Real Property, Financial Services & Title Insurance Case Law Update: Week Ending February 14, 2014

I. FLORIDA STATE CASES – SARA WITMEYER

  • Arbitration/Waiver: defendant waived right to arbitration by defending against claim of replevin in court litigation for two years – Gen. Elec. Capital Corp. v. Bio-Mass Tech, Inc., No. 2D13-1657 (Fla. 2d DCA Feb. 12, 2014) (reversing order staying action and compelling arbitration)
  • Foreclosure/Authentication: court erred in admitting documents relied upon by testifying employee of loan servicer to establish amount due on note, which were hearsay and were not properly authenticated, where no showing employee was records custodian or had personal knowledge – Kelsey v. SunTrust Mortg., Inc., No. 3D12-2994 (Fla. 3d DCA Feb. 12, 2014) (granting rehearing, reversing final default judgment of foreclosure)
  • Foreclosure/Standing: foreclosing plaintiff failed to establish standing to bring action, where it filed  original note containing undated endorsement in blank after complaint was filed and it failed to file evidence establishing that it obtained possession of note prior to filing complaint – Zimmerman v. JPMorgan Chase Bank, N.A., No. 4D12-2190 (Fla. 4th DCA Feb. 12, 2014) (reversing final judgment of foreclosure)
  • Temporary Injunction/Modification: court abused discretion by modifying temporary injunction to disburse to lender disputed funds from court registry with no restrictions, effectively granting lender permanent relief without considering borrower’s counterclaims – Minty v. Meister Fin. Group, Inc., No. 4D13-699 (Fla. 4th DCA Feb. 12, 2014) (reversing modification of temporary injunction)
  • Slander of Title: property owner stated slander of title claim based on lien for unpaid maintenance assessments where she alleged lien was cloud on title resulting in special damages, including inability to obtain conventional loan, loss of contract to sell property, inability to lease property, and damage to creditworthiness – Jenkins v. Plaza 3000, Inc., No. 4D12-4326 (Fla. 4th DCA Feb. 12, 2014) (reversing final judgment)
  • Damages: award for unpaid maintenance assessments not supported by competent, substantial evidence where interest charged exceeded statutory rate – Jenkins v. Plaza 3000, Inc., No. 4D12-4326 (Fla. 4th DCA Feb. 12, 2014) (reversing final judgment)

II. 11TH CIRCUIT CASES - JIN LIU

  • Assignment of Mortgage: Alabama law renders an unrecorded assignment of mortgage void as to a purchaser, mortgagee, or judgment creditor, but not as to borrower -- Watkins v. Regions Mortgage Inc., No. 13-12564 (11th Circ. Feb. 14, 2014) (affirming granting of summary judgment)

III. TITLE INSURANCE CASES - CHRIS SMART

  • Agent Liability: title insurance issuing agent is not a co-insurer with title insurance company for whom it acts as agent and cannot be liable for breach of title insurance policy – Kloster v. Roberts, No. 30546-5 (Wash. App. Feb. 6, 2014) (affirming summary judgment)
  • Commitments: a commitment does not represent status of title but is merely a statement of the terms and conditions for issuance of title insurance policy – Kloster v. Roberts, No. 30546-5 (Wash. App. Feb. 6, 2014) (affirming summary judgment)
  • Commitments: a commitment is not an abstract of title and may not serve as basis for negligent misrepresentation claim – Kloster v. Roberts, No. 30546-5 (Wash. App. Feb. 6, 2014) (affirming summary judgment)
  • Duty to Defend: absent an adverse claim by a third party, a title insurer is not obligated to file an action to quiet title as part of its duty to defend title in Section 4 of the conditions and stipulations of the policy – Kloster v. Roberts, No. 30546-5 (Wash. App. Feb. 6, 2014) (affirming grant of motion for judgment as matter law)
  • Duty to Defend: the duty to defend does not arise if the alleged claim is clearly not covered under the policy – Kloster v. Roberts, No. 30546-5 (Wash. App. Feb. 6, 2014) (affirming grant of motion for judgment as matter law)
  • Bad Faith: title insurer’s denial of coverage based on reasonable interpretation of policy does not amount to bad faith – Kloster v. Roberts, No. 30546-5 (Wash. App. Feb. 6, 2014) (affirming grant of motion for judgment as matter law)
  • Access: while policy insures access, it does not insure specific access by easement across adjacent property where easements are excluded from coverage and insured had other legal access to insured property – Kloster v. Roberts, No. 30546-5 (Wash. App. Feb. 6, 2014) (reversing judgment)
  • Policy Interpretation: easements depicted on sketch attached to title insurance policy which states that it is being provided as a courtesy and is not a part of the policy do not render the otherwise clear terms of the policy ambiguous – Kloster v. Roberts, No. 30546-5 (Wash. App. Feb. 6, 2014) (reversing judgment)