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Massachusetts Appellate Court Allows Foreclosure Judgment to Stand Based on Judicial Estoppel and Equitable Subrogation, Despite Owner Not Being Named on Mortgage Banner Image

Massachusetts Appellate Court Allows Foreclosure Judgment to Stand Based on Judicial Estoppel and Equitable Subrogation, Despite Owner Not Being Named on Mortgage

Month: October 2020

Massachusetts Appellate Court Allows Foreclosure Judgment to Stand Based on Judicial Estoppel and Equitable Subrogation, Despite Owner Not Being Named on Mortgage

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The Appeals Court of Massachusetts recently affirmed a lender’s judgment of foreclosure against a homeowner based on the doctrines of judicial estoppel and equitable subrogation, even though she was not named as a borrower on the mortgage.  See 21st Mortg. Corp. v. Lapham, 98 Mass. App. Ct. 1112 (2020).  In 2002, a husband and wife encumbered their home with a mortgage securing a note for $160,000.  In 2005, the husband executed a note in the face amount of $191,000, the proceeds of which were used to pay off the 2002 mortgage.  The wife did not sign the note, nor did the mortgage name her as a borrower, although she purportedly executed the mortgage.  The couple later divorced and the husband quitclaimed the property to the wife.  In 2010, the mortgage assignee realized the wife was not named as a borrower on the mortgage and brought an action seeking reformation or equitable subrogation.  Although the wife claimed she never signed the mortgage and was not a party to it, the trial court granted the mortgagee summary judgment on its equitable subrogation claim because the proceeds of the 2005 mortgage paid off the 2002 mortgage on which the wife was liable.  The court denied summary judgment on the reformation claim, and the mortgagee dropped the claim.  In 2017, the mortgagee filed a foreclosure action and sold the home.  The wife then brought a motion alleging that the mortgagee failed to follow the notice requirements in the mortgage and misstated the amount of the debt owed.  The trial court denied these motion, and the wife appealed.

On appeal, the Court affirmed.  First, it found that the doctrine of judicial estoppel barred the wife from seeking protection under the mortgage’s notice requirements, because she previously had claimed to not be a party to the mortgage and the trial court had denied summary judgment on the lender’s reformation claim as a result.  “[T]he Housing Court judge did not abuse her discretion in deciding that judicial estoppel precluded the wife from claiming rights under the mortgage that she had previously disavowed.”  Second, the Court found that the mortgagee did not misstate the amount of the debt.  The Court held that the equitable subrogation judgment did not affect the amount owed on the debt, and just affected the lender’s priority position.  “[T]o avoid a windfall to the wife, the subrogation judgment placed 21st Mortgage in a priority position to receive from any foreclosure sale the $148,133.84 paid on the wife’s behalf. . . . nothing in the equitable subrogation judgment affected the amount of the underlying debt or how it was serviced. . . . [and it] simply established the priority position of 21st Mortgage’s security interest in the property.”

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

New Jersey Expands the Use of Antigen Testing for Surgery Centers and Long Term Care Facilities, CMS Adds New Telehealth Codes, and Additional HHS Guidance on the Provider Relief Fund

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For more information about this blog post, please contact Khaled J. Klele, Ryan M. Magee, Labinot Alexander Berlajolli, or Daniel J. Parziale.

Revised New Jersey Executive Directive No. 20-016 Modifies Testing Protocols for Ambulatory Surgery Centers to Allow Antigen Tests

The New Jersey Department of Health has modified its previous guidance on the resumption of elective surgeries and invasive procedures in Ambulatory Surgery Centers (“ASCs”) to allow antigen tests to satisfy the requirement that patients undergo COVID‑19 testing and receive results within six days before their scheduled surgery. As explained in our prior blog post from August 2020, the type of permissible COVID-19 testing that was previously allowed was limited to molecular tests, such as the RT-PCR test. Now, antigen tests can be used. Most point of care tests, (i.e. rapid tests) are antigen tests. Antibody tests, which determine whether or not antibodies to COVID-19 are present, still may not be used. The remaining provisions under the guidance are unchanged.

This is consistent with the New Jersey Department of Health’s recent executive directive allowing antigen testing as a permissible alternative to molecular diagnostic tests in helping long term care facilities to fulfill their weekly testing requirements.

