An intermediate appellate court of the State of New York recently held that Mortgage Electronic Registration Systems, Inc. ("MERS") cannot assign the right to foreclose to a plaintiff in a foreclosure action, absent MERS's right to enforce, or possession of, the related promissory note.
The foreclosure defendant borrowers ("borrowers") received two loans from Countrywide Home Loans ("Countrywide"), each secured by separate mortgages. Both mortgages identified MERS as the mortgagee of record, as nominee of Countrywide.
The borrowers then executed a consolidation agreement with Countrywide (the "consolidation agreement"). The terms of the consolidation agreement again named MERS as mortgagee as nominee of Countrywide, and named Countrywide as the lender and note holder. In addition, the terms of the agreement gave MERS the right to assign the underlying mortgages, but did not specifically give MERS the right to assign the underlying notes.
The borrowers defaulted. After the default, MERS assigned the consolidation agreement to Bank of New York, as Trustee ("Trustee").
Trustee initiated foreclosure proceedings in its name. The borrowers moved to dismiss the foreclosure action for lack of standing. The lower court denied borrowers' motion, and borrowers appealed.
The appellate court noted that, under New York law, "[i]n a mortgage foreclosure action, a plaintiff has standing where it is both the holder or assignee of the subject mortgage and the holder or assignee of the underlying note at the time the action is commenced;" and that "a transfer of the mortgage without the debt is a nullity." Based on that precedent, the Court concluded that "a foreclosure of a mortgage cannot be pursued by one who has demonstrated no right to the debt."
With this in mind, the Court scrutinized the consolidation agreement. It found that although the agreement gave MERS the right to assign the mortgages, it did not specifically give MERS the right to assign the underlying notes. Further, the record did not indicate that the notes were ever physically delivered to MERS. Therefore, MERS did not have the authority to assign the notes. According to the Court, because Countrywide "merely stepped into the shoes of MERS" as the assignee of the mortgages, the Court held that Countrywide and its successors and assigns did not have standing to foreclose.
The Court did not explain how the plaintiff Trustee was somehow not both the holder or assignee of the subject mortgage, and the holder or assignee of the underlying notes, at the time the foreclosure action was commenced.
The foreclosure plaintiff Trustee relied a recent New York appellate court opinion which held that MERS did have the authority to foreclose where MERS is identified in the mortgage as the mortgagee and nominee of record (as was the case in the consolidation agreement). However, the appellate court here noted that the other case involved a lender who transferred the promissory note to MERS prior to the commencement of the foreclosure action. Here, in contrast, there was no such transfer. Thus, the Court found it distinguishable from the matter at hand.
The Court concluded by noting that it was "mindful" of the impact its decision might have on the mortgage industry. However, the Court stated that "the law must not yield to expediency and the convenience of lending institutions."
Friday, July 1, 2011
Thursday, June 30, 2011
4th Cir Says Offer of Judgment "As Full and Complete Satisfaction" Does Not Include Attorney's Fees and Costs
The U.S. Court of Appeals for the Fourth Circuit recently held that a party who accepts an offer of judgment pursuant to Fed. R. Civ. P. 68(a) "as full and complete satisfaction" of the claims asserted may then still be awarded additional attorney's fees and court costs.
A copy of the opinion is available at:
http://pacer.ca4.uscourts.gov/opinion.pdf/101203.P.pdf
The plaintiff initiated a suit against various public employees and organizations (collectively, the "defendants") in connection with her husband's suicide. The defendants extended an offer of judgment pursuant to Rule 68(a) ("the offer of judgment") in the amount of $30,000.
The offer of judgment provided that it was extended "as full and complete satisfaction of [the plaintiff's] claim against.[the d]efendants." The offer did not mention attorney's fees or court costs.
The plaintiff accepted the offer of judgment. After accepting the offer, the plaintiff asked the lower court for the agreed-upon sum of $30,000, in addition to $120,702.55 to cover attorney's fees and costs. Over defendants' objection, the lower court awarded the plaintiff $66,463.80 in fees and costs. The defendants appealed.
As you may recall, Rule 68(a) provides that "a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued." In addition, courts are "obliged by the terms of the rule" to award an additional amount for attorneys' fees and costs, "if the offer does not state that costs are included and an amount for costs is not specified." Marek v. Chesy, 473 U.S. 1, 7 (1985).
