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A weekly summary of select real property, financial services, and title insurance cases and recent developments, presented by Carlton Fields' Real Property Litigation and Consumer Finance practice groups.
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September 20, 2017 9:51 AM | Permalink

REAL PROPERTY UPDATE

  • Summary judgment: trial court erred by denying borrower’s motion to amend answer and defenses, and therefore erred in entering summary judgment in favor of lender. Reyes v BAC Home Loans Servicing LP, Case No. 2D15-3495 (Fla. 2d DCA Sept. 6, 2017) (reversed and remanded).

FINANCIAL SERVICES UPDATE

  • TILA: borrower could not sustain cause of actions for violation of TILA for failing to disclose private mortgage insurance charges because lender corrected error and refunded premiums within 60 days after discovering the error, in accordance with 15 U.S.C. § 1640(b). Bennett v MERS, Inc., et al., Case No. 3D17-0001 (Fla. 3d DCA Sept. 6, 2017) (summary judgment affirmed).

TITLE INSURANCE UPDATE

  • Class Action/Reissue Credit: putative class action against six title insurers alleging unlawful conspiracy to defraud purchasers of title insurance in Georgia by scheming to eliminate discounts from published premiums dismissed with prejudice because, inter alia, alleged misrepresentations of law are not actionable, and even if actionable, were not proximate cause of alleged injury to plaintiff – Downing v. Fidelity Nat’l Title Ins. Co., No. 3:16-cv-119-TCB (N.D. Ga. Sept. 13, 2017) (granting motions to dismiss with prejudice) [Ed. Note: Carlton Fields attorneys Marty Solomon, Dane Blunt, and Scott Feather represented Stewart Title Guaranty Company in this action]
  • Arbitration: title insurer may not move to compel arbitration under loan policy against individual members of class action where (1) insured’s owner and loan policies both contain an arbitration clause; (2) owner’s policy, but not loan policy, contains an arbitration endorsement that amended arbitration provision to require both parties to consent to arbitration; (3) closing service letter incorporates terms of both policies; and (4) Third Circuit previously affirmed trial court’s order compelling arbitration as to other class members (836 F.3d 291) in action alleging insurer overcharged for title policies – Chassen v. Fidelity National Financial, Inc., No. 15-2814 (3d Cir. Aug. 3, 2017) (unpublished opinion affirming denial of motion to compel arbitration)
  • Professional Liability Coverage: no indemnification for title insurer under professional liability policy where (1) insurer’s underlying complaint for negligence against former agent lacked factual specifics demonstrating agent’s failure to properly supervise or maintain escrow accounts; (2) insurer’s allegation against former agent of failing to train and supervise employees is not a “professional service” as defined in liability policy; and (3) clear and unambiguous exclusion in liability policy provided that it did not apply to claims arising from failure to safeguard accounts and funds – Fidelity Nat’l Title Ins. Co. v. Maxum Indemnity Co., Civ. Action No. 16-1360 (E.D. Pa. Sep. 12, 2017) (granting summary judgment)
  • Professional Liability Coverage: no indemnification for title insurer under professional liability policy where (1) insurer’s underlying complaint for negligence against former agent lacked factual specifics demonstrating any kind of negligent supervision or maintenance of the escrow account or failure to properly supervise employees; (2) exclusion barred coverage for claims arising out of breach of fiduciary duty; (3) exclusion barred coverage for claims arising out of dishonest, fraudulent, criminal or malicious acts; and (4) insurer did not argue that “innocent insured” provision of liability policy saved coverage under claim arising out insured’s breach of fiduciary duty – Fidelity Nat’l Title Ins. Co. v. Maxum Indemnity Co., Civ. Action No. 16-1360 (E.D. Pa. Sep. 12, 2017) (granting summary judgment)
  • Notice: Late notice given by insured to insurer following a foreclosure action, in violation of provision in lender’s policy requiring timely notice of claim, resulted in actual prejudice justifying denial of entire claim because insurer was unable to assert either an equitable subrogation argument lessening the amount of the claim, or asserting a defense of an invalid deed of trust which would have defeated foreclosure action altogether – Wells Fargo Bank, N.A., etc., v. First American Title Ins. Co., Civ. No. WMN-15-2882 (D. Md. Sep. 5, 2017) (granting insurer’s motion summary judgment and denying lender’s motion for summary judgment)
September 5, 2017 10:08 AM | Permalink
REAL PROPERTY UPDATE
  • Foreclosure / Statute of Limitations: trial court improperly found that, because payments due under a note and mortgage were accelerated in a prior 2009 action, the second action filed over five years later was barred by the statute of limitations – The Bank of New York Mellon Corp. as Trustee, v. Anton, No. 3D15-2213 (Fla. 3d DCA August 30, 2017) (reversing summary judgment order and remanding)
  • Insurance Policy: material issues of fact existed regarding (1) whether insurer complied with policy and section 627.7011 by paying at least the actual cash value of the cost of repairs, and (2) whether the insureds breached the policy by failing to comply with the policy’s post-loss obligation to allow reasonable inspections – Siegel v. Tower Hill Signature Ins. Co., No. 3D16-1861 (Fla. 3d DCA Aug. 30, 2017) (reversing final summary judgment in insurer’s favor and remanding)
  • Lis Pendens/Bond: trial court did not depart from essential requirements of law by requiring that a $3,000,000 bond be posted by a date certain or the lis pendens would be discharged – Ortiz v. Weiss, No. 3D17-420 (Fla. 3d DCA Aug. 30, 2017) (denying petition)
  • Foreclosure/Banking Statute of Frauds: alleged oral modification of credit agreement was precluded by both the statute of frauds and the Banking Statute of Frauds – Wells Fargo Bank, N.A. v. Richards, Nos. 4D16-1364 & 4D16-2033 (Fla. 4th DCA Aug. 30, 2017) (reversed and remanded)
  • Foreclosure/Standing: appellant, which received title to property by quitclaim deed prior to commencement of foreclosure proceeding, should have been allowed to contest appellee’s standing to bring foreclosure proceeding – 3709 N. Flagler Drive Prodigy Land Trust, Mango Homes LLC, as Trustee v. Bank of America, N.A., Nos. 4D16-3255 (Fla. 4th DCA Aug. 30, 2017) (reversed and remanded)
  • Insurance/Sinkhole: affirming trial court’s stay of execution of final judgment until insured provided insurer with signed contract for completion of subsurface repairs to home damaged by sinkhole activity, but finding that insurer waived its option under policy to tender policy limits in lieu of paying in excess of those limits to complete said repairs – Ringelman v. Citizens Prop. Ins. Corp., No. 5D16-260 (Fla. 5th DCA Sept. 1, 2017) (affirmed)
  • Foreclosure/Statute of Limitations: notwithstanding dismissal of first foreclosure action on note and mortgage, mortgagee’s claims for defaults occurring within five years of filing of second foreclosure action were not barred by statute of limitations – U.S. Bank, N.A., as Successor Trustee v. Diamond, No. 5D16-3609 (Fla. 5th DCA Sept. 1, 2017) (reversed and remanded with instructions)

TITLE INSURANCE UPDATE

  • Indemnity: insurer entitled to recover for loss of title to insured purchaser’s property against sellers pursuant to agreement to indemnify and representation that sellers were not aware of any dispute or claims concerning the property but where they in fact had such knowledge through their attorney – First American Title Ins. Co. v. Howell, Case No. 2016-CA-1293 (La. App. Aug. 30, 2017) (affirming final judgment after trial)
  • Recoupment: title insurer excused from paying balance of settlement where plaintiff interfered with the parties’ contract to recover pursuant to an indemnity agreement – Soundbuilt Northwest, LLC v. Commonwealth Land Title Ins. Co., Case Nos. 74128-4-I & 75994-9-I (App. Wash. Aug. 28, 2017) (affirming final judgment after trial)
August 31, 2017 3:04 PM | Permalink
REAL PROPERTY UPDATE
  • Foreclosure: general reservation of jurisdiction in a foreclosure judgment is very limited, and certainly does not give trial court jurisdiction to eliminate a lien more than three years after Final Judgment of Foreclosure becomes final - Garcia v. Christiana Trust, et al., Case No. 3D16-735 (Fla. 3d DCA August 23, 2017) (vacating trial court order).
  • Foreclosure: “A party that prevails on its argument that dismissal is required because the plaintiff lacked standing to sue upon the contract cannot recover fees based upon a provision in that same contract” - Christiana Trust v. Rushlow, Case No. 4D16-1898 (Fla. 4th DCA August 23, 2017) (reversed and remanded).
  • Foreclosure/Statute of Limitations: foreclosure action was not barred by the statute of limitations where it alleged and proved separate and continuing defaults that fell within the five years preceding the filing of the action - Depicciotto v Nationstar Mortgage LLC, et al., Case No. 4D16-3254 (Fla. 4th DCA Aug.16, 2017).
  • Foreclosure/Collateral Estoppel/Res Judicata: neither res judicata nor collateral estoppel apply to bar subsequent foreclosure based on separate and continuing mortgage and note defaults - Depicciotto v Nationstar Mortgage LLC, et al., Case No. 4D16-3254 (Fla. 4th DCA Aug.16, 2017).
  • Foreclosure/Standing: plaintiff proved standing because the original note, with a blank indorsement, filed in the foreclosure action was in the same condition as the copy attached to the initial complaint - Nationstar Mortgage, LLC v Chan, Case No. 5D16-3492 (Fla. 5th DCA Aug. 18, 2017)
  • Foreclosure/Statute of Limitations: a subsequent foreclosure action is not barred if brought on a subsequent default within five-year statute of limitations period found in section 95.11(2)(c), Florida Statutes - Wells Fargo Bank, N.A., as Trustee v BH-NV Investments 1, LLC, Case No. 3D15-2692 (Fla. 3d DCA Aug.16, 2017)
  • Foreclosure/Servicing: borrower could not sustain claim against services for failing to respond to qualified written requests where lender had established specific address for receipt and handling requests and borrower mailed letter to the wrong address - Bivens v Bank of America, N.A. and Select Portfolio Servicing, Inc., Case No. 16-15119 (11th Jud. Ct. Aug.17, 2017)

FINANCIAL SERVICES UPDATE

  • RESPA: RESPA requires use of designated address when writing to challenge status of purported loan servicer – Bivens v. Bank of America, N.A., No 16-15119 (11th Cir Aug. 17, 2017) (affirming summary judgment against borrower)
  • FSCPA and FCCPA: mortgage servicer that acquires mortgage before it goes into default is not a debt collector, and FCCPA claim based only on state court foreclosure action because that it protected by the litigation privilege – Solis v. Citimortgage, Inc., No. 16-17585 (11th Cir. 17, 2017) (affirming dismissal of FDCPA claim)
  • TILA: Rooker-Feldman prohibited federal court review of clearly erroneous state court judgment that borrowers had been required to sue their lender for rescission rather than simply send a TILA notice – Waisome v. JP Morgan Chase Bank, N.A., No. 16-16531 (11th Cir. Aug. 11, 2017) (affirming dismissal of TILA claim)
  • TILA: record unclear on why borrower's rescission letter was returned undeliverable despite his testimony it was mailed to address he was provided – Barnes v. Chase Home Finance, LLC, No. 13-35716 (9th Cir. Aug. 10, 2017) (reversing lender's summary judgment on TILA claim)

