Tennessee Court Finds Allegation of Fraud Was Pled With Sufficient Particularity Pursuant to Tenn. R. Civ. P. 12.03
The court in deciding Zhong v. Quality Loan Serv. Corp., 2013 U.S. Dist. LEXIS 145916 (W.D. Wash. 2013) reversed the lower court’s ruling dismissing the mortgagor’s intentional misrepresentation claim on the pleadings pursuant to Tenn. R. Civ. P. 12.03.
Plaintiff defaulted on her mortgage and defendants advised plaintiff of their plan to foreclose. Plaintiff subsequently sought an injunction and a declaratory judgment. The trial court entered a temporary restraining order preventing foreclosure, which it dissolved after granting defendants’ motion for judgment on the pleadings. Plaintiff appeals the trial court’s grant of defendants’ motion for judgment on the pleadings.
This court ruled that the lower court erred in dismissing the mortgagor’s intentional misrepresentation claim on the pleadings pursuant to Tenn. R. Civ. P. 12.03 because her allegation of fraud stemming from an intentional misrepresentation were pleaded with sufficient particularity.
Moreover, because the amended complaint alleged particular intentional misrepresentations of a material fact, that signatories possessed authority to execute the deed of trust, as well as the mortgagor’s detrimental reliance upon such, the claim satisfied the heightened requirements of Tenn. R. Civ. P. 9.02. Further, this court found that the mortgagor’s claim was not correctly dismissed based upon the statute of limitations, Tenn. Code Ann. § 28-3-105, because it was at least plausible that the mortgagor was unable to discover the alleged intentional misrepresentation until the mortgagees commenced foreclosure against her.
January 31, 2014 | Permalink | No Comments
Washington Court Rejects Split-the-Note Theory
The court in Zhong v. Quality Loan Serv. Corp., 2013 U.S. Dist. LEXIS 145916 (W.D. Wash. 2013) granted defendant’s motion to dismiss.
In her complaint, plaintiff alleged ten causes of action in connection with the initiation of the non-judicial foreclosure of her property.
Specifically, she brought claims for (1) wrongful foreclosure under the Washington Deed of Trust Act (“DTA”), RCW 61.24, (2) violation of Washington’s Consumer Protection Act (“CPA”), (3) negligence and breach of the duty of good faith and fair dealing, (4) a request for injunctive relief, (5) a request for declaratory judgment, (6) cloud of title, (7) quiet title, (8) predatory lending, (9) emotional distress, and (10) unjust enrichment. Defendants removed the case to federal court, and now move to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim.
The defendants filed a motion to dismiss, this motion was granted. The court found that the plaintiff’s arguments failed as the court found that the plaintiff simply rehashed well-worn arguments that courts have repeatedly rejected.
January 31, 2014 | Permalink | No Comments
January 30, 2014
Reforming NYC’s Property Tax Regime
Andrew Hayashi has posted Property Taxes and Their Limits: Evidence from New York City to SSRN. There probably could not be a more obscure and dull topic than this to the general reader (and coming from me, as the author of this blog, that is saying something!). But for those of us who think about such things, this is an incredibly important topic that is at its heart fundamentally about fairness and treating like people alike.
Hayashi argues that
The property tax is the largest source of tax revenue for local governments. It is also an almost irresistible policy instrument for municipalities, which typically do not have control over any other tax with which to influence the urban landscape and the local distribution of income and wealth. The widespread use of the property tax for planning and redistribution means that virtually no jurisdiction straightforwardly calculates the tax liability for a property as a fixed percentage of its market value. Instead, property tax rates tend to vary with the use to which a property is put or the identity of its owner. As a consequence, many of the potential benefits of the property tax, such as ease of administration, transparency, the clear reflection of the costs and benefits of local services, and the intuitive fairness of imposing taxes in proportion to property wealth, are lost. (2, footnotes omitted)
He concludes
The property tax is a hated tax, but attempts to curtail its most offensive feature, the rapid increase in taxes that can accompany paper gains in property value, have had unintended distributional consequences that are hard to justify on policy grounds. In New York City, the caps are regressive and tend to benefit new homebuyers and sellers rather than current homeowners on fixed incomes. The caps should be replaced with a property tax circuit breaker [that limits increases for lower-income homeowners] or deferral system [that delays full payment until the property is conveyed]. (27)
This issue is even bigger than these selections suggest as there are big disparities in the tax burden among different types of property. For example similarly priced single family homes have a lower tax burden than coops or condos in multifamily properties. NYU’s Furman Center (with which Hayashi is affiliated) has studied these issues and, even better, has highlighted them as part of the De Blasio transition.
Property tax fairness is not a Republican or a Democratic issue — it is a good government issue. Hopefully, the De Blasio Department of Finance will take up this obscure but important issue. Fairness demands it.
January 30, 2014 | Permalink | No Comments
January 29, 2014
Reiss on Remodeling
RealtorMag quoted me in Stay Put and Remodel — or Move? about the relative advantages of renovating and moving. It reads in part:
A New Year ushers in new resolutions, which often includes changes on the home front, but deciding what to do with it can be tough for home owners, financially and emotionally.