The defendants advanced several arguments against the lower's court decision, arguing: (1) that because the offer was made in "full and complete" satisfaction of the plaintiff's claim, and the plaintiff asked for attorney's fees and costs as part of that claim, the offer did in fact refer to those fees and costs; (2) that Rule 68 was intended to encourage settlement, and that the lower court's interpretation frustrates that goal; and (3) principles of equity.
The Fourth Circuit did not find any of these arguments convincing.
The Court rejected the defendants' first argument because the cases relied upon by the defendants involved plaintiffs who sought awards of attorney's fees as the principal relief sought. As attorney's fees were not the principal relief sought in this matter, the Court found the cases relied upon to be distinguishable from the matter at hand. The Court rejected the defendants' second argument on the grounds that the defendants could easily have drafted their offer to specify that it included attorney's fees and costs. Finally, the Court rejected the defendants' third argument on the grounds that it was "wholly foreclosed" by the Supreme Court's decision in Marek v. Chesny, among other reasons.
Therefore, the Court affirmed the lower court's decision to award attorney's fees and costs to Plaintiff.
A copy of the opinion is available at:
http://pacer.ca4.uscourts.gov/opinion.pdf/101203.P.pdf
The plaintiff initiated a suit against various public employees and organizations (collectively, the "defendants") in connection with her husband's suicide. The defendants extended an offer of judgment pursuant to Rule 68(a) ("the offer of judgment") in the amount of $30,000.
The offer of judgment provided that it was extended "as full and complete satisfaction of [the plaintiff's] claim against.[the d]efendants." The offer did not mention attorney's fees or court costs.
The plaintiff accepted the offer of judgment. After accepting the offer, the plaintiff asked the lower court for the agreed-upon sum of $30,000, in addition to $120,702.55 to cover attorney's fees and costs. Over defendants' objection, the lower court awarded the plaintiff $66,463.80 in fees and costs. The defendants appealed.
As you may recall, Rule 68(a) provides that "a party defending against a claim may serve on an opposing party an offer to allow judgment on specified terms, with the costs then accrued." In addition, courts are "obliged by the terms of the rule" to award an additional amount for attorneys' fees and costs, "if the offer does not state that costs are included and an amount for costs is not specified." Marek v. Chesy, 473 U.S. 1, 7 (1985).
The defendants advanced several arguments against the lower's court decision, arguing: (1) that because the offer was made in "full and complete" satisfaction of the plaintiff's claim, and the plaintiff asked for attorney's fees and costs as part of that claim, the offer did in fact refer to those fees and costs; (2) that Rule 68 was intended to encourage settlement, and that the lower court's interpretation frustrates that goal; and (3) principles of equity.
The Fourth Circuit did not find any of these arguments convincing.
The Court rejected the defendants' first argument because the cases relied upon by the defendants involved plaintiffs who sought awards of attorney's fees as the principal relief sought. As attorney's fees were not the principal relief sought in this matter, the Court found the cases relied upon to be distinguishable from the matter at hand. The Court rejected the defendants' second argument on the grounds that the defendants could easily have drafted their offer to specify that it included attorney's fees and costs. Finally, the Court rejected the defendants' third argument on the grounds that it was "wholly foreclosed" by the Supreme Court's decision in Marek v. Chesny, among other reasons.
Therefore, the Court affirmed the lower court's decision to award attorney's fees and costs to Plaintiff.
