New Jersey Appellate Court Finds Later-Executed but First-Recorded Mortgage Not Entitled to Priority When Lender Could Not Produce Origination File

The New Jersey Appellate Division recently found that a subsequent lender’s inability to produce its origination file resulted in a negative inference that the lender had knowledge of a previously-executed mortgage, despite the fact that the subsequent lender’s mortgage was recorded first.  See Wilmington Savings Fund Society, FSB, d/b/a Christiana Trust, not in its individual capacity, but solely as Trustee for BCAT 2015-14BTT, v. 61 Holdings, LLC, 2019 WL 3063740 (N.J. Super. Ct. App. Div. July 12, 2019).

D.C. Circuit Holds Discovery Rule May Have Applied to Toll Limitations Period for Title Insurer’s Claim Against Surveyors

The United States Court of Appeals for the D.C. Circuit recently reversed a lower court and held that a title insurance company’s negligence claims against property surveyors may have been tolled until the insurer or its insured discovered the encroachment at issue.  See Commonwealth Land Title Ins. Co. v. KCI Techs., Inc., 922 F.3d 459 (D.C. Cir. 2019). 

New York Federal Court Grants Debtor Summary Judgment in FDCPA Action When Debt Collector Failed to Notify Debtor That Interest Would Accrue

The United States District Court for the Eastern District of New York recently found that a debt collector violated the Fair Debt Collection Practices Act (“FDCPA”) by sending a letter that offered settlement amounts if plaintiff paid by a certain date, but did not state that the debt would continue accruing interest and/or fees if plaintiff did not pay those amounts by the specified dates. 

New York Court Holds Bank Selling a Property Did Not Violate Insurance Law by Requiring Property Purchaser to Obtain Title Insurance from a Specific Title Insurer

New York’s Second Department Appellate Term recently held that a bank did not violate Insurance Law § 2502(a)(2) when it required a property purchaser to obtain title insurance from a particular insurer because the bank was acting as a seller, not a lender.  See Wenig Saltiel, LLP v. Specialized Loan Servicing, LLC, 63 Misc. 3d 152(A) (N.Y. App. Term. 2019).

New Jersey Appellate Court Holds No Presumptive Rule that Materials Prepared for a Coverage Investigation Are Not in “Anticipation of Litigation”

The New Jersey Appellate Division recently reversed a lower court and held that there is no presumptive rule that materials prepared or collected for an insurance coverage investigation are not privileged work-product prepared in “anticipation of litigation.”  See Paladino v. Auletto Enter., Inc., 2019 WL 2375475 (N.J. Super. Ct. App. Div. June 6, 2019).  This is a significant decision for insurance underwriters as well as claims handlers.

California Federal Court Dismisses TILA Rescission Claim Arising Out of Loan Modification

The United States District Court for the Southern District of California recently held that the Truth in Lending Act’s (“TILA”) disclosure and rescission provisions do not apply to a loan modification in which there is no extension of new credit.  See Lucore v. Wells Fargo Bank, N.A., 2019 WL 2373499 (S.D. Cal. June 5, 2019).  In the case, plaintiff received a loan in 2006 that was secured by a deed of trust against his home.

New York Court Dismisses Action Against Title Insurer Under Exclusion 3(a)

The New York Supreme Court, Kings County recently found that a restrictive covenant could constitute an encumbrance under a title insurance policy but nonetheless dismissed an action brought by an insured because the insured was aware of the covenant before purchasing.  See 50 Clarkson Partners LLC v. Old Republic Nat’l Title Ins. Co., 516966-2018 (N.Y. Sup. Ct. May 30, 2019).  Plaintiff purchased the subject property in 2017, and defendant issued a title insurance policy in connection with the purchase. 

Second Circuit Holds FDCPA Claim Accrued on Date Plaintiff’s Bank Account Was Improperly Frozen, Not on Date Plaintiff Had Notice of the Violation

The United States Court of Appeals for the Second Circuit recently held that a claim brought under the Fair Debt Collection Practices Act (“FDCPA”) accrued on the date the debt collector froze the wrong person’s bank account, not the date the person had “notice” of the violation.  See Benzemann v. Houslanger & Assocs., PLLC, 2019 WL 2079006 (2d Cir. May 13, 2019).  In 2008, the defendant debt collector sent a restraining notice to a bank regarding a judgment against an individual named Andrew Benzemann (the “Debtor”). 

Louisiana Federal Court Finds Lack of Access Did Not Render Property Unmarketable, But That Insured Still May Be Entitled to Actual Loss from Lack of Access

The United States District Court for the Western District of Louisiana recently held that the lack of access of an insured property did not render title to the property unmarketable, but found that the title insurance company must either cure the access issue or pay the diminution of value caused by the lack of access.  See BJD Properties, LLC v. Stewart Title Guar. Co., 2019 WL 2061972 (W.D. La. Mar. 29, 2019).