TITLE INSURANCE UPDATE

  • Dischargeability Exception for Fraud: agent’s debt arising from personal real estate transaction not within dischargeability exception for fraud in 11 U.S.C. § 523(a)(2)(A) and (a)(4) adversary proceeding, where there was no demonstration of intentional conduct or gross deviation from appropriate conduct on the basis of debtor's negligent breach of contract, agent relied on representation of lender that it would swap collateral for second mortgage lien, and underwriter’s representative conducted closing and disbursed funds even though he was aware that second mortgage lien had not been released – Conestoga Title Ins. Co. v. Patchell (In re Patchell), Adv. Case No. 15-00243 (Bankr. D. Md. June 23, 2017) (dismissing case)
  • Economic Loss Doctrine: underwriter’s cause of action against title agent for indemnification barred by the economic loss doctrine because the claim depended on the same facts as a breach of contract claim and alleged negligent conduct resulted in only economic loss – Stewart Title Guar. Co. v. ISGN Fulfillment Servs., Inc., Case No. 3:16-cv-01687 (D. Conn. August 18, 2017) (dismissal with prejudice)
  • Indemnification: no indemnification for agent performing title exam, settlement and closing services where agent successfully defended claims for breach of contract and negligence in closing but escrow conditions did not include language including claims for title – B&H Resources, L.L.C. v. 28925 Lorain Inc., Case No. 105323 (Ohio Dist. Ct. App. August 17, 2017) (affirming judgment)
  • Statute of Limitations: underwriter’s causes of action against title agent for indemnification and breach of agency agreement barred by statute of limitations under court’s rationale that even if a party has suffered no demonstrable harm and has no cause of action it may be entitled to nominal damages, could have sued for specific performance, and creation of a risk of loss had occurred, even though underwriter did not receive a claim until after cause of action accrued (but within statute of limitations period) – Stewart Title Guar. Co. v. ISGN Fulfillment Servs., Inc., Case No. 3:16-cv-01687 (D. Conn. August 18, 2017) (dismissal with prejudice)
  • Statutory Bad Faith: claim for bad faith pursuant to § 624.155(1)(b)(1), Florida Statutes, was premature and abated where action for benefits to assignee of lender’s title policy had not yet been resolved in insured’s favor – Stewart Title Guar. Co. v. The Machado Family Ltd. P’Ship. No. 1, Case No. 6:17-cv-562-ORL (M.D. Fla. August 23, 2017) (abating, rather than dismissing, bad faith claim in light of Florida Supreme Court’s holding in Blanchard v. State Farm Mut. Auto. Ins. Co., 575 So. 2d 1289 (Fla. 1991)) (congratulations to Carlton Fields’ shareholder Marty Solomon and associate Scott Feather, who represented Stewart Title Guar. Co. in this action)
  • Title Agent Liability: title agent was liable neither in contract nor tort for failure to uncover tax dispute where escrow agreement limited its responsibility to pro-rating taxes based on latest available valuation – B&H Resources, LLC v. 28925 Lorain, Inc., No. 105323 (Oh. App. Aug. 17, 2017) (summary judgment affirmed)
August 16, 2017 10:32 AM | Permalink
REAL PROPERTY UPDATE
  • Foreclosure/Short Sale/Statute of Limitations: Florida Statute section 95.11(5)(h)’s one year statute of limitations period does not apply to bar Bank’s cause of action for deficiency judgment arising out of a short sale - Whitney Bank v. Grant, No. 1D16-5112 (Fla. 1st DCA Aug. 7, 2017) (reversed and remanded).
  • Foreclosure/Standing: Clerk of Court is not a bailee of a negotiable instrument where Bank did not properly assign promissory note - Partridge v. Nationstar Mortgage, LLC, No. 2D16-3081 (Fla. 2d DCA Aug. 11, 2017) (reversed).
  • Foreclosure/Fraud Claim: fraud claim based on generalized allegations of fraud in mortgage industry, without specific allegations of fraud in subject case, was not a valid basis under Rule 1.540 to relieve defendant from a Consent Final Judgment or Settlement and Release Agreement - The Bank of New York Mellon v. Simpson, No. 3D16-2445 (Fla. 3d DCA Aug. 9, 2017) (reversed and remanded).
  • Foreclosure/Tortious Interference: bank’s process server’s alleged comments to tenants at the subject property did not fall within absolute litigation privilege because they were unnecessary to effectuate service of process - Pace v. Bank of New York Mellon Trust Company National Association, No. 5D16-748 (Fla. 5th DCA Aug. 11, 2017) (reversed and remanded).

CONSUMER FINANCE UPDATE

  • TCPA/Revocation of Consent: Telephone Consumer Protection Act, 47 U.S.C. § 227 et seq., allows partial revocation of consent to receive automated calls from creditor - Schweitzer v. Comenity Bank, No. 16-10498 (11th Cir. Aug. 10, 2017) (reversing summary judgment).

TITLE INSURANCE UPDATE

  • Class action: declining to recognize an insurance-examination privilege and holding that Conn. statute which makes documents provided to department of insurance in connection with market conduct examination confidential and not subject to subpoena, does create a privilege or prohibition against disclosure by discovery of the documents and the confidentiality created by the statute is limited to the department of insurance in course of the market conduct examination - Mahon v. Chicago Title Ins., Co., Case No. 3:09CV00690 (D. Conn. Aug., 4, 2017)(granting motion to compel and denying motion for protective order)
August 7, 2017 4:33 PM | Permalink
REAL PROPERTY UPDATE
  • Foreclosure/Redemption: foreclosure sale conducted without knowledge of bankruptcy affirmed, but trial court orders denying mortgagor opportunity to redeem property before certificate of sale actually filed reversed and remanded – Coastwide Services, LLC v. Goldberg, No. 3D17-1162 (Fla. 3d DCA August 2, 2017) (affirmed in part, and reversed and remanded for further proceedings)
  • Foreclosure/Damages: testimony of witness for lender, combined with payment history and note, provided competent, substantial evidence of fixed interest rate and escrow disbursements – Fogarty v. Nationstar Mortg. LLC., No. 5D16-3193 (Fla. 5th DCA Aug. 4, 2017) (affirmed in part, reversed in part, and remanded with instructions)
  • Foreclosure: Section 48.23(1)(d), Florida Statues, only precludes enforcement of liens unrecorded at time lis pendens recorded and does not deprive foreclosing first mortgagee of subject matter jurisdiction where homeowners association has previously filed foreclosure action against homeowner and recorded lis pendens - Ditech Financial LLC v. White, Case No. 4D16-3213  (Fla. 4th DCA July 26, 2017) (reversed and remanded)
  • Foreclosure: where foreclosing bank fails to properly admit acceleration letter into evidence and acceleration letter is condition precedent to filing foreclosure action, defendant entitled to final judgment of involuntary dismissal - Delong v. Lakeview Loan Servicing, LLC et al., Case No. 5D16-903 (Fla. 5th DCA July 28, 2017) (reversed and remanded)

CONSUMER FINANCE UPDATE

  • FDCPA: dismissing FDCPA claim because property management company that collected rent and late fees did not fall within statute's narrow definition of "debt collector" – Yatooma v. OP Property Mgmt LP, Case No. 2:17-cv-02645 ODW (C.D. Cal. July 20, 2017).
  • FDCPA: dismissing FDCPA based on collector's response to debtor's motion to dismiss its collection action because response was protected "pleading" within meaning of statute – Lambe v. Allgate Financial, LLC, Case No. 16-cv-24407 (S.D. Fla. July 20, 2017).
  • TCPA: dismissing junk fax class action where allegations failed to specify what role, if any, each defendant played in sending fax advertisement – Scoma Chiropractic, P.A. v. Jackson Hewitt Inc., (M.D. Fla. July 25, 2017).
  • FDCPA and TILA: denying motion to dismiss FDCPA and TILA claims where borrower alleged it had not been late with its payments and that servicer improperly charged late fees, finding servicer’s argument that the note and mortgage, which were not attached to complaint, specifically authorized late fees insufficient to overcome well plead allegations in complaint – Rios v. Rushmore Loan Mgmt. Svcs. LLC, Case No. 16-81973 (S.D. Fla. July 24, 2017).
  • FCRA: denying motion to dismiss FCRA claim where plaintiff alleged that mortgage lender was negligent in failing to investigate and discover that mortgage debt had been forgiven as a result of short sale before reporting negative information to credit reporting agencies – Owens-Benniefield v. Nationstar Mortgage LLC, Case No. 8:17-cv-540 (M.D. Fla. July 25, 2017).