Wednesday, June 29, 2011
Merriganv. Bank of New York Mellon, et al, No. 2D11-178, June 24, 2011, Second District Court of Appeal
April, 2011-ACLU filed petition in appellate court alleging Lee County rocket docket (12-2008), processing foreclosure cases differently than other civil cases, violates due process
Merriganin foreclosure after leaving job to care for husband injured in car accident
Merriganintended to vigorously defend case and sought re-assignment to general civil docket
ACLU: deck stacked against homeowners, Florida Supreme Court said clearing cases must comport with fairly adjudicating cases on merits
Florida legislature funded senior judges for backlog, funding ends June 30th, 2011
Lee chief Circuit Judge responded that rocket docket allows parties to opt out and have norehearings
Appellate Court ruled that case management system does not summarily impact due process, courts can manage caseload
Merriganin foreclosure after leaving job to care for husband injured in car accident
Merriganintended to vigorously defend case and sought re-assignment to general civil docket
ACLU: deck stacked against homeowners, Florida Supreme Court said clearing cases must comport with fairly adjudicating cases on merits
Florida legislature funded senior judges for backlog, funding ends June 30th, 2011
Lee chief Circuit Judge responded that rocket docket allows parties to opt out and have norehearings
Appellate Court ruled that case management system does not summarily impact due process, courts can manage caseload
Korte v. US Bank National Association
et al, No. 4D09-4285, June 8, 2011, Fourth District Court of Appeal, Palm Beach County
Brian Korte, Esquire appealed trial court’s award of sanctions under §57.105 against him and his firm for filing unsupported affirmative defenses
Appellate court found statute applicable in mortgage foreclosure cases to sanction defendants/or their counsel for asserting defenses know or should know not supported but assert for primary purpose of delay
Foreclosure case filed March, 2008
Korte filed answer, affirmative defenses alleging that lender failed to provide borrowers with TILA disclosures
Lender served Korte with unfiled motion for sanctions, advising would file in 21 days if not withdrawn
Motion for sanctions filed in court file December, 2008, Korte withdrew as attorney in February, 2009
Lender deposed Korte and borrower: Korte did not investigate defenses
Borrower stated never received copy of defenses or of motion for sanctions, never discussed with Korte
Borrower testified received TILA disclosures
Korte did not appear at hearing on motion for sanctions
Trial court found defenses frivolous, primarily for delay, not acting in good faith
Court awarded fees, accrued interest for delay
Court sanctions $20,563.59 ($18,682.99 accrued interest) against Korte only instead of splitting with client
Korte appealed finding of bad faith, but appellate court noted trial court’s specific findings
Korte appealed award of accrued interest as unsupported by evidence
Appellate court noted lender representative submitted original note showing interest rate into court, representative testified about calculation
Example of appellate courts correcting the excesses of defense bar, trial court judges
Lender/servicer counsel will be more pro-active in addressing similar cases
Brian Korte, Esquire appealed trial court’s award of sanctions under §57.105 against him and his firm for filing unsupported affirmative defenses
Appellate court found statute applicable in mortgage foreclosure cases to sanction defendants/or their counsel for asserting defenses know or should know not supported but assert for primary purpose of delay
Foreclosure case filed March, 2008
Korte filed answer, affirmative defenses alleging that lender failed to provide borrowers with TILA disclosures
Lender served Korte with unfiled motion for sanctions, advising would file in 21 days if not withdrawn
Motion for sanctions filed in court file December, 2008, Korte withdrew as attorney in February, 2009
Lender deposed Korte and borrower: Korte did not investigate defenses
Borrower stated never received copy of defenses or of motion for sanctions, never discussed with Korte
Borrower testified received TILA disclosures
Korte did not appear at hearing on motion for sanctions
Trial court found defenses frivolous, primarily for delay, not acting in good faith
Court awarded fees, accrued interest for delay
Court sanctions $20,563.59 ($18,682.99 accrued interest) against Korte only instead of splitting with client
Korte appealed finding of bad faith, but appellate court noted trial court’s specific findings
Korte appealed award of accrued interest as unsupported by evidence
Appellate court noted lender representative submitted original note showing interest rate into court, representative testified about calculation
Example of appellate courts correcting the excesses of defense bar, trial court judges
Lender/servicer counsel will be more pro-active in addressing similar cases
JP Morgan Chase Bank, N.A. v. Hernandez
No. 3D10-1099, June 22, 2011, 3d District Court of Appeal from Miami-Dade Circuit Court
Bank appealed Miami-Dade trial judge’s order setting aside sale, judgment and lis pendens, dismissing complaint with prejudice
Wife signed note, both signed mortgage in 2005
April, 2008-foreclosure complaint with lost note count filed
May, 2008-wife, by attorney, filed demand for validation of debt but did not answer complaint or file affirmative defenses
May, 2009-summary judgment in favor of bank entered, sale scheduled for October, 2009
September, 2009-borrowers recorded new, unilateral promissory note naming lender as borrower
Sale continued to February 23, 2010 at lender’s request
February 10, 2010-borrowers filed Notice of Intent to File Discharge dated September 9, 2009 which stated it was filed with the recording of the unilateral note
Notice of Intent dated 9/9/2009, filed in court file 2/19/2010, but notarized on 2/22/2010
Notice of Discharge also filed with Notice of Intent on February 19, 2010, but notarized February 22, 2010
Ex parte hearing on 2/23/2011 resulted in sale continued to May 24, 2010, with hearing scheduled on April 14, 2010
April 14th hearing never noticed, no motions pending until April 13, 2010
April 13, 2010: verified motion to vacate judgment, cancel sale, discharge lis pendens and dismiss case with prejudice filed, without certificate of service, and heard on April 14, 2010, without lender present
Defense attorney “…managed to convince the trial court that a mere letter of ‘tender’ and a fabricated Unilateral Note, without payment of any kind, were sufficient to discharge the entire debt owed to (lender).”