CMS Expands Medicare Coverage for Telehealth Services and COVID-19 Diagnostic Testing

Centers for Medicare & Medicaid Services (“CMS”) recently added 11 new services to the list of telehealth services reimbursable by Medicare during the COVID-19 public health emergency (“PHE”). Effective immediately, Medicare will begin paying eligible practitioners who furnish these newly-added telehealth services for the duration of the PHE.

CMS also announced new actions to pay for expedited COVID-19 test results. Beginning January 1, 2021, Medicare will lower the base payment amount to $75 for COVID-19 diagnostic tests run on high‑throughput technology in accordance with CMS’s assessment of the resources needed to perform those tests. Also starting January 1, 2021, Medicare will make an additional $25 payment to laboratories for a COVID-19 diagnostic test run on high‑throughput technology if the laboratory: (a) completes the test in two calendar days or less; and (b) completes the majority of their COVID-19 diagnostic tests that use high throughput technology in two calendar days or less for all of their patients (not just their Medicare patients) in the previous month.

Hospitals Cannot Use CARES Act Grants to Repay Medicare Loans

The Department of Health and Human Services has updated an FAQ document to clarify that hospitals cannot use COVID-19 provider relief funds distributed under the Coronavirus Aid, Relief and Economic Security Act (“CARES Act”) to repay payments made under the CMS Accelerated and Advance Payment Program. The updated FAQ was issued in response to CMS’s October 8, 2020 news release, which incorrectly stated that hospitals could use CARES Act funds to repay Medicare loans.

New York Court Holds Principal of Title Agent Could Not Claim Fraud Against Title Insurer for Guaranty

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The Supreme Court of New York, Kings County, recently dismissed a fraud claim brought by the principal of a title agent against a title insurance company, finding that any claim that the insurer misrepresented the terms of the guaranty—and there was no evidence supporting this claim—was irrelevant because the principal reviewed the guaranty before signing.  See Chicago Title Ins. Co. v. Brookwood Title Agency LLC, 2020 WL 5369206 (N.Y. Sup. Ct. Sep. 04, 2020).  In 2006, the defendant title agent issued a lender’s title insurance policy to a lender on behalf of the plaintiff title insurance company.  The agent issued the policy pursuant to a policy-issuing contract between the insurer and the agent, and for which the defendant principal signed a guaranty.  In 2011, the Court voided the mortgage because of a fraud in the prior deed.  After satisfying its obligation to the insured, plaintiff brought this action against the title agent and its principal.  The principal asserted a counterclaim of fraud, claiming that plaintiff misrepresented that the guaranty would be limited any escrow shortages.  Plaintiff then moved to dismiss the counterclaim.

The Court granted the motion and dismissed the counterclaim.  The Court found that there was no evidence of any misrepresentation by the title insurance company, but “notwithstanding any representations that may have been made . . . the guaranty was presumably read by Zilberberg and signed by him. Thus, Zilberberg was afforded an opportunity to review the terms of the guaranty and the extent of its reach. Consequently, Zilberberg cannot establish justifiable reliance when he was giving the ability to read the guaranty.”  The Court further found that the principal only brought the counterclaim after the Court previously ruled that he was liable for plaintiff’s indemnification claim:  “The defendant’s true basis for the counterclaim is the fact this court and the Appellate Division interpreted the guaranty as encompassing the indemnification claims sought here. Whether the defendant believed the guaranty should have been read so broadly and whether the defendant would not have signed such guaranty if it had known of this broad interpretation does not constitute fraud [by the title insurer].”

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

Does a Remediation Settlement with a State Protect Against Subsequent CERCLA Claims? Third Circuit Weighs In

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If a potentially responsible party settles its environmental liability with the State of New Jersey, or another state, might it still face liability in the future for costs incurred by the federal government?  According to the United States Court of Appeals for the Third Circuit, the answer may be “yes.”  The Third Circuit’s ruling is particularly relevant to Superfund sites where state and federal governments often coordinate joint cleanups and each incur significant expenses.  In light of this decision, potentially responsible parties should not assume that they can avoid liability for costs incurred by the federal government by settling with a state entity.

