New Jersey Appellate Division Finds Actual Knowledge Does Not Bar Equitable Subrogation

In a decision approved for publication, the New Jersey Appellate Division recently found that actual knowledge is not a bar to the doctrine of equitable subrogation for a lender who paid off a prior mortgage but failed to discharge an intervening lien. See New York Mortg. Tr. 2005-3 Mortg.-Backed Notes, U.S. Bank Nat’l Ass’n as Tr. v. Deely, 2021 WL 520063 (N.J. Super. Ct. App. Div. Feb. 12, 2021). 

Third Circuit Finds Rebuttable Presumption of Fraud Under UFTA

The Third Circuit recently vacated a District Court decision and held that a rebuttable presumption of fraud is created under the Uniform Fraudulent Transfer Act (UFTA) when certain badges of fraud are found. MSKP Oak Grove, LLC v. Venuto, 2020 WL 7496512 (3d Cir. Dec. 21, 2020). Appellants were the landlords and creditors of a Florida location of a chain of tanning salons, the parent company of which (Appellee-Debtors, along with the four individual family members who owned all the company’s shares) sold the majority of its assets in 2007.

California Court Holds Agents Not Entitled to Agent Fees on PPP Loans

The United States District Court for the Central District of California recently held that plaintiffs, who assisted clients in obtaining PPP loans from the defendant lenders, did not have a private right of action against the defendants for agent fees.  See Am. Video Duplicating Inc. v. Citigroup Inc., 2020 WL 6712232 (C.D. Cal. Nov. 16, 2020).  In the case, plaintiffs, who included accountants and other consultants, assisted their clients in obtaining PPP loans from defendants. 

Maryland Supreme Court Affirms No Statute of Limitations for Foreclosures

The Maryland Court of Special Appeals recently affirmed a lower court and held that there is no statute of limitations for foreclosure actions in Maryland.  See Daughtry v. Nadel, 2020 WL 7392787 (Md. Ct. Spec. App. Dec. 16, 2020).  The borrowers purchased a property in 2007 and executed a mortgage to the lender. In 2012, the borrowers defaulted.  In March 2019, the lender brought this foreclosure action.

Michigan Court Holds No Title Insurance Coverage for Reduced Easement

The Michigan Court of Appeals recently found that a title insurance company was not required to reimburse its insured after the company negotiated a settlement that reduced the size of an easement used by the insured.  See Horwood v. N. Am. Title Ins. Co., 2020 WL 7635765 (Mich. Ct. App. Dec. 22, 2020).  Plaintiffs purchased the real property at issue in this action and obtained a title insurance policy from defendant.  A portion of the property was accessible only through an easement across a neighboring property owned by the Roses, and the legal description to plaintiffs’ property noted that it was “subject to an easement for a 33-foot roadway to be used in common with others.” 

First Circuit Holds No Equitable Lien for Lender Where Home Equity Line of Credit Debtor Was Not Actual Owner of Property, Proceeds Used to Buy Another Property

The United States Court of Appeals for the First Circuit recently reversed a District Court decision and held that a creditor was not entitled to an equitable lien arising from a Home Equity Line of Credit (HELOC) when the debtor did not actually own the property and used the proceeds from the loan to buy another property.  See Wilmington Sav. Fund Soc'y, FSB v. Collart, 980 F.3d 210 (1st Cir. 2020).

Texas Federal Court Holds Limitations Period May Not Have Run on FDCPA Claim if Creditor Obtained Default Judgment in Improper Venue

The United States District Court for the Eastern District of Texas recently denied a debt collector’s motion to dismiss, holding that the one-year statute of limitations under the FDCPA may not have commenced if the creditor brought its action against the debtor in an improper venue.  See Barboza v. Weinstein & Riley, P.S., 2020 WL 5849549 (E.D. Tex. 2020).