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Posts published by “Eric Tsai”

Calif. App. Court (4th Dist) Confirms Limited Liability for Foreclosure Trustees

The Court of Appeal for the Fourth District of California recently held that a trustee conducting a non-judicial foreclosure is not subject to tort liability unless it violated duties established by the deed of trust and governing statutes, or if the trustee has effectively taken on a different or modified duty by its actions. A copy of the opinion in Citrus El Dorado, LLC v. Chicago Title Company is available at:  Link to Opinion. A commercial developer purchased real property and obtained a loan to fund construction.  The loan was secured by a deed of trust on the property. The lender…

9th Cir. Holds GSE Is Not ‘Consumer Reporting Agency’ Under FCRA

The U.S. Court of Appeals for the Ninth Circuit recently held that a government sponsored enterprise (“GSE”) that licensed underwriting software to lenders was not a consumer reporting agency under the federal Fair Credit Reporting Act. In so ruling, the Ninth Circuit determined that the GSE did not assemble or evaluate consumer information to furnish consumer reports to third parties.  Instead, the GSE merely provided software to allow lenders to assemble or evaluate such information. A copy of the opinion in Zabriskie v. Federal National Mortgage Association is available at:  Link to Opinion. The plaintiffs had a short sale after defaulting…

Calif. App. Court (2d Dist) Holds Former Servicer, Trustee Entitled to Recover Attorneys’ Fees

The Court of Appeal for the Second District of California held that California’s fee shifting statue in California Civil Code § 1717 permitted a former loan servicer and foreclosure trustee to recover their attorneys’ fees authorized by the contract, even though the deed of trust was assigned to another financial institution. However, the Court vacated the trial court’s award of attorneys’ fees against the borrower because the deed of trust only permitted attorneys’ fees to be added to the loan balance. A copy of the opinion in Chacker v. JPMorgan Chase Bank, N.A. is available at:  Link to Opinion. The borrower…

11th Cir. Rejects Argument That Chapter 13 Bankruptcy Discharged Mortgage Loan

The U.S. Court of Appeals for the Eleventh Circuit recently held that a mortgage loan with a post-plan maturity date was not discharged in a Chapter 13 bankruptcy because the plan did not “provide for” the debt and modify the repayment terms of the mortgage. The Eleventh Circuit also held that the debt was not discharged because discharge would violate 11 U.S.C. § 1322(b)(2)’s anti-modification provision for mortgages secured by the debtor’s principal residence. A copy of the opinion in Mildred M. Dukes v. Suncoast Credit Union is available at:  Link to Opinion. The debtor had two mortgage loans on her…

7th Cir. Vacates $10 Million FLSA Award Against Mortgage Company

The U.S. Court of Appeals for the Seventh Circuit recently joined the Fourth, Sixth, Eighth, Ninth, and Eleventh Circuits, in ruling that class or collective arbitrability is a gateway question that is presumptively for the court to decide, rather than the arbitrator. In so ruling, the Court vacated the trial court’s order enforcing a $10 million federal “wage and hour” Fair Labor Standards Act arbitration award against the defendant. A copy of the opinion in Herrington v. Waterstone Mortgage Corporation is available at:   Link to Opinion. The plaintiff filed a putative class and collective action against her former employer.  She alleged…

7th Cir. Holds Attorney’s Fees and Emotional Distress Not ‘Actual Damages’ for RESPA QWR Claim

The U.S. Court of Appeals for the Seventh Circuit recently affirmed a trial court’s finding that a servicer did not violate the federal Real Estate Settlement Procedures Act (RESPA) and Wis. Stat. § 224.77 because the borrower could not prove that the servicer’s alleged failure to completely respond to a “qualified written request” (QWR) caused any actual damages, notwithstanding the alleged attorney’s fees incurred in reviewing the servicer’s response and the borrower’s alleged emotional distress. In so ruling, the Seventh Circuit held that “RESPA was not intended to give people who cannot pay their mortgages the means to engage in…