In New Jersey Department of Environmental Protection v. American Thermoplastics Corp. et al., the environmental costs at issue arose from the Combe Fill Landfill Superfund Site in Morris County, New Jersey, which was owned and operated by numerous entities for decades.  In 1983, the United States Department of Environmental Protection (“USEPA”) designated the property a Superfund site and entered into a cooperative agreement with the New Jersey Department of Environmental Protection (“NJDEP”) to jointly clean up the property.  The many potentially responsible parties included Carter Day Industries Inc. (“Carter Day”), which filed for bankruptcy in 1991.  As part of the bankruptcy proceedings, Carter Day entered into a settlement agreement with NJDEP to address its liability to the State of New Jersey for remediation costs.  The USEPA was not a party to that agreement.

In 1998, after incurring costs to investigate and remediate the site, USEPA and NJDEP each sued multiple responsible parties for reimbursement.  Among the parties sued was Compaction Systems Corporation (“Compaction”), which previously was retained by one of Carter Day’s subsidiaries to conduct operations at the site.  Following a settlement agreement with both NJDEP and USEPA in which Compaction agreed to pay certain remediation costs, it filed a third-party complaint against Carter Day for contribution under Section 113(f) of the Comprehensive Environmental Response, Compensation, and Liability Act (“CERCLA”).  (Section 113(f) of CERCLA permits a private party that pays remediation costs, including remediation costs incurred by the federal government, to seek reimbursement from other private parties.)  Compaction’s complaint sought reimbursement from Carter Day for remediation costs Compaction paid to the USEPA. 

The District Court dismissed Compaction’s complaint and ruled in favor of Carter Day, reasoning that Carter Day’s 1991 settlement agreement with the NJDEP protected it from contribution claims pursuant to CERCLA arising from the same site.  According to the District Court, CERCLA Section 113(f) protected a party from future contribution claims if that party already resolved its liability for a contaminated site with either the state or federal government.

Compaction appealed the District Court’s ruling to the United States Court of Appeals for the Third Circuit, which reversed the District Court’s holding and ruled that the prior settlement of liability to a state does not bar CERCLA contribution claims for costs the federal government incurred.

The primary question for the Circuit Court was whether the “matters addressed” in the state settlement agreement included Carter Day’s liability as to CERCLA contribution claims.  The Third Circuit examined the language of CERCLA Section 113(f)(2), which states that “[a] person who has resolved its liability to the United States or a State in an administrative or judicially approved settlement shall not be liable for claims for contribution regarding matters addressed in the settlement.”  CERCLA does not define the scope of “matter addressed” or explain whether the matters addressed in a state remediation settlement agreement would include liability for federal remediation expenses.

Ultimately, the Third Circuit read the “matters addressed” provision of CERCLA Section 113(f)(2) narrowly and looked to the language of the settlement agreement itself to determine that the parties did not intend for the agreement to include liability for costs incurred by the USEPA.  According to the language of the settlement agreement, Carter Day was discharged from “all liabilities to NJDEP,” and the agreement made no mention of Carter Day’s liability for costs incurred by the USEPA.  In addition, the Circuit Court looked to the reasonable expectations of the parties and found that it would be unreasonable for either Carter Day or NJDEP to have expected at the time of settlement that the agreement would apply to bar future CERCLA contribution claims for costs incurred by the USEPA.

Carter Day argued that a narrow reading of the scope of CERCLA section 113(f)(2) would deter responsible parties from entering into early remediation settlement agreements, which would be contrary to CERCLA’s goal of prompt cleanups.  In response, the Circuit Court acknowledged that its narrow reading of “matters addressed” could affect future responsible parties’ incentives to settle, but it determined that concern was outweighed by the need for equitable distribution of cleanup costs.  The Third Circuit explained that its interpretation of section 113(f)(2) would encourage responsible parties to settle with both of the relevant state and federal governments.  The Court cautioned that reading this provision broadly would encourage responsible parties to rush to settle their liability with only the relevant state in order to avoid contributing to the typically more extensive costs incurred by the USEPA.

