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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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June 5, 2018 1:58 PM | Permalink

REAL PROPERTY UPDATE

  • Foreclosure/Standing: bank's allegation in complaint that it acquired loan and possessed both legal and beneficial interest in note and mortgage prior to filing complaint, coupled with the subsequent entry into evidence at trial of original note identical to copy attached to the complaint, was sufficient to demonstrate bank's standing at inception of action and at time of final judgment - Bank of New York Mellon, as Trustee v. Burgiel, No. 5D17-1152 (Fla. 5th DCA May 25, 2018) (reversing and remanding judgment of involuntary dismissal)
  • Proposal for Settlement: a joint Proposal for Settlement served pursuant to section 768.79, Florida Statutes (2011), and Florida Rule of Civil Procedure 1.442, that was contingent, and divested one defendants' ability to independently evaluate and accept, irrespective of the other party's decision, cannot support a claim for fees. Pacheco v Gonzalez, Case No. 3D16-355 (Fla. 3d DCA May 16, 2018) (reversed).
  • Foreclosure/Attorneys' Fees: following dismissal, borrowers were entitled to recover attorneys' fees, a parties to the mortgage and section 57.105, Florida Statutes. Madl v Wells Fargo Bank, N. A., as Trustee, Case No. 5D16-53 (Fla. 5th DCA May 18, 2018) (affirmed)
  • Foreclosure - Credit Agreement: HELOC credit agreement is not for a fixed amount of money and, therefore, is not a negotiable instrument, is not self-authenticating, and must be authenticated with evidentiary proof. Third Federal Savings & Loan Assoc. of Cleveland v Koulouvaris, Case No. 2D17-773 (Fla. 2d DCA May 18, 2018) (affirmed).

FINANCIAL SERVICES UPDATE

  • FDCPA: dismissing FDCPA claim based on alleged misrepresentations in loan modification agreement, as such agreements are not communications made in connection with the collection of a debt under § 1692e. Thomas v. Select Portfolio Servicing, Inc., 1:18-cv-00211 (E.D. Cal. May 24, 2018)
  • FDCPA: dismissing putative class action brought under FDCPA and premised on theory that letter to collect cellular telephone debt was sent after two-year time bar under 47 USC § 415(a); Congress did not intend section 415(a) to preempt New York's six-year statute of limitations concerning the collection of a debt arising from a contractual obligation. Torres v. Midland Credit Mgmt., Inc., 17-cv-2794 (E.D.N.Y. May 21, 2018)
  • FCRA and TCPA: entering summary judgment in favor of lender on FCRA claim where it conducted a reasonable investigation following each dispute by confirming borrower's name, social security number, date of birth, address, account number, account opening/closure dates, date of first delinquency, outstanding balance, and amount charged off. Entering summary judgment on TCPA claim based on a speculative inference that long pause before the caller began speaking meant the calls came from an auto dialer. Celestine v. JP Morgan Chase Bank, 1:17-cv-20915 (S.D. Fla. May 11, 2018)
  • FDCPA: dismissing FDCPA claim based on monthly mortgage statement that included language that "[t]his is an attempt to collect a debt," as lender's statement tracked the TILA model statement and discrepancies were minor. Jones v. Select Portfolio Servicing, Inc., No. 1:18-cv-20389 (S.D. Fla. May 2, 2018)

TITLE INSURANCE UPDATE

  • Foreclosure Commitment Fees: under the Colorado Consumer Protection Act and the Colorado Fair Debt Collection Practices Act, foreclosure attorneys and title companies are prohibited from billing mortgage servicers for the full amount of a foreclosure commitment when a foreclosure is not completed and a title policy is not issued - State ex rel. Coffman v. Robert J. Hopp & Associates, LLC, No. 2018COA69 (Col. App. May 17, 2018) (affirming trial court judgment)
  • Statute of Limitations: affirming dismissal of negligence claim over incorrect legal description, which accrued either at closing or, at the latest, when the error was discovered; but reversing as to action on the policy, which accrued only when the bank's security on the (wrong) property turned out insufficient to cover the debt - US Bank, N.A. v. HLC Escrow, Inc., No. 17-1121 (1st Cir. April 25, 2018)
  • Creditor's Rights Exclusions: affirming the summary judgment that fraudulent conveyance and fraudulent transfer claims were excluded by Exclusion 4, but reversing for fact-finding as to whether post-petition preferential transfer claim could be excluded by Exclusion 3 - Hanks v. First American Title Ins. Co., No. M2017-00560-COA-R3-CV (TN App. May 16, 2018)
  • RICO: dismissing RICO count against homeowner's association and title company who supplied it with a search report showing dues owing from owners, where owners could not allege an "enterprise" separate from the association and title company merely pursuing their own affairs - Edwards v. Holishor Assoc., Inc., No. 18-0134-DRH (May 15, 2018)
  • Damages: summary judgment for title insurer where insured owner's title was cleared of unexcepted lien by insurer's settlement with lienholder, and insured failed to produce evidence beyond his own speculation to support arguments on lost profits, decline in market value, loss of use of funds, and newly-raised lost rents theories of damages - Neikes v. Ticor Title Co. of Oregon, No. A155171 (Or. App. May 16, 20180)
May 15, 2018 2:45 PM | Permalink

REAL PROPERTY UPDATE

  • Summary Judgment: incorporation of an affirmative defense by referencing “previously filed pleadings” does not obviate movant’s obligation to comply with particularity requirements mandated by rule 1.510(c) - Ambrogio v. McGuire, Case No. 2D17-2202 (Fla. 2d DCA May 11, 2018) (reversed and remanded).
  • Foreclosure/Standing: plaintiff’s affidavit in support of motion for summary judgment failed to address how affiant/employee of purported servicer derived personal knowledge about Plaintiff’s connection to subject note or how Plaintiff became owner or holder - Johnson v. Deutsche Bank National Trust Company Americas, as Trustee RALI 2007-QS1, No. 2D16-4262 (Fla. 2d DCA May 11, 2018) (reversed and remanded).
  • Leasing/Exculpatory Clause: exculpatory clause in lease held ambiguous and unenforceable where, in a single clause, it purports to relieve landlord from all liability and then concurrently imposes a duty on landlord to exercise ordinary care to prevent unauthorized opening of a safe - Obsessions in Time, Inc., et al. v. Jewelry Exchange Venture, LLLP, No. 3D16-2620 (Fla. 3d DCA May 9, 2018) (reversed and remanded).
  • Condominiums/Summary Judgment: dispute over ownership of parking spaces in condominium unable to be resolved on summary judgment due to genuine issues of material facts, as only evidence that purportedly established a transfer of ownership of parking spaces was a letter that was not properly authenticated - Gidwani v. Roberts et al., No. 3D17-677 (Fla. 3d DCA May 9, 2018) (reversed and remanded).
  • Homeowner’s Association/Prevailing Party: plaintiff considered prevailing party and awarded fees and costs where jury found association breached its governing documents and granted injunctive claim in equity, but awarded no damages to plaintiff - Coconut Key Homeowner’s Association, Inc. v. Gonzales, No. 4D17-739 &1749 (Fla. 4th DCA May 9, 2018) (affirmed in part, reversed in part and remanded).

FINANCIAL SERVICES UPDATE

  • FDCPA: denying a motion to dismiss FDCPA claim and finding that repossession agencies can be considered “debt collector” when acting as “enforcers of security interests” - Wright v. Santander Consumer USA, Inc., No. 6:18-cv-263-Orl-22KRS (M.D. Fla. May 1, 2018)
  • BAPCPA: denying Chapter 7 Trustee’s motion to intervene in action to recover tax return in case filed pre-BAPCPA, holding Trustee does not get the benefit of Bankruptcy Code § 1115 because any refund not property of bankruptcy estate where Debtor disgorged money post-petition, giving rise to a credit on post-petition tax return - In re Steffen, 583 B.R. 284, 286 (M.D. Fla. Bankr. 2018)
  • FCRA and FDCPA: granting motion to dismiss FCRA claim on grounds that “duties imposed on furnishers of credit information under § 1681s-2(a) are enforceable only by federal or state agencies” and there is no private right of action; granting motion to dismiss FDCPA claim because alleged debt collector provided plaintiff with a copy of itemized monthly billing statement in response to plaintiff’s notices of dispute and itemized monthly billing statement “is all that is required to verify a debt under § 1692g” - Kozlowski v. Bank of America, N.A., et al., No. 1:18-cv-00131-DAD-EPG (E.D. Cal. May 7, 2018)
  • FDCPA and TILA: dismissing FDCPA claim because “mortgage servicers seeking to recover their own debt, are not debt collectors covered by the Fair Debt Collections Practices Act”; dismissing TILA claim for failure to allege “in any way how she was damaged by the lack of notice” - Kashef v. Wells Fargo Bank, N.A., et al., No. 17-cv-06576-JST (N.D. Cal. May 2, 2018)
  • FDCPA: affirming summary judgment in favor of defendant and holding that FDCPA does require validation notices to include transitional language (i.e. language explaining that a request for payment does not limit a consumer’s right to challenge a debt within thirty days) - Stuppiello v. Southwest Credit Systems, L.P., No. 17-55061 (9th Cir. May 1, 2018).
  • FCRA: granting, in part, defendant’s motion to dismiss and strike class allegations, court found that to bring a negligence claim under FCRA, “Plaintiff must plead and prove that Defendant’s alleged FCRA violation caused her to suffer actual damages”; court further recognized that injunctive relief is consistently denied to private litigants under FCRA (by federal district courts in the Ninth Circuit) and statutory and punitive damages are not recoverable for negligent as opposed to willful violations of the FCRA - Gadomski v. Equifax Information Services, LLC, No. 2:17-cv-00670-TLN-AC (E.D. Cal. May 7, 2018)
  • FCRA and FAA: finding bankruptcy discharge did not render arbitration provision in underlying credit agreement void and compelling arbitration for debtor’s FCRA claim - Delgado v. Ally Financial, Inc., No. 3:17-cv-02189-BEN-JMA (S.D. Cal. May 8, 2018)
  • TILA: dismissing a claim under TILA where account renewal disclosure was included with a periodic statement in compliance with TILA and Regulation Z - Singer v. American Express Centurion Bank, No. 17-CV-2507 (S.D.N.Y. May 9, 2018)

TITLE INSURANCE UPDATE

  • Negligence: actions for negligence and breach of oral contract against abstractor who was an agent of title company brought 10 years after they accrued were time-barred and precluded by the integration clause in the title insurance policy – Union St. Tower, LLC v. First Am. Title Co., Case No. 2018 N.Y. Slip. Op. 03390 (N.Y. App. 2018) (affirming the order granting abstractor’s motion to dismiss).
  • Bankruptcy: real property vendor who gave an affidavit to the title that failed to disclose a judgment was not entitled to a discharge because of false pretenses and false representation – In Re Fakuri, Case No. 16 B 28526 (N.D. Ill. 2018) (memorandum opinion granting title insurer’s motion for summary judgment).
April 24, 2018 4:34 PM | Permalink

REAL PROPERTY UPDATE

  • Lis Pendens: lawsuit to foreclose mortgage on real property is an action "founded on a duly recorded instrument" - National American Home, LLC v Deutsche Bank Nat. Trust Co., Case No. 4D17-2614 (Fla. 4th DCA April 4, 2018) (affirmed).
  • Foreclosure/Assessments: notwithstanding 12 month assessment limitation applicable to first mortgage lenders that purchase property in foreclosure, lender could be liable for fees and costs incurred by association in connection with collecting assessments that accrued after certificate of title issued - Emerald Estates Community Assoc. v U.S. Bank N.A., Case No. 4D17-1278 (Fla. 4th DCA April 4, 2018) (reversed and remanded).
  • Pleadings/Amendment: plaintiff that amended complaint once as a matter of right before any responsive pleading had been filed did not abuse privilege to amend and must have been allowed to amend at least once more following first order of dismissal - If Six Were Nine, LLC v Lincoln Rd. III, LLC, Case No. 3D16-2614, 3D17-895 (Fla. 3d DCA April 4, 2018) (reversed and remanded).
  • Attorneys' Fees: seller could not recover attorneys' fees from buyer under purchase and sale contract that buyer refused to sign, even though buyer had committed to enter into purchase and sale agreement in bidding contract between buyer and auctioneer - Haas Automation, Inc. v Dr. Robert Fox, Case No. 3D16-1692, 3D17-173, 3D17-174 (Fla. 3d DCA April 4, 2018) (affirmed in part, reversed in part, remanded).
  • Attorneys' Fees: trial court had authority to reconsider order granting attorneys' fees to defendant, subject to outcome of appeal, but reconsideration must be based upon record evidence; mere representations and argument of counsel legally insufficient to support ruling - Radosevich v The Bank of NY Mellon, Case No. 3D16-1880 Fla. 3d DCA April 4, 2018) (reversed and remanded).
  • Note: individual personally liable on promissory note given by entity because individual signed both as an officer of entity and individually - Monique M. Agia and Lisa Agia v Fareed Ossi, Case No. 2D16-4659 (Fla. 2d DCA April 6, 2018) (reversed and remanded).
  • Due Process /Notice: trial court erred by considering and ruling on issues not noticed for hearing and by refusing to allow party to name additional expert witnesses after discovery cut-off without considering or determining prejudice - Gaspar's Passage, LLC v Racetrac Petroleum, Inc., Case No. 2D17-55 (Fla. 2d DCA April 4, 2018) (reversed and remanded).
  • Foreclosure/Condition Precedent: foreclosure judgment reversed and remanded for entry of involuntary dismissal where lender failed to prove notice of default to borrower, which was condition precedent to foreclosure - Spencer v Ditech Financial, LLC, et al., Case No. 2D16-4817 (Fla. 2d DCA April 4, 2018)(reversed and remanded for entry of involuntary dismissal).

