New York Federal Court Holds Property Reverted to Government When Purchaser Failed to Meet Conditions Subsequent Due to Zoning Restrictions

The United States District Court for the Eastern District of New York recently held that title to a property reverted to the government when the purchaser was unable to meet the deed’s conditions subsequent due to zoning restrictions that prevented the purchaser from opening a homeless shelter.  See United States v. Overcoming Love Ministries, Inc., 2018 WL 4054867 (E.D.N.Y. Aug. 24, 2018).

Third Circuit Holds Statement That a Forgiveness of Debt Might Be Reported to the IRS May Have Violated the FDCPA

The United States Court of Appeals for the Third Circuit recently reversed a lower court and held that a dunning letter stating that the forgiveness of debt might be reported to the IRS may violate the Fair Debt Collection Practices Act (“FDCPA”) when there is no chance of such a reporting.  See Schultz v. Midland Credit Mgmt., Inc., 2018 WL 4558595 (3d Cir. Sept. 24, 2018).

Pennsylvania Federal Court Holds Title Insurance Company Did Not Have Duty to Defend Border Wall Claim

The United States District Court for the Eastern District of Pennsylvania recently held that a title insurance company did not breach its policy when it denied an insured’s claim regarding coverage for a litigation about a wall that encroached on a neighbor’s property.  See 631 N. Broad St., LP v. Commonwealth Land Title Ins. Co., 2018 WL 4051798 (E.D. Pa. Aug. 23, 2018).

Florida Appellate Court Finds Attorney May Be Liable to Lender for Erroneous Legal Description Prepared by Title Agent

The Florida Court of Appeals recently held that an attorney was not entitled to summary judgment dismissing a legal malpractice claim brought by a lender regarding an erroneous legal description on a mortgage, despite the fact that the attorney had not prepared the legal description himself.  See JBJ Inv. of S. Fla., Inc. v. S. Title Grp., Inc., 2018 WL 3301673 (Fla. Dist. Ct. App. July 5, 2018). 

Third Circuit Holds That Title Companies Are Only Obligated to Defend Covered Claims Under Pennsylvania Law

In a precedential opinion issued on September 10, 2018, the United States Court of Appeals for the Third Circuit reversed the District Court and held that, under Pennsylvania law, an insurer’s duty to defend turned on allegations within the four corners of the complaint, and a title insurer is only bound to defend claims in the complaint that it specifically covered. See Lupu v. Loan City, LLC, et. al., v. Stewart Title Guaranty Company, 2018 WL 4290048 (3d Cir. Sep. 10, 2018). 

Seventh Circuit Holds Debt Collector Did Not Violate FDCPA by Sending Motion Papers Directly to Represented Debtor in Compliance with State Rules

The United States Court of Appeals for the Seventh Circuit recently reversed a district court’s decision granting a debtor’s motion for summary judgment and held that the defendant debt collector did not violate the Fair Debt Collection Practices Act (“FDCPA”) by sending motion papers directly to the debtor when the debtor was represented by an attorney who had not filed a notice of appearance.  See Holcomb v. Freedman Anselmo Lindberg, LLC, 2018 WL 3984544 (7th Cir. Aug. 21, 2018). 

Massachusetts Federal Court Dismisses Borrower’s Wrongful Foreclosure and Predatory Lending Claims

The United States District Court for the District of Massachusetts recently dismissed a borrower’s complaint against a lender, finding that the lender did not wrongfully foreclose on the borrower or engage in predatory lending.  See Healy v. U.S. Bank, N.A. for LSF9 Master Participation Tr., 2018 WL 3733934 (D. Mass. Aug. 3, 2018).  In the case, the borrower executed a loan agreement secured by a mortgage on his house in 2004.  In 2013, he defaulted on the loan, and the note and mortgage were assigned to the defendant lender thereafter. 

New Jersey Appellate Court Holds Business Judgment Rule Protects Decisions of Common-Interest Community Board in Adopting and Enforcing Building Height Restrictions

In a decision approved for publication, New Jersey’s Appellate Division recently held that the business judgment rule protected the actions of a common-interest community’s board of trustees in rejecting certain residents’ requests to elevate their homes higher than the board’s regulations allowed after Superstorm Sandy. See Alloco v. Ocean Beach & Bay Club, 2018 WL 3999039 (N.J. Super. Ct. App. Div. Aug. 22, 2018). The decision is significant in limiting challenges to a board’s action to grounds of fraud, self-dealing or unconscionability.

New York Federal Court Holds County Tax Foreclosure May Constitute Fraudulent Conveyance

The United States District Court for the Western District of New York recently reversed a Bankruptcy Court’s dismissal of an action and held that sales arising from tax foreclosures may be avoidable as fraudulent transfers.  See Hampton v. Ontario Cty., New York, 2018 WL 3454688 (W.D.N.Y. July 18, 2018).  The case involves two adversary proceedings commenced by homeowners against the County of Ontario (the “County”).  In each matter, the County foreclosed on plaintiffs’ homes after plaintiffs failed to pay property taxes.