The Circuit Court ended its opinion by acknowledging that its decision aligned with CERCLA section 104, which makes clear that remedial costs incurred by the USEPA and individual states are distinct, and thus, are separate matters to be addressed.
In light of the Circuit Court’s ruling, individuals and companies who entered into remediation settlement agreements with either a state or the federal government for sites involving cleanup efforts by both USEPA and state environmental agencies should be aware that they may face exposure for costs incurred by the non-settling governmental entity.  Going forward, potentially responsible parties are cautioned to carefully consider the scope of the specific matters addressed in remediation settlement agreements.

For more information, please contact the author Jason Boyle at jboyle@riker.com or any attorney in our Environmental Practice Group.

New Jersey Federal Court Dismisses Defamation Claim Against Title Insurer for Letter to Prior Property Owner Regarding Unpaid Mortgage

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The United States District Court for the District of New Jersey recently dismissed a prior property owner’s defamation suit brought against a title insurance company after the company sent a letter regarding a mortgage the seller failed to disclose or discharge.  See Ezeiruaku v. Fid. Nat'l Title Ins. Co., 2020 WL 5587438 (D.N.J. Sept. 18, 2020).  In 2012, plaintiff sold a property to a third party via a bargain and sale deed with a covenant against grantor’s acts stating that there were no liens or encumbrances on the property.  In 2019, the defendant title insurance company sent plaintiff a letter seeking indemnification for a mortgage plaintiff failed to disclose, and plaintiff brought this action alleging defamation.  According to plaintiff, “the letter accuses him of having committed a crime by fraudulently and knowingly conveying an encumbered property while stating that it was free of encumbrances” and “this letter was made available not only to other employees of [defendant] who had access to the claim file for the property’s title insurance, but also to the purchasers of the property and a third-party bank.”  Defendant moved to dismiss.

The Court granted the motion and dismissed the complaint with prejudice.  First, it found that plaintiff admitted that he encumbered the property with a mortgage in 2005 and continues to pay it – “not only acknowledging the existence of the mortgage, but also making clear that Plaintiff knows that the mortgage was still outstanding almost 8 years after the 2012 conveyance.”  Thus, the allegation in the letter was true, and this alone was grounds to dismiss the defamation claim.  Second, the Court found that the letter was not defamatory.  The letter did not accuse plaintiff of committing any crime or fraudulent act, and instead simply stated that plaintiff conveyed the property with the mortgage and that plaintiff was responsible for the mortgage payments.  Finally, the Court found that plaintiff did not sufficiently allege that the letter was published, and accusations that the letter was “available” to defendant’s employees, the purchaser, or the bank are insufficient.  Accordingly, the Court dismissed the claims with prejudice, finding that “[a]s the Court finds that Defendants’ statements were true, Plaintiff's claims are not capable of being cured and further amendments would be futile.”

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

HHS Is Providing an Additional $20 Billion to the Provider Relief Fund, CMS Relaxes Repayment Terms Under the Accelerated and Advance Payment Program, and New Jersey Poised to Allow Telemedicine for Medical Cannabis

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For more information about this blog post, please contact Khaled J. Klele, Ryan M. Magee, Labinot Alexander Berlajolli, or Daniel J. Parziale.

New Jersey Is Poised to Allow the Use of Telemedicine for Medical Cannabis

New Jersey is poised to approve S619, which would permit providers to authorize patients for medical cannabis through telemedicine and telehealth. The bill has already passed the Assembly and is before the Senate for a second reading. Under the bill, for the first 270 days following enactment, a healthcare practitioner may authorize the medical use of cannabis via telemedicine and telehealth for a patient who is a resident of a long-term care facility, has a developmental disability, is terminally ill, is receiving hospice care from a licensed hospice care provider, or is housebound as certified by the patient’s physician. After that first 270-day period, a healthcare practitioner may then authorize the medical use of cannabis via telemedicine and telehealth to any qualified patient, provided the patient has had at least one previous in-office consultation with the healthcare practitioner prior to the patient’s authorization for medical use of cannabis. Following an initial authorization, a patient must have an annual in‑office consultation with the practitioner to receive continued authorization for the medical use of cannabis.