FINANCIAL SERVICES UPDATE

  • FCCPA/FDCPA/TCPA: servicer's communications with represented parties was debt collection activity in violation of FCCPA and FDCPA where parties' attorney had entered appearance in foreclosure proceeding in which servicer sought deficiency; servicer was debt collector where servicer began servicing debt only after default; monthly mortgage loan statements and loss mitigation letters were debt collection activities; use of predictive dialer can constitute violation of TCPA; plaintiffs' claims not compulsory counterclaims which must have been filed in underlying foreclosure - France v. Ditech Financial, LLC, 2018 WL 1695405, No. 8:17-cv-3038, (M.D. Fla. Apr. 6, 2018) (denying motion to dismiss).
  • FDCPA/FCCPA: putative class action alleging violation of FDCPA and FCCPA based upon servicer's practice of sending collections communications to consumers threatening foreclosure or additional fees even though consumers participating in Home Affordable Loan Modification Program should be certified - Belcher v. Ocwen Loan Serv., LLC, 2018 WL 1701963, No. 8:16-cv-690 (MD. Fla. March 9, 2018) (report and recommendation certifying class).
  • TCPA: plaintiff seeking treble damages bears burden of proving consent issues as element of willfulness - In re: Nicholas Sinclair Fields vs. Specialized Loan Servicing, LLC, No. 8:14-bk-09347-MGW (Bankr. M.D. Fla. Mar. 30, 2018) (order vacated).
  • FDCPA: claims against bank defendants acting in capacities of trustee and loan servicer dismissed because not "debt collectors" under FDCPA - Johnson-Gellineau vs. Steine & Associates, P.C. et al., No. 16-CV-9945 (S.D.N.Y. Mar. 29, 2018) (dismissed)
  • Section 1692e: claims predicated on communications not initiated by debt collector and representations made to a third party (rather than to borrower) dismissed for failure to state a claim - Sandoval v. I.C. Systems, No. 17-CV-3755 (E.D.N.Y. Mar. 29, 2018) (dismissed)
  • RESPA/FDCPA: borrower's RESPA claims against loan servicer (for failure to timely acknowledge a loss mitigation application and failure to properly respond to a Qualified Written Request and Notice of Error) and FDCPA claim (predicated on default letter alleged to include time-barred debts and other improper fees) related to the mortgage and, thus, notice and opportunity to cure was required before filing suit - Kurzban v. Specialized Loan Servicing, LLC, No. 17-cv-20713 (S.D. Fla. Mar. 30, 2018) (dismissed).
  • FDCPA/CIVIL RICO: district court did not err in dismissing third amended pro se complaint with prejudice where complaint failed to allege facts sufficient to state claims against bank and other defendants under civil RICO and FDCPA statutes and only "mention[ed] in passing" other federal statutes - Lapinski vs. Leech et al., No. 17-13698 (11th Cir. Apr. 5, 2018) (dismissal affirmed)
  • FCRA: summary judgment granted to all defendants under § 1681s-2(b) where plaintiff failed to establish willful or plausible actual damages as a matter of law; actual damages must be "attributable to defendants' unreasonable investigation" and "traceable to the inaccurate, FCRA-violating information - not just to the report that contained that information or to accurate data within the same report"- Frederick v. Capital One Bank (USA), N.A. et al., No. 14-CV-5460 (S.D.N.Y. Mar. 27, 2018) - (summary judgment granted)

TITLE INSURANCE UPDATE

  • Marketability of Title: Policy's internal definition of "unmarketability of title" restricts coverage to issues of ownership or possession affecting the title to property, i.e. defects affecting rights of ownership rather than defects affecting physical condition or use of property, following Tenth Circuit - Lauritzen v. First American Title Ins. Co., Case No. 20160717-CA (Utah Ct. App. Apr. 5, 2018) (affirming in part and remanding in part)
  • Marketability of Title/Defect in Title: In matter where insured purchased five lots based on plat which contained material defect because one of the five lots partially overlapped another parcel , marketability of title was implicated and title was defective, but only as to the overlapped lot, not all five as claimed by insured - Lauritzen v. First American Title Ins. Co., Case No. 20160717-CA (Utah Ct. App. Apr. 5, 2018) (affirming in part and remanding in part)
April 2, 2018 9:44 AM | Permalink

REAL PROPERTY UPDATE

  • Foreclosure / Amendments to Conform to Evidence: trial court erred in allowing Wells Fargo to amend its complaint during trial to conform to evidence presented of two unpled modification agreements – Tracey v. Wells Fargo Bank, N.A., as Trustee, No. 2D16-5091 (Fla. 2d DCA Mar. 23, 2018) (reversed and remanded)
  • Tax Appeal / Defense Class: trial court properly denied unit owners' motion to certify a defense class with the association as the owners' class representative in appraiser's appeal of value adjustment board's determinations because the individual condominium units are assessed in the name of the individual owners, not their association, and section 194.181 requires the taxpayer to be a party defendant – Central Carillon Beach Condo. Ass'n, Inc. v. Garcia, Nos. 3D17-1198 & 3D17-1197 (Fla. 3d DCA Mar. 21, 2018) (affirmed).
  • Interpretation of Condo Declaration: trial court erred in concluding that sections of declaration required commercial unit owners to obtain the association's board's written consent before altering landscaping appurtenant to their units – Waverly 1 & 2, LLC v. Waverly at Las Olas Condo. Ass'n, Inc., No. 4D16-2866 (Fla. 4th DCA Mar. 21, 2018) (reversed and remanded)
  • Foreclosure / Standing: plaintiff failed to prove at trial that initial plaintiff had standing to enforce lost note when it filed suit – Vieira v. PennyMac Corp., No. 4D16-3430 (Fla. 4th DCA Mar. 21, 2018) (reversed and remanded)
  • Foreclosure / Standing: heirs did not have standing to challenge borrower's liabilities under note and mortgage, and, even if they did, it was their burden to plead affirmative defense regarding a forbearance agreement – Rouffe v. CitiMortgage, Inc., No. 4D16-3583 (Fla. 4th DCA Mar. 21, 2018) (affirming judgment of foreclosure, except as to the amount due under note, and remanding for further proceedings to determine that amount)

FINANCIAL SERVICES UPDATE

  • FCCPA/FDCPA: denying summary judgment on FCCPA claim alleging violations of 559.72(9), based upon finding that a reasonable jury could infer actual knowledge of illegitimacy of amounts sought, despite lack of evidence that Defendant had actual knowledge that amounts sought were illegitimate - Revien v. Eastern Revenue, Inc., No. 9:17-CV-80959 (S.D. Fla. Mar. 21, 2018).
  • FDCPA/FDUTPA: claim for FDCPA violations based upon two letters sent to plaintiff in June 2013, were time-barred and alleged "continuing violations" based upon filing of collection action could not save time-barred claim; FDUTPA claim against attorneys based upon sending pre-suit demand letters could not survive dismissal because alleged conduct "had zero connection to any ‘trade or commerce'" - In re Smith-Johnson, No. 8:16-BK-02514-RCT (Bankr. M.D. Fla. Mar. 19, 2018).

TITLE INSURANCE UPDATE

  • Exclusion 3(a): Exclusion 3(a) applies in Texas to preclude coverage to insured who engaged in substantial misconduct where insured was aware that a judgment had been entered against him but did not have "full knowledge" that the judgment had attached to his real property, because to find otherwise would require an insurer to guarantee an insured's debt where the insured intentionally refuses to fulfill his financial obligation and would receive an inequitable windfall at the expense of the insurer – Moser v. Fidelity Nat'l Title Ins. Co. (In Re Moser), Civil Action No. 4:17-CV-104 (E.D. Texas Mar. 21, 2018) (affirming bankruptcy court)
  • Fortuity Doctrine: In Texas, the fortuity doctrine applies to relieve insurers from covering inequitable behavior that an insured undertook prior to purchasing a "backward looking" title insurance policy, and precludes coverage when an insured is or should be aware of an ongoing, progressive or known loss at the time the policy is purchased – Moser v. Fidelity Nat'l Title Ins. Co. (In Re Moser), Civil Action No. 4:17-CV-104 (E.D. Texas Mar. 21, 2018) (affirming bankruptcy court)
March 23, 2018 12:04 PM | Permalink

REAL PROPERTY UPDATE

  • Condition Precedent: trial court properly rejected motion to dismiss for failure to satisfy condition precedent of pre-litigation non-binding arbitration, required by Chapter 718, Florida Statutes, because claim for breach of fiduciary duty is excepted from the requirement. Palisages Owners' Association, Inc. v Browning, Case No. 1D17-2129 (Fla. 1st DCA March 15, 2018) (dismissal affirmed).
  • Unclean Hands: argument that borrower was misled by lender regarding the terms of the loan and instructed to stop paying on the mortgage to qualify for a loan modification, where insufficient to support a defense of unclean hands. McMichael v Deutsche Bank National Trustee Company, Case No. 4D16-3879 (Fla. 4th DCA March 14, 2018) (affirmed)
  • Reestablishment of Lost Note: trial court is required to provide for adequate protection or make a finding that none is needed as a condition precedent to entering judgment reestablishing lost note. Debish v Wells Fargo Bank, N.A., Case No. 4D17-469 (Fla. 4th DCA March 14, 2018) (reversed and remanded).
  • Eviction: County Court lacks subject matter jurisdiction to enter a final judgment of eviction. Mesnikoff v. FQ Backyard Trading, LLC, No. 3D17–2803 (Fla. 3rd DCA March 7, 2018) (decision of circuit court appellate division quashed).
  • Foreclosure/Notice: Plaintiff substantially complied with the notice of default requirement by sending notice to the address listed in a loan modification agreement, even though that address listed a different unit number than the one listed on the original mortgage documents and any defect in the notice did not prejudice borrowers. Citigroup Mortgage Loan Trust Inc. v. Scialabba, No. 4D17–401 (Fla. 4th DCA March 7, 2018) (reversed and remanded).
  • Foreclosure/Statute of Limitations: Plaintiff was not barred by the statute of limitations where Plaintiff limited its recovery only to those defaults occurring within five years of the second foreclosure lawsuit (first foreclosure lawsuit was involuntarily dismissed). Desai v. Bank of New York Mellon Trust Company, No. 4D17–0890 (Fla. 4th DCA March 7, 2018) (affirmed.)