11th Cir. Upholds Approval of FACTA Class Settlement Despite Non-Lodestar Class Counsel Fees, Other Issues

The U.S. Court of Appeals for the Eleventh Circuit recently affirmed a class settlement where the defendant allegedly violated the federal Fair and Accurate Credit Transactions Act (FACTA) by printing point-of-sale credit card receipts that included more than the last five digits of the card number. In so ruling, and over the objections of two class members, the Eleventh Circuit held that :  Consistent with similar prior rulings from other federal appellate courts, the named plaintiff had Spokeo standing to pursue the claims, because the FACTA claims were similar to the common law tort of breach of confidence; and Class…

8th Cir. Holds CAFA Amount in Controversy Includes Future Attorney’s Fees Incurred After Removal

The U.S. Court of Appeals for the Eighth Circuit held that a plaintiff could not defeat federal jurisdiction under the Class Action Fairness Act based on a pre-class certification damages stipulation limiting attorney’s fees to ensure that the amount in controversy remained under CAFA’s $5 million jurisdictional limit. In so ruling, the Eighth Circuit affirmed the trial court’s finding that the amount in controversy for jurisdiction under CAFA includes the amount of future attorney’s fees based on the expected length of the litigation, the risks and complexity involved, and the hourly rates charged. A copy of the opinion in Faltermeier v. FCA US…

9th Cir. Holds CAFA Amount in Controversy Includes Future Attorney’s Fees Incurred After Removal

The U.S. Court of Appeals for the Ninth Circuit recently reversed a trial court’s order remanding a putative class action lawsuit to state court on the ground that the defendant removing party failed to prove that the amount in controversy exceeded $5 million, as required for jurisdiction under the Class Action Fairness Act (CAFA). In so ruling, the Ninth Circuit held that the amount in controversy for jurisdiction under CAFA includes all attorney’s fees that the plaintiff would be entitled to under a contract or statute, including future fees incurred after the date of removal. A link to the opinion…

8th Cir. Rules Against Debtor Who Tried to ‘Provoke’ FDCPA Violation

The U.S. Court of Appeals for the Eighth Circuit recently held that a consumer waived his right under the federal Fair Debt Collection Practices Act (FDCPA) to cease further communications by calling the debt collector and asking questions about the underlying debt. A copy of the opinion in Scheffler v. Gurstel Chargo, P.A. is available at:  Link to Opinion. A law firm obtained a judgment against a debtor in connection with a credit card debt.  The debtor was a former debt collector and had litigated a number of FDCPA claims against other debt collectors. The law firm mailed a garnishment notice to the debtor’s credit…

9th Cir. Holds FDCPA Plaintiff Must Prove Defendant’s Net Worth

The U.S. Court of Appeals for the Ninth Circuit recently held that the plaintiff carries the burden of proving the debt collector’s net worth to obtain statutory damages in a class action under the federal Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. § 1692, et seq. A copy of the opinion in Tourgeman v. Nelson & Kennard is available at:  Link to Opinion. A consumer financed the purchase of a computer through an installment loan.  When the consumer defaulted, the creditor charged off the account and sold the debt to a third party. The third party referred the account to a law…

11th Cir. Holds No FCRA Violation for Reporting Forbearance Payments as ‘Past Due’ and ‘Delinquent’

The U.S. Court of Appeals for the Eleventh Circuit recently held that the reporting of a mortgage account as past due and delinquent during a forbearance plan was neither inaccurate nor materially misleading under the federal Fair Credit Reporting Act (FCRA), 15 U.S.C. § 1681, et seq. A copy of the opinion in Felts v. Wells Fargo Bank, N.A. is available at:  Link to Opinion. The plaintiff borrower lost her job and enrolled in an unemployment forbearance plan with her mortgage loan servicer.  The forbearance plan called for “monthly forbearance plan payments” of $25 for a period of six months. The…