Real Property, Financial Services & Title Insurance Case Law Update: November 2013

by Carlton Fields
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I. FLORIDA STATE CASES – SARA WITMEYER & SASHA FUNK GRANAI

  • Implied Warranties of Fitness and Merchantability: warranties apply to improvements that provide essential services to residential subdivision, including infrastructure, roadways, retention ponds, underground pipes, and drainage systems – Maronda Homes, Inc. of Fla. v. Lakeview Reserve Homeowners Ass’n, No. SC10-2292 (Fla. Nov. 21, 2013) (affirmed)
  • Implied Warranties of Fitness and Merchantability: section 553.835, Fla. Stat. does not apply to cause of action for breach of implied warranties that accrued before effective date of that section – Maronda Homes, Inc. of Fla. v. Lakeview Reserve Homeowners Ass’n, No. SC10-2292 (Fla. Nov. 21, 2013) (affirmed)
  • Taxing E-Discovery Costs: Uniform Guidelines on the Taxation of Costs amended to allow recovery of (i) costs of producing copies of relevant electronic media in response to a discovery request and (ii) costs of converting electronically stored information to a reasonably usable format in response to a discovery request that seeks production in such format – In Re: Amendments to Fla. R. of Civ. P., No. SC13-74 (Fla. Nov. 14, 2013) (adopting amendments)
  • Release: settlement agreement that released claims “relating in any way” to subject loan documents and/or property not broad enough to release separate foreclosure involving other property; separate foreclosure not related to subject loan documents simply because  shared common guarantor whose guaranty contained cross-default provision – Columbia Bank v. Columbia Developers, LLC, No. 1D12-5270 (Fla. 1st DCA Nov. 20, 2013) (order of dismissal reversed)
  • Foreclosure: trial court lacked jurisdiction to enter default judgment in favor of mortgagors declaring mortgage and note cancelled and satisfied, and subject property free of all encumbrances and liens, where mortgagors’ counterclaims sought only money damages – BAC Home Loans Servicing, Inc. v. Headley, No. 3D12-1560 (Fla. 3d DCA Nov. 20, 2013) (final judgment reversed)
  • Foreclosure: clerk’s default entered after defendant served motion seeking additional time to respond to complaint was error and could not provide basis for final summary judgment of foreclosure in favor of plaintiff – Palacin v. HSBC Bank USA Nat’l Ass’n, as Trustee, No. 4D12-4083 (Fla. 4th DCA Nov. 20, 2013) (final summary judgment reversed)
  • Default Judgment: court must find “deliberate” and “contumacious disregard of the court’s authority” to enter default for failure to comply with a court order – Timeus v. Wells Fargo Bank, No. 3D13-1462 (Fla. 3d DCA Nov. 27, 2013) (final judgment of foreclosure reversed

II. 11TH CIRCUIT CASES - JIN LIU

  • Fraudulent Lien: despite evidence amount of lien willfully exaggerated, property owner failed to prove damages to prevail on fraudulent lien claim -- Iberiabank v. Coconut 41, LLC, No. 2:11-cv-321-FtM-29DNF (M.D. Fla. Nov. 18, 2013) (judgment entered)
  • Slander of Title: false lien not slander of title where no evidence lien induced others not to deal with property owner or that owner suffered resulting damages -- Iberiabank v. Coconut 41, LLC, No. 2:11-cv-321-FtM-29DNF (M.D. Fla. Nov. 18, 2013) (judgment entered)

III. TITLE INSURANCE CASES – CHRIS SMART

  • RESPA: policy statement issued by HUD did not supplement RESPA’s existing “affiliated business arrangement” safe-harbor prerequisites; title insurance company with ABA that qualified under RESPA was not also subject to additional prerequisite contained in policy statement – Carter v. Welles-Bowen Realty, Inc., No. 10-3922 (6th Cir. Nov. 27, 2013) (affirming district court ruling)
  • Attorney Agent: lawyer acting as title agent who was willfully blind to what he should have known was false information in preparing HUD settlement statements for straw transactions indefinitely suspended – Mahoning County Bar Association v. Wagner, No. 2013-Ohio-5087 (Ohio Nov. 21, 2013) (suspension)
  • Policy Interpretation: section 7(a)(ii) of title insurance policy too indefinite to be enforced – Doss & Assocs. v. First Am. Title Ins. Co., Nos. A13A0988, A13A0689, A13A0990 (Ga. App. Nov. 21, 2013) (affirming in part, reversing in part, summary judgment)
  • Policy Interpretation: section 7(a)(iii) of title insurance policy precludes liability even if mortgage priority not as insured as long as insured receives payment in excess of value of insured estate – Doss & Assocs. v. First Am. Title Ins. Co., Nos. A13A0988, A13A0689, A13A0990 (Ga. App. Nov. 21, 2013) (affirming in part, reversing in part, summary judgment)
  • Continuation of Coverage: under section 2(c) of title insurance policy, insured has claim for failure of mortgage lien on one parcel of collateral, even though it forecloses on another parcel of collateral and receives more than original principal amount of loan – Preservation Capital Consultants, LLC v. First Am. Title Ins. Co., No. 2012-209186 (affirming summary judgment)

 

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Carlton Fields
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