TITLE INSURANCE UPDATE

  • Escrow Agents: title agent holding construction escrow owed no duty to go beyond requirements of escrow agreement and conduct "informal inspections" of problem project – 231 W. Scott, LLC v. Lakeside Bank, 2017 IL App (1st) 161131, Case No. 1-16-1131 (Ill. 1st Dist. June 28, 2017).
  • Negligent Search: holding that insured customer of title searcher could recover in a negligent search action the fees it incurred in collateral litigation they had to file to defend their title, but that award should be reduced by amount of fee award satisfied by opposing party in that litigation – Eastern Shore Title Co. v. Ochse, 160 A.3d 1238 (Md. App. May 31, 2017).
  • Policy Coverage and Bad Faith: reversing summary judgment to title insurer where policy's meets and bounds description covered only one lot, but tax parcel ID including both created reasonable expectation of coverage, and negligence in preparing deed, as well as bad faith in claims handling were alleged – Michael v. Stock, Case No. 1229 EDA 2016 (Pa. Sup. April 11, 2017).
  • Policy Coverage: granting summary judgment to title insurer where insured lender had conveyed property without warranty after non-judicial foreclosure to third party who then discovered a senior lien on the property – Hovannisian v. First American Title Ins. Co., Case No. F072789 (Cal. App. 1st Dist. July 25, 2017).
July 25, 2017 4:56 PM | Permalink
REAL PROPERTY UPDATE
  • Foreclosure/Standing: note owner had constructive possession of promissory note in original servicer’s physically possession of blank-endorsed note when it filed the complaint, and had standing to enforce same - FNMA v Rafaeli, et al., Case No. 4D16-1376 (Fla. 4th DCA July 19, 2017) (reversed and remanded)
  • Prevailing Party Fees: plaintiff that prevailed on claims of complaint and was award substantial damages was prevailing party entitled to attorneys’ fees; although defendant prevailed on counterclaim, its award was not substantial enough to override the outcome on plaintiff’s complaint - Hough Roofing, Inc. v Don Facciobene, Inc., et al., Case No. 5D15-2878 (Fla. 5th DCA July 21, 2017) (reversed).
  • Dismissal of Appeal: notice of appeal filed by non-attorney on behalf of trust constitutes the unauthorized practice of law and is ineffective - Lavine, Trustee v JPMorgan Chase Bank, etc., et al., Case No. 5D15-2450 (Fla. 5th DCA July 21, 2017) (appeal dismissed).
  • Standing: title holder that purchased property after lis pendens had been filed and who was not named a party-defendant and did not seek to intervene in foreclosure action lacked standing to challenge foreclosure judgment under Rule 1.540(b) - Chalisle v U.S. Bank, NA, as Trustee, Case No. 3D17-58 (Fla. 3d DCA July 19, 2017) (appeal dismissed for lack of standing).
  • Prejudgment Interest: prejudgment interest is an element of damages, which does not need to be specially pleaded - The Leila Corp. of St. Pete, et al., v Fareed Ossi, et al., Case No. 2D15-3279 (Fla. 2d DCA July 21, 2017)
  • Foreclosure/Res Judicata: Rule 1.420, often referred to as the “two dismissal rule,” did not bar a third foreclosure action based on the same note and mortgage, because the open-ended series of defaults included different missed payments at issue in each suit. Forero v. Green Tree Servicing, LLC, No. 1D16-2151 (Fla. 1st DCA July 14, 2017) (affirmed).
  • Foreclosure/Default: Final judgment reversed where a trial court refused to allow the defendant to raise affirmative defenses that were included in an answer filed two days before a default was entered. Singh v. U.S. Bank, N.A. as trustee for the certificate holders of Citigroup Mortgage Loan Trust, Inc. asset-backed pass- through certificates, series 2007-AMC1, et al., No. 2D16-1462 (Fla. 2d DCA July 14, 2017) (reversed and remanded).
  • Corporate Status: Plaintiff failed to timely raise defendant’s corporate (inactive) status prior to entry of final judgment and after notice of appeal. Building B1, LLC v. Component Repair Services, Inc., No. 3D16-1286 (Fla. 3rd DCA July 12, 2017) (affirmed).
  • Foreclosure/Statute of Limitations: Fourth District Court of Appeals joins Second District Court of Appeals in concluding that the allegations of the complaint in underlying action that the borrowers were in a continuing state of default at the time of filing of the complaint was sufficient to satisfy the five-year statute of limitations. Kebreau v. Bayview Loan Servicing, LLC et al., No. 4D16-2010 (Fla. 4th DCA July 12, 2017) (affirmed in part, reversed in part).
  • Landlord/Tenant/Contract Interpretation: A ninety-nine-year lease clearly and unambiguously granted lessor a right to reappraise the property at specified dates, and only those dates. City of Pompano Beach, Florida v. Beatty, as Trustee of the Nancy C. Beatty Revocable living Trust, dated October 26,1990 et al., No. 4D16-2621 and 4D16-3699 (Fla. 4th DCA July 12, 2017) (reversed and remanded).

TITLE INSURANCE UPDATE

  • Expert Testimony: excluding Bush Nielsen's testimony as to the measure of damages under a title policy as legal opinion on a matter of fact properly consigned to the trier of fact under Connecticut law – Chicago Title Ins. Co. v. Lapuma, No. CV156018031S (Conn. Superior, June 9, 2017).
  • Statute of Limitations: granting title insurer's motion to dismiss on Utah statute of limitations that runs from "inception of loss," holding that time to be when insured was named in quiet title suit, not when he lost it – Park v. First American Title Ins. Co., Case No. 2:17-CV-280-DAK (D. Ut., July 12, 2017).
  • RESPA: granting summary judgment to law firm that referred business to title insurance agent affiliated, holding that it satisfied RESPA's affiliated business arrangement safe harbor – CFPB v. Borders & Borders, PLC, Case No. 3:13-CV-01047-CRS-DW (W.D. Ky., July 13, 2017).
  • Title Search Negligence: affirming summary judgment to title agent against negligent searchclaim where agent prepared only a title commitment and plaintiff did not order an abstract or title search – Russo v. PPN Title Agency, LLC, (N.J. Superior, July 30, 2017).
  • Escrow Agent Negligence: dismissing negligence claim against closing agent for short payoff, holding that agent's only duties ran to lender, not to borrower that did not buy title policy or give closing agent any instructions – Ruvalcaba v. Ocwen Loan Svc., LLC, Case No. 15-cv-00744-BAS(DHB) (S.D. Cal., July 13, 2017).
  • Unauthorized Practice of Law: holding that lender and title insurance agent did not engage in unauthorized practice of law because licensed attorneys were involved in every significant step in the transactions – Boone v. Quicken Loans, Inc., (S.C. Sup. Ct., July 19, 2017).
  • Title Insurance Policy Breach: Affirming judgment for title insurer that cured title defect in 18 months, holding that delay did not proximately cause building to be demolished and owner's refinancing to fall through and that loss of property's value was not recoverable under title policy – Wade v. Stewart Title Guaranty Co., 2017 IL App (1st) 161765, Case No. 1-16-1765 (Ill App. 1st Dist., June 30, 2017)
July 13, 2017 12:24 PM | Permalink

REAL PROPERTY UPDATE

  • Takings/Declaratory Relief: plaintiff’s request for a declaration that its further pursuit of a zoning application was futile was not a proper claim for declaratory relief – GolfRock, LLC v. Lee County, Fla., No. 2D15-2105 (Fla. 2d DCA July 7, 2017) (reversed and remanded with direction to dismiss)
  • Foreclosure/Standing: plaintiff that was substituted in after complaint was filed failed to prove that its predecessor in interest had standing at the inception of the case – Winchel v. PennyMac Corp., No. 2D15-5601 (Fla. 2d DCA July 7, 2017) (reversed and remanded for judgment in defendant’s favor)
  • Foreclosure/Intervention: purchaser of property that was the subject of a foreclosure action was not entitled to intervene in the action where a notice of lis pendens had been recorded by foreclosing lender prior to said purchaser buying the property – Tikhomirov v. Bank of New York Mellon f/k/a Bank of New York Successor Trustee, No. 16-1032 (Fla. 3d DCA July 5, 2017) (affirmed)
  • Foreclosure/Allonge: an endorsement and assignment of note was, effectively, an allonge, and, as such, bank was required to, but did not, file original document, as it did not plead a lost note count – U.S. Bank Nat’l Ass’n, as Trustee v. Kachik, No. 4D16-1776 (Fla. 4th DCA July 5, 2017) (affirmed)
  • Foreclosure/Standing: disparity between name of trust in complaint and name of trust in special endorsement to promissory note did not create standing defect – Bank of New York Mellon Trust Co., Nat’l Ass’n, as Trustee v. Ginsberg, No. 4D16-3168 (Fla. 4th DCA July 5, 2017) (reversed and remanded)
  • Foreclosure/Admissions: because pleadings and other record evidence contradicted the bank’s technical admissions caused by its failure to timely respond to requests for admission and there was no prejudice to borrowers, entry of summary judgment in favor of borrowers was improper – Wells Fargo Bank, N.A. v. Shelton, No. 5D15-3283 (Fla. 5th DCA July 7, 2017) (reversed and remanded)
  • Foreclosure/Standing: trustee failed to show its standing to foreclose at lawsuit’s inception where there was an allonge indorsing note to a different entity and trustee’s current servicer provided no evidence indicating when undated indorsement was placed on note – Kumar v. U.S. Bank, N.A. Successor Trustee, No. 5D16-2889 (Fla. 5th DCA July 7, 2017) (reversed and remanded for entry of involuntary dismissal)

TITLE INSURANCE UPDATE

  • Title Insurance Coverage: whether 18 months to cure title defect by litigating against holder of undisclosed second mortgage and then settling constitutes removal of the defect in a reasonably diligent manner is a fact question properly resolved by trial court's judgment. Costs invested in property by insured were not recoverable under title policy. And insured failed to prove causation when insurer testified it would have insured over defects if insured had told it she was seeking rehabilitation loan – Wade v. Stewart Title Guaranty Co., 2017 IL App (1st) 161765 (Ill App. 1st Div. June 30, 2017 (Affirming judgment for title insurer after bench trial).
  • Replacement Doctrine and Equitable Subrogation: under the replacement doctrine, refinancing lender stepped into the shoes to the extent of the first mortgage lien ahead of a HELOC that was partially paid, but not satisfied at the closing, but equitable subrogation did not apply because the HELOC was not fully paid off – US Bank, N.A. v. JPMorgan Chase Bank, N.A., No. 1 CA-CV 16-0253 (Arizona App. Div. 1 June 29, 2017) (affirming in part and reversing in part summary judgment for refinancing lender).
June 26, 2017 3:27 PM | Permalink

Real Property Update

US Supreme Court

  • Regulatory Taking: owner of parcel A, that took title to adjacent parcel B after regulation restricting use of parcels had been passed, lost grandfather rights for both parcels by operation of merger and was not entitled to compensation for taking - Murr, et al. v Wisconsin, et al., Case No. 15–214 (U.S. June 23, 2017) (affirmed).

Florida Courts

  • Foreclosure/Standing: final judgment of foreclosure reversed for failure to prove standing at the inception of lawsuit - Verizzo v The Bank of NY Mellon, Case No. 2D15-2508 (Fla. 2d DCA June 21, 2017).
  • Judgment Collection/Garnishment: judgment creditor stated a cause of action for negligence against garnishee who failed to retain contents of judgment debtor’s safe deposit box after being served with a writ of garnishment. Judgment debtor’s subsequent discharge in bankruptcy did not bar judgment creditor’s claim against garnishee - Salcedo v Wells Fargo Bank, N.A., Case No. 3D16-430 (Fla. 3d DCA June 21, 2017) (involuntary dismissal reversed).
  • Foreclosure/Surplus: pursuant to section 45.033, Florida Statutes, surplus foreclosure proceeds are generally disbursed to owner of record (except in certain limited circumstances) and trial court erred by disbursing the proceeds to purchaser at foreclosure sale - Rodriguez, et al. v Federal National Mortgage Assoc., Case No. 5D17-196 (Fla. 5th DCA June 23, 2017) (reversed and remanded)
  • Foreclosure/Conditions Precedent: testimony of lender’s practice of creating and mailing breach letters and business record reflecting mailing raised a presumption that a breach letter was mailed to the borrower by first class mail in accordance with standards and in compliance with the mortgage’s notice requirements - Citibank, N.A., Trustee, et al. v Manning, et al., Case No. 4D15-4526 (Fla. 4th DCA June 21, 2017)

Title Insurance Update

  • Right of Access: insured could state a claim for breach of policy based upon lack of right of access despite being able to obtain access under Louisiana law because insured would have to litigate in order to establish actual access to a public road - BJD Properties, LLC v. Stewart Title Guaranty Co., Case No. 16-01757 (W.D. La. May 22, 2017)(Report and Recommendation Adopted by District Court on June 15, 2017)
  • Attorneys’ Fees: in Texas first party claims litigation, insurer not required to produce its own billing records when challenging the insureds’ attorney fee claims, because billing records are protected by the work-product privilege constituting a compilation of information that reveals an attorney’s strategy and thought process, and records are irrelevant to fee challenge, where insurer did not compare its own fees to the insureds’ or seek to recover its own fees – In re Nat’l Lloyds Ins. Co., Case No. 15-0591 (Tex. Jun. 9, 2017) (reversing appellate court and provisionally granting writ of mandamus; at odds with some other jurisdictions, including Florida)
June 7, 2017 3:07 PM | Permalink