FINANCIAL SERVICES UPDATE

  • TCPA: Upon review of the FCC's 2015 Omnibus Order, (1) setting aside explanation of which devices qualify as auto dialers; (2) setting aside treatment of reassigned numbers, including one-call safe harbor; (3) sustaining treatment of revocation; and (4) sustaining scope of exemption for certain healthcare-related calls. ACA International v. FCC, Case No. 15-1211 (D.C. Cir. Mar. 16, 2018) (granting in part appeal from agency rulemaking)
  • FDCPA: affirming dismissal of FDCPA claim against Ocwen where plaintiff filed his initial complaint more than one year after Ocwen allegedly violated the FDCPA, and where the amended complaint did not allege facts demonstrating Ocwen used any instrumentality of interstate commerce in the collection of debt. Cooley v. Ocwen Loan Serv., LLC, Case No. 16-14835 (11th Cir. Mar. 5, 2018)
  • TILA: dismissing with prejudice TILA claim for failure to provide notice; "When there is no sale or transfer of a loan, but only a merger, and therefore no assignment, notification under § 1641(g) is not needed." Arzamendi v. Wells Fargo Bank, Case No. 1:17-cv-01485, 2018 WL 1210978 (ED Cal. Mar. 8, 2018)
  • ECOA/RESPA: granting dismissal of plaintiff's ECOA claim where plaintiffs were in default at time they submitted their loan modification applications, and "ECOA's 30–day notice requirements do not apply to a creditor's refusal to provide a loan modification to applicants in default"; and denying dismissal of RESPA violations because bank "was obligated to comply with section 1024.41's notice requirements … after section 1024.41 became effective," and for failing to respond to borrower requests under section 1024.35 and 1024.36. Hackett v. Wells Fargo Bank, Case No. 2:17-cv-7354, 2018 WL 1224410 (CD Cal. Mar. 5, 2018)
  • FCRA: dismissing with prejudice a complaint premised on purported willful and negligent violation of FCRA. Plaintiff alleged lender wrongfully reported his mortgage as delinquent for 22 months because he had no obligation to make payments during this period, which included the period of time after the lender accelerated the loan. The Court rejected this argument because the acceleration notice and mortgage informed Plaintiff that he could reinstate the loan, there was no dispute that plaintiff did not make payments for the 22 months, and plaintiff failed to pay judgment after foreclosure judgment was entered. As a result, the information reported to the credit reporting agencies was not factually inaccurate and plaintiff had no cause of action pursuant to the FCRA. Hunt v. JP Morgan Chase Bank, N.A., 2018 WL 1183357, No. 17-CV-62094 (Feb. 26, 2018)

TITLE INSURANCE UPDATE

  • Salvage: dismissing title insurer's salvage action against title search company on statute of limitations grounds – Commonwealth Land Title Ins. Co. v. KCI Technologies, Inc., No. 1:17-cv-01070 (D.D.C. March 13, 2018).
  • Escrow Agent's Duties: affirming judgment for title insurer and escrow agent on policy claim and on claim that agent should have reported potentially fraudulent nature of purchase of five properties, holding that escrow agent need not go beyond plain terms of escrow agreement to investigate potential fraud – C&G Farms, Inc. v. First American Title Ins. Co., No. 1 CA-CV 16-0600 (Az. App. March 13, 2018).
March 5, 2018 11:13 AM | Permalink
REAL PROPERTY UPDATE
  • Foreclosure/Standing: borrower's standing arguments failed because they were based on notion that note changed hands after it was delivered to World Savings Bank in 2007, when in fact the note continued to be held by original lender - Heyward v. Wells Fargo Bank, N.A., No. 2D16-339 (Fla. 2d DCA Mar. 2, 2018) (affirmed)
  • Foreclosure/Standing: bank failed to offer proof of successor's authority to assign note to bank, and, therefore, bank failed to establish standing - Arcuri v. HSBC USA Nat'l Ass'n, as Trustee, No. 2D16-4201 (Fla. 2d DCA Mar. 2, 2018) (reversed and remanded for entry of order of involuntary dismissal)
  • Foreclosure/Statue of Limitations: affirming order vacating default against bank and order dismissing with prejudice complaint against bank seeking to quiet title to property and alleging that enforcement of mortgage was barred by statute of limitations, but dismissing appeal of sanctions order as premature - Kelly v. HSBC USA Nat'l Ass'n, etc., No. 3D16-2830 (Fla. 3d DCA Feb. 28, 2018) (reversed and remanded)
  • Foreclosure/Standing: genuine issue of material fact existed regarding bank's standing at inception of lawsuit because endorsement on note attached to complaint was different than endorsements on original note subsequently filed with court - Russell v. BAC Home Loan Servicing, LP, No. 4D16-3908 (Fla. 4th DCA Feb. 28, 2018) (reversed and remanded)
  • Foreclosure/Statute of Limitations: because bank's complaint included allegations of missed payments subsequent to the dismissal of first lawsuit, dismissal of bank's complaint was improper - HSBC Bank USA, Nat'l Ass'n, as Trustee v. Sanchez, No. 4D17-1085 (Fla. 4th DCA Feb. 28, 2018) (reversed and remanded)
  • Foreclosure/Sufficiency of Testimony: after excluding power of attorney in favor of corporate representative court erred in striking testimony of corporate representative, since proof of contractual authority to testify is not required for witness to lay foundation for business records exception to hearsay and witness may testify to matters within his or her personal knowledge - Deutsche Bank Trust Co. Americas, as Trustee v. Merced, No. 5D16-3486 (Fla. 5th DCA Mar. 2, 2018) (reversed and remanded)

FINANCIAL SERVICES UPDATE

  • FDCPA: Neither lender nor its counsel qualified as “debt collectors” under the FDCPA for conduct taken in connection with enforcement of security interest in non-judicial foreclosure proceedings. Lucore v. Zeff, Case No. 15-cv-910 JLS (S.D. Cal. Feb. 26, 2018) (granting defendants' motions to dismiss with prejudice).
  • TCPA: Rite Aid did not violate TCPA by making pre-recorded call regarding availability of flu shot; although call had marketing purpose, it also had a health care purpose such that the calls fell within the health care exemption. Zani v. Rite Aid Hdqtrs. Corp., Case No. 17-1230-CV (2d Cir. Feb. 21, 2018) (affirming summary judgment for defendant).

TITLE INSURANCE UPDATE

  • Damages: an assignee and current holder of a deed of trust has the contractual right under California Civil Code § 2941(b)(6) to seek damages against a title company that allegedly recorded a release of the deed of trust in error, because an unqualified assignment of a contract vests all rights and remedies in the assigned contract to the assignee - SMS Financial XXIII, LLC v. Cornerstone Title Co., 19 Cal. App. 5th 1092 (Cal. Jan. 26, 2018) (reversing motion to dismiss)
  • Exceptions to Policy: title insurer adequately disclosed and excepted an easement in a title policy and was not liable to insured for fraud or unfair trade practices, where exception to title policy listed an abstract which referenced a certificate of survey which provided information on the easement, and by listing abstract insurer fulfilled its contractual obligations and statutory and regulatory requirements to “show” an easement in a policy - Parks v. Stewart Title Guaranty Co., - Case No. DA 17-0336 (Mt. Jan. 3, 2018) (unpublished opinion affirming summary judgment)
  • Exclusion 3(a): Exclusion 3(a) applies under Missouri law even if the insured did not engage in intentional misconduct or inequitable dealings, and it is error to prevent insurer from presenting Exclusion 3(a) defense to jury of lender's intentional conduct (not misconduct) of acting improvidently in opening and monitoring multi-million dollar construction loan and failing to protect itself from mechanics' liens - Captiva Lake Investments, LLC v. Fidelity Nat'l Title Ins. Co., Case Nos. 16-1854 and 16-1923 (8th Cir. Feb. 28, 2018) (vacating judgment and award of attorneys' fees and remanding for further proceedings)
  • Mechanics' Liens: a lender has the authority and responsibility to discover, monitor and prevent the risk of loss from mechanics' liens, and a title insurer does not bear the risk of insufficient construction funding if lender fails to do so - Captiva Lake Investments, LLC v. Fidelity Nat'l Title Ins. Co., Case Nos. 16-1854 and 16-1923 (8th Cir. Feb. 28, 2018) (vacating judgment and award of attorneys' fees and remanding for further proceedings)
  • Tortious Interference: under paragraph 4(b) of a title policy, insurer acts within its rights to control litigation, evaluate claims, and decide whether to litigate or settle claims, and does not tortiously interfere with insured when it directs appointed counsel to undertake actions in litigation or limit defense coverage to activity involving only the validity and priority of insured lien - Captiva Lake Investments, LLC v. Fidelity Nat'l Title Ins. Co., Case Nos. 16-1854 and 16-1923 (8th Cir. Feb. 28, 2018) (affirming insurer's motion for judgment as a matter of law on tortious interference count)
  • Unmarketability of Title: insurer not liable under provision governing unmarketability of title, where insured failed to show that title was rendered unmarketable by mechanics' liens or that it suffered resulting damages as a result of insurer's failure to resolve liens that were inchoate as of the date of title policy - Captiva Lake Investments, LLC v. Fidelity Nat'l Title Ins. Co., Case Nos. 16-1854 and 16-1923 (8th Cir. Feb. 28, 2018) (vacating judgment and award of attorneys' fees and remanding for further proceedings)
March 1, 2018 3:18 PM | Permalink

REAL PROPERTY UPDATE

  • Breach of Contract/Damages: court erred by precluding setoff when calculating damages because purpose of award is to restore the injured party to the position it would have realized no for the other party’s breach. Asset Management Holdings, LLC, et al v Assets Recovery Center Investments, LLC, et al, Case Nos. 2D16-341 and 3599 (Fla. 2d DCA Feb. 23, 2018).
  • Foreclosure/Standing: ownership of lost note and standing to foreclose mortgage securing same can be proven by unbroken chain of assignments from originating lender to present lender. Hines and Long v New Urban Pine Road LLC, Case No. 3D16-1168 (Fla. 3d DCA Feb. 21, 2018).
  • Subscription Agreements: a subscription agreement is an agreement to invest on specific terms and is enforceable against subscriber without mutuality of agreement necessary to sustain a bilateral contract. Liork, LLC, et al v BH 150 Second Avenue, LLC, Case No. 3D16-1881 (Fla. 3d DCA Feb. 21, 2018).
  • Foreclosure/Default: borrower that continued making payments into account, in accordance with terms of note, following receipt of “goodbye letter” from original lender notifying borrower note had been sold and payment should be made to new lender, did not default on note for failing to pay to new lender because original lender was not the holder of the Note at time of notice and, therefore, had no authority to change payment terms of note. Coconut Grove Acquisition, LLC v. S&C Venture, Case No. 3D17-434 (Fla. 3d DCA Feb. 21, 2018).
  • Time for Appeal: order enforcing settlement agreement is final and appealable when enforcement is the only thing left for the court to do, and there is no need for a subsequent formal order of dismissal. Mack v Repole, Case No. 4D16-3595 (Fla. 4th DCA Feb. 21, 2018).
  • Failure to Preserve Arguments for Appeal: dismissal with prejudice resulting from counsel’s failure to appear at case management conference affirmed, notwithstanding the lack of necessary findings required to sustain it, where appellant failed to raise deficiencies in order in a motion for rehearing. Shelswell v Bourdeau, Case No. 4D17-174 (Fla. 4th DCA Feb. 21, 2018).
  • Agency: attorney had apparent authority to receive notice of default on behalf of client where attorney previously received notices on behalf of client, which client upon, and attorney did not advise opposing counsel he no longer represented client and/or could not accept notice for client. Clayton v Poggendorf, et al., Case No. 4D17-488 (Feb. 21, 2018).
  • Deficiency Judgment/Limitations: statute of limitations for seeking deficiency judgment begins to run after foreclosure sale pursuant to judgment of foreclosure. Dyck-O’Neal, Inc. v Germany, et al., Case No. 5D17-1059 (Fla. 5th DCA Feb. 23, 2018)
  • Foreclosure/Best Evidence Rule: trial court erred in admitting copies of a loan modification where the bank’s witness did not provide any explanation regarding why the original loan modification was not available. McCampbell v. Federal National Mortgage Association, No. 2D16-177 (Fla. 2d DCA Feb. 14, 2018) (reversed and remanded).
  • Foreclosure/Hearsay: plaintiff failed to introduce any admissible evidence that a default letter was actually mailed to the borrowers, where the plaintiff’s witness was an employee of the servicer and not an employee of the company that mailed the default letter (“About Mail”), had never visited About Mail’s facility, never spoke with an About Mail employee, and did not have documents from About Mail to support his testimony that About Mail mailed the default letter to the borrowers. Knight et. al., v. GTE Federal Credit Union, No. 2D16-3241 (Fla. 2d DCA Feb. 14, 2018) (reversed and remanded).
  • Intervention: plaintiff in an action to rescind a first deed does not have a direct and immediate interest in a reformation cross-claim to reform a second deed where Plaintiff was not a party to that second deed and would need to first prevail in its action to void or rescind the first deed. C&J Global Investments, Inc., v. JVS Contracting, Inc., No. 2D16-3241 (Fla. 2d DCA Feb. 14, 2018) (reversed and remanded).

