The U.S. District Court for the Northern District of California recently denied a motion to compel arbitration filed by two allegedly affiliated banks that issued department store credit cards, and the one of the issuing banks and another entity that serviced the cards, in a case alleging they violated the federal Telephone Consumer Protection Act by calling the debtor’s cellular phone in an attempt to collect on the credit card debt. A copy of the opinion is available here. The plaintiff stopped paying his credit card in July 2013 and sent a letter to the issuing bank advising that he could no longer make payments and…
The Florida Fourth District Court of Appeal recently held that the priority between two assignees of notes secured by the same mortgage due to fraud is determined by Article 9 of the Uniform Commercial Code and not the recording statute applicable to assignments of mortgage. The Court held that the transferee that first perfected its interest in a note and related mortgage is entitled to the priority of its interest. A copy of the opinion is available at: http://www.4dca.org/opinions/May%202015/05-06-15/4D13-3193.op.pdf. In April 2006, a borrower obtained a loan and signed a mortgage securing the loan. At closing, the borrower signed two almost identical notes for…
Statutory damage claims, like those under the TCPA and the FCRA, will be scrutinized in the next session of the U.S. Supreme Court and its decisions could have broad implications for the financial services industry. Today we look at one of the cases the court will consider, Gomez v. Campbell-Ewald Co. The case considers whether an offer of complete relief to a litigant will extinguish both her individual claims and, prior to class certification, render her class claims moot. A decision will likely impact litigation under the FDCPA, TILA, EFTA and other federal laws, which can expose financial services companies to…
The Court of Appeal of the State of California, Second Appellate District, recently affirmed the trial court’s ruling in favor a bank and its employee as to a plaintiff’s malicious prosecution claim. In so ruling, the Appellate Court held that the doctrine of the law of the case does not bar application of the doctrine of collateral estoppel to plaintiff’s malicious prosecution claim, and that a magistrate’s determination in the plaintiff’s criminal proceeding on the issue of probable cause defeats the malicious prosecution claim as a matter of law. A copy of the opinion is available at: http://www.courts.ca.gov/opinions/documents/B258021.PDF. The plaintiff sued…
The New York Court of Appeals, the state’s highest court, recently held that the statute of limitations does not bar an action to cancel a mortgage based upon a forged deed. A copy of the opinion is available here. The plaintiff was the administrator of her deceased father’s estate. The decedent and his sister (the “aunt”) inherited from their mother a house in Brooklyn as tenants-in-common. Several years later, in May 2000, the aunt executed a quitclaim deed conveying her one-half interest in the property to her daughter (the “cousin”). In February 2001, the cousin recorded a corrective deed that purported to…
The Supreme Court of Florida recently held that first-party insurer bad faith is not a ‘willful tort,’ and that, as a government entity that enjoys broad statutory immunity from suit, Citizens Property Insurance Corporation (“Citizens”) is consequentially immune from statutory first-party bad faith causes of action. In sum, the Supreme Court determined that the Florida Legislature, when it created Citizens as a property ‘insurer of last resort,’ did not expressly waive Citizens’ statutory immunity from first-party lawsuits arising under Fla. Stat. § 624.155(1), more commonly known as statutory bad faith actions. Florida does not and has never recognized a common…
The U.S. Bankruptcy Court for the Southern District of Florida recently held that a wholly unsecured second mortgage lien may be “stripped off,” even if the property encumbered by the lien is no longer part of the bankruptcy estate due to abandonment by the bankruptcy trustee. The Bankruptcy Court did not specifically reference the consolidated cases now before the U.S. Supreme Court in Bank of Amer. v. Toledo-Cardona, and Bank of Amer. v. Caulkett, which should resolve the issue of whether a wholly unsecured lien may be stripped off in a Chapter 7 bankruptcy. However, the Court noted that, “[a]t…
The Florida First District Court of Appeal recently affirmed a trial court’s dismissal of a follow up foreclosure action based on res judicata to the extent the default date was the same as that in the first action, which had been dismissed for failure to prosecute. However, the Court reversed the trial court’s dismissal of the foreclosure action with prejudice and cancellation of the note and mortgage as a sanction because the trial court failed to make the requisite findings of fact. In addition, the Court held that Florida law allows a subsequent foreclosure action based on subsequent and different…
As big data grows, so does the scale of TCPA violations, and with that the settlements; one of the largest in TCPA history was in the news last week. In a California district court, attorneys who guided consumers in suing a bank for a $32 million settlement were denied a bid to increase their fees to $8 million. The settlement was the largest TCPA deal to be approved at the time, settling the case in which the plaintiffs claimed they had received automated phone calls from the defendants without their consent. However, this past July saw a $75.5 million settlement granted preliminary approval in…
The Florida Third District Court of Appeal recently reversed a trial judge’s refusal to admit a loan payment history into evidence, holding that the foreclosing mortgagee properly demonstrated that the payment history was a business record, even though its witness started working for the mortgagee in 2012 and the payment history included information since 2005. A copy of the opinion is available at: http://www.3dca.flcourts.org/Opinions/3D13-0910.pdf The mortgagee started servicing the loan in 2005. The borrowers defaulted in 2009 and the mortgagee sued to foreclose. At trial, the mortgagee called a “mortgage resolution associate,” who had worked at the mortgagee only since 2012, who…
The Florida First District Court of Appeal recently affirmed a monetary judgment against a borrower in a follow up action to collect the balance owed on a note secured by a mortgage. The follow up action was consolidated with a prior foreclosure action in which the court reserved jurisdiction to enter a deficiency judgment. A copy of the opinion is available at: https://edca.1dca.org/DCADocs/2014/0930/140930_DC05_05012015_101049_i.pdf. The plaintiff bank sued to foreclose its mortgage on the borrower’s property in 2008. The complaint also requested a deficiency judgment. The trial court entered summary judgment against the borrower, reserving jurisdiction to enter a deficiency judgment. The plaintiff mortgagee was…
The Supreme Court of Ohio recently held that, although the plaintiff in a mortgage foreclosure action must have standing to sue when suit is filed, standing can be proven after the case is filed. A copy of the opinion is available at: http://www.supremecourt.ohio.gov/rod/docs/pdf/0/2015/2015-Ohio-1484.pdf The plaintiff mortgagee sued to foreclose its mortgage in 2010 after borrowers defaulted on the promissory note. The complaint did not seek a deficiency because the borrowers’ personal liability had been discharged in bankruptcy. One of the borrowers filed an answer raising lack of standing as a defense. The mortgagee moved for summary judgment, supporting its position on…