Last week, I wrote about an exception to the strict liability normally imposed on dog owners under New Jersey's dog bite statute. (A short time before that, I wrote about yet another exception to strict liability under the dog bite statute, so the exceptions are obviously more interesting than the rule.) This post is about a different dog bite case, Ward v. Ochoa, with a similar result even though it was not decided under the dog bite statute. Ward involved a home inspector who was attacked and severely injured while performing a home inspection. She sued the dog owners (who eventually settled) along with the real estate agency and real estate agent who were selling the house. Like the dog groomer in last week's post, however, the home inspector's claims were dismissed.
Although the temperature today is supposed to reach 90 degrees, this post is about frozen pipes. More specifically, pipes in a house that is under contract for sale that freeze and cause property damage after the scheduled, but not completed, closing, but before the buyer takes possession of the home. In a case like that, who is liable for the damage?
In Bianchi v. Ladjen, plaintiff was under contract to buy a home. It was an all cash sale, no mortgage was involved. The closing was scheduled for New Year's Eve. Plaintiff performed a walk through on the morning of the closing and reported no damage to, or issues with, the home. The closing could not be completed as scheduled, however, because plaintiff did not wire the balance of the purchase price to the title company prior to the closing as he had been instructed to do. Instead, plaintiff brought a certified check to the closing. As a result, the parties entered into an escrow agreement, which provided that the title company would hold "all closing proceeds" and the "Deed & Keys" in escrow until the check cleared.
This is where it gets tricky.
The Wall Street Journal recently reported that the Federal Reserve conditionally approved a Colorado credit union, Fourth Corner Credit Union, to serve cannabis-linked businesses. To obtain this approval, however, the credit union had to “step back from its original plan to serve state-licensed dispensaries.” Instead, it will focus on “individuals and companies that support legalized marijuana, including those who partner with vendors, such as accountants and landlords.” In other words, the credit union can service individuals and entities involved in the cannabis industry, but not those who “touch the plant.”
Read the full article here.
Add this to the list of things you never want to hear a court say about your performance during a case: "defendants' presentation of evidence certainly gave voice to the song lyric, 'when nothing makes any sense, you have a reason to cry.'" (It is a lyric from a Lucinda Williams song if you were curious.) But this was the Appellate Division's conclusion in Brunswick Bank & Trust v. Heln Management, LLC, a case that was making its second appearance before the Appellate Division (after an earlier remand) and was sent back to the trial court for a third round.
The issue in Brunswick Bank was relatively straightforward. Plaintiff and defendants entered into five loans. The loans were secured by mortgages on several properties owned by defendants. After defendants defaulted on the loans, plaintiff sued and obtained a judgment against defendants. Plaintiff then filed foreclosure actions against defendants, seeking to foreclose on the mortgages it held against defendants' properties. It received final judgments of foreclosure in these cases as well. Some of these properties were then sold, which "provided rolling compensation for [plaintiff] against all defendants' obligations."
At some point during this "rolling" sale of mortgaged properties, defendants moved to stay all pending foreclosure proceedings, arguing that plaintiff was "over-capitalized" – i.e., it was going to collect more than it was entitled to collect under its judgment. Defendants then moved to have the judgment deemed satisfied, arguing that plaintiff had already recovered — through its collection efforts — the full amount of the judgment. The trial court granted the motion but held that two pending foreclosures could proceed. The trial court further acknowledged that it had the power to "prevent a windfall" to plaintiff, but that the record was "too muddled" to decide whether this was the case.
A wise colleague once told me that obtaining a judgment only gets you about 60% of the way home. Collecting on judgments is a sometimes overlooked, but almost always tedious and expensive process that makes me think my colleague was optimistic with his 60% projection. The Appellate Division's decision in Banc of America Leasing and Capital, LLC v. Flethcer-Thompson Inc., offers just one example of the many nuances of collection work that make it a minefield for the unwary.
In Banc of America, plaintiff obtained a judgment against several defendants in Michigan. It domesticated the judgment in New Jersey and obtained a bank levy against a joint account held by both defendant, Kurt Baur, and his wife, who was not a party to the lawsuit. After the sheriff served the writ and froze the assets in the account, plaintiff filed a turnover motion to have the funds turned over to satisfy a portion of the judgment. Baur and his wife opposed the motion, arguing that the funds in the account were the wife's personal property and derived from her pension, earnings, and tax refunds.