Real Property Update

  • Lease: where lessee transfers leasehold interest to third party, but retains easement in leased property, lessee transfers less than “entire interest” in property, and such sublease not tantamount to an assignment - City of Pensacola v. Seville Harbour, Inc., Case No. 1D16-2481  (Fla. 1st DCA June 1, 2017) (affirmed).
  • Ad Valorem Taxes: property appraiser allowed to make mathematical corrections to previous taxed year assessed values so long as homeowners given notice and opportunity to be heard in front of value adjustment board, pursuant to Taxpayer Bill of Rights - Nikolits-v-Haney, Case No. 4D15-4464 (Fla. 4th DCA May 31, 2017) (reversed and remanded).
  • Foreclosure: involuntary dismissal against foreclosing bank improper where bank introduced payoff screenshot into evidence showing “all the amounts due and owing, including the principal balance . . . the escrow advance, accrued interest, per diem interest, and [the default date];” when considered in light most favorable to bank, admitted evidence established prima facie case on damages - Wells Fargo Bank, N.A. v. Eisenberg, Case No. 4D16-2646  (Fla. 4th DCA May 31, 2017) (reversed and remanded).
  • Foreclosure: “[w]ithout evidence showing that a modified credit agreement exists [between a foreclosing bank and a borrower, a] modified mortgage is insufficient to establish the increased amount [the foreclosing bank] claims it is owed” - Chuchian v. Situs Investments, LLC, Case No. 5D15-2125  (Fla. 5th DCA June 2, 2017) (reversed and remanded).

Title Insurance Update

  • Attorney’s Fees/American Rule: in Maryland exception to American Rule permits award of fees from collateral litigation, and court may award damages and fees from plaintiff’s separate litigation against a third party caused by defendant’s negligent title search, where wrongful conduct of defendant forced plaintiff into litigation with third party, and plaintiff demonstrated that defendant’s negligence proximately caused plaintiff to file the collateral action incurring costs and necessary expenses in good faith and did not otherwise receive compensation for those costs and expenses – Eastern Shore Title Co. v. Ochse, Case No. 20-C-10-007315 (Md. Dist. Ct. App. May 31, 2017) (affirming trial court)
  • Compensatory Damages: insurer permitted an award of compensatory damages from title agent, in an action brought in negligence rather than indemnity, where the award reflects insurer’s full amount of settlement with insureds and insurer was legally liable to a insureds as a result of agent breaching its duty to insureds – Chicago Title Ins. Co. v. Accurate Title Searches, Inc., AC 37869 (Conn. Dist. Ct. App. May 30, 2017) (affirming trial court’s award of compensatory damages via summary judgment)
  • Compensatory Damages/American Rule: American Rule does not preclude insurer from receiving an award of compensatory damages from title agent for its attorney’s fees and expenses incurred in defending its insured in prior litigation as a result of agent’s negligence – Chicago Title Ins. Co. v. Accurate Title Searches, Inc., AC 37869 (Conn. Dist. Ct. App. May 30, 2017) (affirming trial court’s award of compensatory damages via summary judgment)
  • Embezzlement/Evidence of Wrongdoing: underwriter’s correspondence with former title agent convicted of embezzlement that provided a timeline of agent’s wrongdoing, detailed allegations of misappropriation, and expressed doubts about defendant’s veracity and credibility, was permissible and relevant Rule 403 evidence, where its probative value outweighed its prejudicial effect and there was additional, abundant inculpatory evidence of agent’s wrongdoing – State v. McDonald, Case No. K2/11-798A (R.I. Apr. 20, 2017) (affirming conviction of embezzlement and conspiracy)
June 2, 2017 11:06 AM | Permalink

Real Property Update

  • Foreclosure/Standing/Lost Note: if plaintiff did not have right to enforce note when lost, plaintiff should present evidence of assignment from payee to plaintiff or affidavit of ownership - Peters v. The Bank of New York Mellon, Case No. 2D15-2222 (Fla. 2d DCA May 26, 2017) (Reversed and remanded with directions.)
  • Foreclosure/Standing/Assignment: assignment of mortgage, but not note, insufficient to prove standing - Peters v. The Bank of New York Mellon, Case No. 2D15-2222 (Fla. 2d DCA May 26, 2017) (Reversed and remanded with directions.)
  • Foreclosure/Standing: lender failed to prove standing because original allonge to note not filed before or at trial - Mathis v Nationstar Mortgage, LLC, Case No. 2D15-2782 (Fla. 2d DCA May 26, 2017) (Reversed and remanded with directions.)
  • Condition Precedent/Foreclosure: notice to borrower of terms of default and action required to cure constitutes substantial compliance with paragraph 22 default notice in mortgage - U.S. Bank National Assoc., Trustee v Doepker, Case No. 2D15-5307 (Fla. 2d DCA May 24, 2017) (Reversed and remanded.)
  • Due Process: violation of procedural due process occurred when trial court considered and adjudicated matters beyond those noticed for hearing - Nationstar Mortgage, LLC v Weiler, Case No. 2D16-1607 (Fla. 2d DCA May 26, 2017) (Reversed and remanded.)
  • Claim to Deposit: broker had “ownership interest” in forfeited deposits because listing agreement provided broker would be paid commission from any retained deposits - Plaza Tower Realty Group, LLC v 300 S. Duval Assoc., LLC, et al., Case No. 3D16-1491 (Fla. 3d DCA May 24, 2017)
  • Standing/Foreclosure: lender not entitled to evidentiary inference that it possessed original note at time of filing foreclosure action because copy attached to complaint did not have loan numbers and, therefore, was not “identical” to original note, with loan numbers - Friedle v The Bank of NY Mellon, et al., Case No. 4D15-1750 (Fla.  4th DCA May 24, 2017)
  • Exemption to Homestead Protection: trial court could force sale of ex-spouse’s homestead property to pay former spouse when property owner acts egregiously, reprehensibly, or fraudulently - Spector v Spector, et al., Case No. 4D16-0922 (Fla. 4th DCA May 24, 2017) (Reversed and remanded with instructions.)
  • Homeowners Association Powers/Restrictions: HOA required to strictly comply with 14 day notice required under section 720.305(2)(b), Florida Statutes, before imposing fines - Dwork v Executive Estates of Boynton Beach Homeowners Ass., Inc., Case No. 4D16-1698 (Fla. 4th DCA May 24, 2017) (Reversed and Remanded.)
  • Vacating Dismissal: voluntary dismissal filed by clerical error should have been vacated pursuant to 1.540(b) where evidence showed inadvertence of filing - Wells Fargo Bank, N.A. v Rojas, Case No. 4D16-4301 (Fla. 4th DCA May 24, 2017) (Reversed and remanded.)
  • Lis Pendens: possible financial harm, by way of loss of potential sale of property, not enough to show requisite irreparable harm imposed by trial court’s denial of motion to dissolve lis pendens - Landmark at Crescent Ridge, L.P. v. Everest Financial, Inc., No. 1D16-4532 (Fla. 1st DCA May 16, 2017) (petition for writ of certiorari dismissed)
  • Proposal for Settlement: proposal for settlement complied with rule 1.442 in inverse condemnation case where plaintiff did not raise any equitable claims for relief in its complaint - Polk County v. Highlands-in-the-Woods, L.L.C., No. 2D15-5642 (Fla. 2d DCA May 19, 2017) (reversed and remanded)
  • Foreclosure/Attorneys’ Fees: plaintiff not entitled to attorneys’ fees where failed to present expert testimony as to reasonableness of attorney’s hourly rate and hours expended - Sciandra v. Pennymac Corp., No. 2D15-5189 (Fla. 2d DCA May 19, 2017) (affirmed in part; reversed in part; remanded with instructions)
  • Foreclosure/Statute of Limitations: accrual of cause of action for each missed monthly installment payment accrues the day after each is due to be paid, not on the date of acceleration of entire balance - Ventures Trust 2013-I-NH v. Johnson, No. 5D16-1020 (Fla. 5th DCA May 19, 2017) (affirmed)
  • Short Sale/Statute of Limitations:  one-year statute of limitations to bring deficiency action, contained in Florida Statute 95.11(5)(h), is not applicable to an action after a short sale - Bush v. Whitney Bank et al., No. 5D16-2344 (Fla. 5th DCA May 19, 2017) (affirmed)

