The Pipes, The Pipes Are . . . Frozen! (Or, Who Is Liable For Property Damage While Home Buyer And Home Seller Wait For The Final Check To Clear?)

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Frozen pipe (pd)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.  

Continue reading “The Pipes, The Pipes Are . . . Frozen! (Or, Who Is Liable For Property Damage While Home Buyer And Home Seller Wait For The Final Check To Clear?)”

Court Awards Attorney Almost $100,000 Less Than He Requested In New Jersey Consumer Fraud Act Case

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Legal fees (pd)I recently wrote about Garmeaux v. DNV Consepts, Inc., a case in which the Appellate Division held that, under New Jersey's Consumer Fraud Act, successful plaintiffs can, in certain circumstances, recover legal fees they incurred in connection with both the prosecution of their affirmative claims and the defense against any counterclaims. If the facts relevant to a counterclaim are "inextricably caught up with," and related to the common core of, the facts relevant to an affirmative CFA claim, then legal fees can be awarded for both claims. In another recent decision, Riccardi v. Bruno, the Appellate Division addressed a similar issue but arrived at a result that was less favorable to plaintiff than the result in Garmeaux.

In Riccardi, plaintiff purchased a home from one of the defendants. The home had been damaged in a fire and required "extensive renovations" before being put on the market. (Although it was not listed as having been fire damaged, the certificate of occupancy issued by the township at the closing noted "rehab after fire.") After the closing, plaintiff allegedly discovered numerous problems with the house, including mold, burnt and fractured joists, and damaged foundation walls. He sued the seller and several related entities (architect, contractor, home inspector, etc.), alleging breach of contract and a violation of the CFA.

Default was entered against several defendants for failing to answer the complaint, and the claims against several others were dismissed either by summary judgment or at the close of plaintiff's case in chief. The jury then determined that the two remaining defendants — the prior owners of the property — violated the CFA. The jury's verdict was based on a "knowing concealment, suppression, or omission of a material fact with the intent that other would rely upon that fact." (The decision does not identify the fact that was omitted.) The jury found no cause of action under the CFA based on an unconscionable commercial practice, fraud, false pretense, false promise , or misrepresentation. And, it awarded plaintiff only $4,500, which was "attributable to the cost to repair a damaged window frame and to dispose of buried construction litter."

Continue reading “Court Awards Attorney Almost $100,000 Less Than He Requested In New Jersey Consumer Fraud Act Case”

Supreme Court Issues Important Decision On Truth In Lending Act

by: Peter J. Gallagher (@pjsgallagher)

Please check out an article I wrote for law360.com on the U.S. Supreme Court's  recent decision in Jesinoski v. Countrywide Home Loans. Here is the opening paragraph:

On Jan. 13, 2015, the U.S. Supreme Court released its opinion in Jesinoski v. Countrywide Home Loans (No. 13-684) and resolved a circuit split on an important issue arising under the Truth in Lending Act, 15 U.S.C. §1601-1677 (“TILA”). Under TILA, a borrower has the right to rescind certain loans for up to three years after the loan is consummated. To exercise this right, borrowers must “notify the creditor” of their intention to rescind the loan within three years. The question in Jesinoski was whether a borrower satisfies this requirement by sending written notice to a lender of its intent to rescind or whether the borrower must file a lawsuit within the three-year statutory period. In recent years, a circuit split had developed over this issue. In Jesinoski, the Supreme Court resolved this split, holding that written notice is sufficient.

Check out the rest of the article here.

End of (An) Empire (In) Nevada

by:  Peter J. Gallagher

You can now count Empire, Nevada as one of the unintended victims of the housing crisis.  Yes, that's right, the whole town is gone.  Unlike  cities like Youngstown, Ohio ("Sweet Jenny I'm Sinking Down . . . Here Darlin' In Youngstown"), however, Empire is not shutting down because of mass migration of residents or a wave of foreclosures.  Rather, Empire was populated by 350 US Gypsum employees who worked at the company's nearby gypsum mine.  As reported recently on NPR ("Shuttered Plant Marks The End Of A Nevada Town"), the drop in home construction led to a corresponding drop in demand for U.S. Gypsum's Sheet Rock and the gypsum used to make it.  As a result, the company closed the mine.  Because everyone in Empire worked at the mine, when it closed, the town went with it.  Perhaps the most interesting aspect of the end of Empire is that its former zip code (89405) disappeared, along with the town, when the post office closed up shop a few weeks back.

If you are curious, click here for a view of the town from Google Maps.