Before the trial court ruled on the motion, the parties entered into a consent order, under which defendants agreed to replace the "levied funds" with "replacement funds" in an equal amount. Once the "replacement funds" were deposited, plaintiff's counsel would release the "levied funds" back to defendants. In addition, defendants agreed to pay plaintiff $25,000 per quarter and $6,000 per month until the judgment was satisfied. Unfortunately, defendants defaulted on their obligations under the consent order, and plaintiff filed a new motion to turnover the "levied funds." Baur and his wife opposed the new motion on the same grounds as they had opposed the original motion. The trial court granted plaintiff's motion. In a three-sentence opinion, the court concluded that there was an agreement reached by the parties to avoid turnover, but defendants breached that agreement, therefore turnover was justified. Defendants appealed.
Lawsuits arising out of foreclosures and mortgage modifications are common. (Even more common than lawsuits about gyms or health clubs if you can believe that.) Nearly every day there is a decision from the Appellate Division arising out of a residential foreclosure. Most of these fall into the same category — borrower defaults and loses home through foreclosure then challenges lender's standing to foreclose after the fact — but some are more interesting. That was the case with GMAC Mortgage, LLC v. Willoughby, a decision released yesterday by the New Jersey Supreme Court involving a mortgage modification agreement entered into to settle a foreclosure lawsuit.
Almost two years ago, I wrote a post about Arias v. Elite Mortgage, a lawsuit over the alleged breach of a mortgage modification agreements. In that case, borrowers entered into a mortgage modification agreement with their lenders that included a Trial Period Plan ("TPP"). As the name suggests, a TPP requires borrowers to make reduced monthly payments in a timely manner for a trial period, after which, if they make the payments, the lender agrees to modify their mortgage. In Arias, the Appellate Division held, as a matter of first impression, that if a borrower makes the trial payments under the TPP, the lender must modify the mortgage, and if it doesn't, the borrower can sue for breach. However, the holding was purely academic because the borrower in that case failed to make one of the trial payments in a timely manner so it could not sue.
In GMAC Mortgage, the New Jersey Supreme Court faced a similar situation with a much less academic result.
A recent decision from the Appellate Division drives home (1) the duty of sellers at sheriff's sales to announce all material information about the property being sold at the sale, (2) the duty of bidders at sheriff's sales to perform independent due diligence about the property notwithstanding that announcement, and (3) the flexibility of Chancery Division courts to fashion remedies when both fail to fully satisfy their obligations.
In Wells Fargo Bank Bank, N.A. v. Torney, plaintiff foreclosed on property owned by defendant, obtained final judgment against defendant, and proceeded to sheriff's sale. In advance of the sheriff's sale, plaintiff submitted its "sheriff's sale package" to the Camden County Sheriff. Included in the package was a short form property description (required under N.J.S.A. 2A:61-1), which, among other things, disclosed that the property was subject to a $94,000 first mortgage. The existence of this prior mortgage was also disclosed in the conditions of sale attached to the short form property description, and in the Affidavit of Consideration submitted by plaintiff in connection with the foreclosure. Finally, the short form property description also contained the following disclaimer: "all interested parties are to conduct and rely upon their own independent investigation to ascertain whether or not any outstanding interest remain[s] of record and/or have priority over the lien being foreclosed and, if so[,] the correct amount due thereon."
Edward Shuman, who would eventually be the winning bidder at the sheriff' sale, learned about the sale through the sheriff's website, which did not mention the prior mortgage. Also, at the sheriff's sale, plaintiff did not announce, as part of its "general announcements," that the property was subject to a prior mortgage. And, on the "printed condition of sale, the box next to 'subject to a first mortgage' was not checked." Shuman claims that he did not know about the prior mortgage when he placed his winning bid on the property, and did not learn about it until later that day when he inquired about the existence of any tax liens on the property. Once he learned about the mortgage, he contacted plaintiff and requested that the sale be vacated and his deposit returned. When plaintiff refused, Shuman filed a motion seeking the same relief.