The U.S. Court of Appeal for the Sixth Circuit recently affirmed the dismissal of a municipality’s public nuisance claims against two different mortgage lenders for allegedly maintaining a policy of violating local and state building codes if the costs outweighed the value added to the eventual resale of foreclosed property. A copy of the opinion in City of Cincinnati v. Deutsche Bank National Trust Company is available at: Link to Opinion. The municipality brought multiple claims against the mortgage lender defendants alleging various claims concerning the maintenance and condition of REO properties. Eventually, through multiple amended pleadings, stipulations and settlements, only one…
The U.S. Court of Appeals for the Sixth Circuit recently reversed the dismissal of a class action lawsuit filed by a bank account holder who asserted that the bank violated the Uniform Commercial Code 4-401 and 4-103(a), dealing with liability for fraudulent checks. The account holder experienced check fraud and the bank refused liability because the master services agreement for the account contained a liability waiver for failure to purchase fraud protection products, which the account holder had not done. A copy of the opinion in Majestic Building Maintenance, Inc. v. Huntington Bancshares Inc. is available at: Link to Opinion. The…
The District Court of Appeal of the State of Florida, First District, recently affirmed the trial court’s entry of a final judgment of foreclosure, holding that because the complaint included at least some installment payments within five years of the filing of the complaint, the action was not barred by res judicata or the statute of limitations. A copy of the opinion in Forero v. Green Tree Servicing, LLC is available at: Link to Opinion. Husband and wife borrowers defaulted on their mortgage loan in December 2008. The mortgagee filed a foreclosure action in February 2010, but voluntarily dismissed the case in…
The U.S. Court of Appeals for the Ninth Circuit recently held that mortgage underwriters were not exempt under the federal Fair Labor Standards Act (FLSA) and were therefore entitled to overtime compensation for hours worked in excess of 40 per week. After analyzing the specific details of the underwriters’ responsibilities, the Ninth Circuit panel concluded that, because the underwriters’ primary job duty did not relate to their employer bank’s management or general business operations, the administrative employee exemption to the FLSA’s overtime requirements did not apply. Recognizing that there was a split between the Second Circuit and Sixth Circuit as…
In a deeply divided opinion, the U.S. Court of Appeals for the Seventh Circuit, in an en banc review, reversed its previous opinion, Oliva v. Blatt, Hasenmiller, Leibsker & Moore, LLC, 825 F.3d 788, 791 (7th Cir. 2016), holding this time that a debt collector that relied upon circuit precedent interpreting the federal Fair Debt Collection Practices Act (FDCPA) venue provision was not protected by the bona fide error defense. In so ruling, the Court also held that for purposes of compliance with the FDCPA, reliance on court precedent is permitted, but only if there can be no doubt whatsoever as to the accuracy…
The U.S. Court of Appeals for the Third Circuit recently held that a consumer satisfied the concreteness requirement for constitutional standing and asserted a valid cause of action under the federal Telephone Consumer Protection Act (TCPA), where she alleged she received one unsolicited prerecorded phone call to her cell phone. Accordingly, the Third Circuit reversed the order of the trial court granting the defendant’s motion to dismiss. A copy of the opinion in Susinno v. Work Out World Inc. is available at: Link to Opinion. The plaintiff consumer alleged that she received an unsolicited call on her cell phone from the…
The U.S. District Court for the Northern District of Illinois recently held that a title insurer may exclude coverage under the exception for defects “created, suffered, assumed, or agreed to by the insured claimant” without intentional or wrongful conduct by the insured. In so ruling, the Court also held that the Illinois statute for bad faith denial of coverage by insurers did not apply to title insurers. A copy of the opinion in Bank of America, NA v. Chicago Title Insurance Company is available at: Link to Opinion. In 2007, a developer sought to purchase real estate in Yorkville, Illinois, to…
The District Court of Appeal of the State of Florida, Second District, recently held that where loan documents provided that Florida law applied to foreclosure claims, the trial court erred in applying Texas law because the deficiency claim in the case was part of the Florida foreclosure process. A copy of the opinion in Bonita Real Estate Partners, LLC v. SLF IV Lending, L.P. is available at: Link to Opinion. Two limited liability companies and their principals borrowed $6.1 million to develop real estate, signing a promissory note, mortgage and personal guarantees. The loan documents provided that they would be…
The U.S. Court of Appeals for the Fourth Circuit recently held that the federal Servicemembers Civil Relief Act (SCRA) does not apply to a mortgage loan obligation incurred while a borrower is a member of the military, even where he subsequently leaves and then later re-enlists in the military prior to a foreclosure sale. A copy of the opinion in Sibert v. Wells Fargo Bank, NA is available at: Link to Opinion. The borrower obtained a mortgage loan to purchase his home from the lender while he was serving in the U.S. Navy. After his discharge from the Navy, the borrower…
A recent decision from the Third Circuit Court of Appeals examines both the provision of consent under the federal Telephone Consumer Protection Act (TCPA) and the bona fide error defense for debt collectors under the federal Fair Debt Collection Practices Act (FDCPA). The decision has dire implications for debt collectors, creditors and any commercial enterprise using telephone technology and QR codes in communicating with customers. A copy of the decision in Daubert v. NRA Group, LLC is available at: Link to Opinion. First up is the TCPA. The trial court ruled that the collection agency violated the TCPA when it used…
The District Court of Appeal of the State of Florida, Fourth District, recently affirmed a final judgment in favor of a borrower because the foreclosing mortgagee failed to file the original allonge to the note, holding that as a result the mortgagee lacked standing to foreclose. A copy of the opinion in U.S. Bank National Assoc., etc. v. Jean Kachik is available at: Link to Opinion. A mortgagee sued to foreclose the mortgage, attaching copies of the promissory note and an “Endorsement and Assignment of Note” to the complaint. The endorsement was “blank.” At trial, the mortgagee offered the original note…
The Illinois Court of Appeals, First District, recently determined that a borrower in a foreclosure matter did not have standing to challenge whether the mortgagee’s notice of sale was in violation of the Illinois Human Rights Act (IHRA). Following the entry of a judgment of foreclosure, the plaintiff mortgagee published its notice of sale, in which the mortgagee required that anyone attending the sale possess a “photo identification issued by a government agency.” The mortgagee purchased the property at the sale, and then moved for an order confirming the sale. The borrower objected to the mortgagee’s motion, arguing that the…