Real Property, Financial Services & Title Insurance Case Law Update: Week Ending January 24, 2014


  • Condominiums: given ambiguity in Condominium Act’s escrow requirements (Fla. Stat. § 718.202) and fact that willful violation of same by developer carried criminal penalties, rule of lenity required construction of statute most favorably to developer, allowing developer to maintain both types of escrow deposits in single escrow account - North Carillon, LLC v. CRC 603, LLC, No. SC12-75 (Fla. 2014) (reversing 3rd DCA and remanding)
  • Statute of Limitations: statute of limitations to challenge amendments to restrictive covenants begins to run when amendments recorded - Harris v. Aberdeen Prop. Owners Assoc., Inc., No. 4D12-1435 (Fla. 4th DCA January 22, 2014) (reversing final summary judgment)
  • Receivership: to determine appropriate receivership fee, court must conduct hearing to determine value of receiver’s services and what compensation would be just – Reema Hospitality, Inc., v. MSC1 2007-IQ13 DIKE ROAD, LLC, No. 5D13-3158 (Fla. 5th DCA January 24, 2013) (affirming in part; reversing in part and remanding)


  • Quiet Title: Mortgage does not become void if note and mortgage are severed – Lane v. MERS, No. 8:13-cv-01271-JSM-AEP (M.D. Fla. Jan. 14, 2014) (order granting motion to dismiss)


  • Duty to Insured: insurer’s obligations to provide defense extends only to insured; where individual insured only in capacity as trustee, insurer not required to defend and individual has no standing to state claim against insurer – Mulhearn v. Lawyers Title Insurance Co., No. B244893 (Cal. App. Jan. 21, 2014) (reversing judgment in part and affirming in part)
  • Denial of Coverage: where insurer first denies and then accepts coverage, it admits it was in breach of the policy and insured can assert a claim for damages incurred during time of improper denial – Mulhearn v. Lawyers Title Insurance Co., No. B244893 (Cal. App. Jan. 21, 2014) (reversing judgment in part and affirming in part)
  • Coverage Determination: insurer did not act unreasonably by taking 6 weeks to make coverage determination or by reconsidering, changing its position, and accepting coverage under reservation of rights 2 and half weeks later – Mulhearn v. Lawyers Title Insurance Co., No. B244893 (Cal. App. Jan. 21, 2014) (reversing judgment in part and affirming in part)
  • Statute of Limitations: under FIRREA, if state law cause of action has not run as of date FDIC appointed, FDIC has 3 years for tort claims and 6 years for contract claims from the later of (a) its date of appointment or (b) the date on which the action accrued to bring cause of action – F.D.I.C. v. St. Louis Title, LLC, No. 4:13 cv 1078 (E.D. Mo. Jan. 17, 2014) (memorandum and order denying motion to dismiss)
  • Subrogation: title insurer entitled to be equitably subrogated to rights of insureds – Horn v. High Point Services, Inc., Case No. 12-1604 (C.D. Cal. Jan. 17, 2014) (memorandum decision after trial on equitable issues)
  • Class Arbitration: gateway issue of class arbitration should be determined by court, not arbitrator, at an evidentiary hearing as to whether the parties consented to class arbitration – Chassen v. Fidelity Nat. Financial, Inc., No. 09-291 (D.N.J. Jan. 17. 2014) (memorandum)

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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