkelman Miller & Shah in Weston, Liddle & Robinson in New York, Saxena White in Boca Raton, Strauss & Troy in Cincinnati, and Statman Harris & Eyrich in Cincinnati to represent the investors.