HHS Announces Additional $20B in New Phase 3 COVID‑19 Provider Relief Funding

The Department of Health and Human Services (“HHS”), through the Health Resources and Services Administration (“HRSA”), has announced an additional $20 billion in funding for providers to help offset the financial strain resulting from the COVID‑19 pandemic. Providers who already received a Provider Relief Fund payment and previously ineligible providers may apply for the additional funding. Payments will first be distributed to providers who have not yet received payments under the Fund that amounts to 2 percent of annual patient care revenue. The HRSA will then calculate an equitable add-on payment from the remaining balance of the $20 billion budget that considers the following: (1) a provider’s change in operating revenues from patient care; (2) a provider’s change in operating expenses from patient care, including expenses incurred related to coronavirus; and (3) payments already received through prior Provider Relief Fund distributions. The application period is from October 5 through November 6, 2020. For more information on eligibility and the application process, please visit the Provider Relief Fund webpage.

CMS Issues New Guidance on Medicare Accelerated and Advance Payment Program Loan Repayment

As previously noted in our October 9, 2020 blog post, on September 30, 2020, as part of a larger government short-term spending bill, President Trump signed into law a program which relaxes the repayment terms for Medicare loans that hospitals received earlier this year through the Medicare Accelerated and Advance Payment Program (the “Program”). The law directed the Centers for Medicare & Medicaid Services (“CMS”) to wait up to one year after the loan was issued to begin withholding Medicare payments to recoup funds. On October 8, 2020 CMS issued new guidance related to the new law and the Program, which provides, in relevant part, that: i) CMS will now begin recouping payments for loans made under the Program one year from the issuance date of each provider or supplier's accelerated or advance payment; ii) hospitals will have up to 29 months, increased from 12 months, to repay the loan; iii) the interest on loans made under the Program will be reduced to 4% from 10%; iv) the repayment rate is lowered, beginning at 25% for the first 11 months and then raising to 50% for the next six months; and v) CMS will allow providers who continue to experience financial hardships to require an extended repayment schedule.

New Jersey Court Holds Surplus Proceeds From Foreclosure Sale Should Be Used to Pay Judgment Lien Against One Spouse

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A New Jersey trial court recently held that the surplus proceeds from a foreclosure sale should be used to pay the judgment lien recorded against only one of the spouses when the other spouse failed to contest the judgment creditor’s pre-sale motion, and only objected after the sale.  See Wilmington Savings Fund Society, FSB, as Trustee of Stanwich Mortgage Loan Trust v. Schneeweiss, et al., F-13586-17, (N.J. Ch. Div., Aug. 25, 2020).  Plaintiff brought this action to foreclose on a mortgage after the defendant borrowers defaulted.  The borrowers were a married couple, Ms. Schneeweiss and Mr. Reitzenstein, who owned the house as tenants by the entirety.  Among the defendants named in the complaint was defendant Sponzilli, who had a judgment against Mr. Reitzenstein and his company.  When plaintiff moved for final judgment, Sponzilli submitted a certification seeking surplus funds in the amount of $35,985.48.  Although the certification incorrectly said Sponzilli had judgments against both Ms. Schneeweiss and Mr. Reitzenstein, no one opposed the motion, and the Court granted it.  After the Sheriff’s sale, there were surplus fees in the amount of $60,506.06, and Ms. Schneeweiss filed a motion for half of the surplus funds.  Ms. Schneeweiss argued that the Sponzilli judgment was against Mr. Reitzenstein only and that Sponzilli should only collect out of his share of the surplus proceeds, allowing Ms. Schneeweiss to collect her full $30,253.03 share of the surplus.  Sponzilli objected, arguing that the Court already had found that the judgment was a second priority lien on the property.  Mr. Reitzenstein also objected, arguing that surplus proceeds are entireties property and that Ms. Schneeweiss was not entitled to half of them without the written consent of both spouses.