As the real estate market rebounds and buyers increase in number, help your contacts make a well-informed decision on the direction they should take with their home. Your insight is valuable when customers are torn between selling in order to upgrade and remodeling their current space to add value and meet their needs. Even those who don’t list and sell with you now may do so later, and even refer friends and family because of your attentive service.
Here are seven key steps to help clients arrive at the best solution:
* * *
6. Compare the appraisal and remodeling costs with other neighborhood homes for future resale.
Even though home owners should base decisions in large measure on enjoyment and not wholly on resale value, it’s smart to have an idea of how changes will affect the house compared with others nearby, says real estate attorney and Brooklyn Law School Professor David Reiss.
It’s never smart to overbuild for an area. The type of improvement can also affect the value. Remodeling changes may add to the house’s worth without changing real estate taxes, while an addition will probably cause an uptick in taxes.
January 29, 2014 | Permalink | No Comments
Georgia Court Finds Chase Had Authority to Foreclose
The court in deciding Ball v. JP Morgan Chase Bank, N.A., 2013 U.S. Dist. LEXIS 146503 (M.D. Ga. 2013) granted the defendants’ motion for judgment on the pleadings.
Plaintiffs Johnny Frank Ball Jr. and Tempie Ball filed a suit in the Superior Court of Sumter County, Georgia, seeking to set aside the non-judicial foreclosure of their home. They also sought compensatory and punitive damages against Chase and the Freddie Mac for wrongful foreclosure and fraudulent and negligent misrepresentation.
The legal theory underlying the plaintiff’s causes of action was premised on the definition of a “secured creditor” in the Georgia Code. Plaintiffs maintained that Chase lacked authority to foreclose its property because only a “secured creditor” [a creditor who holds the promissory note] may initiate a non-judicial foreclosure, and only Chase held the security deed.
The court in assessing the validity of this argument rejected it as the Georgia Supreme Court recently rejected this very theory. Therefore, the court granted the defendants’ motion for judgment on the pleadings.
January 29, 2014 | Permalink | No Comments
Nevada Court Found Plaintiff’s Claim for Quiet Title Failed as a Matter of Law Based on Statute’s Express Language
The court in dealing with Beverly v. Weaver-Farley, 2013 U.S. Dist. LEXIS 146150 (D. Nev. 2013) ultimately dismissed the plaintiff’s claims. In her complaint, plaintiff alleged that pursuant to NRS 116.3116(2)(b), Wells Fargo’s first deed of trust was extinguished by the HOA’s foreclosure and sale of the underlying property.
The court found that, the first deed of trust was recorded in October 2004; also defendant Wells Fargo was assigned all rights under the first deed of trust in April 2009, a full month before the delinquent HOA assessment was recorded on the subject property. Thus, Wells Fargo’s lien meets the statutory requirements of NRS 116.3116(2)(b) as such survived the HOA sale. Therefore, the plaintiff took title to the property subject to the first deed of trust.
As an alternative argument, plaintiff contended that Section 3116(2)(c) carved out a limited exception to Section 3116(2)(b) that is applicable in this matter.
Plaintiff further contended that this section provided that the foreclosure of a delinquent HOA assessment lien extinguished the first security interest on the property if it related to charges incurred during the nine months prior to the foreclosure.
However, once again the court found that the plaintiff misconstrued the statute. The court found that the plain language of NRS 116.3116(2)(c) simply created a limited super priority lien for nine months of HOA assessments leading up to the foreclosure of the first mortgage, but it did not eliminate the first security interest. Based on the express language of the statutes, the court found that the plaintiff’s claim for quiet title failed as a matter of law. Accordingly, the court granted Wells Fargo’s motion to dismiss.
January 29, 2014 | Permalink | No Comments
January 31, 2014
California Court Dismisses Action Brought Against MERS and Aurora Loan Services for Wrongfully Initiated Foreclosure Proceedings
By Ebube Okoli
The court in Morgan v. Aurora Loan Servs., LLC, 2013 U.S. Dist. LEXIS 145623 (C.D. Cal. 2013) granted defendants’ motion to dismiss plaintiff’s claims. The court concluded that the “allegation of other facts consistent with the challenged pleading could not possibly cure the deficiencies” of either the first or third through tenth claims, thus the court dismissed these claims with prejudice.
Plaintiff Cherie J. Morgan filed this action against Aurora Loan Services, LLC (“Aurora”), Mortgage Electronic Registration Systems, Inc. (“MERS”), and Does 1-100, inclusive (collectively, “defendants”).
Plaintiff principally complained that defendants wrongfully initiated foreclosure proceedings against her property and that a subsequent trustee’s sale was invalid because defendants lacked any interest in the property. Plaintiff’s claim asserted the following claims for relief: (1) lack of standing; (2) breach of written contract; (3) intentional misrepresentation; (4) negligent misrepresentation; (5) cancellation of instruments; (6) quiet title; (7) promissory estoppel; (8) breach of implied covenant of good faith and fair dealing; (9) premature and unlawful filing of notice of default; and (10) unfair business practices under Cal. Bus. & Prof. Code §§ 17200 et seq. (“UCL”).
Defendants moved to dismiss plaintiff’s SAC. Plaintiff opposed the motion, but after considering the parties’ arguments, the court granted defendant’s motion to dismiss.
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January 31, 2014 | Permalink | No Comments