FINANCIAL SERVICES UPDATE

  • Dodd-Frank: held that “[t]o sue under Dodd-Frank’s anti-retaliation provision, a person must first ‘provid[e]…information relating to a violation of the securities laws to the [Securities and Exchange] Commission’”, reasoning that such an interpretation is consistent with the definition of the term “whistleblower” in the statute, the statute’s express mandate that the definition apply throughout § 78u-6 of Dodd-Frank, and the purpose for which the Dodd-Frank was enacted. Digital Realty Trust, Inc. v. Somers, Case No. 16-1276 (U.S. Feb. 21, 2018).
  • FACTA/FCRA: concluded that plaintiff lacked Article III standing in putative class action arising from the issuance of a parking receipt containing his credit card’s full expiration date where he merely alleged the potential for exposure to identity theft and fraud, as opposed to alleging a concrete injury resulting from the purported FCRA violation. Bassett v. ABM Parking Services, Inc., Case No. 16-35933 (9th Cir. Feb. 21, 2018).
  • TILA: TILA does not apply to federally-insured student loans. -- Upshaw v. United States Department of Education, 2017 WL 7156267 (C.D. Cal. Nov. 20, 2017).
  • FDCPA/Standing: borrowers lack standing to challenge foreclosure under the FDCPA based on the allegedly invalid assignments of mortgage. -- Im v. Bayview Loan Servicing, LLC, 2018 WL 840088 (S.D.N.Y. Feb. 12, 2018) (stating, "Although foreclosure is certainly a pecuniary injury, a borrower is injured by the invalidity of a mortgage assignment only if that assignment exposes her to some additional injury—for example, 'imminent danger ... of having to make duplicate loan payments.'")
February 13, 2018 4:36 PM | Permalink

REAL PROPERTY UPDATE

  • Misrepresentation/Concealment: genuine issues of material fact remained in dispute regarding whether board-certified real estate attorney committed fraudulent or negligent misrepresentation or concealment by falsely assuring purchaser that no buyer’s-side real estate broker commission would be payable in transaction – Grimes v. Lottes, No. 2D16-5557 (Fla. 2d DCA Feb. 9, 2018) (reversing summary judgment)
  • Proceedings Supplementary/Homestead: because property was owned by corporation, and individual residing there did not possess ownership interest, property was not entitled to homestead protection against forced sale – DeJesus v. A.M.J.R.K. Corp., No. 2D17-2374 (Fla. 2d DCA Feb. 9, 2018) (reversed and remanded)
  • Foreclosure/Negotiability and Standing: reversing judgment for borrower, and concluding that (1) trial court erred by admitting expert testimony on legal issues, (2) negotiability of note was not destroyed by its reference to mortgage, nor by its definition of “note holder,” (3) bank had standing to foreclose, and alleged violations of pooling and servicing agreement did not destroy standing, nor did assignment of mortgage, (4) servicer’s business records were admissible, and (5) bank did not have unclean hands – HSBC Bank USA, Nat’l Ass’n, etc. v. Buset, No. 3D16-1383 (Fla. 3d DCA Feb. 7, 2018) (reversed with directions to enter judgment for bank)
  • Foreclosure/Attorneys’ Fees: borrowers’ motion for attorneys’ fees denied because bank was not party to note and mortgage, and because borrowers successfully argued that bank was not entitled to enforce instrument containing attorneys’ fee provision – Sabido v. The Bank of New York Mellon f/k/a The Bank of New York, Successor to JP Morgan Chase Bank, Nat’l Ass’n, as Trustee, No. 4D16-2944 (Fla. 4th DCA Feb. 7, 2018) (granting motion for clarification and denying motion for reconsideration)
  • Guaranty/Condition Precedent: trial court erred in entering partial summary judgment in landlord’s favor because demand for payment was condition precedent to guarantor’s performance – Nabbie v. Orlando Outlet Owner, LLC, No. 5D16-1146 (Fla. 5th DCA Feb. 9, 2018) (reversed and remanded)
  • Best Evidence Rule: trial court erred by admitting a copy of promissory note into evidence at trial; best evidence rule required original note (negotiable instrument) be submitted into evidence to support judgment - Heller v Bank of America, et al., Case No. 2D14-3530 (Fla. 2nd DCA January 27, 2018) (reversed and remanded); see also, Morales v Fifth Third Mortgage Co., Case No. 4D17-1260 (Fla. 4th DCA January 31, 2018) (reversed and remanded).
  • Hearsay: testimony by lender’s representative based upon bank records not entered into evidence is inadmissible hearsay - Heller v Bank of America, et al., Case No. 2D14-3530 (Fla. 2nd DCA January 27, 2018) (reversed and remanded).
  • Deficiency: a deficiency action is not an action to collect a consumer debt and, therefore, section 559.715, Florida Statutes, requiring 30 days’ notice before any action to collect the debt, is inapplicable - O’Neal, Inc. v Ward, Case No. 2D15-2989 (Fla. 2nd DCA January 27, 2018) (reversed and remanded).
  • Standing: a foreclosure plaintiff must have standing at both the time when the foreclosure complaint is filed and when the final judgment is entered - Fielding v PNC Bank NA, Case No. 5D16-440 (Fla. 5th DCA February 2, 2018) (reversed and remanded).
  • Attorneys’ Fees: purchaser of real property in foreclosure was not a party to the mortgage and, therefore, was not entitled to recover attorneys’ fees following lender’s dismissal of foreclosure action - PNC Bank, NA v MDTR LLC, as Trustee, Case No. 5D16-2887 (Fla. 5th DCA February 2, 2018) (reversed and remanded).
  • Easement: unit owners not entitled to access a dock through neighboring lands by way of an easement by necessity because unit owners could not show “absolute necessity” given that unit owners lived on waterfront property and could build their own access to the dock - Goldman et. al., v. Lustig, No. 4D16-1933 (Fla. 4th DCA Jan. 24, 2018) (reversed and remanded).
  • Attorney’s Fees: Once sellers chose affirmation of contract, rather than rescission, sellers could not be awarded attorney’s fees as damages - DFG Group, LLC et. al., v. Heritage Manor of Memorial Park, Inc., et. al., No. 4D16-2972 (Fla. 4th DCA Jan. 24, 2018) (affirmed in part, reversed in part, and remanded).
  • Leasing/Doctrine of Avoidable Consequences: summary judgment reversed where plaintiff did not conclusively refute affirmative defense that plaintiff failed to exercise ordinary and reasonable care in disconnecting fire sprinkler system and if it had done so, water damage could have been avoided - Penton Business Media Holdings, LLC v. Orange County, Florida, No. 5D16-3935 (Fla. 5th DCA Jan. 26, 2018) (affirmed in part, reversed in part, and remanded).

FINANCIAL SERVICES UPDATE

  • FDCPA/FCCPA/TCPA: Defendant mortgage servicers were not liable for violations of FDCPA or FCCPA based upon claim that they attempted to collect illegitimate debt where court in foreclosure action found that debt was legitimate and claims were thus barred by collateral estoppel; Defendants were not liable for TCPA violations where no auto-dialed calls were placed to a cellular phone number owned by plaintiff - Ferrer v. Bayview Loan Servicing, LLC, (S.D. Fla. Jan. 26, 2018) (granting summary judgment for defendants).
  • RESPA/FCCPA: Borrower sued for violations of RESPA and FCCPA claiming servicer improperly rejected her loan modification without notice and an opportunity to correct the error, which was that she failed to return the original signed documents. District court found servicer complied with RESPA by providing an explanation as to the denial, and that unreasonable conduct by a servicer does not necessarily amount to a violation of RESPA. Servicer also did not violate FCCPA by proceeding with foreclosure after modification was denied - Finster v. U.S. Bank, N.A., Case No. 17-11662 (11th Cir. Jan. 31, 2018) (affirming summary judgment for defendant).
  • TCPA: Defendants entitled to summary judgment in class action brought by consumer who received auto-dialed text messages on his cell phone from payday lender without consent because entity that sent actual text messages was not a party to the suit and defendants had not ratified the conduct and were not aware of the TCPA violations - Kristensen v. Credit Payment Services Inc., 879 F.3d 1010 (9th Cir. Jan. 10, 2018) (affirming summary judgment for defendants).
  • FCCPA/FDCPA: concluding that allegations that loan servicer and law firm violated the FCCPA and FDCPA by filing a verified amended foreclosure complaint seeking, according to the borrower, collection of mortgage loan debt that was partially barred by the applicable 5-year statute of limitations, was legally insufficient to support borrower’s FCCPA and FDCPA claims and, rather, were affirmative defenses that could possibly be raised in a foreclosure or other action to collect the indebtedness owed; and concluding that merely alleging a conflict between the loan due date listed on a mortgage statement and that alleged in the verified amended foreclosure complaint was, by itself, insufficient to state a claim for violation of the FCCPA - Blake v. Select Portfolio Servicing, Inc., Case No. 6:17-cv-1523-ORL-31TBS (M.D. Fla. Jan. 18, 2018).
  • FDCPA/FCRA/RESPA/TILA: affirming dismissal of complaint on collateral estoppel grounds where claims were based on borrower’s purported 2008 rescission of the loan and where the rescission issue was decided in an earlier action between the parties; concluding that borrower was also barred by res judicata from asserting claims under the various consumer protection statutes that were or could have been raised by him in the earlier action; and concluding that borrower’s TILA claim failed because there were no allegations that a TILA violation existed at the time the loan was assigned to the defendant/assignee which is a requisite for stating a claim of assignee liability under TILA and noting that “an assignee of a loan is not subject to liability under the Truth in Lending Act for violations that occur after the loan has been made” - Kareem v. Ocwen Loan Services, LLC, Case No. 16-15589 (11th Cir. Jan. 22, 2018).
  • TILA: rejecting claim that TILA violation occurred by virtue of mere existence of a provision in motor vehicle sales contract granting seller the unilateral right to cancel the contract, and stating that a “seller’s unilateral right to cancel a sales contract or a contract conditioned upon seller-located financing, does not, by itself, violate TILA” because it does not relieve the seller of the seller’s disclosure obligations under TILA - Clarke v. West Palm Nissan, LLC, Case No. 9:17-CV-81032-ROSENBERG (S.D. Fla. Jan. 23, 2018).
  • FDCPA: concluding that Federal Rule of Civil Procedure 23’s class certification requirements were met and certifying class in action alleging that bank violated FDCPA by mailing debt collection letters to borrowers which contained language requiring that borrowers dispute the validity of the debt in writing, and noting that the Court had previously joined those courts who have analyzed the issue of whether § 1692g(a)(3) contains a writing requirement and who have determined that the statute “does not require a consumer to dispute the validity of the debt in writing before the debt collector may assume the debt is valid” - Alderman v. GC Services Limited Partnership, Case No. 2:16-CV-14508-ROSENBERG/MAYNARD (S.D. Fla. Jan. 19, 2018).
  • Rosenthal Act: denying summary judgment and determining that plaintiffs had Article III standing to pursue claims against automobile finance loan servicer under California’s Rosenthal Act for the servicer’s collection and retention of alleged unauthorized processing fees charged to plaintiffs by Western Union for making their loan payments online or by phone through Western Union, concluding that a concrete harm was suffered by virtue of plaintiffs’ payment of the fee and that “[i]t is immaterial that the fee was optional [‘]and at times convenient’ if the collection of the fee is impermissible altogether” under the Rosenthal Act; and concluding that a fact issue existed as to whether the fee was permitted by the Act - Lindblom v. Santander Consumer USA Inc., Case No. 1:15-cv-0990-BAM (E.D. Cal. Jan. 22, 2018).
  • FCRA: concluding that plaintiff had Article III standing to pursue FCRA claims against company which performed an employment-related background check on plaintiff and furnished a report to plaintiff’s prospective employer inaccurately reporting that plaintiff had a criminal history, and stating that plaintiff’s alleged emotional distress suffered due to the uncertainty of his prospects in obtaining the job in light of the inaccurate report as well as the cost and time he spent pursuing court proceedings to establish a case of mistaken identity constituted concrete, actual harm sufficient for demonstrating Article III standing; but finding that fact issues remained as to whether the defendant willfully/recklessly or negligently violated the FCRA by failing to use reasonable procedures to ensure the accuracy of the information it reported, by failing to use strict procedures to ensure that the “reported public records information for employment purposes was complete and up to date,” and by failing to timely provide plaintiff written notice of the defendant’s reinvestigation of the dispute concerning the inaccurate report - Adan v. Insight Investigation, Inc., Case No. 16cv2807-GPC(WVG) (S.D. Cal. Jan. 18, 2018).
  • FCRA: denying creditor’s motion to dismiss and concluding that plaintiff sufficiently pled an FCRA claim by alleging that creditor reported inaccurate or misleading information by inaccurately reporting her account as “charged off” when the creditor knew that the debt had instead been discharged in bankruptcy; and concluding that plaintiff’s allegation that creditor failed to comply with the applicable Metro 2 reporting guidelines, standing alone, would support plaintiff’s FCRA claim - Nissou-Rabban v. Capital One Bank (USA), N.A., Case No. 15cv1673-JAH (RBB) (S.D. Cal. Jan. 23, 2018).
  • RESPA/FCCPA: mortgage servicer did not violate its responsibilities to respond to borrower's notice of error under RESPA where servicer explained its reasons for denying borrower’s loan modification, even though borrower was unsatisfied with responses and found servicer’s actions to be unreasonable. Servicer also did not violate FCCPA where it had no actual knowledge that it lacked the authority to deny the loan modification and proceed with foreclosure - Finster v. U.S. Bank National Association, Case No. 17-11662, (11th Cir., Jan. 31, 2018) (affirming granting of summary judgment to mortgage servicer).
  • TILA: residential mortgage transactions (i.e., first mortgages and construction mortgages) are expressly excluded from the right of rescission under TILA. Under TILA, if a creditor fails to make a required disclosure, borrower only has one year from violation to sue for statutory and actual damages - Cooper v. Countrywide Home Loans, Case No. 16-16173, (11th Cir., Feb. 6, 2018) (affirming dismissal of borrower’s complaint brought under TILA).

