Wisconsin Federal Court Holds That Creditor Who Inadvertently Included Extra Space in Debtor’s Name in UCC Financing Statement Was Unsecured

The United States District Court for the Western District of Wisconsin recently held that a creditor did not perfect its security interest in the debtor’s property because the creditor inadvertently included a space in the debtor’s name in its UCC financing statement.  See United States Sec. & Exch. Comm’n v. ISC, Inc., 2017 WL 3736796 (W.D. Wis. 2017).  In the case, the creditor filed a UCC financing statement with the Wisconsin Department of Financial Institutions (“DFI”) regarding an interest it had in certain assets of the debtor, ISC, Inc.  However, the creditor accidentally included a space between “Inc” and the period, naming the debtor as “ISC, Inc .”

New Jersey Appellate Division Affirms That Lender Was Not Entitled to Priority for Its First-Recorded Mortgage When It Was Aware of Other Mortgage, Even if It Was Not Aware of Other Mortgagee’s Identity

The New Jersey Appellate Division recently affirmed that a lender who records a mortgage with knowledge of another unrecorded mortgage is not entitled to priority over the subsequently-filed mortgage, even if the lender was not aware of the identity of the other mortgagee.  See Morgan Stanley Private Bank v. Earle, 2017 WL 5988070 (N.J. App. Div. Dec. 4, 2017).   In the case, the defendant lender obtained a $5,000,000 mortgage on the borrower’s property in 2008. 

Texas Appellate Court Affirms Grant of Summary Judgment for Title Agent, Holding It Was Not Liable to Third Party for Escrow Disbursement

A Texas appellate court recently affirmed a lower court’s decision granting summary judgment and holding that a title agent and its individual employee were not liable to a nonparty to the escrow agreement for their disbursement of escrow funds, regardless of whether the nonparty contributed said funds.  See Muller v. Stewart Title Guar. Co., 525 S.W.3d 859 (Tex. App. 2017). 

New York Supreme Court Dismisses Defendant’s Usury Defense for Merchant Agreement

The Supreme Court of New York, Westchester County, recently granted a plaintiff’s motion to dismiss defendant’s affirmative defenses and counterclaims and held that the parties’ merchant agreement whereby plaintiff purchased defendant’s future receivables was a valid contract, and not a usurious loan, as defendant alleged.  See Rapid Capital Fin., LLC v. Natures Mkt. Corp., 2017 WL 4764559 (N.Y. Sup. Ct. Oct. 11, 2017).

New Jersey Federal Court Dismisses Plaintiff’s Complaint Against Mortgage Servicer Under Rooker-Feldman and Entire Controversy Doctrines

The United States District Court for the District of New Jersey recently granted a mortgage servicer’s motion to dismiss a borrower’s claim because the allegations should have been brought in the parties’ foreclosure action.  See Sanchez v. Select Portfolio Servicing, Inc., 2017 WL 4711475 (D.N.J. Oct. 20, 2017).  In the case, plaintiff defaulted on a loan and defendant’s predecessor in interest instituted a state court foreclosure action in 2008.

New Jersey Appellate Division Holds Foreclosing Lender Not Responsible for Condominium Association Fees after Winterizing the Property

The New Jersey Appellate Division recently affirmed that a lender who winterizes and secures a property during a foreclosure is not deemed a mortgagee in possession subject to condominium association fees, even if the lender performed “modest repairs” to the property.  See Union Hill Condo. Ass’n v. Wells Fargo Bank, N.A., 2017 WL 5478310 (N.J. Super. Ct. App. Div. Nov. 15, 2017).  There, the borrower became delinquent on both his mortgage loan and his condominium association assessments.

New Jersey Federal Court Holds Plaintiff Had Standing to Bring FDCPA Claim for Procedural Violations

The United States District Court for the District of New Jersey recently denied a debt collector’s motion to dismiss a debtor’s claim that a debt collection notice violated the Fair Debt Collection Practices Act (“FDCPA”) because the notice failed to state that certain requests must be in writing.  See Kausar v. GC Servs. Ltd. P’ship, 2017 WL 5175596 (D.N.J. Nov. 8, 2017). 

Connecticut Court Grants Title Insurance Company’s Motion for Summary Judgment and Holds Insureds Agreed to Easement Traversing Property

The Superior Court of Connecticut recently held that insured owners were barred from coverage under a title insurance policy for an easement that the policy did not disclose because the sellers had informed the insureds about the easement before the closing, even if the insureds had misunderstood the scope of the easement.  See Pamela Egan et al. v. Eastland Title Servs., Inc. et al., 2017 WL 5202842 (Conn. Super. Ct. Sept. 29, 2017). 

Florida Appellate Court Reverses Final Judgment of Foreclosure for Lack of Standing under PSA

Florida’s District Court of Appeal recently reversed a trial court and vacated a final judgment of foreclosure because the bank, as trustee of a mortgage pool trust governed by a pooling and servicing agreement (“PSA”) was unable to prove standing.  See Friedle v. Bank of New York Mellon, 2017 WL 4280592 (Fla. Dist. Ct. App. Sept. 27, 2017).  In the case, the trial court granted the bank final judgment of foreclosure and the borrower appealed, arguing that the bank did not prove that it had possession of the note at the time it filed the complaint.  On appeal, the appellate court agreed that the bank had not proved it possessed the note and reversed. 

New York Surrogate’s Court Holds Presumption Under Banking Law § 675 Does Not Apply to Joint Account Claim Made by Decedent’s Brother

The Surrogate’s Court of New York, Oneida County, recently denied a petitioner’s motion for summary judgment seeking to compel the executor to deliver all of the funds withdrawn from a decedent’s accounts to the petitioner, as the alleged surviving joint owner, on grounds that there is insufficient proof to warrant a finding that title to the accounts is vested in the petitioner as the survivor.