TITLE INSURANCE UPDATE

  • Adverse Possession: under Delaware law, the state is exempt from loss of title by adverse possession absent consent by statute – Delaware v. Sweetwater Point, LLC, C.A. No. 5009-VCG (N.D. Ala. May 23, 2017) (unpublished memorandum opinion) (congratulating the parties on their diligence in tracing title back to colonial times and their exemplary civility and courtesy in pursuit of zealous advocacy)
  • Bad Faith: title insurers are exempt from bad faith denial of coverage claims by Illinois Title Insurance Act, and claims for common law bad faith or breach of covenant of good faith and fair dealing are barred by Illinois law – Bank of America v. Chicago Title Ins. Co., Case No. 17 C 0407 (N.D. Ill. May 18, 2017) (granting motion to dismiss)
  • Breach of Agency Agreement: inappropriate to enter summary judgment where agency agreement is ambiguous and the court must consider parole evidence to determine meaning of agreement – First American Title Ins. Co. v. Nat’l Title Agency, LLC, Case No. 2:13CV1055DAK (D. Utah, May 19, 2017) (denying summary judgment)
  • Breach of Agency Agreement: title agent breached agency agreement with insurer by failing to pay for shortfalls in trust account and insurer was required to pay for shortfalls, even though shortfalls may have been caused by financial institution which permitted garnishment of trust account –First American Title Ins. Co. v. Nat’l Title Agency, LLC, Case No. 2:13CV1055DAK (D. Utah, May 19, 2017) (granting summary judgment)
  • Breach of Contract: title company permitted to bring breach of contract action against lender that conveyed property purchased at foreclosure sale to insured and inadvertently conveyed additional lot not owned by lender, where property description was not included in the contract, parties executed contract prior to drafting property description, and insured purchaser was in possession of the land – Fidelity Nat’l Title Ins. Co. v. Wooden, Case No. 5:16-cv-00844-AKK (N.D. Ala. May 23, 2017) (denying motion to dismiss)
  • Breach of Warranty: title company permitted to bring breach of warranty action against lender where lender purported to convey good and marketable title to property purchased at foreclosure sale via special warranty deed to insured, and inadvertently conveyed additional property not owned by lender – Fidelity Nat’l Title Ins. Co. v. Wooden, Case No. 5:16-cv-00844-AKK (N.D. Ala. May 23, 2017) (denying motion to dismiss)
  • Closing instructions: issue of whether purchaser provided closing instructions and whether instructions were required by law, policy, custom or practice to be in writing is a genuine issue of material fact underlying breach of contract action, where closing agent who was provided with borrower’s verbal closing instructions was title insurer’s escrow, title and closing agent – Johnson v. U.S. Title Agency, Inc., Case No. 103665 (Ohio Dist. Ct. App. May 18, 2017) (reversing and remanding summary judgment)
  • Closing instructions: borrower has standing to bring action against closing, title and escrow agent for agent’s failure to comply with lender’s closing instructions where instructions contained a provision that agent will be liable for bank’s losses – Johnson v. U.S. Title Agency, Inc., Case No. 103665 (Ohio Dist. Ct. App. May 18, 2017) (reversing and remanding summary judgment)
  • Created, Suffered or Assumed: insured not required to act intentionally or wrongfully under Exclusion 3(a); rather, the Exclusion applies if the insured either expressly or impliedly assumed or agreed to the defects or encumbrances in the course of purchasing the property involved – Bank of America v. Chicago Title Ins. Co., Case No. 17 C 0407 (N.D. Ill. May 18, 2017) (denying motion to dismiss counterclaim)
  • Fraudulent Transfers: Utah’s Fraudulent Transfer Act does not provide a cause of action against individual directors of a corporate entity, and unless insurer brings a claim to pierce the corporate veil against the corporate entity causing the transfer it cannot prevail against the principals of the corporation – First American Title Ins. Co. v. Nat’l Title Agency, LLC, Case No. 2:13CV1055DAK (D. Utah, May 19, 2017) (granting summary judgment)
  • Indemnification: title company’s claim for indemnity against lender that sold property purchased at foreclosure sale to insured and inadvertently conveyed additional lot not owned by lender not ripe because no payment for loss had been made – Fidelity Nat’l Title Ins. Co. v. Wooden, Case No. 5:16-cv-00844-AKK (N.D. Ala. May 23, 2017) (granting motion to dismiss without prejudice)
  • Personal Guaranty: insurer can bring suit against guarantor for unpaid premiums, where guarantor obligated to remit policy premiums under personal guaranty – First American Title Ins. Co. v. Nat’l Title Agency, LLC, Case No. 2:13CV1055DAK (D. Utah, May 19, 2017) (granting summary judgment)
  • Record Title: under Delaware law, evidentiary standard is preponderance of the evidence in an in personam action to determine competing claims to property – Delaware v. Sweetwater Point, LLC, C.A. No. 5009-VCG (N.D. Ala. May 23, 2017) (unpublished memorandum opinion) (congratulating the parties on their diligence in tracing title back to colonial times and their exemplary civility and courtesy in pursuit of zealous advocacy)
  • Indemnity from title agent: Title underwriter awarded summary judgment on fraud claims against former title agent, which were deemed excepted from discharge in former agent’s bankruptcy proceedings, based upon former agent’s intentional failure to except pre-existing liens from coverage prior to issuing policies. IN RE: Syed Rizwan Mohiuddin, Southern Title Ins. Corp. v. Mohiuddin, Adversary No. 16-3151 (Bankr. S.D. Tex May 12, 2017)
May 15, 2017 2:42 PM | Permalink

REAL PROPERTY UPDATE:

  • Foreclosure/Conditions Precedent: plaintiff not required to given notice under section 559.715 as condition precedent to foreclosure, and plaintiff’s default notice to borrowers pursuant to paragraph 22 of mortgage was sufficient – U.S. Bank, N.A., as Trustee for RFMSI 2006-S10 v. Adams, No. 2D15-4202 (Fla. 2d DCA May 12, 2017) (reversing summary judgment and remanding)
  • Enforcement of Restrictions: defendants’ commercial activity on property violated restrictive covenant, and substantially competent evidence supported trial court’s injunction against defendants to enjoin nuisance – Clark v. Bluewater Key RV Ownership Park Prop. Owners Ass’n, Inc., No. 3D16-1645 (Fla. 3d DCA May 10, 2017) (affirming final judgment granting declaratory and injunctive relief)
  • Negligence/Statute of Limitations: statute of limitations for subrogation action stemming from roof leak allegedly caused by negligent repairs on insured premises began to run on date water damage allegedly occurred, not date of repairs – Companion Prop. & Casualty Group v. Built Tops Building Servs., Inc., No. 3D16-2044 (Fla. 3d DCA May 10, 2017) (reversing dismissal and remanding for further proceedings)
  • Construction of Easement: trial court incorrectly concluded that ingress/egress, utility, and drainage easement over certain property could only be used by named grantee in the deed and no other person, including grantee’s invitees – Kovach v. Holiday Springs RV, LLC, No. 5D15-2335 (Fla. 5th DCA May 12, 2017) (reversed and remanded)

TITLE INSURANCE UPDATE:

  • No updates this week.
May 9, 2017 11:28 AM | Permalink

REAL PROPERTY UPDATE

  • Foreclosure: final summary judgment in borrower’s favor inappropriate where borrower merely asserted that lender mistakenly filed copy of original note with court, instead of original, and where borrower failed to establish that plaintiff could not prevail at trial - ALS Maxim I LLC v. Katsenko, Case No. 2D15-5153 (Fla. 2d DCA May 3, 2017) (reversed and remanded)
  • Foreclosure: where foreclosing bank’s witness unable to testify as to procedures used to “board” payment histories onto successor bank’s computers, proper remedy was to remand for further proceedings, rather than dismiss action - Evans v. HSBC Bank, USA, N.A., Case No. 2D15-433 (Fla. 2d DCA May 5, 2017) (reversed in part, affirmed in part, and remanded)
  • Property Taxes: long-term lease that is not perpetually renewable does not result in taxable fee simple ownership interest for lessee of real estate pursuant to Accardo v. Brown, 139 So. 3d 848 (Fla. 2014) - Garcia v. Dadeland Station Associates, Ltd., Case No. 3D16-1698 (Fla. 3d DCA May 3, 2017) (affirmed).
  • Foreclosure: where improperly served defendant files motion for protective order and subsequent motion for sanctions related thereto, that defendant has not sought the “type of affirmative relief that would amount to a submission to the trial court’s jurisdiction” - Bornstein v. The Bank of New York Mellon, Case No. 4D16-2908 (Fla. 4th DCA May 3, 2017) (reversed and remanded)
  • Restrictive Covenants: short-term vacation rentals did not violate restrictive covenants restricting use of property to residential purposes where renters used the property for residential living; owner’s income from rental did not convert use to business. Santa Monica Beach Property Owners Assoc., Inc. v Acord, et al., Case No. 1D16-4782 (Fla. 1st DCA April 28, 2017)
  • Foreclosure/Standing: lender established standing where original note and blank-endorsed allonge was properly authenticated, was introduced into evidence at trial, and was identical to the copy of the note and blank-endorsed allonge attached to the complaint. Bank of New York Mellon v Heath, Case No. 4D16-1988 (Fla. 4th DCA April 26, 2017)
  • Deficiency/Jurisdiction: holding that a party cannot pursue a separate action for deficiency judgment where the foreclosure court reserved jurisdiction to enter a deficiency; certifying conflict with 2nd DCA, 3rd DCA, 4th DCA and 5th DCA. Dyck-O’Neal, Inc. v Lanham, Case No. 1D16-1624 (Fla. 1st DCA April 24, 2017)
  • Foreclosure/Standing: assignment of mortgage signed while lawsuit was pending did not negate the possibility that lender had standing at the inception of the case. HSBC Bank USA, Trustee v Alejandre, Case No. 4D15-2750 (Fla. 4th DCA April 26, 2017)
  • Foreclosure/Due Process: trial court violated borrower’s due process rights by refusing borrower’s request to present evidence following close of lender’s prima facie case. Dobson v U.S. Bank National Assoc., Trustee, et al., Case No. 5D16-200 (Fla. 5th DCA April 28, 2017)

TITLE INSURANCE UPDATE

  • Duty to Defend: it is “nonsense” that insurer may claim it was unaware that there might be coverage under a policy where insured title agency did not challenge denial of coverage under errors and omissions policy, and insureds are not required to lodge an exception or request reconsideration to a denial – Title Indus. Assurance Co., R.R.G. v. First American Title Ins. Co., Case No. 15-3310 (7th Cir. Dec. 10, 2017) (affirming summary judgment against liability insurer)
  • Duty to Defend/Estoppel: under Illinois law, an insurer uncertain of its obligations may defend under a reservation of rights or seek declaratory relief, but if it abandons its insured at the onset where it should have defended its insured, the insurer has breached its duty, is estopped from invoking policy defenses to indemnify, and may be liable for judgments or settlements that claimants obtain against the insured – Title Indus. Assurance Co., R.R.G. v. First American Title Ins. Co., Case No. 15-3310 (7th Cir. Dec. 10, 2017) (affirming summary judgment against liability insurer)
  • Duty to Defend/Exclusions: exclusion withholding coverage for “dishonest, fraudulent, criminal, malicious or intentional wrongful acts” of insured title agency is not triggered when title insurance company alleges agency committed errors and omissions that could arise from mere negligence, which allegations were legal conclusions that did not permit insurer to avoid a duty to defend – Title Indus. Assurance Co., R.R.G. v. First American Title Ins. Co., Case No. 15-3310 (7th Cir. Dec. 10, 2017) (affirming summary judgment against liability insurer)
  • Duty to Defend/Exclusions: fraud count against third party with unexplained relationship to insured title agency, without more, does not permit liability insurer to invoke exclusion for “dishonest, fraudulent, criminal, malicious or intentional wrongful acts” under errors and omissions policy – Title Indus. Assurance Co., R.R.G. v. First American Title Ins. Co., Case No. 15-3310 (7th Cir. Dec. 10, 2017) (affirming summary judgment against liability insurer)
  • Duty to Defend/Exclusions: liability insurer not permitted to preemptively decline coverage at outset of litigation based on facts it did not and could not know, where underlying complaints alleged several theories of recovery and any theory was within potential coverage of an errors and omissions policy – Title Indus. Assurance Co., R.R.G. v. First American Title Ins. Co., Case No. 15-3310 (7th Cir. Dec. 10, 2017) (affirming summary judgment against liability insurer)
  • Duty to Defend/Prior Knowledge Provision: liability insurer’s failure to assert prior knowledge provision of title agency’s errors and omissions policy until summary judgment stage required insurer to provide justification for delay in asserting exclusion, in an action brought by insurer seeking declaratory relief where title insurance company appeared as a defendant seeking recovery for insured title agency’s wrongdoing – Title Indus. Assurance Co., R.R.G. v. First American Title Ins. Co., Case No. 15-3310 (7th Cir. Dec. 10, 2017) (affirming summary judgment against liability insurer)
  • Duty to Defend/Waiver: both a long delay in asserting a policy defense and the “mend-the-hold” doctrine in which an insurer changes the basis for denial of a claim may constitute a waiver of the defense upon a showing by a claimant that it has been prejudiced by the delay – Title Indus. Assurance Co., R.R.G. v. First American Title Ins. Co., Case No. 15-3310 (7th Cir. Dec. 10, 2017) (affirming summary judgment against liability insurer)
April 24, 2017 3:25 PM | Permalink