The Court first found that Sponzilli originally filed a notice of unpaid balance and right to file lien in 2010, which indicated that his judgment arose out of improvements to the property “for the benefit of both Ms. Schneeweiss and Mr. Reitzenstein.”  Thus, even if the judgment was only against Mr. Reitzenstein and his company, the Court found that it should be equitably enforced against Ms. Schneeweiss because she benefited from the creditor’s services.  Additionally, the Court found that Ms. Schneeweiss’s motion was effectively a motion for reconsideration of the Court’s prior determination that the lien was against both homeowners’ interests in the property.  The Court found that there was no reason Ms. Schneeweiss could not have opposed the motion when it was filed in 2018, and that the creditor’s lien amount should be taken from the gross surplus funds.  The Court then addressed Mr. Reitzenstein’s claim that Ms. Schneeweiss was not entitled to half the proceeds without written consent of both parties because the surplus monies are entireties property under N.J.S.A. 46:17-2.  The Court found that “the funds at issue are not the sales proceeds of entireties property . . . , but surplus monies from a foreclosure sale of property owned by the entirety. Moreover, the clear-cut provisions of N.J.S.A. 46:17-2 have no application to surplus funds. Unlike sales proceeds of a real estate transaction, there is no vesting of title in the former property owners by written instrument or otherwise. Instead, surplus funds are deposited with the court to be distributed on application of defendants and junior lienholder.”  Accordingly, the Court found that Ms. Schneeweiss was entitled to half the remaining proceeds after Sponzilli was paid.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

Providers Get Extended Time to Repay Advanced Medicare Funds, Insurers Roll Back Some Telemedicine Coverage, and other Federal Rules and Programs

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For more information about this blog post, please contact Khaled J. Klele, Ryan M. Magee, Labinot Alexander Berlajolli, or Daniel J. Parziale.

Time to Repay Medicare Loans Extended

On September 30, 2020, as part of a larger government short-term spending bill, President Trump signed into law a program which relaxes the repayment terms for Medicare loans that hospitals received earlier this year under the Accelerated and Advanced Payment Program. Whereas the loans were originally due 120 days after they were issued, the new law directs the Centers for Medicare & Medicaid Services (“CMS”)  to wait up to one year after the loan was issued to begin withholding Medicare payments to recoup funds.

Insurers Roll Back Telehealth Coverage

On October 1, 2020, Anthem and UnitedHealth Group will implement changes made to virtual health coverage on select plans, scaling back telehealth coverage originally launched in light of COVID-19. Specifically, UnitedHealth updated its cost-sharing for its individual plans and fully insured employer plans regarding non-COVID-19 virtual visits, including those with Medicare Advantage.  Patients enrolled in Anthem's fully insured employer and individual plans will also have cost-sharing for non-COVID-19 virtual visits. Just because these insurers rolled back some coverage does not necessarily mean these changes are effective in New Jersey. To make sure that the rollbacks apply to your patients, please check the various orders in New Jersey that were issued as a result of the pandemic.

Proposed Rule on 340B Program

85 FR 60748 – The Department of Health and Human Services (“HHS”) issued a proposed rule implementing Executive Order 13937, which requires that entities funded under section 330(e) of the Public Health Service Act that also participate in the 340B Drug Pricing Program, must establish practices to provide access to insulin and injectable epinephrine to low-income patients at the price the health center purchased the drugs through the 340B Drug Pricing Program. To qualify under the proposed rule, low-income patients must have (a) a high cost sharing requirement for either insulin or injectable epinephrine, (b) a high unmet deductible, or (c) no health insurance at all. Comments are due October 28, 2020.

HHS Announces New Program to Monitor Health IT

HHS recently announced a new initiative to monitor and measure health information technology (“health IT”) use among office-based physicians across the country. The HHS’s Office of National Coordinated Health Information Technology (“ONC”) awarded a cooperative agreement to the American Board of Family Medicine (“ABFM”) to monitor and measure the use and potential burdens experienced by office-based physicians use of health IT. Under the three-year cooperative agreement, ABFM will: (a) develop key measures related to health IT use and the interoperability of health information; (b) collect data from a nationally representative sample of office-based physicians to support national level progress; and (c) collaborate with the ONC on the analysis and interpretation of the survey results. The ONC expects to utilize the data it collects to impact future federal health IT policies.

Quick-Start Guidance for Clinical Laboratory Improvement Amendments ("CLIA") Certification

CMS recently published guidance for laboratories seeking to apply for CLIA certification. CLIA regulates the quality and safety of U.S. clinical laboratories to ensure the accuracy, reliability, and timeliness of patient results, regardless of where the test was performed. As part of its regulatory oversight, CLIA imposes requirements that all laboratories must meet to obtain certification.  Pursuant to CLIA’s guidance, applicants must: (1) complete Form CMS-116; (2) submit Form CMS-116 to the appropriate state agency; (3) receive a fee coupon; (4) pay applicable fees using the U.S. Treasury online platform; (5) receive a Certificate of Registration; and (6) maintain a valid and current CLIA Certificate in accordance with CLIA’s survey schedule.