TITLE INSURANCE UPDATE

  • Breach of Contract: title insurer, as subrogee, not entitled to expand rights under a sales contract to bring a breach of contract claim pursuant to a special warranty deed, where insurer alleged seller breached covenant of siesin but special warranty deed delineated the parties’ rights and sales contract merged with the special warranty deed – Cochran Investments, Inc. v. Chicago Title Ins. Co., Case No. 14-16-00119-CV (Tex. Ct. App. Feb. 6, 2018) (reversing final judgment)
  • Consequential Damages: under Nebraska law, if the terms of a title policy are clear they are accorded their plain and ordinary meaning and the plain language of the policy does not provide for consequential damages – Helms v. Old Republic Nat’l Title Ins. Co., Case No. 4:16-CV-2010 (D.Neb. Jan. 11, 2018) (order granting in part and denying in part summary judgment)
  • Defect in Title: inability to develop property as intended, based solely on a defect in title, is precisely the kind of reliance title insurance seeks to protect against – Helms v. Old Republic Nat’l Title Ins. Co., Case No. 4:16-CV-2010 (D.Neb. Jan. 11, 2018) (order granting in part and denying in part summary judgment)
  • Diminution in Value: in Nebraska, the proper method for valuing an insured’s loss is the highest and best use of the property, where policy issued in 2012 insured fee simple title but did not reflect a portion of land subject to 1940 government condemnation proceeding and insured was required to undo irrigation improvements to the property to restore land to original 1940 status – Helms v. Old Republic Nat’l Title Ins. Co., Case No. 4:16-CV-2010 (D.Neb. Jan. 11, 2018) (order granting in part and denying in part summary judgment)
  • Expert Valuation of Property: factual basis of an expert opinion in valuing property in Nebraska goes to the credibility of testimony, rather than the admissibility of purportedly inaccurate facts – Helms v. Old Republic Nat’l Title Ins. Co., Case No. 4:16-CV-2010 (D.Neb. Feb. 5, 2018) (denying motion to exclude expert testimony)
  • Indemnification Under Agent’s D&O Policy: E&O liability insurance carrier not required to indemnify title agent where agent knew of an incident or circumstance which may result in a claim prior to filing application for and receiving coverage under D&O Policy – Aztec Abstract & Title Ins. Inc. v. Maxum Specialty Group & Maxum Indemnity Co., Case No. 16-103 KG/KBM (D.N.Mex. Feb. 6, 2018) (order granting summary judgment)
  • Indemnification Under Agent’s D&O Policy: in New Mexico, E&O liability insurance carrier not required to indemnify title agent unless a lawsuit is filed and a duty to defend arises – Aztec Abstract & Title Ins. Inc. v. Maxum Specialty Group & Maxum Indemnity Co., Case No. 16-103 KG/KBM (D.N.Mex. Feb. 6, 2018) (order granting summary judgment)
January 24, 2018 11:56 AM | Permalink

REAL PROPERTY UPDATE

  • Standing/Foreclosure: pursuant to Florida Rule of Procedure 1.260, the assignee of a note during pendency of a foreclosure acquires standing of original plaintiff lender - Spicer v Ocwen Loan Servicing, LLC, et al., Case No. 4D16-2335 (Fla. 4th DCA Jan. 10, 2018) (affirmed).
  • Substitute Service: service on Secretary of State, pursuant to section 48.181, Fla. Stat., was insufficient to support default judgment, where defendant provided sworn unrefuted testimony he was not conducting business in the State of Florida, and was not avoiding service - Cozzetto v Banyan Finance, LLC, Case No. 4D17-1255 (Fla. 4th DCA Jan. 10, 2018)(reversed and remanded).
  • Statute of Limitations/Foreclosure: lawsuit filed more than 5 years after borrower's first default under note/mortgage was timely for payments due within limitations period, and required judgment exclude those payment defaults outside of limitations period - Velden v Nationstar Mortgage, LLC, Case No. 5D16-3628 (Fla. 5th DCA Jan. 12, 2018) (affirmed, in part, reversed in part, remanded).
  • Tax Deed/Redemption: trial court’s finding that owner ready, willing, and able to redeem property on day of tax deed auction—i.e., prior to execution and recording of tax deed of owner’s property to successful bidder the following day—was supported by competent substantial evidence – Ashear v. Sklarey, No. 3D16-888 (Fla. 3d DCA Jan. 17, 2018) (affirmed in part, reversed in part, and remanded with instructions)
  • Code Enforcement: some improvements to horse farm, including two barns, storage building, and bin, were exempt from village’s building permit requirements and zoning regulations pursuant to section 604.50(1), Florida Statutes – 14269 BT LLC v. Village of Wellington, Florida, No. 4D17-2376 (Fla. 4th DCA Jan. 17, 2018) (granting petition in part)
  • Sinkhole/CRNs: pursuant to section 624.155(1)(d), Florida Statutes, filing of CRN before appraisal process was complete and damages were determined did not render CRN a legal nullity, nor did it preclude insured’s bad faith claim against insurer in connection with sinkhole claim – Landers v. State Farm Florida Ins. Co., No. 5D15-4032 (Fla. 5th DCA Jan. 19, 2018) (reversed and remanded)

FINANCIAL SERVICES UPDATE

  • TCPA: denying motion to stay TCPA proceeding pending the D.C. Circuit's decision in a case challenging the FCC's July 10, 2015 Order as, issuing stay "would amount to a constructive refusal to enforce the FCC's interpretation [of the statute], which th[e] court is prohibited from doing []" - Williams v. Bluestem Brands, Inc., 2017 WL 6507226 (M.D. Fla. Dec 15, 2017)
  • TCPA: denying summary judgment motion on TCPA claim where plaintiff's sworn statement that she orally revoked consent conflicted with defendant's records which contained no such notation - Miller v. Ginny's Inc., 2017 WL 6398302 (M.D. Fla. Dec 13, 2017)
  • FCCPA: denying summary judgment motion on FCCPA claims for harassing calls and asserting a legal right that does not exist where predicated on calls that continued after the oral revocation of consent but conflicting record evidence demonstrated fact issues remained on whether plaintiff orally revoked - Miller v. Ginny's Inc., 2017 WL 6398302 (M.D. Fla. Dec 13, 2017)
  • TILA: rescission claim properly dismissed where plaintiff failed to allege facts sufficient to show that she exercised the right to rescind within three years of the consummation of her loan, and claim was time-barred with no allegations supporting equitable tolling - Agraz v. Golden Empire Mortgage, Inc., 2017 WL 6525234 (9th Cir. 2017)
  • RESPA: claim predicated on itemized and verified payoff statement properly dismissed where plaintiff did not allege servicer failed to provide specific information requested, that he suffered actual damages from a potential non-response; noting one potential instance of non-responsiveness cannot constitute a "pattern and practice of noncompliance" warranting statutory damages - Petrovich v. Ocwen Loan Servicing, LLC, 2017 WL 6330877 (9th Cir. 2017)
  • RESPA: dismissing RESPA claim under 12 C.F.R. section 1024.41 due to borrowers' failure to allege a "colorable relationship" between the lender's conduct and their alleged actual damages consisting of active foreclosure of their property, attorney's fees and various manifestations of distress - Judan v. Wells Fargo Bank, N.A., 2017 WL 6405615 (N.D. Cal. Dec. 15, 2017)
  • FDCPA: dismissing FDCPA claim predicated on defendant's attempts to foreclosure on real property because "[t]he filing a foreclosure complaint does not constitute a prohibited communication under the FDCPA" and plaintiffs did not allege defendant was attempting to collect a debt from them as they were not obligated on the subject promissory note - Bruce v. U.S. Bank, N.A., 2017 WL 6406904 (M.D. Fla. Dec. 15, 2017)
  • FDCPA: dismissing FDCPA claim where plaintiffs failed to provide pre-suit notice in accordance with deed of trust, holding the notice provision does not impermissibly abrogate the FDCPA - Giotta v. Ocwen Loan Servicing, LLC, 2017 WL 6397179 (9th Cir. 2017)
  • FDCPA: while the FDCPA section 1692f(6) claim includes nonjudicial foreclosure in its scope, dismissing claim due to wholly conclusory allegations - Arias v. Select Portfolio Servicing, Inc., 2017 WL 6447890 (E.D. Cal. Dec. 18, 2017)
  • FCRA: finding reported information (that loan was 120 days or more delinquent) was not inaccurate or incomplete and dismissing with prejudice borrower’s complaint alleging violation of the FCRA based on borrower’s position that because the state court mortgage foreclosure action accelerated the mortgage, borrower no longer had the ability and/or obligation to make monthly payments on her mortgage – Leones v. Rushmore Loan Management Services, LLC, No. 0:17-CV-61266-WPD (S.D. Fla. Dec. 11, 2017)

TITLE INSURANCE UPDATE

  • Experts: Late-disclosed “rebuttal” expert report excluded because opinions related to issues on which offering party bore the burden of proof. First American Title Ins. Co. v. Bowles Rice, LLP, Case No. 1:16cv219 (N.D. W. Va. Jan. 5, 2018).
  • Survey Exception: Affirming summary judgment to title insurer on survey exception where survey would have shown that separate garage parcel was not included in conveyed land. Kreider v. Correa, Case No. 2111 MDA 2106 (Pa. Sup. Jan. 11, 2018).
  • Mortgage Fraud: unlike fraud and bankruptcy dischargeability, where material issues of fact as to intention remain, summary judgment may be granted on conversion as to the principal of a mortgage lender who loaned himself money but failed to record the mortgage – First American Title Ins. Co. v. Sadek, Case No. 11-1302 (D.N.J. Dec. 29, 2017) (order granting in part and denying in part summary judgment)
December 18, 2017 2:45 PM | Permalink

REAL PROPERTY UPDATE

  • Foreclosure/Errors in Legal Description: error in legal description did not preclude judgment of foreclosure because property was sufficiently identified by accurate lot and tract, street address, and parcel identification number - Bayview Loan Servicing, LLC v. Newell, Case No. 1D16-5173 (Fla. 1st DCA Dec. 6, 2017) (reversed and remanded for entry of judgment).
  • Foreclosure/Certification of Possession of Original Note: 702.015, Florida Statutes, requires a certification of possession of the original note, under penalty of perjury, with the filing of the complaint; notarization is not required - RBS Citizens N.A. v Reynolds, et al., Case No. 2D16-735 (Fla. 2d DCA Dec. 8, 2017) (reversed and remanded).
  • Foreclosure/Standing: “to prove standing as a nonholder in possession [of the original promissory note,] with the rights of a holder, the [lender] must prove the chain of transfers starting with the first holder of the note” - Supria v Goshen Mortgage, LLC, et al., Case No. 4D16-4356 (Fla. 4th DCA Dec. 6, 2017) (reversed and remanded).
  • Foreclosure: judgment of dismissal based upon statute of limitations defense was improper where lender alleged an initial default outside of the limitations period, but also alleged subsequent defaults within limitations period - Deutsche Bank National Trust Co., Trustee, v Corrigan, et al., Case No. 5D16-2983 (Fla. 5th DCA Dec. 8, 2017) (judgment of dismissal reversed and remanded).
  • Foreclosure/Standing: dismissal for lack of standing was improper because bank filed a copy of the note, endorsed in blank, with the complaint and offered the original into evidence, thereby creating an inference that the bank had possession of the note at the inception of the case, and had standing, absent evidence to the contrary - Bank of NY Mellon v Thompson, Case No. 5D16-3372 (Fla. 5th DCA Dec. 8, 2017) (dismissal reversed and remanded for new trial).
  • Foreclosure/Standing: assignee of lender was required to prove standing of predecessor lender at the time of filing the complaint and, the Court’s failure to admit testimony concerning lost note by predecessor was not harmful error because, even if it were admitted, such evidence would be insufficient to prove standing of predecessor at time of filing lawsuit - Green Tree Servicing, LLC v Atchison, Case No. 5D17-226 (Fla. 5th DCA Dec. 8, 2017) (final judgment affirmed).