Appellate court reversed: note and mortgage merged into judgment and therefore unilateral note after judgment nullity
Unilateral Note nonsensical, no evidence, self-serving
Court granted lender’s motion for fees, sanctions under §57.105 for action without factual or legal merit, reported to Florida Bar
Bank appealed Miami-Dade trial judge’s order setting aside sale, judgment and lis pendens, dismissing complaint with prejudice
Wife signed note, both signed mortgage in 2005
April, 2008-foreclosure complaint with lost note count filed
May, 2008-wife, by attorney, filed demand for validation of debt but did not answer complaint or file affirmative defenses
May, 2009-summary judgment in favor of bank entered, sale scheduled for October, 2009
September, 2009-borrowers recorded new, unilateral promissory note naming lender as borrower
Sale continued to February 23, 2010 at lender’s request
February 10, 2010-borrowers filed Notice of Intent to File Discharge dated September 9, 2009 which stated it was filed with the recording of the unilateral note
Notice of Intent dated 9/9/2009, filed in court file 2/19/2010, but notarized on 2/22/2010
Notice of Discharge also filed with Notice of Intent on February 19, 2010, but notarized February 22, 2010
Ex parte hearing on 2/23/2011 resulted in sale continued to May 24, 2010, with hearing scheduled on April 14, 2010
April 14th hearing never noticed, no motions pending until April 13, 2010
April 13, 2010: verified motion to vacate judgment, cancel sale, discharge lis pendens and dismiss case with prejudice filed, without certificate of service, and heard on April 14, 2010, without lender present
Defense attorney “…managed to convince the trial court that a mere letter of ‘tender’ and a fabricated Unilateral Note, without payment of any kind, were sufficient to discharge the entire debt owed to (lender).”
Appellate court reversed: note and mortgage merged into judgment and therefore unilateral note after judgment nullity
Unilateral Note nonsensical, no evidence, self-serving
Court granted lender’s motion for fees, sanctions under §57.105 for action without factual or legal merit, reported to Florida Bar
Wednesday, June 22, 2011
Saturday, June 11, 2011
Register of Deed Refuses to Aceept Documents
http://www.newburyportnews.com/local/x775920585/Register-refuses-to-accept-robo-signed-documents
The South Essex register of deeds, who has been on a crusade to hold major banks accountable for their role in the home mortgage crisis, is now turning his attention to what he and others say are forged mortgage documents being pumped out by lenders seeking to back up foreclosures.
Yesterday, he refused to accept two documents purportedly signed by "Linda Green" — a name that appears on nearly 300 other mortgage documents already on file at the South Essex registry and on thousands of other mortgage documents being filed around the country.
The South Essex register of deeds, who has been on a crusade to hold major banks accountable for their role in the home mortgage crisis, is now turning his attention to what he and others say are forged mortgage documents being pumped out by lenders seeking to back up foreclosures.
Yesterday, he refused to accept two documents purportedly signed by "Linda Green" — a name that appears on nearly 300 other mortgage documents already on file at the South Essex registry and on thousands of other mortgage documents being filed around the country.
Tuesday, June 7, 2011
PRIVATE EMPLOYERS MAY DISCRIMINATE AGAINST DEBTOR/APPLICANTS
The Eleventh Circuit Court of Appeals, in Meyers v. Toojay's Mgmt. Corp., joined two other circuits in holding that private employers have the right to deny employment to applicants on the basis of their filing for bankruptcy.