Eleventh Circuit Affirms Dismissal of Time-Barred FDCPA Complaint, Despite State Renewal Statute That Allows Plaintiffs to Refile Within Six Months of Voluntary Dismissal

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The United States Court of Appeals for the Eleventh Circuit recently affirmed the dismissal of a FDCPA claim as untimely, holding that a Georgia statute that allows a party to voluntarily dismiss a timely action and then refile it within six months could not overcome the FDCPA’s one-year limitations period.  See Edwards v. Solomon & Solomon, P.C., 2020 WL 5816754 (11th Cir. Sept. 30, 2020).  On April 26, 2019, plaintiff filed an action alleging FDCPA violations against defendant in Georgia state court.  Defendant removed the action to federal court, and plaintiff voluntarily dismissed the action without prejudice on May 20, 2019.  On November 17, 2019, plaintiff refiled the complaint in Georgia state court.  Defendant again removed it to federal court and moved to dismiss the action based on the fact that the alleged violations occurred between May and July 2018, and the November 2019 complaint was outside the FDCPA’s one-year limitations period.  See 15 U.S.C. 1692k(d).  Plaintiff argued that the action was timely under Ga. Code Ann. § 9-2-61, which states that “[w]hen any case has been commenced in either a state or federal court within the applicable statute of limitations and the plaintiff discontinues or dismisses the same, it may be recommenced in a court of this state or in a federal court either within the original applicable period of limitations or within six months after the discontinuance or dismissal.”  The District Court nonetheless granted the motion to dismiss.

On appeal, the 11th Circuit affirmed.  The Court agreed that, if the Georgia renewal statute applied here, the re-filed action would be timely.  However, the Court found that Congress had set an express statute of limitations for FDCPA claims and a state statute cannot extend it.  “Congress specifically provided for a one-year limitations period for FDCPA claims. And incorporating Georgia’s renewal statute into the FDCPA would undermine the uniform application of this federal limitation.”  Accordingly, the Court affirmed the dismissal.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

Washington Appellate Court Affirms Dismissal of Homeowners’ Adverse Possession Claim Regarding Railroad Corridor

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The Court of Appeals of Washington recently held that homeowners who owned property bordering a former railroad corridor now owned by the county could not adversely possess some of the corridor.  See Neighbors v. King Cty., No. 2020 WL 5629699 (Wash. Ct. App. Sept. 21, 2020).  The action involves land previously used for railroad tracks, and which the railroad company obtained via both adverse possession and easement.  In 1998, the property was conveyed to King County via quitclaim deed, and the County then obtained a survey showing the property—which was converted into a trail—was 100 feet wide in the areas at issue in this litigation.  Plaintiffs then brought this action, claiming that the easement was only the width of the railroad tracks, ties, and ballasts (about 12 feet) and, even if the easement was 100 feet wide, plaintiffs took some of that property back via adverse possession.  The trial court granted the County’s motion for summary judgment.

The Court affirmed.  First, the Court found that government surveys constitute presumptive evidence of the facts therein, and referenced maps and surveys from 1917, 1930, 1940, and 1998, all of which showed a 100-foot wide corridor.  The Court rejected plaintiffs’ claim that a government survey should not be entitled to any presumption if the government is using that survey in an action against a private party:  “government officials are presumed to have performed their duties legally and professionally.”  Second, the Court found that the adverse possession claim was properly dismissed because “the County is immune from adverse possession claims for its public lands under RCW 7.28.090.”  Third, the Court found that even if plaintiffs had alleged that their adverse possession claims had ripened before the County purchased the property in 1998, they would be preempted by the Interstate Commerce Commission Termination Act, which preempts adverse possession claims against railroads.  49 U.S.C. § 10501(b).  The Court finally found that, even if the adverse possession claims were not barred, plaintiffs did not have an adverse possession claim.  Even if plaintiffs were able to show that they had adversely possessed a portion of the property while it was owned by the railroad, the County began maintaining the corridor in 1998 and would have adversely possessed it back.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com or Anthony Lombardo at alombardo@riker.com.

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