FINANCIAL SERVICES UPDATE

  • TCPA/FCCPA: TCPA claim failed because Borrower made cell phone number available regarding the debt, providing express consent during loan transaction and subsequent phone calls; FCCPA claim failed because Borrower failed to prove lender’s repeated telephone calls were abusive or harassing - Harrington v. RoundPoint Mortg. Servicing Corp., Case No. 2:15-cv-322-FtM-28MRM, --- F. Supp. 3d ---- (M.D. Fla. Nov. 30, 2017) (entering judgment for Defendants after bench trial under Rule 52).
  • FDCPA/FCCPA: court held that least sophisticated consumer would not be misled or deceived where debtor alleged collection letter misleading where it included column for “fees” reflecting $0.00 balance since no fees authorized under statute or subject agreement - Jones v. Professional Fin. Co., Inc., Case No. 17-61435-CIV (S.D. Fla. Dec. 4, 2017) (granting motion to dismiss with prejudice).
  • FDCPA/FCCPA: collection agency had right to rely on the creditor’s representations of debt and FDCPA does not require a debt collector to validate a debt prior to seeking collection - Cornette v. I.C. System, Inc., Case No. 16-24454-CIV (S.D. Fla. Nov. 30, 2017).
  • FDCPA: servicer did not violate the FDCPA by demanding amounts in its foreclosure complaint that were barred by the statute of limitations - Green v. Specialized Loan Servicing LLC, Case No. 6:16-cv-1298, --- F. Supp. 3d ---- (M.D. Fla. Nov. 30 2017) (granting motion to dismiss with prejudice).
  • FCRA: denying summary judgment on consumer’s FCRA claims where, in response to receipt of consumer’s dispute letter, reporting agency notified consumer that it no longer maintained a commercially available credit file on consumer at time dispute letter was received - Rumbough v. Comenity Capital Bank, Case No. 6:16-cv-1305-ORL-18GJK (M.D. Fla. Nov. 27, 2017).
  • FDCPA/FCCPA/FDUTPA: no FDCPA violation because agency entitled to reasonably rely upon provider’s representations concerning amount of debt owed and was not required to conduct pre-collection investigation; incorrect interpretation of contract by provider and/or agency, and a pattern or practice of charging collection fees, even if true, legally insufficient to establish knowledge element required to support FCCPA claim; no FDUTPA violation where no evidence agency attempted to collect fee that was excessive or for a service that was not performed - Cornette v. I.C. System, Inc., Case No. 16-24454-Civ-COOKE/TORRES (S.D. Fla. Nov. 30, 2017).
  • FDCPA: FDCPA claim time-barred where trustee’s sale of real property which formed basis of action occurred more than 9 years before plaintiff filed case, rejecting plaintiff’s reliance on equitable tolling and delayed discovery rule where plaintiff’s reliance based upon securitization of underlying loan and where no evidence substantiating plaintiff’s conclusory statement he could not have previously discovered his loan had been securitized - Ratliff v. Mortgage Store Financial, Inc., Case No. 17-cv-02155-EMC (N.D. Cal. Nov. 29, 2017).
  • TCPA: text message confirming dinner reservation does not constitute telemarketing or an advertisement and, as such, under TCPA only express prior consent is required and such consent can be given orally or in writing; concluding plaintiff consented to receiving text message by making dinner reservation and providing telephone number to defendant in connection therewith - MacKinnon v. Hof’s Huts Restaurant, Inc., Case No. 2:17-cv-01456-JAM-DB (E.D. Cal. Nov. 28, 2017).
  • ECOA: determining plaintiff failed to plead valid ECOA claim because she was not an “applicant” for purposes of ECOA where claim based on loan modification her parents applied for and where plaintiff not a party to loan and failed to allege she directly applied for extension, renewal, or continuation of credit from defendant - Gatpandan v. Wilmington Savings Fund Society FSB, Case No. 17-cv-04001-LB (N.D. Cal. Nov. 28, 2017).
  • TILA: concluding plaintiffs’ TILA claim based on alleged fraudulent non-disclosure of identity of lender for loan time-barred where deed of trust identified lender and where rescission not timely sought by plaintiffs; rejecting plaintiffs’ equitable tolling argument; dismissing complaint with prejudice - Styles v. Deutsche Bank National Trust Company, Case No. 2:17-cv-01947 TLN AC (E.D. Cal. Nov. 30, 2017).
  • FDCPA: noting in action brought against law firm for firm’s debt collection activities that “debt collectors do not have immunity from FDCPA liability for their litigation conduct,” and holding that “a debt collector engages in unfair or unconscionable litigation conduct in violation of section 1692f when, as alleged here, it in bad faith unduly prolongs legal proceedings or requires a consumer to appear at an unnecessary hearing,” and rejecting the argument “that the remedial scope of the FDCPA is limited by State law.” Arias v. Gutman, Mintz, Baker & Sonnenfeldt LLP, Docket No. 16-2165-cv (2d Cir. Nov. 14, 2017).
  • FDCPA: finding plaintiff sufficiently alleged facts to state a claim under sections 1692e and 1692g of the FDCPA where she alleged defendant’s letter failed to state clearly whether interest would accrue on debt and noting that “debt collectors are required to disclose to consumers that their balance may increase due to interest and fees;” but concluding that letter did not violate that portion of 1692e and 1692g of the FDCPA concerning consumer’s ability to dispute debt where letter tracked language of FDCPA pertaining to procedure for disputing debt - Thomas v. Midland Credit Management, Inc., Case No. 2:17-cv-00523 (E.D. N.Y. Nov. 27, 2017).

TITLE INSURANCE UPDATE

  • Marketability of Title/Encumbrances: restrictive covenants may affect the manner in which property is to be used and the property’s economic marketability but do not necessarily impact title to property, however, the restrictive covenants do create an interest in the property that are encumbrances within the meaning of a title policy – Chesapeake Land Dev. Co., LLC v. Chicago Title Ins. Co., Case No. CIV-16-0132-HE (W.D. Ok., Nov. 30, 2017) (granting in part and denying in part motion to dismiss)
  • Good Faith and Fair Dealing: Oklahoma law applies the implied duty of good faith and fair dealing to title insurers – Chesapeake Land Dev. Co., LLC v. Chicago Title Ins. Co., Case No. CIV-16-0132-HE (W.D. Ok., Nov. 30, 2017) (granting in part and denying in part motion to dismiss)
  • Date of Loss/Calculation of Loss: title policy does not contain a provision that explicitly supplies a date certain for calculating loss or damage, or the method for calculating such loss or damage; rather the policy provides significant leeway for the title insurer to evaluate and pay claims, and where the parties submit competing calculations of loss and damage summary judgment is inappropriate – Marcantel v. Stewart Title Guar. Co., Case No. 2:16-cv-00250-DBP (D. Utah, Dec. 1, 2017) (granting partial summary judgment)
  • Title Agent’s Tort Liability: Plaintiffs’ ability to minimize loss by purchase of property through a related entity was not a defense to breach of fiduciary duty claim against title agent for failing to record mortgages or issue title insurance – Tafea v. Gateway Title Co., No. G048674 (Cal. App. Nov. 29, 2017).
November 30, 2017 2:35 PM | Permalink

REAL PROPERTY UPDATE

  • Receiver/Barton Doctrine: individual could not bring negligence action against discharged receiver of commercial property until individual first obtained leave to do so from the court that appointed the receiver – Asset Recovery Group, LLC v. Cabrera, No. 3D17-1517 (Fla. 3d DCA Nov. 22, 2017) (granting petition for writ of prohibition, quashing order, and remanding for entry of order dismissing claims against receiver)
  • Foreclosure/Summary Judgment: bank established at summary judgment that borrower defaulted on the promissory note, that bank owned the loan, and that borrower owed bank damages but not “pre-accrued interest,” a figure which was not supported by record evidence – Capotosto v. Fifth Third Bank, No. 4D16-4197 (Fla. 4th DCA Nov. 22, 2017) (affirming but remanding for correction of judgment)

FINANCIAL SERVICES UPDATE

  • TILA/ECOA: borrower’s complaint was properly dismissed because TILA exempts business loans from its scope and because plaintiff failed to allege discrimination on the basis of a protected ground under the Equal Credit Opportunity Act – Roberts v. FNB South of Alma, Georgia, Case No. 17-11269, (11th Cir. Nov. 14, 2017).
  • FDCPA/FCCPA: “nothing in the FDCPA, or the FCCPA, negates the right to collect a debt because of a violation of the statute” – Pimentel v. Nationwide Credit, Inc., 2017 WL 5633310 (S.D. Fla. Nov 13, 2017) (dismissing FDCPA and FCCPA claims predicated on alleged violations of the FDCPA, and FDCPA claims predicated on state specific notices and statutory language included in collection letter; but finding plaintiff sufficiently alleged Section 1692e claim predicated on defendant’s failure to disclose accruing interest applying the least sophisticated consumer standard)
  • FDCPA/FCCPA: summary judgment granted to plaintiff on FDCPA and FCCPA claims where defendant admitted to mailing to the plaintiff directly a letter containing an implicit demand for payment, having actual knowledge plaintiff was represented by counsel; but finding genuine issues of material fact as to defendant’s bona fide error defense precluded the entry of summary judgment thereon -- Castellanos v. Portfolio Recovery Associates, LLC, 2017 WL 5514368 (S.D. Fla. Nov 3, 2017)
  • FDCPA/FCCPA/TCPA: district court not deprived of jurisdiction over FDCPA, FCCPA, and TCPA where the alleged violations do not require the court to undo the state court foreclosure judgment and the claims are predicated on debt collection practices not challenged in state court foreclosure proceeding -- Ferrer v. Bayview Loan Servicing, LLC, 2017 WL 5508528 (S.D. Fla. Nov 16, 2017) (denying motion to dismiss on Rooker-Feldman grounds)
  • TILA/FDCPA: TILA and FDCPA claims dismissed on preclusion grounds, or alternatively, for failure to state a claim – Sui v. Wells Fargo Bank, N.A., 2017 WL 5624297 (C.D. Cal. Oct 5, 2017)
  • FCRA: section 1681s-2 claim dismissed where plaintiff generally alleged furnisher failed to review all relevant information regarding the disputed account but failed to identify any information the furnisher failed to review -- Aknin v. Experian Information Solutions, Inc., 2017 WL 5508385 (S.D. Fla. Nov 15, 2017)
  • RESPA: allegations that loan servicer repeatedly requested documentation previously submitted by the borrowers on their initial application for mortgage assistance sufficiently alleged violation under RESPA rule 12 C.F.R. § 1021.41(b), and delinquency fees assessed during the eight-month review sufficiently alleged actual damages under RESPA -- Jackson v. Bank of America, N.A., 2017 WL 5598856 (W.D.N.Y. Nov 21, 2017)

TITLE INSURANCE UPDATE

  • Created, Suffered or Assumed: insured owners barred from coverage under title insurance policy for an easement that the policy did not disclose because owners were aware of easement prior to closing, and because contradictory disclosures in property descriptions at closing did not create a genuine issue of material fact as to owners’ knowledge of easement – Egan v. Eastland Title Servs., Inc., Opinion No. 138068 (Ct. Sup. Ct., Sep. 29, 2017) (granting insurer’s motion for summary judgment)
  • Negligent Misrepresentation: buyers’ reliance on sellers’ representation concerning easement was unreasonable, where sellers did disclose easement, and buyer knew of easement but failed to ask about discrepancies in closing documents – Egan v. Eastland Title Servs., Inc., Opinion No. 138068 (Ct. Sup. Ct., Sep. 29, 2017) (granting seller’s motion for summary judgment)
  • Motion to Dismiss: insurer may not rely on presumption that defendant had knowledge of her deceased partner’s misrepresentations in mortgage fraud scheme to be directly, derivatively, constructively and/or vicariously liable for deceased’s fraud in action for fraud, fraudulent conveyance, breach of fiduciary duty, negligence, unjust enrichment, breach of contract and breach of the implied covenant of good faith and fair dealing, where no contract exists between insurer and defendant and deceased partner was acting in individual capacity – First American Title Ins. Co. v. Bayoh, No. ESX-L-4539-17 (Sup. Ct. N.J., Nov. 3, 2017) (granting motion to dismiss, with prejudice)
  • Statute of Limitations: insurer, as assignee of lender in mortgage fraud matter, stands in the shoes of lender for statute of limitation purposes and is bound by prior owner’s timeline when attempting to bring claims for fraudulent conveyance, breach of fiduciary duty, and negligence – First American Title Ins. Co. v. Bayoh, No. ESX-L-4539-17 (Sup. Ct. N.J., Nov. 3, 2017) (granting motion to dismiss, with prejudice)
  • Equitable Subrogation/Double Recovery: insurer’s judgment against former insured is not subject to the double recovery doctrine or Nevada’s one action rule and is not implicated by lenders’ equitable subrogation rights against the same former insured, where lenders and insurer are separate entities and obtained damages in different cases under different legal theories – Zhang v. Reconstrust Co., N.A., et al., No. 69246/70923 (Nev., Nov. 15, 2017) (affirming trial court’s judgment of equitable subrogation)
November 14, 2017 2:12 PM | Permalink