In re Henderson,
2011 WL 1467934 (Bankr. D. Idaho, April 18, 2011) (Pappas)
A Chapter 13 debtor with no calculated projected disposable income, the applicable commitment period need not propose a minimum duration of a plan; Kagenveama still has some validity
A Chapter 13 debtor with no calculated projected disposable income, the applicable commitment period need not propose a minimum duration of a plan; Kagenveama still has some validity
Bye Bye Student Loans?
On May 26th, Sen. Durbin (D-IL) introduced S.1102 a bill to amend Title
11 with respect to certain exemptions to discharge in bankruptcy.
The bill is Durbin's previously introduced, in other Congresses, student loan in discharge bill.
According to Durbin's statement, the bill restores fairness in student lending by treating privately issued student loans in bankruptcy the same as other types of private debt.
U.S. Senators Durbin was joined in the Senate by Sens. Whitehouse (D-RI) and Franken (D-MN) with a companion measure (HR 2028) in the House sponsored by Reps. Cohen (D-TN), Davis (D-IL), Miller (D-CA) and Conyers (D-MI).
The bill is Durbin's previously introduced, in other Congresses, student loan in discharge bill.
According to Durbin's statement, the bill restores fairness in student lending by treating privately issued student loans in bankruptcy the same as other types of private debt.
U.S. Senators Durbin was joined in the Senate by Sens. Whitehouse (D-RI) and Franken (D-MN) with a companion measure (HR 2028) in the House sponsored by Reps. Cohen (D-TN), Davis (D-IL), Miller (D-CA) and Conyers (D-MI).
Mediation
If you really want a loan modification turn in the requested materials to creditor/plaintiff's counsel at the minimum of 1 week prior to the modification! Most lenders will not review it on the spot if you decide to just show up with the documents. Think about it would you really want someone doing your taxes, surgery ..... while you sat there jabbering away a t them. No you want them to be able to concentrate on what they are doing!
You need your last tax return, 30 days worth of pay stubs and bank statements, a hardship letter, the companies financial affvdt, the HAMP form, the 4506T-EZ, P &L if you are self employed. These are a minimun folks.
US Bank
https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0ByahxE3mgBCEMTk0MDEwMzMtZTkwYy00OWI5LWJiMzgtOWNhNGU2YjdjZmU4&hl=en_US&authkey=COu-v_8P
HAMP
https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0ByahxE3mgBCEN2RkMWJlNzktMTNlOC00NGMyLTk3Y2YtYzFhYzZkMmFlM2Uw&hl=en_US&authkey=CPyU2YcM
Wells
https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0ByahxE3mgBCEMWJhZmQxMGQtMjEwZS00OGNlLTk4YWYtMDAwNmFiMDNkMTU2&hl=en_US&authkey=CPLjguYD
Midland
https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0ByahxE3mgBCENmY0N2QxODAtYmQ3My00ZGQ4LWJhNGYtOGNiMjgxMjZjNzVk&hl=en_US&authkey=CNKihbAP
Am Gen
https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0ByahxE3mgBCENmJkZjM5MTEtNWI4Yi00MWFiLTkyNTAtMDc0NjJkMjQyYjY0&hl=en_US&authkey=CKzM4dYL
MetLife
https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0ByahxE3mgBCEZjM1ZjIxYWQtZGI0MS00ZjUwLWJlMjQtNWY5MTAxODUxNDE1&hl=en_US&authkey=CP7zgokI
You need your last tax return, 30 days worth of pay stubs and bank statements, a hardship letter, the companies financial affvdt, the HAMP form, the 4506T-EZ, P &L if you are self employed. These are a minimun folks.