REAL PROPERTY UPDATE

  • Foreclosure/Attorneys’ Fees: mortgage foreclosure plaintiffs seeking attorney’s fees must support their claim with competent, substantial evidence of the number of hours worked and evidence that those hours and hourly rate are reasonable - Henderson v. Onewest Bank FSB, No. 1D16-2670 (Fla. 1st DCA April 18, 2017) (reversed and remanded in part).
  • Foreclosure/Standing: plaintiff failed to provide evidence that indorsee had intent to transfer any interest to plaintiff when note was transferred into trust - Shaffer v. Deutsche Bank National Trust, as Indenture Trustee for American Home Mortgage Investment Trust 2006-1, Mortgage Backed Notes, Series 2006-1, No. 2D14-4205 (Fla. 2d DCA April 19, 2017) (reversed and remanded).
  • HOA/Summary Judgment: trial court erred in entering final summary judgment in favor of homeowners' association, where conflicting affidavits evinced disputed issues regarding owner's property and her compliance with recorded restrictions - Sexton v. Southfield Subdivision Maintenance and Property Owners' Association, Inc., No. 2D16-3567 (Fla. 2d DCA April 19, 2017) (reversed and remanded).
  • Foreclosure/Lack of Prosecution: “close enough” is not “good enough” where plaintiff’s good cause showing was filed 4 days before hearing, as opposed to minimum 5 day requirement under rule 1.420(e) - Held v. U.S. Bank National Association, as Trustee for C-BASS 2007-CB7 Trust, Mortgage Loan Asset-Backed Certificates, Series 2006-CB7, et al., No. 4D15-499 (Fla. 4th DCA April 19, 2017) (reversed and remanded).
  • Foreclosure/Standing: plaintiff, as nonholder in possession, failed to prove series of transactions through which it acquired note starting with first holder of note - Powell v. Wells Fargo Bank, N.A. as Trustee for Structured Asset Mortgage Investments II, Inc., GreenPoint Mortgage Funding Trust 2006-AR2, Mortgage Pass-Through Certificates, Series 2006-AR2, No. 4D15-3013 (Fla. 4th DCA April 19, 2017) (reversed and remanded).
  • Foreclosure/Appeal: order granting summary judgment for borrowers and dismissing case without prejudice to lender’s filing a new foreclosure action was final appealable order - Bank of New York Mellon v. Swain, No. 5D16-139 (Fla. 5th DCA April 21, 2017) (dismissed).
  • Foreclosure/Conditions Precedent: plaintiff’s notice of default substantially complied with notice provision contained in paragraph 22 of mortgage – U.S. Bank Trust, N.A., etc. v. Wellman, No. 3D15-1368 (Fla. 3d DCA Apr. 12, 2017) (reversed and remanded)
  • Dismissal with Prejudice: trial court improperly dismissed with prejudice pro se plaintiff’s complaint against lender for, among other things, unauthorized entry and conversion of personal property, and plaintiff should have been permitted to amend – Hanna-Mack v. Bank of Am., N.A., No. 3D16-1897 (Fla. 3d DCA Apr. 12, 2017) (reversed and remanded to permit amendment of complaint)
  • Foreclosure/Assignment of Rents: where there was no agreement between the parties to assign rents or other basis for sequestering rents, and the rents were not the subject of the litigation, trial court lacked authority to order that rents be deposited into court registry – UV Cite III, LLC v. Deutsche Bank Nat’l Trust Co., as Trustee, No. 3D16-2341 (Fla. 3d DCA Apr. 12, 2017) (reversed and remanded)
  • Foreclosure/Attorneys’ Fees: party that successfully prevailed in obtaining dismissal with prejudice of foreclosure action based on lack of standing pursuant to contract sued upon not entitled to an attorneys’ fees award pursuant to contract’s attorneys’ fee provision – Nationstar Mortg. LLC v. Glass, No. 4D15-4561 (Fla. 4th DCA Apr. 12, 2017) (denying motion for fees, and denying without prejudice request for costs)
  • Foreclosure/Reverse Mortgage: language in reverse mortgage was patently ambiguous regarding whether spouse of decedent was a “borrower” under its terms, and extrinsic evidence was necessary to resolve this factual question – Nationstar Mortg. Co. v. Levine, No. 4D16-615 (Fla. 4th DCA Apr. 12, 2017) (reversing entry of summary judgment)
  • Foreclosure/Business Records Hearsay Exception: bank satisfied predicate necessary for admission of prior servicers’ loan payment histories, having presented detailed testimony regarding the “on-boarding” process utilized by current servicer to verify information received from prior servicers – Bank of New York Mellon f/k/a Bank of New York Successor Trustee v. Vessels, No. 5D15-4248 (Fla. 5th DCA Apr. 13, 2017) (reversed and remanded for new trial on issue of damages)

TITLE INSURANCE UPDATE

  • Duty to Defend: duty to indemnify is a contractual one dictated by title policy provisions, and insurer is required to indemnify insured under Section 9(b) of an ALTA 2006 Extended Lender’s policy where deed was invalid and unenforceable as an unauthorized conveyance in a Ponzi scheme – Banner Bank v. First American Title Ins. Co., Case No. 2:16-CV-00200-BSJ (D. Utah. Apr. 12, 2017)(granting summary judgment in favor of insured)
  • Duty to Defend: title defect not exempt from coverage under Exclusion 6 of an ALTA 2006 Extended Lender’s policy for unauthorized conveyances that violate the Securities Act of 1933 and Exchange Act of 1934, and Rules 10(b) and 10b-5 because the Exclusion only applies to fraudulent conveyances or transfers pursuant to federal bankruptcy, state insolvency or similar creditors’ rights laws – Banner Bank v. First American Title Ins. Co., Case No. 2:16-CV-00200-BSJ (D. Utah. Apr. 12, 2017)(granting summary judgment in favor of insured)
  • Implied Covenant of Good Faith and Fair Dealing: insurer breached implied covenant of good faith and fair dealing when it failed to diligently investigate, fairly evaluate, and promptly and reasonably act in rejecting or settling claim for indemnity as a result of unauthorized conveyances, where insurer took four months to respond and had not investigated or evaluated the insured’s reading of claim documents – Banner Bank v. First American Title Ins. Co., Case No. 2:16-CV-00200-BSJ (D. Utah. Apr. 12, 2017)(granting summary judgment in favor of insured)
  • Paragraph 15(b) – Applicability: summary judgment should not have been entered in favor of insurer based upon paragraph 15(b) of policy when insured also sued for negligent provision of real estate transaction services and policy did not include property at issue. Michael v. Stock, Case No. 1229 EDA 2016 (Pa. Sup. Ct. Apr. 11, 2017) (vacating award of summary judgment in favor of title insurer).
  • Estoppel: insured’s argument that insurer’s failure to properly search title records and properly issue policy insuring entirety of property purchased by insured precluded summary judgment on coverage issue in favor of insurer. Michael v. Stock, Case No. 1229 EDA 2016 (Pa. Sup. Ct. Apr. 11, 2017) (vacating award of summary judgment in favor of title insurer).
  • Bad faith: Pennsylvania’s bad faith statute creates independent cause of action to insured which is not dependent on success of coverage dispute and thus trial court’s reasoning regarding existence of coverage was not determinative of insured’s bad faith claims. Michael v. Stock, Case No. 1229 EDA 2016 (Pa. Sup. Ct. Apr. 11, 2017) (vacating award of summary judgment in favor of title insurer).
  • Defective Description Exception: insurer had no duty to defend because defective description exception – that expressly stated insurer could not insure a description based on acreage – excludes coverage for any claims related to legal description. Fischer Sand & Aggregate, LLP v. Old Republic National Title Ins. Co., Case No. A16-0988 (Minn. Ct. App. Apr. 10, 2017).
  • Survey Exception: insurer was entitled to summary judgment when an accurate survey would have disclosed boundary and insured failed to provide survey to clear exception. Fischer Sand & Aggregate, LLP v. Old Republic National Title Ins. Co., Case No. A16-0988 (Minn. Ct. App. Apr. 10, 2017).
April 12, 2017 11:05 AM | Permalink

REAL PROPERTY UPDATE

  • Foreclosure/Deficiency Judgment: where a foreclosing bank acquires in rem jurisdiction via service by publication in underlying foreclosure action, bank may still seek personal service over an individual to pursue deficiency judgment - Dyck-O’Neal, Inc. v. Meikle, Case No. 4D15-3911 (Fla. 4th DCA April 5, 2017) (reversed and remanded)
  • Foreclosure: foreclosing bank’s witness does not need to know when blank indorsement placed on note where copy of already-indorsed note attached to foreclosure complaint; further, bank’s witness does not need to have personal knowledge of acceleration letter being sent where witness may testify that bank’s business records show that acceleration letter was sent - JPMorgan Chase Bank N.A. v. Pierre, Case No. 4D16-1119 (Fla. 4th DCA April 5, 2017) (reversed and remanded)
  • Foreclosure/Intervention: “Whoever purchases property that is the subject of a foreclosure lawsuit in which a mortgagee has previously filed a lis pendens is a purchaser pendent lite . . . [and] is not entitled to intervene or otherwise be made a party to the ongoing lawsuit” - Investor Trustee Services, LLC v. DLJ Mortgage Capital, Inc., Case No. 5D15-3082 (Fla. 5th DCA April 7, 2017) (affirmed)
  • Failure to State Cause of Action: borrower could move for involuntary dismissal for failure to state a cause of action and prove an agreement at close of trial, but was not entitled to relief where mortgage note and short form mortgage provided prima facie evidence of agreement - Khleif v Bankers Trust Co. of California, N.A., as Trustee, Case No. 2D15-4853 (Fla. 2nd DCA March 31, 2017) (affirmed)
  • Jurisdiction: order denying borrower’s motion to quash constructive service was a non-appealable, nonfinal order because order did not determine personal jurisdiction over borrower and only in rem relief was sought - Archer v U.S. Bank National Association, Case No. 5D16-1970 (Fla. 5th DCA March 31, 2017)
  • Foreclosure/Objection to Sale: trial court was required to conduct an evidentiary hearing on borrower’s timely filed objections before clerk of court could issue certificate of title following judicial sale of borrower’s property - McKnight v Chase Home Finance, LLC, Case No. 4D16-2645 (Fla. 4th DCA March 29, 2017)
  • Foreclosure/Lost Note: lender’s witness proved loss of original note and entitlement to reestablish same by testifying that (1) the lender could not locate the note after it was sent to its counsel, (2) its procedure was to contact counsel in an attempt to locate the lost note, (3) it followed the procedure in this case, and (4) a copy of the lost note was presented into evidence - Wells Fargo Bank, N.A. v Ayers, et al., Case No. 4D16-288 (Fla. 4th DCA March 29, 2017) (dismissal reversed)