REAL PROPERTY UPDATE

  • Misrepresentation: developer entitled to directed verdict on claims of fraudulent and negligent misrepresentation asserted by condominium association because association failed to present evidence that: (i) developer induced association to rely on misrepresentation or (ii) association justifiably relied on misrepresentation, resulting in damages - Arlington Pebble Creek, LLC v Campus Edge Condominium Association, Inc., Case No. 1D16-1347 (Fla. 1st DCA Nov. 6, 2017).
  • Zoning/Certiorari: circuit court’s failure to apply proper law on appeal of government’s decision to deny zoning justified second-tier review. Surf Works, L.L.C. v. City of Jacksonville Beach, Case No. 1D16-3312 (Fla. 1st DCA Nov. 8, 2017).
  • Hearsay/Business Records Exception: servicer’s witness sufficiently acquainted with history of records that comprise loan and, therefore, could testify concerning loan payment history and third party default letter sent to borrower; lack of servicer’s familiarity with prior servicer’s record keeping practices and policies irrelevant - Deutsche Bank National Trust Co., etc. v Brito, Case No. 3D16-1466 (Fla. 3d DCA Nov. 8, 2017).
  • Hearsay/Business Records Exception: payoff printout admissible as business record even if not kept in the ordinary course of business, so long as qualified witness testifies as to manner of preparation, reliability, and trustworthiness - Deutsche Bank National Trust Co., etc. v Brito, Case No. 3D16-1466 (Fla. 3d DCA Nov. 8, 2017)
  • Zoning: zoning ordinance prohibiting vegetable gardens in front yard is constitutional as it does not restrict a fundamental right or suspect class - Ricketts and Carroll v. Village of Miami Shores, Florida, et. al., No. 3D16-2212 (Fla. 3d DCA Nov. 1, 2017) (affirmed).
  • Restrictive Covenants/Standing: unit owners and condominium association had standing to enforce certain development restrictions contained in condominium documents, which were defined by declaration of condominium to include the subject lease - Waterview Towers Condo. Assoc., Inc., et. al. v. City of West Palm Beach, et. al., No. 4D16-285 (Fla. 4d DCA Nov. 1, 2017) (reversed and remanded)

FINANCIAL SERVICES UPDATE

  • FDCPA/FCCPA: debtors not required to give lender notice and opportunity to cure violations of consumer protection statutes; lender not entitled to bona fide error defense - Foster v. Green Tree Servicing, LLC, Case No. 8:15-cv-1878-T-27MAP (M.D. Fla. Nov. 3, 2017) (denying lender’s motion for summary judgment)
  • TCPA: defendant can still be held liable under TCPA for sending “junk faxes” where it did not send faxes directly but hired a company to send fax advertisements on its behalf - Meyer v. Capital Alliance Group, Case No. 15-cv-2405-WVG (S.D. Cal. Nov. 6, 2017) (denying motion for summary judgment and holding that triable issue of fact exists as to apparent agency theory of vicarious liability)
  • FDCPA: statute of limitations for FDCPA begins to run on date consumer receives allegedly unlawful communication, not on date it is sent - Gil v. Allied Interstate, LLC, Case No. 2:17-cv-3362 (E.D.N.Y. Nov. 3, 2017) (denying defendant’s motion to dismiss on basis of statute of limitations)
  • TCPA: noting that well-pled allegations of an automated telephone dialing system rely on indirect allegations, and finding allegations that a prerecorded message was utilized during relevant calls and that there was a noticeable pause or delay between the time the calls were answered and the time a person came on the line and began speaking were sufficient to raise an inference that defendants used an automated telephone dialing system to call plaintiff’s cellular telephone - Cummings v. Rushmore Loan Management Service, Case No. 8:17-cv-1652-T-33MAP (M.D. Fla. Oct. 26, 2017)
  • FDCPA/FCCPA: granting summary judgment in creditor’s favor, concluding that although creditor’s actual name was different from that listed in credit report by consumer reporting agency, name listed would not confuse the least sophisticated consumer into believing that separate entities were involved; plaintiff failed to prove FDCPA claims by, inter alia, failing to prove creditor engaged in conduct prohibited by the statute, failing to prove that a misrepresentation occurred that materially misled her, and failing to prove that a misrepresentation occurred that negatively impacted her; and concluding that FCCPA claim was preempted by FCRA since it was based solely on creditor’s alleged inaccurate reporting - Jimenez v. Trident Asset Management, L.L.C., Case No. 8:16-cv-1059-T-23AAS (M.D. Fla. Oct. 31, 2017)
  • RESPA: rejecting servicer’s argument that, as a condition precedent to filing suit, plaintiff required to comply with “notice and cure” provision in mortgage, and concluding that “notice and cure” provision applies only to disputes between plaintiff and lender regarding acts pertaining to the mortgage and does not apply to disputes between plaintiff and servicer regarding servicing of the loan - Johnson v. Specialized Loan Servicing, LLC, Case No. 3:16-cv-178-J-MCR (M.D. Fla. Oct. 24, 2017)
  • FDCPA: based upon the plain language of FDCPA and consumer protection purposes behind enactment of the statute, there is no bright line rule that requires a debt collector to “always identify the creditor by its full business name in order to avoid liability under § 1692g.  Rather, consistent with the FTC’s commentary, a debt collector may use the creditor’s full business name, the name under which the creditor usually transacts business, or a commonly used acronym” - Leonard v. Zwicker & Associates, P.C., Case No. 17-10174 (D.C. Docket No. 2:16-cv-14326-DMM) (11th Cir. Nov. 1, 2017)
  • FDCPA/Rosenthal Act/HOLA: because California law does not allow for deficiency judgment following non-judicial foreclosure, “actions taken to facilitate a non-judicial foreclosure, such as sending the notice of default and notice of sale, are not attempts to collect [a] ‘debt’” under FDCPA.  In addition, foreclosing on property pursuant to a deed of trust does not constitute debt collection activity under the Rosenthal Act.  Further, court found that plaintiff’s claims for violation of California’s Homeowners’ Bill of Rights were preempted by the federal Home Owners Loan Act (“HOLA”), concluding that HOLA preemption “continues to apply to conduct related to loans originated by a federally-chartered savings association even after those banks are merged into national banking associations” - Warren v. Wells Fargo & Co., Case No. 3:16-cv-2872-CAB-(NLS) (S.D. Cal. Oct. 27, 2017)
  • TCPA: rejecting challenge under U.S. Supreme Court’s decision in Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) to plaintiff’s standing, and noting that Ninth Circuit held earlier this year that a violation of TCPA is a concrete, de facto injury; thus, “plaintiffs who allege the receipt of an unwanted telephone call or text message in violation of the TCPA ha[ve] Article III standing, and they need not allege any additional harm beyond the one Congress has identified in passing the TCPA” - Franklin v. Ocwen Loan Servicing, LLC, Case No. 17-cv-02702-JST (N.D. Cal. Oct. 31, 2017)
  • FDCPA: term “consumer” under FDCPA includes “persons from whom debt collectors mistakenly attempt to collect money, because through such collection efforts the debt collector  effectively ‘alleges’ that the individual is ‘obligated’ to pay the debt”  - Hedayati v. The Perry Law Firm, Case No. SA CV 16-0846-DOC (DFMx) (C.D. Cal. Oct. 27, 2017)

TITLE INSURANCE UPDATE

  • Title Insurer’s Tort Liability: claim that title insurer failed to disclose clouds on title dismissed because title insurer does not owe the duties of an abstractor, but merely agrees to issue contract of indemnity – Cao v. BSI Financial Svcs., Inc., No. H-17-321 (S.D. Tex. Oct. 19, 2017)
  • Coverage: liens attaching to property through one of the insured co-owners renders the other co-owner’s title unmarketable and that is a covered claim where title insurer fails to prove the liens were created, suffered, assumed or agreed to by the co-owner at trial - Degueyter v. First Am. Title Co., Case No. 17-78 (La. App. October 2017)
October 30, 2017 9:39 AM | Permalink

REAL PROPERTY UPDATE

  • Foreclosure: witness may testify as to business records of another company so long as that witness can lay proper foundation of personal knowledge necessary to establish business records exception - Bayview Loan Servicing, LLC v. Kay, Case No. 1D16-4043  (Fla. 1st DCA October 18, 2017) (reversed and remanded)
  • Condominium/Appurtenances: beach club memberships of beach club located a mile away from condominium units in which condominium owners had no ownership interest were not appurtenances to the condominium units, despite declaration of condominium stating that such club memberships were appurtenances to the condominium units -Silver Beach Towers Property Owners Association, Inc. v. Silver Beach Investments of Destin, L.C., Case No. 1D16-4555 (Fla. 1st DCA October 18, 2017) (reversed and remanded).
  • Foreclosure: subsequent purchaser who takes title to property subject to mortgage may not join foreclosure action to challenge note and mortgage’s validity - Wells Fargo Bank, NA v. Rutledge, Case No. 2D16-244  (Fla. 2d DCA October 20, 2017) (reversed and remanded)
  • Tax Liens:  tax liens are superior to mortgage liens and are given priority in foreclosure actions pursuant to Florida Statutes section 197.122(1), and priority of tax liens imposed due to improper grant of homestead tax exemptions governed by section 197.122(1) - Miami-Dade County v. Lansdowne Mortgage, LLC, Case No. 3D16-1046 (Fla. 3d DCA October 18, 2017) (reversed and remanded)
  • Foreclosure: where landlord/tenant relationship exists independent of any rental agreement and where tenant claims equitable interest in property, ejectment, and not eviction, is proper remedy for landlord - Borjas v. Vergara, Case No. 3D16-1788  (Fla. 3d DCA October 18, 2017) (reversed and remanded).
  • Foreclosure: “[a] lost [mortgage note] can be enforced if the person seeking to enforce the instrument was entitled to enforce it when the loss occurred or acquired ownership of it from someone entitled to enforce it when the loss occurred, the loss was not the result of a transfer or seizure, and the instrument cannot reasonably be obtained” - Wisman v. Nationstar Mortgage, LLC, Case No. 5D16-3236 (Fla. 5th DCA October 20, 2017) (reversed and remanded)
  • Littoral Rights: “owners of real property abutting a lake have [certain] common law littoral rights, including the right to an unobstructed view of the lake”  - HagertySmith, LLC v. Gerlander, Case No. 5D16-3655  (Fla. 5th DCA October 20, 2017) (reversed and remanded). 
  • Reformation/Statute of Limitations: action seeking reformation of deeds not barred by section 95.231(2), Florida Statutes’ 20-year statute of limitations because that statute only bars claims against the claimants under the deed or their successors in title, as opposed to individuals seeking relief in conformance with the interests of claimants under deed – Pettis v. Chrisentery, No. 1D17-506 (Fla. 1st DCA Oct. 24, 2017) (reversing and remanding for further proceedings on reformation claim and reevaluation of other claims and impact of the Marketable Record Title Act)
  • Foreclosure / Standing:  promissory note did not contain endorsement in bank’s favor, nor was evidence admitted that established merger of bank with predecessor bank, and, in addition, bank did not establish that sub-servicer was properly acting as bank’s agent with power to file suit – Buckingham v. Bank of Am., N.A., No. 2D15-5424 (Fla. 2d DCA Oct. 25, 2017) (reversing and remanding for entry of order of involuntary dismissal)
  • Landlord-Tenant/Rent in Court Registry:  in suit between tenant and subtenant, trial court incorrectly found that funds in court registry represented rent owed to landlord, an intervenor in the lawsuit; rather, landlord is entitled to claim against any remaining funds in the registry to which tenant is entitled, after disbursement is made to subtenant for the value of subtenant’s successful claim in lawsuit – Tribeca Aesthetic Med. Solutions, LLC. V. Edge Pilates Corp., No. 4D16-648 (Fla. 4th DCA Oct. 25, 2017) (reversing and remanding)
  • Liability for Assessments:  although current parcel owner did not directly qualify for safe harbor provision under section 720.3085(2)(c), it indirectly benefited from said provision because it was jointly and severally liable with prior parcel owner for all unpaid assessments due up to time of transfer of title – Villas of Windmill Point II Prop. Owners’ Ass’n, Inc. v. Nationstar Mortg., LLC, No. 4D16-2128 (Fla. 4th DCA Oct. 25, 2017) (affirming and remanding for trial court to correct final judgment)
  • Contract for Sale/Election of Remedies:  trial court erred in finding that judgment on buyer’s damages claim estopped it from later electing to pursue its specific performance claim because remedies were factually consistent and only full satisfaction of the damages claim would estop buyer from pursuing specific performance – The Allegro at Boynton Beach, L.L.C. v. Pearson, No. 4D16-4299 (Fla. 4th DCA Oct. 25, 2017) (reversing and remanding)
  • Foreclosure/Standing:  trial court erred in concluding that standing could not be transferred by selling the note – US Bank, NA, as Legal Title Trustee for Truman 2012 SC2 Title Trust v. Glicken, No. 5D15-4059 (Fla. 5th DCA Oct. 27, 2017) (reversing and remanding for final judgment in plaintiff’s favor)

