Real
Cases in Real Estate
is a weekly update on real estate law, with legal principles illustrated and
explained by lawsuits from around the country. The topics are wide-ranging for
appeal to a broad spectrum of readers including lawyers, homeowners, investors
and the general public. Andrea Lee Negroni, a Washington DC
attorney and legal writer with 25 years of experience in financial services and
mortgage law, contributes the case summaries.
Followers of
Real Cases in Real Estate will learn and be entertained by lawsuits
involving nuisance, trespass, zoning violations, deed restrictions, title
insurance, public utilities, mechanics liens, construction defects, adverse
possession, foreclosure and eviction, divorce and marital property rights,
tenants' rights, and more. Real Cases in Real Estate uncovers the
unpredictable, amusing, and sometimes outrageous disputes between next-door
neighbors, contractors and homeowners, condo boards and residents, real estate
brokers and homebuyers, and zoning administrators and developers.
Each fully
cited case summary highlights the essential law of the case and explains the
principal legal theories and concepts relevant to the outcome. Plain language
treatment makes Real Cases in Real Estate accessible to lawyers and
laymen alike.
Whether you
follow real estate law professionally or as a hobby, you'll find something new
and useful every week in Real Cases in Real Estate.
Updates
for the Week of January 9th, 2012
"Formulaic Claims" Against Assignee of a Mortgage Lender
Don't Cut Ice in Hawaii.
The Rodenhursts sued Bank of America for harms they claimed resulted
from a 2007 refinance of their Hawaii loan with Countrywide Home Loans. After defaulting
on the loan, their lawsuit claimed everything from fraud to conspiracy, with
intentional infliction of emotional distress thrown in. The borrowers' attorney
filed defective complaints, which were amended several times. The amended
complaints added defendants and causes of action without leave of the Court,
and the Court's exasperation with the plaintiff's lawyers comes through in the
decision.
Lenders will take heart in the holding that Bank of America
cannot be held liable for claims against Countrywide because the borrowers did
not allege facts to support a theory of derivative
liability. "Liability does not attach merely because one is an
assignee." The borrowers' claim that
RESPA's Qualified Written Request rule was violated was dismissed because they
sent their request to the noteholder, not the loan servicer. Third, the
borrowers claimed they were defrauded by Bank of America, but this too was
dismissed, the court noting that BOA could not be liable for fraud merely
because it eventually became the assignee of their loan. As the decision notes,
"other courts have dismissed claims against BOA where BOA was named solely
because of allegations that it was the parent company of Countrywide." Moreover,
the borrowers could not make valid fraud claims against Bank of America because
"fraud claims are inappropriate to assert against an assignee where there are
no allegations that the assignee had any contact with the mortgagor or made any
representations to the mortgagor..."
The borrowers also claimed breach of fiduciary duty, but the
Court held "lenders typically do not owe fiduciary duties to their borrowers."
In dismissing the claim for intentional and negligent infliction of emotional
distress, the Court noted that the statement that the defendants caused "severe
mental and emotional distress" was a legal conclusion, not supported by
specific facts suggesting recklessness or outrageous conduct by the defendants.
The decision shines a bright light on what can only be
described as poor lawyering and ignorance or disregard of Court orders by the
plaintiffs' counsel. Finding that the deficient complaints wasted the parties'
and court's resources, the defendant's motion to dismiss was granted and the
case dismissed with prejudice.
Rodenhurst v Bank of
America FKA Countrywide Home Loans, Civil No. 10-00167 LEK-BMK, Sept. 30,
2011 (D. Hawaii) [enhanced version available to lexis.com subscribers].
....
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