REAL PROPERTY UPDATE

Foreclosure/Priority: bank entitled to relief from judgment where junior lienholder foreclosed on subject property and Court ordered sale of property free and clear of all claims by bank – Bank of America, N.A. v. Kipps Colony II Condominium Assn., Inc., Case Nos. 2D14-858, 2D14-4436 (Fla. 2d DCA Dec. 9, 2015) (reversed and remanded)

Foreclosure/Standing: mortgagee not entitled to summary judgment against junior lienholder where junior lienholder’s motion to dismiss challenging standing had not yet been set for hearing – Statewide Homeowners Solutions, LLC v. Nationstar Mortgage, LLC, Case No. 4D13-3467 (Fla. 4th DCA Dec. 9, 2015) (reversed and remanded)

Foreclosure/Standing: bank not entitled to summary judgment where genuine issue of material fact existed as to whether note had been endorsed prior to filing complaint – Morris v. Deutsche Bank Nat. Trust Co. as Trustee for HIS Asset Securitization Corp. Trust 2006-HE1, Case No. 4D13-4049 (Fla. 4th DCA Dec. 9, 2015) (reversed and remanded)

Foreclosure/Standing: bank not entitled to final judgment of foreclosure where bank’s expert admitted he had no idea when allonge endorsements were created or affixed to the note – Hepworth v. Wells Fargo Bank, N.A., Case No. 4D13-4056 (Fla. 4th DCA Dec. 9, 2015) (reversed and remanded)

Foreclosure/Oral Modification: borrower not entitled to judgment based upon alleged oral modification to mortgage, as any modification would have been subject to Statute of Frauds – Ocwen Loan Servicing, LLC v. Delvar, Case No. 4D14-763 (Fla. 4th DCA Dec. 9, 2015)

Foreclosure/Issues of Fact: mortgage servicer not entitled to summary judgment, as genuine issues of material fact existed as to whether Fannie Mae owned note at time of complaint and whether certain payments made by borrower were properly credited to account – Gomes v. Suntrust Mortgage, Inc., Case No. 5D14-1668 (Fla. 5th DCA Dec. 11, 2015) (reversed)

Foreclosure: testimony of amounts due under mortgage foreclosed was inadmissible hearsay because witness’s testimony based on amounts in draft judgment, which was not a business record admitted into evidence - McMillan v The Bank of NY Mellon, Trustee, Case No. 4D14-514 (Fla. 4th DCA Dec. 2, 2015) (affirmed in part, reversed in part).    

Claim of Lien: HOA’s claim of lien for past due assessments does not relate back to filing of declaration absent specific relation-back language in declaration - U.S. Bank NA, Trustee v Grant, et al., Case No. 4D14-979 (Fla. 4th DCA Dec. 2, 2015) (reversed and remanded).    

Jurisdiction: trial court had jurisdiction under Rule 1.540(b)(1) to set aside notice of voluntary dismissal filed by inadvertence or mistake - JP Morgan Chase Bank, NA v Kehle, Case No. 4D14-1631 (Fla. 4th DCA Dec. 2, 2015) (reversed and remanded).

Substitute Service: process server complied with substitute service statute requiring he “inform the person of their contents” by advising defendant’s husband he was serving a summons and complaint that needed to be responded to within twenty days - Mauro and Quinn v Wells Fargo Bank, NA, Case No. 4D14-1993 (Fla. 4th DCA Dec. 2, 2015) (affirmed).

Standing: subsequent owner of mortgage failed to prove standing to foreclose mortgage because testimony at trial not based on personal knowledge and no business records reflecting how or when mortgage was assigned entered into evidence - Gonzalez v BAC Home Loans Servicing, LP, et al., Case No. 5D14-3678 (Fla. 5th DCA Dec. 4, 2015) (reversed)

Automatic Stay: foreclosure action properly dismissed when filed after borrower filed bankruptcy petition and automatic stay was in effect - Select Portfolio Servicing, Inc. v Worobec, et al., Case No. 5D14-4022 (Fla. 5th DCA Dec. 4, 2015) (affirmed). 

Standing: trial court erred by denying borrower’s motion for involuntary dismissal because lender failed to present documents and other competent evidence necessary to reestablish lost note, prove its standing to foreclose, prove amount owed on note, and did not prove compliance with condition precedent listed in paragraph 22 of mortgage - Figueroa v FNMA, et al., Case No. 5D14-4078 (Fla. 5th DCA Dec. 4, 2015) (reversed and remanded).

TITLE INSURANCE UPDATE

Closing Protection Letters: an incorrect HUD settlement statement does not give rise to liability under paragraph 1(b) of the CPL because of the exclusion as to the documents validity, enforceability, or effectiveness -  Fifth Third Mortgage MI-LLC v. First American Ins. Co., Case No. 151757 (Mich. Nov.  24, 2015) (application for leave to appeal March 10, 2015 judgment denied)

Statute of Limitations: in South Carolina, title insurance policies are sealed instruments subject to a 20 year statute of limitations, from the date the insured discovers the breach - Lyons v. Fidelity National Title Ins. Co., Case No. 2013-002137 (S.C. App. Dec. 2, 2015) (affirming summary judgment)

Exclusion 1: in South Carolina, a no-build resolution and spoil easement are inherently public records covered under an owner’s policy and not subject to the police power exclusion - Lyons v. Fidelity National Title Ins. Co., Case No. 2013-002137 (S.C. App. Dec. 2, 2015) (affirming summary judgment)

Exclusion 1: in South Carolina, a mobile home is not a single-family residence and the ability to use the property for a mobile home does not bar coverage for the inability to use the property as a single-family residence - Lyons v. Fidelity National Title Ins. Co., Case No. 2013-002137 (S.C. App. Dec. 2, 2015) (affirming summary judgment)

Mitigation of Damage: in South Carolina, an insured owner does not fail to mitigate its damages under a policy of title insurance by rejecting an offer to purchase the insured property - Lyons v. Fidelity National Title Ins. Co., Case No. 2013-002137 (S.C. App. Dec. 2, 2015) (affirming summary judgment)

Definition of Insured: Wyoming takes minority position by holding that a voluntary transfer of title from insured individuals to a limited liability limited partnership by quit claim deed qualifies as a transfer by “operation of law” for purposes of determining that the LLLP is entitled to coverage – North Fork Land & Cattle, LLLP v. First American Title Ins. Co., Case No. S-14-0314 (Wy.  Nov. 24, 2015) (reversing summary judgment)

Duty to Defend: an affirmative defense to insured lender’s foreclosure action does not trigger the duty to defend unless that it shows grounds for potential liability of the insured plaintiff – Yarborough v. First American Title Ins. Co., Case No. 3:14-cv-01453 (D. Or. Nov. 223, 2015) (order granting summary judgment and dismissing with prejudice)