Tag Archives: Downstream Litigation

Georgia Court Finds Chase Had Authority to Foreclose

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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.

Nevada Court Found Plaintiff’s Claim for Quiet Title Failed as a Matter of Law Based on Statute’s Express Language

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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.

 

California Court Dismisses All Seven Causes of Action Arising Out of the Alleged Wrongful Foreclosure of Plaintiff’s Home

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The court in deciding Dorn v. Countrywide Home Loans, 2013 Cal. App. Unpub. LEXIS 7356 (Cal. App. 2d Dist. 2013) concluded that the trial court did not abuse its discretion in dismissing the action; the court thus affirmed the lower courts decision.

Plaintiff Jason Dorn appealed from a judgment dismissing his action against defendants America’s Wholesale Lender, Countrywide Bank, Bank of America Home Loan Services, MERS, and ReconTrust.

Plaintiff filed a complaint asserting causes of action for: (1) declaratory relief: fraud in the execution, (2) declaratory relief: failure of consideration, (3) declaratory relief: existence of an obligation — no creation of rights, (4) declaratory relief: existence of an obligation — no creation of rights,(5) injunctive relief, (6) accounting.

After considering arguments the court ultimately affirmed the lower court’s decision to dismiss.

Wisconsin Court Grants Summary Judgment in Favor of GMAC

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The court in deciding GMAC Mortg., LLC v. Poley, 2013 Wisc. App. LEXIS 872 (Wis. Ct. App. 2013) affirmed the lower court’s decision in granting summary judgment in favor of GMAC.

In this foreclosure action, the circuit court granted summary judgment in favor of the mortgagee, GMAC Mortgage LLC. On appeal, mortgagor James Poley argued that the court should have stayed this foreclosure action as a result of a federal bankruptcy proceeding initiated by GMAC during the pendency of this action and, in any case, erred in granting summary judgment in favor of GMAC.

After considering the arguments the court concluded that the lower court did not err in determining that the bankruptcy proceeding did not prevent Poley from opposing summary judgment. The court also concluded that the lower court properly granted summary judgment. Therefore the court affirmed the decision of the lower court in all respects.

Michigan Court Grants Summary Judgement in Favor of Bank

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The court in deciding Wargelin v. Bank of Am., 2013 U.S. Dist. LEXIS 146326 ( E.D. Mich. 2013) ultimately granted defendants’ motion for summary judgment.

Plaintiff brought an action arising out of a foreclosure and subsequent sheriff’s sale of his residential property. Count I of plaintiff’s action was violation of the Real Estate Settlement Procedures Act (“RESPA”), 12 U.S.C. § 2601 et seq. Count II, was for breach of implied covenant of good faith and fair dealing. Count III involved defamation of title. Count IV was discharge of lien and claim to quiet title. Count V of the plaintiff’s complaint was for a violation of Mich. Comp. Laws §600.3205a.

Count VI of the plaintiff’s complaint was intentional infliction of emotional distress. Count VII was request for equitable, declaratory & injunctive relief; count VIII, Fraudulent Misrepresentation; count IX, quiet title; count XI, silent fraud and bad faith promises. Count XII of the claim was for breach of contract and wrongful foreclosure. Lastly, count XIII arose out of a violation of Michigan Foreclosure Law and Count XVI, violation of the Fair Credit Reporting Act (“FCRA”), 15 U.S.C. § 1681s-2(b).

The defendants maintained that all of the plaintiff’s claims challenging the foreclosure sale were subject to dismissal because these claims were based on a purported breach of an oral modification agreement, therefore these claims were barred by the statute of frauds. Defendants also argued that plaintiff’s failure to redeem the property within the redemption period precluded plaintiff from raising any claims associated with the foreclosure.

California Court Finds Plaintiff Lacked Standing to Bring Action

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The court in deciding Mottale v. Kimball Tirey & St. John, LLP, 2013 U.S. Dist. 146293 (S.D. Cal. Oct. 9, 2013) ultimately granted the defendants’ motion to dismiss.

Plaintiff alleged unnamed investors brought an unlawful detainer action in state court foreclosed his home. Plaintiff also alleged his loans were securitized from a pool of funds provided by unknown investors who misrepresented the identities of the actual lenders. Plaintiff alleged that the assignment was invalid and fraudulent because the assignment documents were forged and defective. Plaintiff further alleged the notice of default (“NOD”) was void because BAC had “no prior recorded interest” in the Property when Recontrust recorded the NOD. Lastly, the plaintiff alleged that the NTS 2 was also fraudulent because Reconstrust had no legal right to record a substitution of trustee.

Defendants moved to dismiss plaintiff’s complaint on several grounds. First, defendants argued that the plaintiff failed to show he tendered the amount owed under default, and thus plaintiff lacked standing to challenge the foreclosure.

Second, defendants argue several courts in California have rejected plaintiff’s securitization theory. Defendants further contend that possession of the promissory note was not a pre-requisite to commence a non-judicial foreclosure proceeding. Defendants also pointed to a number of deficiencies in the complaint, including failure to joint an indispensible party and defective and insufficient claims under other statutes.

After considering both arguments, the court granted defendants’ motion to dismiss.

New York Court Finds Chase Had the Right to Enforce the Loan

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The court in deciding Beka Realty LLC v JP Morgan Chase Bank, N.A., 41 Misc. 3d 1213(A) (N.Y. Sup. Ct. 2013) ultimately granted Chase’s motion for an order dismissing plaintiff’s claims.

Beka Realty LLC (plaintiff) brought an action against defendant JP Morgan Chase Bank, N.A. (Chase) for a judgment declaring that the enforcement or foreclosure of the mortgage held by Chase is barred on the claimed basis that Chase lacked ownership of the mortgage, cancelling the mortgage, and awarding it damages for fraud, negligent misrepresentation, and unjust enrichment.

Chase moved, pursuant to CPLR 3211 (a) (1) and (7) and 3016 (b), for an order dismissing plaintiff’s complaint in its entirety, and awarding it reasonable attorneys’ fees, costs, and expenses. The court granted this motion, moreover, the court found that the plaintiff’s five causes of action all failed as a matter of law because each of them was predicated on the unfounded assertion that Chase did not have the right to enforce the Loan. Since the court found that the unrefuted documentary evidence flatly contradicted this assertion, the court found that none of these causes of action stated legally viable claims.

Accordingly Chase’s motion for an order dismissing plaintiff’s complaint in its entirety was granted, and it was declared that Chase is entitled to enforce the Loan.