US Bank
https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0ByahxE3mgBCEMTk0MDEwMzMtZTkwYy00OWI5LWJiMzgtOWNhNGU2YjdjZmU4&hl=en_US&authkey=COu-v_8P
HAMP
https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0ByahxE3mgBCEN2RkMWJlNzktMTNlOC00NGMyLTk3Y2YtYzFhYzZkMmFlM2Uw&hl=en_US&authkey=CPyU2YcM
Wells
https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0ByahxE3mgBCEMWJhZmQxMGQtMjEwZS00OGNlLTk4YWYtMDAwNmFiMDNkMTU2&hl=en_US&authkey=CPLjguYD
Midland
https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0ByahxE3mgBCENmY0N2QxODAtYmQ3My00ZGQ4LWJhNGYtOGNiMjgxMjZjNzVk&hl=en_US&authkey=CNKihbAP
Am Gen
https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0ByahxE3mgBCENmJkZjM5MTEtNWI4Yi00MWFiLTkyNTAtMDc0NjJkMjQyYjY0&hl=en_US&authkey=CKzM4dYL
MetLife
https://docs.google.com/viewer?a=v&pid=explorer&chrome=true&srcid=0ByahxE3mgBCEZjM1ZjIxYWQtZGI0MS00ZjUwLWJlMjQtNWY5MTAxODUxNDE1&hl=en_US&authkey=CP7zgokI
Fannie Mae Issues New Servicing Standards for Delinquent Mortgages
During the first 120 days of delinquency, homeowners will be contacted both verbally and in writing to complete a mortgage modification or other solution to remain in the home, or enter into an arrangement to exit the home without a foreclosure. Fannie Mae says contacting homeowners early in the default process is one of the most important factors in reaching a resolution that avoids foreclosure.
http://www.dsnews.com/articles/fannie-mae-issues-new-servicing-standards-for-delinquent-mortgages-2011-06-06
For loans that do not qualify for a loss mitigation option, Fannie Mae has updated the maximum number of allowable days for completing foreclosure in each jurisdiction. The new timelines are effective for all loans referred to a foreclosure attorney as of January 1, 2011.
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2011/svc1107.pdf
Compensatory fees will be assessed for failing to meet the specified timeframe, and will be based on the unpaid principal balance of the mortgage loan, the applicable pass-through rate, the length of the delay, and any additional costs that are directly attributable to the delay.
The jurisdiction-specific foreclosure timelines have not yet been published but will be made available on the GSE’s business site on June 10th.
http://www.dsnews.com/articles/fannie-mae-issues-new-servicing-standards-for-delinquent-mortgages-2011-06-06
For loans that do not qualify for a loss mitigation option, Fannie Mae has updated the maximum number of allowable days for completing foreclosure in each jurisdiction. The new timelines are effective for all loans referred to a foreclosure attorney as of January 1, 2011.
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2011/svc1107.pdf
Compensatory fees will be assessed for failing to meet the specified timeframe, and will be based on the unpaid principal balance of the mortgage loan, the applicable pass-through rate, the length of the delay, and any additional costs that are directly attributable to the delay.
The jurisdiction-specific foreclosure timelines have not yet been published but will be made available on the GSE’s business site on June 10th.
Hamilton v Greenich Investors 2DCA 6/1/11
The Court of Appeal of the State of California, Second District, recently confirmed that if a borrower fails to "schedule" or disclose claims against a creditor in the borrower's bankruptcy proceedings, the borrower is barred from litigating the undisclosed claims against the creditor in subsequent proceedings.
The plaintiff-borrower defaulted on his home loan. He entered into a forbearance agreement with the servicer of the loan, Select Portfolio Servicing, Inc. ("SPS"), but then re-defaulted. SPS notified the borrower that his loan had been transferred to Greenwich Investors ("Greenwich").
The borrower then filed for bankruptcy, making no mention of a possible claim against Greenwich. The borrower's bankruptcy workout plan called for borrower to make regular payments to Greenwich. The borrower again defaulted, and Greenwich initiated nonjudicial foreclosure proceedings.
The borrower then filed suit against Greenwich, alleging breach of contract, fraudulent and negligent misrepresentation, and violation of foreclosure statutes. These claims arose from Greenwich's alleged failure to acknowledge the forbearance agreement, as well as Greenwich's alleged failure to abide by the notice provisions of the relevant foreclosure statute, among other alleged statutory violations.
Greenwich demurred to the borrower's complaint, on the grounds that the borrower was barred from raising his claims by the doctrines of res judicata and estoppel. The trial court sustained the demurrer, and the foreclosure sale took place. The borrower appealed, but the appellate court upheld the trial court's decision.
The appellate court's decision to sustain the lower court hinged on the application of the rule established in Oneida Motor Freight, Inc., v.
