The U.S. Court of Appeals for the Fifth Circuit recently held that section 506(c) of the Bankruptcy Code, 11 U.S.C. § 506(c), permits a trustee to recover from a secured creditor the expenses the trustee incurred while maintaining a property during bankruptcy. A copy of the opinion in In re Domistyle, Inc. is available at: Link to Opinion. The debtor in this case was placed into receivership in April 2013. The receiver initiated Chapter 11 proceedings on the belief that the debtor had enough equity to reorganize. One of the debtor’s most valuable assets was an industrial building situated on 17 acres…
The District Court of Appeal of the State of Florida, Fourth District, recently reversed a final judgment in favor of a borrower based on an alleged oral modification of the mortgage and the doctrine of promissory estoppel, holding that because the mortgage fell within the statute of frauds, it could not be orally modified, and that the trial court misapplied the doctrine of promissory estoppel. A copy of the opinion in Ocwen Loan Servicing, LLC v. Jean Marie Delvar a/k/a Jean Delvar, et al. is available at: Link to Opinion. A mortgagee sued to foreclose in April 2008. The borrower’s answer raised…
The U.S. District Court for the Southern District of New York recently dismissed a putative class action alleging violations of the federal Telephone Consumer Protection Act (TCPA) against a marketing company that conducted a mass text message advertising campaign on behalf of a national retail clothing store. In so ruling, the Court held that: (1) the plaintiffs failed to adequately plead that the marketing company is directly liable under the TCPA as the party who “made” the subject text messages; and (2) the plaintiffs failed to adequately plead any agency relationship between the marketing company and the company that actually…
The U.S. Court of Appeals for the Sixth Circuit recently confirmed that a servicer and loan owner who did not bring a debt collection or foreclosure action as a counterclaim to a federal Fair Debt Collection Practices Act (FDCPA) lawsuit did not waive their ability to collect on the debt in the future. A copy of the opinion in Bauman v. Bank of America, NA is available at: Link to Opinion. In August 2004, the borrowers obtained a loan and executed a note to purchase property. The note was secured by a mortgage on the property. Later that year, the loan was…
The U.S. Court of Appeals for the Ninth Circuit recently held that a 2009 amendment to the federal Truth in Lending Act (TILA), codified at 15 U.S.C. § 1641(g), which contains disclosure requirements for the sale or transfer of a mortgage loan, does not apply retroactively. A copy of the opinion in Mohammad Ali Talaie et al. v. Wells Fargo Bank NA et al. is available at: Link to Opinion. The plaintiff homeowners brought a putative class action against two banks alleging violations of various federal and state laws and alleging claims arising out of the modification of the deed of trust…
The U.S. Bankruptcy Court for the Middle District of Florida recently overruled a debtor’s objection to a mortgagee’s secured claim and denied the debtor’s motion to determine secured status, holding that the issues should have been brought by adversary proceeding, and in any event neither Florida’s statute of limitations nor its statute of repose barred enforcement of the note and mortgage. A copy of the opinion in In re Anthony is available at: Link to Opinion. A mortgagee filed a mortgage foreclosure action in Florida state court in 2009. The complaint contained a paragraph accelerating the note. The mortgagee also…
The Federal Trade Commission has released a report examining the benefits, potential risks, and legality of the use of big data in business. Big Data: A Tool for Inclusion or Exclusion? Understanding the Issues focuses on how big data is used after it is collected and how that information could result in discrimination against consumers. The primary goal of the report is to provide businesses with important information on the relevant laws to big data analytics, as well as guidelines on how to use big data effectively while remaining compliant and non-discriminatory, according to the FTC. “Big data’s role is…
The U.S. Court of Appeals for the Fourth Circuit recently rejected a challenge to a class action settlement by a group of consumers objecting to the release of statutory and punitive damages claims – but not claims for actual damages – in exchange for non-monetary injunctive relief under the federal Fair Credit Reporting Act (FCRA), holding that the district court did not abuse its discretion in approving the settlement or awarding attorney’s fees to class counsel. A copy of the opinion in Gregory Thomas Berry et al. v. LexisNexis Risk & Information Analytics Group Inc. et al. is available at: Link to…
Joining several other federal district courts around the country, the U.S. District Court for the Eastern District of New York recently granted a joint motion to stay proceedings in a putative class action lawsuit alleging violation of the federal Telephone Consumer Protection Act (TCPA). The Court found that appeals currently pending before the Supreme Court of the United States would likely result in controlling determinations as to: (1) whether a Rule 68 offer of judgment renders a matter moot; (2) whether a plaintiff has standing to pursue his claims in the absence of actual damages or injury in fact; and…
The District Court of Appeal of Florida, Second District, recently dismissed the appeal of a foreclosure judgment by a third party purchaser of the collateral property, where the third party purchased the collateral property while it was the subject of a foreclosure proceeding and a recorded lis pendens. In so ruling, the Appellate Court confirmed a third party purchaser had no standing to appeal a final judgment of foreclosure where the purchaser did not appeal a prior denial of its motion to intervene, even though the third party purchaser’s name was erroneously placed in the style of the uniform final…
The District Court of Appeal of the State of Florida, Fifth District, recently held that the trial court erred by denying the borrower’s motion to involuntarily dismiss a foreclosure action, because the plaintiff mortgagee’s counsel failed to properly introduce evidence to reestablish the lost note, prove that it had standing to foreclose, prove the amount owed, and demonstrate compliance with the mortgage’s condition precedent of giving notice of default. A copy of the opinion in Figueroa v. Federal National Mortgage Association, etc., et al is available at: Link to Opinion. A servicer foreclosed alleging that the borrower defaulted under the note by failing…
The District Court of Appeal of the State of Florida, Fourth District, recently held that a lender cannot be held liable for its customer’s suicide because it does not have any special relationship with the customer that gives rise to a duty to prevent the customer’s suicide. A copy of the opinion is available at: Link to Opinion. The personal representative of the estate of a mentally ill decedent sued the decedent’s bank and its senior vice president for wrongful death. The amended complaint alleged that the decedent suffered from a type of severe anxiety that made him unable to…