California Appellate Court Affirms Lack of Constructive Knowledge Required for Protection Under Quiet Title Act

The Court of Appeal of California, Second Appellate District, Division Two, recently upheld a trial court’s finding that a later purchaser or encumbrancer for value seeking protection under the Quiet Title Act from the invalidation of an earlier quiet title judgment may only do so if it lacked constructive knowledge of some “defects or irregularities in [the earlier quiet title] judgment or proceedings” at the time it obtained its interest in the property. Tsasu LLC v. U.S. Bank Tr., N.A., 2021 WL 1220171 (Cal. Ct. App. Apr. 1, 2021).

Georgia Federal Court Grants Title Insurer’s Motion to Dismiss Breach of Contract and Conversion Claims

The United States District Court for the Northern District of Georgia recently granted a title insurance company’s motion to dismiss claims for breach of contract and conversion, finding that: (1) the closing protection letter at issue was not in effect at the time of the closing due to a subsequently-issued letter; and (2) the lender’s conversion claim was precluded under Georgia law.  See First IC Bank v. N. Am. Title Ins. Co., 2021 WL 732354 (N.D. Ga. Jan. 21, 2021).

New York Federal Court Grants Bank’s Motion to Compel Arbitration in PPP Class Action

On April 8, 2021, the United States District Court for the Southern District of New York granted a national bank’s motion to compel arbitration in a Paycheck Protection Program ("PPP") class action, finding that the issue of arbitrability must be decided by an arbitrator pursuant to the terms of the bank’s Deposit Account Agreement and Online Service Agreement. See KPA Promotion & Awards, Inc. et al v. JPMorgan Chase & Co. et al, 2021 WL 1317163 (S.D.N.Y. Apr. 8, 2021).

Third Circuit Affirms Itemization of Interest and Fees on “Static” Debt Collection Letter Does Not Violate FDCPA

The United States Court of Appeals for the Third Circuit recently affirmed a District Court’s finding that a debt collection letter that itemizes a “static” debt as including “$0.00” in interest and fees, despite the fact that the debt cannot accrue interest and fees, does not violate the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq. (“FDCPA”).  See Hopkins v. Collecto, Inc., 2021 WL 1345203 (3d Cir. Apr. 12, 2021).

New York Court Denies Summary Judgment in Action to Enforce a Restrictive Covenant

The New York Supreme Court, Kings County, recently denied a property owner’s motion for summary judgment, holding that there were issues of fact as to whether a restrictive covenant applied to the property at issue. See Fenimore Civic Block Ass’n Inc. v. 1919 Bedford Realty LLC, (N.Y. Sup. Ct. Mar 31, 2021). In the case, Defendant purchased a corner lot (the “Property”) with the intent of constructing three four-story apartment buildings thereon.

New York Court Expands Borrower’s Entitlement to Legal Fees After Foreclosure Action Successfully Defended

The New York Supreme Court, New York County, recently held that a borrower on a mortgage is entitled to recover reasonable legal fees pursuant to Real Property Law § 282(a) so long as a successful defense to foreclosure is asserted, even where it is undisputed that the borrower failed to make their monthly mortgage payments. NRZ Pass-Through Trust IV v. Rouge, 2021 WL 465982 (N.Y. Sup. Ct. Feb. 9, 2021).

New Jersey Federal Court Dismisses FDCPA Claim Based on Visibility of Debt Collector’s Name

The United States District Court for the District of New Jersey recently found that a debt collector was permitted to use its name on the envelope of a debt collection letter, despite the possibility that an internet search would disclose that the debt collector was in the debt collection business, but may have violated Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) by attempting to collect a debt without a license from the New Jersey Department of Banking and Insurance. See Valentine v. Unifund CCR, Inc., 2021 WL 912854 (D.N.J. Mar. 10, 2021).

New York Federal Court Holds “No Obligation to Renew” Language in Collection Letter Does Not Violate Fair Debt Collection Practices Act

The United States District Court for the Southern District of New York recently held that a debt collector does not violate the Fair Debt Collection Practices Act, 15 U.S.C. § 1692, et seq. (“FDCPA”) when it sends a collection letter that, among other things, states that the collector “is not obligated to renew this offer.”  See Rajkumar v. FBCS, Inc.,  2021 WL 949867 (S.D.N.Y. Mar. 12, 2021).  

Fifth Circuit Affirms Summary Judgment in Favor of Title Insurer on Mechanic’s Lien Issue

The United States Court of Appeals for the Fifth Circuit recently affirmed a District Court’s decision granting summary judgment to a title insurance company, holding that the insured was not entitled to coverage for loss caused by a mechanic’s lien where the insured agreed to remove Covered Risk 11(a) in the title insurance policy. See Hall CA-NV, L.L.C. v. Old Republic Nat'l Title Ins. Co., 2021 WL 912726 (5th Cir. Mar. 10, 2021).

Third Circuit Affirms NJ Doctrine of Necessaries Not Preempted by Equal Credit Opportunity Act

In a recently published opinion, the United States Court of Appeals for the Third Circuit affirmed a finding that the Equal Credit Opportunity Act (“ECOA”), 15 U.S.C. § 1691 et seq., does not preempt New Jersey’s common law doctrine of necessaries that allows a creditor to seek collection of necessary expenses from the debtor’s spouse. See Klotz v. Celentano, Stadtmauer & Walentowicz LLC, 2021 WL 969479 (3d Cir. Mar. 16, 2021).