United Jersey Bank, 848 F.2d 214 (3d Cir. 1988). As you may recall, the court in Oneida Motor Freight stated that a party's failure to disclose litigation claims likely to arise in a nonbankruptcy context "triggers application of the doctrine of equitable estoppel, operating against a subsequent attempt to prosecute the action." Id. at 417.
The borrower argued that cases decided subsequent to Oneida Motor Freight provided that the rule applied only where the nondisclosure was accompanied by bad faith. The court disagreed because, among other reasons, the cases cited by borrower did not involve a subsequent lawsuit against an entity that had been a creditor in the bankruptcy proceedings.
As such, in the other cases, the debtor did not benefit from the nondisclosure. As the cases the borrower relied upon by the borrower were all distinguishable from the matter at hand, the court concluded that the Oneida Motor Freight rule should apply. Therefore, the borrower was barred from litigating the claims he failed to disclose in his bankruptcy proceedings.
However, the borrower's statutory claims (lack of notice, failure to provide a loan modification) arose after the bankruptcy proceedings, and thus were not barred by the Oneida Motor Freight rule. However, the court found no merit in either claim.
The plaintiff-borrower defaulted on his home loan. He entered into a forbearance agreement with the servicer of the loan, Select Portfolio Servicing, Inc. ("SPS"), but then re-defaulted. SPS notified the borrower that his loan had been transferred to Greenwich Investors ("Greenwich").
The borrower then filed for bankruptcy, making no mention of a possible claim against Greenwich. The borrower's bankruptcy workout plan called for borrower to make regular payments to Greenwich. The borrower again defaulted, and Greenwich initiated nonjudicial foreclosure proceedings.
The borrower then filed suit against Greenwich, alleging breach of contract, fraudulent and negligent misrepresentation, and violation of foreclosure statutes. These claims arose from Greenwich's alleged failure to acknowledge the forbearance agreement, as well as Greenwich's alleged failure to abide by the notice provisions of the relevant foreclosure statute, among other alleged statutory violations.
Greenwich demurred to the borrower's complaint, on the grounds that the borrower was barred from raising his claims by the doctrines of res judicata and estoppel. The trial court sustained the demurrer, and the foreclosure sale took place. The borrower appealed, but the appellate court upheld the trial court's decision.
The appellate court's decision to sustain the lower court hinged on the application of the rule established in Oneida Motor Freight, Inc., v.
United Jersey Bank, 848 F.2d 214 (3d Cir. 1988). As you may recall, the court in Oneida Motor Freight stated that a party's failure to disclose litigation claims likely to arise in a nonbankruptcy context "triggers application of the doctrine of equitable estoppel, operating against a subsequent attempt to prosecute the action." Id. at 417.
The borrower argued that cases decided subsequent to Oneida Motor Freight provided that the rule applied only where the nondisclosure was accompanied by bad faith. The court disagreed because, among other reasons, the cases cited by borrower did not involve a subsequent lawsuit against an entity that had been a creditor in the bankruptcy proceedings.
As such, in the other cases, the debtor did not benefit from the nondisclosure. As the cases the borrower relied upon by the borrower were all distinguishable from the matter at hand, the court concluded that the Oneida Motor Freight rule should apply. Therefore, the borrower was barred from litigating the claims he failed to disclose in his bankruptcy proceedings.
However, the borrower's statutory claims (lack of notice, failure to provide a loan modification) arose after the bankruptcy proceedings, and thus were not barred by the Oneida Motor Freight rule. However, the court found no merit in either claim.
Monday, June 6, 2011
ABA is Unfair!
The above article angers me to no end. I have a child with ADHD the girl is entitled to accommodations under the ADA.
When I was in college and law school "the system' was a kinder and gentler place. I know people who received extra time on college exams, law school exams, GRE, SAT, LSAT, Bar Exam........ for a variety of reasons. None of them ever were rejected or had to sue for their rights. There was a gentleman in my school, Thomas Cooley Law School- who used a machine in the library to read the tests and books to him because he was blind, and another student used it because they had dyslexia. One of my study partners took his exams in a private room with a proctor because of his anxiety issues.
I will be the first to tell you we do not need more lawyers or law schools-- but everyone should be given an equal change, and some times that means they need extra time, more breaks, or a quieter environment.
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