TITLE INSURANCE UPDATE

  • Duty to Defend: duty to defend under title policy was triggered by filing of complaint challenging invalidity of mortgage rather than filing of summary judgment papers by insured asserting same arguments as to validity of mortgage. Lupu v. Loan City, LLC, Case No. 12-4456 (E.D. Pa. Mar. 27, 2017) (Memorandum Opinion granting summary judgment in favor of Stewart Title Guaranty Company)
  • Duty to Defend (Scope): notwithstanding Massachusetts case law as well as language of policy limiting scope of duty to defend, current Pennsylvania law requires title insurer to defend all the claims in lawsuit if insurer has duty to defend one claim. Lupu v. Loan City, LLC, Case No. 12-4456 (E.D. Pa. Mar. 27, 2017)(Memorandum Opinion)
  • Escrow Agent – Duties: escrow agent had no further duty to search for and disclose recorded documents and was permitted to rely on title commitment and thus escrow agent did not breach any duty to buyers of property for failing to find Declaration of Restrictive Covenants relating to septic tank on property belonging to adjoining lot owner. Eleazer v. First American Title Ins. Co., Case No. 75097-6-I (Wash. Ct. App. Mar. 27, 2017) (Unpublished Opinion)
  • Policy Exclusion 4(a): title insurer properly denied coverage under Exclusion 4(a) when insured owners had pre-closing knowledge of septic tank and had agreed to provide easement for tank to adjoining lot owner - Eleazer v. First American Title Ins. Co., Case No. 75097-6-I (Wash. Ct. App. Mar. 27, 2017) (Unpublished Opinion)
  • Bad Faith: title insurer did not act in bad faith in waiting to defend insured until filing of Fourth Amended Complaint when Court agreed with insurer’s interpretation of when duty arose and when insurer relied on valid precedent from another jurisdiction to argue that duty to defend was limited - Lupu v. Loan City, LLC, Case No. 12-4456 (E.D. Pa. Mar. 27, 2017) (Memorandum Opinion)
  • Third Party Beneficiary: a purchaser of property is not a third party beneficiary entitled to enforce an owner’s title insurance policy lender under Maryland law, where the title policy provides that an “insured” includes successors to the title of the Insured by operation of law as distinguished from purchase . . .” – McRae v. Westcor Land Title Ins. Co., Case No. RWT-16-2332 Case (D. Mar. Mar. 17, 2017)(granting motion to dismiss)
  • Double Recovery Doctrine: FDIC is not precluded from pursuing title agent for damages under Nevada’s double recovery doctrine, where the FDIC settled a separate action with an appraisal company for allegedly inflating property values and the settlement does not apportion any amount recovered by the FDIC to loan at issue – FDIC v. Nevada Title Co., Case No. 2:14-cv-01567-JAD-GWF (D. Nev. Mar. 30, 2017)(denying motion for summary judgment)
  • Breach of Closing Instructions: WAMU’s closing instructions which stated that agent was not authorized to pay fees to a broker or third party were not ambiguous, and required closing agent not to close escrow or disburse funds without contacting WAMU and waiting for further instructions – FDIC v. Nevada Title Co., Case No. 2:14-cv-01567-JAD-GWF (D. Nev. Mar. 30, 2017)(denying motion for summary judgment)
  • Breach of Closing Instructions: FDIC not entitled to summary judgment for breach of closing instructions where title agent failed to inform WAMU regarding involvement of third parties, where the FDIC could not demonstrate that disbursement of $1.2 million to third parties was material – FDIC v. Nevada Title Co., Case No. 2:14-cv-01567-JAD-GWF (D. Nev. Mar. 30, 2017)(denying motion for summary judgment)
  • Breach of Closing Instructions/HUD-1: FDIC not entitled to summary judgment where it was not clear that escrow officer received information on disbursement of closing funds to third parties after estimated HUD-1 was submitted to WAMU – FDIC v. Nevada Title Co., Case No. 2:14-cv-01567-JAD-GWF (D. Nev. Mar. 30, 2017)(denying motion for summary judgment
March 29, 2017 1:37 PM | Permalink

REAL PROPERTY UPDATE

TITLE INSURANCE UPDATE

  • Constructive Trust: a lender is not entitled to a constructive trust or an equitable mortgage to create priority over a federal tax lien, where lender did not have a valid mortgage or protected security interest when federal tax lien was imposed – Bank of New York Mellon v. Ashley, Case No. 14-2914 (D. Mar. March 20, 2017)(denying motion for summary judgment as to constructive trust and equitable mortgage)
  • Equitable Subrogation/Federal Tax Liens: a lender is entitled to a first priority lien over a federal tax lien by reason of equitable subrogation, where borrower refinanced prior to the imposition of the tax lien and proceeds of the lender’s invalid mortgage discharged a prior valid mortgage – Bank of New York Mellon v. Ashley, Case No. 14-2914 (D. Mar. March 20, 2017)(granting motion for summary judgment as to equitable subrogation)
  • Tax Liens: city may not foreclose tax liens, when city records erroneously indicated liens were satisfied at time of purchase and borrower ‘s title search indicated there were no open tax liens – Equity Inv. & Mortg. Co. v. Smith, Case No. 58583/2015 (N.Y. Ct. App. March 21, 2017)(granting motion for summary judgment)
March 20, 2017 12:32 PM | Permalink

REAL PROPERTY UPDATE

  • Coequal Liens: trial court properly authorized tax collector to issue tax certificates subject to community development district’s assessment liens – Villages of Avignon Community Dev. Dist. v. Manatee Cnty. Tax Collector, No. 2D16-1048 (Fla. 2d DCA Mar. 17, 2017) (affirmed but question of great public importance certified)
  • Foreclosure/Association’s Lien: because association’s claim of lien dated back to 1989 declaration, its recorded interest predated bank’s 2009 lis pendens, and therefore association’s 2011 lien foreclosure action was not barred by bank’s mortgage foreclosure action (although association’s action inferior to foreclosure of first mortgage) – Fountainspring II Homeowners Ass’n, Inc. v. Veliz, No. 4D15-3408 (Fla. 4th DCA Mar. 15, 2017) (reversed and remanded)
  • Code Enforcement Liens/Statute of Limitations: applicable statute of limitations for filing suit to foreclose code enforcement lien is twenty years; trial court erred in ruling otherwise – City of Riviera Beach v. J & B Motel Corp., No. 4D16-0174 (Fla. 4th DCA Mar. 15, 2017) (reversed and remanded)
  • Foreclosure/Standing: because JPMorgan’s indorsement was an anomalous indorsement, plaintiff’s possession of note did not make it a holder and, therefore, plaintiff needed to, but did not, establish standing by showing it was a nonholder in possession of note with rights of a holder – PennyMac Corp. v. Frost, No. 4D16-262 (Fla. 4th DCA Mar. 15, 2017) (affirmed)
  • Foreclosure/Original Note: trial court erred (1) in denying original note’s admissibility because placement of undated blank endorsement on note after filing of complaint did not affect note’s authenticity and enforceability, and (2) by involuntarily dismissing bank’s action before bank completed its presentation of evidence – U.S. Bank Nat’l Ass’n as Trustee v. Roseman, No. 4D16-876 (Fla. 4th DCA Mar. 15, 2017) (reversed and remanded)
  • Foreclosure/Condition Precedent: HUD regulation requiring face-to-face meeting prior to foreclosure is condition precedent to foreclosure - Harris v. U.S. Bank National Association, a Trustee for the Certificate Holders of the LXS 2007-16N Trust Fund, No. 1D15-2022 (Fla. 1st DCA March 10, 2017) (affirmed).
  • Foreclosure/Condition Precedent: affidavit in opposition to summary judgment created a genuine issue of material fact where there was a factual issue as to applicability of exception to HUD regulation requiring face-to-face meeting when mortgaged property not within 200 miles of Lender, its servicer, or branch office of either - ARC HUD I, LLC v. Ebbert et al., No. 2D15-4848 (Fla. 2d DCA March 8, 2017) (reversed and remanded)
  • Ejectment: trial court erred in entering order of ejectment, which operated as de facto grant of summary judgment, without Plaintiff filing proper summary judgment motion establishing entitlement to relief sought in pleadings, and that disproves conclusively defendant's entitlement to relief - Abundant Living Citi Church, Inc., v. Abundant Living Ministries, Inc., et al., No. 3D16-2649 (Fla. 3d DCA March 10, 2017) (reversed)
  • Equitable lien/Homestead exemption: plaintiff entitled to foreclose equitable lien imposed to prevent unjust enrichment of defendant in that it secured monies paid to satisfy pre-existing mortgage on homestead property - Flinn v. Doty, as Personal Representative of the Estate of Robert Flinn, deceased, No. 4D-2424 (Fla. 4th DCA March 8, 2017) (affirmed in part and reversed in part)

TITLE INSURANCE UPDATE

  • Res Judicata: title insurer barred from re-litigating equitable subrogation and reformation claims in its own name where it had controlled prosecution of first action brought by loan servicer that lacked standing to bring first suit, resulting in judgment in favor of borrower - The Bank of New York Mellon, Trustee v. Heinz Otto Georg, Case No. 2396 (Md. Ct. Spec. App. March 10, 2017)(unreported)
  • Duty to Defend: duty to defend not triggered under policy based upon mere assertions of public right of way when there was no third party claiming interest against title of insured or any specified loss caused by hypothetical encumbrance - Osprey Landing, LLC v. First American Title Ins. Co., Case No. Lin-16-298 (Me. March 9, 2017)
  • Marketability of Title: mere possibility of future claims for public easements does not render title unmarketable and thus trigger insurer’s duty to defend - Osprey Landing, LLC v. First American Title Ins. Co., Case No. Lin-16-298 (Me. March 9, 2017)
March 7, 2017 8:54 AM | Permalink

REAL PROPERTY UPDATE

  • Foreclosure: foreclosing bank’s allegation that borrowers were in a continuing state of default sufficient to satisfy five-year statute of limitations even though stated initial default date was more than five years prior to foreclosure complaint - Desylvester v. Bank of New York Mellon, Case No. 2D15-5053  (Fla. 2d DCA February 22, 2017) (affirmed)
  • Appellate Jurisdiction:  denial of motion to vacate writ of possession not an appealable non-final order because not set forth in Rule 9.130(a)(3) - Nacius v. One West Bank, FSB, Case No. 4D16-2853 (Fla. 4th DCA February 22, 2017) (appeal dismissed)
  • Foreclosure; Intervention: intervention by purchaser of real property after final judgment of foreclosure entered should not have been allowed; trial court departed from essential requirements of law in permitting purchaser to intervene - Federal National Mortgage Association v. Gallant, Case No. 4D16-3152  (Fla. 4th DCA February 22, 2017) (quashing order and remanding)
  • Foreclosure; Paragraph 22: summary judgment improper where foreclosing bank failed to include mention of its paragraph 22 acceleration letter in affidavit in support of summary judgment to show it complied with conditions precedent to foreclose - Galloway v. Suntrust Bank, et al., Case No. 5D14-2878  (Fla. 5th DCA February 24, 2017) (reversed and remanded)

