Field of Bad Dreams?

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

Field of Dreams (PD)
In Field of Dreams, James Earl Jones's character makes a famous speech about baseball being "the one constant through all the years." While "America has rolled by like an army of steamrollers," and has been "erased like a blackboard, rebuilt, and erased again . . . baseball has marked the time." In D.W. v. L.W., the Law Division started its opinion with a less poetic, but more ominous baseball-related statement: "This case involves separated parents, young children, and Little League baseball." If you have been to more than a few youth sporting events, you can probably guess what was at issue in the case. Nonetheless, the court's opinion is a good read as it is part homage to little league baseball and part framework for how parents should (and should not) behave at youth sporting events.

In D.W., a husband and wife's child played in a "coach-pitch league." Although they were separated, they agreed that they could both attend the games as long as the husband stayed at least 50 feet from the wife. A few months later, the husband filed a follow-up motion to attend their son's football games. The wife opposed the motion and further asked the court to ban the husband from continuing to attend their son's baseball games because he had "acted inappropriately at the baseball field, in a publicly embarrassing manner, by making negative and demeaning comments about the team coach's baseball-related decisions, within earshot of the coach's wife." She further claimed that the couple's daughter later started repeating the husband's comments, and that the husband had posted similar commentary about the coach on Facebook. The husband denied that he acted inappropriately, and further claimed that it was his wife "who, at least previously, did not approve of the coach's baseball-related abilities." (As an aside, how many "baseball-related decisions" does a coach really make in a 7-year-old's coach-pitch game?)

The court began its opinion by emphasizing the importance of youth sports in America. More than 40 years ago, the Appellate Division recognized that little league baseball was a "piece of public Americana." It has been almost universally praised as a "social and cultural tool for positive childhood development and inclusion." According to the court, the benefits of little league baseball go beyond "simply teaching children to hit, field and catch," but include developing "good citizenship, sportsmanship, and maturity of character." In fact, the court took judicial notice that "the results of particular Little League games are not nearly as significant as the underlying goal of developing a child's ongoing personal character in a positive fashion."

 

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On a warm summer’s evenin’, on a train bound for nowhere . . . is a dispute over insuring a stranger’s life

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

Gambling

I know it is a little obvious, but I couldn't write a post about gambling without using lyrics from "The Gambler." Fortunately, the case this post discusses — Sun Life Assurance Co. of Canada v. U.S. Bank National Association — is anything but obvious. Sun Life involved gambling on another person's life but not in a Deer Hunter, Russian roulette kind of way. In Sun Life, the U.S. Court of Appeals for the Seventh Circuit addressed the enforceability of an insurance policy that insured a stranger's life.

In Sun Life, Judge Posner began his decision by discussing the common law principle that "forbids a person to own an insurance policy that insures someone else's life unless the policy owner has an insurable interest in that life." A wife can have an insurable interest in her husband's or children's lives, a creditor can have an insurable interest in a debtor's life, but "you cannot own an insurance policy on the life of a stranger who you happen to know is in poor health and likely to die soon." The reason is that, by doing so, you are essentially gambling on another person's life, and gambling contracts are generally unenforceable as a matter of public policy. 

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Another Lesson From A New Jersey Court On The UCC And Standing To Foreclose

by: Peter J. Gallagher (@pjsgallagher)

The running battle between lenders and borrowers over standing to foreclose continues in the Garden State. A recent decision from the Appellate Division — Bank of New York v. Ukpe — is the latest in an ever-growing body of case law addressing this issue from seemingly every conceivable angle. 

The facts in Ukpe will be familiar to anyone who has followed the wave of residential foreclosures in recent years. Defendants applied for a mortgage from Countrywide Home Loans, Inc. (“CHL”). They claimed that they told the broker that they could not afford a monthly payment over $1,000 and were assured by the broker that the monthly payment would not exceed this amount. However, at the closing, they learned that the monthly payment would be almost $1,500 per month. They alleged that the broker told them not to worry because they could refinance the loan a few months after closing. Nonetheless, two years later, after several unsuccessful attempts to refinance the loan, Defendants defaulted. 

Defendants’ note was made "payable to lender," and the mortgage, after it was recorded, was held by Mortgage Electric Recording System ("MERS") as nominee for the lender. Shortly after being recorded, the mortgage was securitized along with other mortgages. As part of this process, several entities entered into a "Pooling and Servicing Agreement" ("PSA"). Under the PSA, CHL was identified as a "seller," CWABS, Inc. was identified as the "depositor" and "master servicer," and the Bank of New York ("BNY") was identified as the "trustee." Under the PSA, the CHL and the other “sellers” transferred the mortgages to CWABS, Inc., which then transferred them to BNY, which held the mortgages for the benefit of the investors in the newly-created security. The PSA also required the original mortgage notes to be endorsed in blank and delivered to BNY.

After Defendants defaulted, BNY filed a foreclosure complaint. In response, Defendants claimed, among other things, that BNY lacked standing to foreclose because it was not a holder in due course. The trial court rejected this claim and the Appellate Division affirmed. In doing so, the Appellate Division provided a crash course in what it means to be a holder in due course.

 

 

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How Lady Gaga Keeps Her Poker Face And Avoids The Paparazzi When Looking For An Apartment

by:  Peter J. Gallagher

The New York Times recently reported on the lengths celebrities go to in order to maintain their anonymity when buying property in New York City ("Keep My Boldface Name Out Of It").  Real estate brokers interviewed for the article described signing confidentiality agreements with clients, taking them to view apartments in the dead of night, and employing code words for their clients in order to avoid the ever-prying eyes of professional celebrity watchers.  They also described a tactic that is becoming more popular with celebrities, purchasing property in the name of a trust or limited liability company to hide the identity of the true owner, as in this example of a famous tabloid friend:

[W]hen Jennifer Aniston — whose search for a home in Manhattan was chronicled with the same intensity as every change in her hairstyle and relationship status — reportedly settled on a West Village apartment last month, her name appeared nowhere on the paperwork.

But her dog’s did. As was widely reported, the corgi-terrier mix (who has since died) lent his name to the Norman’s Nest Trust, which purchased several apartments in a building on West 12th Street; Bruce Lagnese, Ms. Aniston’s business manager, signed the documents.

Increasingly, however, celebrities are not alone in seeking to hide their identities.  The article notes that "Wall Street types are more eager than ever to keep their multimillion-dollar real estate deals away from prying eyes," both because of the "public scorn" with which many are held and, more importantly apparently, to protect assets from their spouses in case their marriages "hit the rocks."  

The article does note that not all celebrities hide from the spotlight as they apartment shop.  Courtney Love shared nearly every aspect of her search for the "perfect downtown town house" through correspondence with the editors at Curbed NY and through Twitter.  In case you are wondering, she settled on renting a cozy place on West 10th Street for $28,000 a month.