FINANCIAL SERVICES UPDATE 

  • FDCPA: judgment debtor’s misrepresentation and over-collection claim under FDCPA barred by Rooker-Feldman doctrine and FDCPA's venue provision does not apply to postjudgment garnishment proceedings under California law – Muhammad v. Reese Law Group, Case No. 16cv2513-MMA (S.D. Cal. Oct. 12, 2017) (granting defendant’s motion for summary judgment and dismissing FDCPA claims)
  • FDCPA: affirming dismissal of FDCPA claim where default letter substantially complied with statute and defendant’s acquisition of debt after default insufficient allegation to make it a “debt collector” within meaning of statute – Kurtzman v. Nationstar Mortgage, LLC, No. 16-17236 (11th Cir. Oct. 10, 2017)
  • FDCPA: reversing in part dismissal of FDCPA claim because voicemail was “initial communication” requiring statutory disclosures – Hart v. Credit Control, LLC, No. 16-17126 (11th Cir. Sept. 22, 2017)
  • FCCPA/FDCPA: upon entry of default judgment against non-appearing defendants, maximum statutory damages of $1,000 per defendant under FCCPA and FDCPA awarded; however, an additional $5,000 for "stress, anxiety, loss of sleep, and deterioration of relationships” deemed "too tenuous to warrant an award of actual damages at this stage of the pleadings" -- Castro v. Capital One Services, LLC, Case No. 8:16-CV-889- T-17TGW (M.D. Fla., Aug. 3. 2017).
  • FDCPA: allegations that mortgage balance statement was "inflated" and amounted to an "improper demand" with regard to the amount owed on the loan were insufficient to allege a violation of Section 1692e(2)(A) absent allegations showing the stated balance did not accurately reflect was owed on the loan at that particular point in time, noting "[t] he fact that the balance exceeds the value of the Property does not, in and of itself, establish the loan balance is overinflated." -- Kemp v. Wells Fargo Bank, N.A., Case No. 17-cv-01259-MEJ, (N.D. Cal. Oct. 25, 2017).
  • FDCPA/RESPA: summary judgment for Fannie Mae and loan servicer affirmed on debtors' FDCPA and RESPA claims predicated on chapter 13 bankruptcy payments where the record demonstrated the payments were applied to the loan and fees remained due and owing thereafter such that the total demand in the servicer's default letter was not false, deceptive or misleading -- Moore v. Seterus, Inc., No. 16-17571 (11th Cir. Oct. 19, 2017).
  • TCPA: upon entry of default judgment against non-appearing defendants, statutory damages of $500 per alleged call awarded; however, sparse record did not support a finding that the defendants acted willfully or knowingly to award treble damages -- Castro v. Capital One Services, LLC, Case No. 8:16-CV-889-T-17TGW (M.D. Fla., Aug. 3. 2017).
  • TCPA: motion to certify TCPA class denied where issues of consent, including whether consent was obtained through and conveyed by intermediaries, the purpose of the challenged calls, and "called party" determinations required examination into individual calls and could not be determined based on classwide evidence -- Jacobs v. Quicken Loans, Inc., 15-81386-CIV-MARRA (S.D. Fla. Oct. 19, 2017).
  • Arbitration: waiting one year from the filing of an action to move to compel arbitration, participating in a case management conference where the prospect of arbitration was never raised, responding to discovery and propounding its own waived the right to arbitrate TCPA and FCCPA claims under arbitration provision in credit card agreement -- Nelson v. Synchrony Bank, Case No: 2:16-cv-703-FtM-99MRM (M.D. Fla. Oct. 20, 2017). 

TITLE INSURANCE UPDATE

  • Title Agency Agreement Salvage: reversing summary judgment because title underwriter that did not have “unconditional right to settle” in indemnity provision of its agency agreement was required to prove settlement with insured lender was in good faith and reasonable in salvage action against title agent whose mistake caused the claim – Colonial Title Co., LLC v. Commonwealth Land Title Ins. Co., No. 12-16-00328-CV (Tex. App. Oct. 18, 2017)
  • Claim Preclusion/Privity: insurer who provided appointed counsel to insured in state court action concerning lien priority was not in privity with insured in trial court, therefore judgment against insured in trial court does not prevent insurer’s claim in subsequent bankruptcy action to recover for fraud and misrepresentation by borrower in obtaining title insurance – Commonwealth Land Title Ins. Co. v. Creditor Group., Case No. 2:14-cv-01394-JAD (D. Nev. Oct. 17, 2017) (reversing bankruptcy court’s order sustaining creditors’ objection to insurer’s claim)
  • Litigation Privilege: no litigation privilege for actions of executor of estate who claimed his work for the estate was privileged and that he had no liability to title insurer who sought to recover the amount of a lien on real property sold without satisfying a lien on the property – Stewart Title Guaranty Co. v. Borkowski, Case Nos. C075264 and C076709 (Cal. Ct. App. Oct. 23, 2017) (unpublished opinion affirming summary judgment for unjust enrichment and breach of contract)
  • Res Judicata/Class Action:  class plaintiffs’ appeal of motion to enforce a consent decree and for contempt barred by res judicata where trial court in first action ruled that contempt motion was barred by statute of limitations and the new action was based on the same factual occurrence as the first action, even though plaintiffs sought a new remedy, argued a new theory, and asserted new evidence – Terry v. Chicago Title Ins. Co., Case No. 2017-0102 (N.H. Sep. 29, 2017) (affirming trial court)
  • Unmerchantable Title: property purchased by two parties with undivided interests has unmerchantable title when judgments and liens against one party encumbered property prior to date of title policy, party donated his undivided interest to the second party and second party was unaware of liens and did not agree to attachments of the liens to property – Degueyter v. First American Title Co., Case No. 17-78 (La. Ct. App. Oct. 25, 2017) (reversing summary judgment denying coverage under title policy)
October 17, 2017 12:06 PM | Permalink

REAL PROPERTY UPDATE

  • Ad Valorem Taxes: land lease holders are considered equitable owners of land for tax purposes if land lease renews automatically and is perpetual; owners of condominium built on land leased from government for 99 years, with option to renew on terms to be renegotiated at the time, were not equitable owners of land and could not be liable for taxes accrued thereon - Beach Club Towers Homeowners Assoc., Inc. v. Jones, Case No. 1D15-5886 (Fla. 1st DCA October 11, 2017) (reversed and remanded)
  • Deficiency Judgment/Attorneys’ Fees: deficiency judgment cannot include attorneys’ fees awarded without evidentiary support - B and H Miracle, LLC, et al. v Wells Fargo Bank, N.A., Case No. 1D16-3549 (Fla. 1st DCA October 11, 2017) (reversed and remanded)
  • Foreclosure: evidence of possession of note endorsed in blank is all that is necessary to establish standing to foreclose - GMAC Mortgage, LLC v. Pisano, Case No. 4D15-2843 (Fla. 4th DCA October 11, 2017) (reserved and remanded)
  • Trespass: Seller of real property could not sustain claim for trespass against purchaser because purchaser became equitable owner of real property upon entering into purchase and sale contract - Gunning v. Equestleader.Com, Inc., Case No. 2D16-2214 (Fla. 2d DCA October 13, 2017)
  • Unlawful Detainer/Service: service of complaint for unlawful detainer may be accomplished by posting on property, but such service insufficient to confer jurisdiction for other counts pled - Wincor v. Potash, Case No. 4D16-4351 (Fla. 4th DCA October 11, 2017) (affirmed, in part, reversed, in part)
  • Foreclosure: involuntary dismissal of foreclosure reversed where trial court misapprehended mortgage servicing agent’s need to prove authorization to prosecute foreclosure action on behalf of lender; servicing agent was not “prosecuting the case” on lender’s behalf when it verified lender’s foreclosure complaint or when its employee testified as a witness at a foreclosure trial; lender was and always had been the plaintiff and it was not improper for servicing agent to verify complaint or testify on its behalf at trial - Wells Fargo Delaware Trust Company N.A. v. Petrov et. al., No. 2D16-1536 (Fla. 2d DCA Oct. 6, 2017) (reversed and remanded)
  • Quiet Title/Summary Judgment: factual issue as to whether decedent was mentally competent at time of execution of deed should have precluded trial court from entering final summary judgment - Petithomme v. Petithomme et. al., No. 3D16-2457 (Fla. 3d DCA Oct. 4, 2017) (reversed and remanded)

FINANCIAL SERVICES UPDATE

  • FDCPA: borrower failed to adequately allege that loan servicer was a debt collector for purposes of FDCPA or to otherwise state a claim under FDCPA for allegedly flawed notice of foreclosure sale - Kurtzman v. Nationstar Mortg. LLC, Case No. 16-17236 (11th Cir. Oct. 10, 2017) (affirming dismissal of borrower’s claims against loan servicer).
  • FDCPA/TILA: debtor’s claims under FDCPA and TILA arising from prior bankruptcy case were barred by res judicata - Russell v. Redstone Fed. Credit Union, Case No. 16-15117 (11th Cir. Oct. 3, 2017) (affirming dismissal of claims based on res judicata)
October 9, 2017 10:16 AM | Permalink

REAL PROPERTY UPDATE

  • Constructive Notice: a memorandum of agreement that is recorded in the official records of the county in which the property is located and refers to an unrecorded agreement entered into by the then-owner of the property gives subsequent purchasers constructive notice of the agreement, binding them to its provisions - AHF-Bay Fund, LLC v. City of Largo, Case No. 2D14-408 (Fla. 2d DCA Sept. 27, 2017) (affirmed after remand from Florida Supreme Court)
  • Foreclosure / Standing: bank did not present sufficient evidence through witness at trial to admit pooling and service agreement, which it was attempting to rely on to prove possession of the note at the time the suit was filed - Friedle v. The Bank of New York Mellon, No. 4D15-1750 (Fla. 4th DCA Sept. 27, 2017) (reversing and remanding for entry of involuntary dismissal)
  • Foreclosure / Statute of Limitations: trial court erred in dismissing foreclosure proceeding on grounds of res judicata and statute of limitations, where a subsequent complaint was filed alleging a continuing default in monthly payments - HSBC Bank USA, Nat'l Ass'n, as Trustee v. The Estate of Chloe Ann Petercen, No. 4D16-3283 (Fla. 4th DCA Sept. 27, 2017) (reversing and remanding)
  • Foreclosure: foreclosing bank's 1.540(b) motion for relief from judgment was properly denied where foreclosing bank argued that defendant was denied due process rights because defendant was not served with order to show cause pursuant to section 702.10(1), but where counsel for defendant informed the trial court that defendant consented to and did not oppose the entry of a final judgment of foreclosure - Nationstar Mortgage, LLC v. Diaz, et al., Case No. 3D16-1927 (Fla. 3d DCA Sept. 20, 2017) (Affirmed).
  • Foreclosure: homeowner defendants were entitled to involuntary dismissal of foreclosure action where certain HUD regulations were incorporated into the terms of the loan as conditions precedent to foreclosure, and where foreclosing bank failed to comply with those HUD regulations - McIntosh v. Wells Fargo Bank, N.A., Case No. 5D16-2189 (Fla. 5th DCA Sept. 18, 2017) (reversed and remanded).

FINANCIAL SERVICES UPDATE

  • RESPA: consent order directing $1.25 million in restitution and fines where title agency referred business to an affiliated title insurance underwriter and sometimes kept excessive amounts of premium, without making affiliated business arrangement disclosure to consumers, in violation of RESPA - In re Meridian Title Corp., File No. 2017-CFPB-0019 (Sept. 27, 2017).
  • RESPA: affirming summary judgment for loan servicer because borrower's postage to send request for information and the cost of her attorney's review of the response did not constitute "actual damages" under RESPA - Baez v. Specialized Loan Servicing, LLC, Case No. 16-18292 (11th Cir. Sept. 22, 2017).
  • TCPA: certifying class of car owners who advertised cars for sale on Craiglist, then had their cell phone number "scraped" and texted by an auto-dialer system in a scheme to get them to come to one of the defendant's car lots, in alleged violation of the TCPA - Mohamed v. American Motor Co., LLC, Case No. 15-23352-Civ-Cooke/Torres (S.D. Fla., July 12, 2017).
  • FDCPA: reversing, in part, a dismissal and holding that a voicemail was an "initial communication" within the meaning of the FDCPA, but that if debt collection company was identified in the voicemail, that was "meaningful disclosure" and it was not required to identify the individual caller - Hart v. Credit Control, LLC, Case No. 16-17126 (11th Cir., Sept. 22, 2017).
  • FDCPA: denying dismissal of putative class action under FDCPA alleging that debt collectors seeking to collect time-barred debts had failed to disclose that the partial payments they asked for in their letters might serve to revive the debt - White v. First Step Group LLC, Case No. 2:16-cv-02439 (E.D. Cal., Sept. 19, 2017).
  • FCRA: affirming dismissal of FCRA complaint for insufficient allegations of intentional violation where it was not objectively unreasonable for credit reporting agency to list on plaintiff's credit report her parents' credit card for which she was an authorized user - Pedro v. Equifax, Inc., Case No. 16-13404 (11th Cir., Aug. 24, 2017)

TITLE INSURANCE UPDATE

  • Title Policy Late Notice Defense: denying cross-motions for summary judgment and holding that the extent of prejudice caused by lender's late notice of policy claim to title insurer presented a fact issue - Emigrant Bank v. Commonwealth Land Title Ins. Co., No. 15-CV-7593 (KMK) (S.D.N.Y., Sept. 26, 2017).
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).