TITLE INSURANCE UPDATE

  • Damages/Statute of Limitations:  under Kansas law, causes of action for negligence and breach of fiduciary duty against title company accrue and are “reasonably ascertainable” only when plaintiff first claims ownership interest in mineral rights and defendant stops receiving royalty payments for such mineral rights, even though plaintiff suffered legal injury when title company recorded deed six years earlier without reserving mineral rights – LCL, LLC. V. Falen, Case No. 115,434 (Kan. Dist. Ct. App. Feb. 17, 2017)(reversing summary judgment)
  • Offer of Judgment/Attorneys’ Fees: title insurer entitled to attorneys’ fees based upon rejected offer of judgment because real issue in case was money damages despite count for injunctive relief - Kahama VI, LLC v. HJH, LLC, Case No. 11-CV-2029-T-30TBM (M.D. Fla. Feb. 13, 2017)
  • Equitable of Subrogation: Corporation that pledged property as security for corporate officer’s personal loan entitled to equitable subrogation to enforce lien of officer’s lender because corporation paid officer’s loan involuntarily based upon reasonable belief that payment was necessary for corporation’s protection - Holley v. Holley & Taylor, Inc., Case No. 11-15-00046 (Tex. Ct. App. Feb. 10, 2017)
February 14, 2017 1:12 PM | Permalink

REAL PROPERTY UPDATE

  • Foreclosure: where foreclosing bank, who purchased debt from original mortgagee, failed to establish standing to enforce lost note “through evidence of a valid assignment, proof of purchase of the debt, or evidence of an effective transfer,” summary judgment in favor of foreclosing bank improper Houk v. PennyMac Corp. , Case No. 2D15-2583  (Fla. 2d DCA February 10, 2017) (reversed and remanded).
  • Foreclosure/Standing:  where foreclosing bank filed original note bearing blank indorsement with original complaint, it sufficiently established standing to enforce note -U.S. Bank, N.A. v. Becker, Case No. 4D15-4615 (Fla. 4th DCA February 8, 2017) (reversed and remanded).
  • Foreclosure/Removal: trial court lacked jurisdiction to render final summary judgment where defendants had filed a notice of removal to federal court and federal court had not yet remanded case back to trial court - Mawhinney v. 998 SW 144th Court Rd, LLC, Case Nos. 5D15-2185; 5D15-2819  (Fla. 5th DCA February 10, 2017) (reversed and remanded).

 TITLE INSURANCE UPDATE

  • Full Credit Bid: Section 2 of the 1992 ALTA lender’s policy applies when a lender purchases property by full or partial-credit bid at a trustee’s sale – Equity Income Partners, LP v. Chicago Title Ins. Co., Case No. CV-16-0162-CQ (Ariz. Feb. 7, 2017)(answering certified question from 9th Circuit Court of Appeals)
  • Full Credit Bid: a lender’s full or partial-credit bid at a trustee’s sale is not a “payment”  or “payment made” under a 1992 ALTA lender’s policy because to do so would render Section 2 meaningless and contravene Arizona public policy of protecting debtors – Equity Income Partners, LP v. Chicago Title Ins. Co.,, Case No. CV-16-0162-CQ (Ariz. Feb. 7, 2017)(answering certified question from 9th Circuit Court of Appeals)
  • Full Credit Bid: a lender’s full or partial-credit bid at a trustee’s sale does not terminate coverage under Section 2(a)(i), reduce coverage under Section 2, or any possible liability under Section 7 of a 1992 ALTA lender’s policy – Equity Income Partners, LP v. Chicago Title Ins. Co.,, Case No. CV-16-0162-CQ (Ariz. Feb. 7, 2017)(answering certified question from 9th Circuit Court of Appeals)
February 10, 2017 11:40 AM | Permalink

REAL PROPERTY UPDATE:

  • Foreclosure/Sufficiency of Notice: although lender’s notice of default did not expressly state that property could be sold in foreclosure, it substantially complied with notice provision (paragraph 22) of mortgage because it advised mortgagors they would lose their interest in and rights to property in event of foreclosure and notice contained the other necessary disclosures - Wells Fargo Bank, N.A. v Guess, Case No. 2D15-4222 (Fla. 2d DCA February 1, 2017)(summary judgment reversed).
  • Foreclosure: promissory note need not be attached to complaint to state claim on note and for foreclosure of mortgage, where mortgage and material terms of note were attached or incorporated in complaint - Garron, LLC v Buchwald, Case No. 5D15-2279 (Fla. 5th DCA February 3, 2017) (reversed and remanded)
  • Foreclosure/Standing: lender required to prove it was authorized by lender’s predecessor to sign assignment of mortgage to itself, as attorney-in-fact for predecessor-lender, when borrower had asserted standing defense challenging lender’s authority and validity of assignment - Bonafide Properties, LLC v E-Trade Bank, et al., Case No. 5D16-136 (Fla. 5th DCA Feb. 3, 2017) (reversed and remanded) 

TITLE INSURANCE UPDATE:

  • CPL/Damages: court did not abuse discretion in awarding damages that used value of property at time of foreclosure as offset against outstanding loan amount - Aurora Loan Services v. Hirsch, 170 Conn. App. 439 (Conn. Ct. App. Jan. 31, 2017) (judgment affirmed)
  • CPL/Damages: court properly refused to award attorneys’ fees because CPL only provides for recovery of actual losses incurred in connection with closing - Aurora Loan Services v. Hirsch, 170 Conn. App. 439 (Conn. Ct. App. Jan. 31, 2017) (judgment affirmed)
  • CPL/Prejudgment Interest:  court did not abuse discretion in awarding prejudgment interest from date of filing of complaint rather than date of closing - Aurora Loan Services v. Hirsch, 170 Conn. App. 439 (Conn. Ct. App. Jan. 31, 2017) (judgment affirmed)
  • Bona Fide Purchaser: void judgment in chain of title has effect of nullifying subsequent transfer to bona fide purchaser and thus bona fide purchaser took title to property subject to prior lien that had been cancelled via judgment that was set aside after transfer of title - OC Interior Services, LLC v. Nationstar Mortgage, LLC, Case No. D070680 (Cal. Ct. App. Jan. 31, 2017) (reversed and remanded)
February 3, 2017 1:40 PM | Permalink

REAL PROPERTY UPDATE

  • Foreclosure/Lis Pendens: a proper reading of Florida Statute section 48.23(1)(d) is that “when a foreclosure action is prosecuted to a judicial sale, that sale discharges all liens, whether recorded before the final judgment or after, if the lienor does not intervene in the action within 30 days” after the recording of the notice of lis pendens - Ober v. Town of Lauderdale-by-the-Sea, No. 4D14-4597 (Fla. 4th DCA January 25, 2017) (reversed and remanded). 
  • Foreclosure/Deficiency: Florida Statute section 559.715 of the Florida Consumer Collection Practices Act’s requirement that notice must be given “at least 30 days before any action to collect the debt” does not apply in deficiency actions because it is not an action to collect consumer debt - Dyck O’Neal, Inc., v. Ward, No. 2D15-2989 (Fla. 2d DCA January 27, 2017) (reversed and remanded). 
  • Foreclosure: it is necessary to surrender the original note into evidence to remove it from the stream of commerce and prevent the negotiation of the note to another person as the promissory note is a negotiable instrument - Heller v. Bank of America, NA, No. 2D14-3530 (Fla. 2d DCA January 27, 2017) (reversed and remanded). 
  • Foreclosure/Deficiency: guarantors are not collaterally estopped from challenging the amount of deficiency in subsequent deficiency actions, where guarantors were not named in the underlying foreclosure action - Romagnoli v. SR Acquisitions − Homestead, LLC, etc., et al., No. 3D16-386 (Fla. 3d DCA January 25, 2017) (reversed). 
  • Eminent Domain: expert appraisal testimony offered by owner under “development approach” method for determination of fair and just value was appropriate as it was based on the actual value of the property at the time of the taking if sold for its highest and best use - City of Sunny Isles Beach, etc, v. Cavalry Corp., etc., et al., No. 3D15-1420 (Fla. 3rd DCA January 25, 2017) (affirmed).

TITLE INSURANCE UPDATE

  • Collateral Estoppel: where issue of validity of plaintiff’s title to property was decided in her favor as a result of previous construction defect litigation, plaintiff is collaterally estopped from arguing validity of title in a breach of contract and bad faith action against title insurer in a new action, where title insurer was not a party to previous litigation and plaintiff is attempting a second bite at the apple by re-litigating the same issue – Gillard v. Fidelity Nat’l Title Ins. Co., Case No. D067604, (Cal Ct. App., Jan. 24, 2017) (unpublished opinion) (reversing trial court opinion)
  • Statute of Limitations: claims against title insurer barred by the statute of limitations because insurer addressed insured’s claim eight years earlier and thus plaintiff had discovered the loss or damage suffered – Grill v. Ticor Title Ins. Co., Case No. C070730, (Cal Ct. App., Jan. 24, 2017) (unpublished opinion) (affirming dismissal)
  • Collateral Estoppel: where trial court took judicial notice of claims in current litigation that were adjudicated adversely to plaintiff in prior litigation, issues decided in prior litigation bar subsequent action against title insurer – Edwards v. First American Title Ins. Co., Case No. B264490 (Cal Ct. App. Jan. 19, 2017) (unpublished opinion) (affirming judgment and awarding fees)
  • Administrative Review: title insurer must exhaust administrative remedies concerning Insurance Commissioner’s investigatory hearing before seeking relief in Indiana’s courts – First American Title Ins. Co. v. Robertson, 65 N.E. 3d 1045 (In. Ct. App. 2016) (affirming dismissal)
  • Claim Preclusion: title insurer not permitted to pursue an action for declaratory relief and for prohibition and mandate after receiving an unfavorable result in a prior appeal of a proceeding pertaining to an administrative order and procedures act – First American Title Ins. Co. v. Robertson, 65 N.E. 3d 1045 (In. Ct. App. 2016) (affirming dismissal)
  • Created, Suffered or Assumed: title insurer is not liable to insured where insured entrusted insurer’s policy issuing agent for disbursement of loan funds and the agent misappropriated funds and failed to satisfy prior mortgages, because the insured assumed or agreed to the prior mortgages and also failed to make a claim for vicarious liability – Northwest Savings Bank v. Fidelity Nat’l Title Ins. Co., Case No. 451 WDA 2016 (Pa. Ct. App., Jan. 20, 2017) (non-precedential, unreported opinion) (affirming dismissal)
  • MRTA: Ohio’s Marketable Title Act operates to extinguish interests and claims in existence prior to effective date of root of title unless properly noted subsequent to root of title, where the root of title is the most recent conveyance to be recorded as of a date forty years prior to the time when marketability is being determined – Spellman Outdoor Advertising Serv., LLC v. Ohio Turnpike and Infrastructure Comm., Case No. 2015–P–0081, --- N.E.3d ---- (Oh. Ct. App. Sep. 30, 2016) (affirming summary judgment)