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title insurance: matters
Summary Professionals Matters News Events Publications
Lenders/Title Insurance - Litigation to Protect $15 Million in First Priority Mortgages
Following a 38-day trial in a complex multi-party dispute, Herrick successfully obtained an equitable lien on behalf of four lenders against a prominent New Jersey real estate developer on the basis of unclean hands. The case, in which the developer and affiliated plaintiffs sought to divest the owner of various New Jersey investment properties and, in so doing, to avoid our clients' mortgages, involved thorny bankruptcy-related issues, as the properties are owned by a debtor in bankruptcy, as well as an array of real estate, tax, corporate and equitable issues.  The developer plaintiffs have appealed.
Title Insurance Company/Property Owner - Restrictive Covenant Dispute
Representing the owner of a vacant parcel of land in Westchester County, New York in a dispute with neighboring property owners over our client's plans to construct an affordable housing complex on the property.  Relying on a century-old restrictive covenant contained in a prior deed which prohibited development of a "tenement or flat-house" on the property, the neighboring property owners are attempting to block our client's planned development of the land.   
Real Estate Developer - Adverse Possession Dispute
Representing the buyers of a parcel of vacant land located in New York City's Lower Eastside in a dispute with a community activist group over the property's legal owner.
Title Insurance Companies - Mortgage Fraud Litigation
Representing title insurance companies in litigation with two former employees and a title issuing agent formerly authorized to issue policies on our clients' behalf, in connection with an alleged mortgage fraud scheme involving "mortgage stacking," or the practice of fraudulently obtaining multiple mortgages on a property by concealing outstanding liens. 
Real Estate Buyers - Cyber Hacking Litigation
Won dismissal of all claims against our clients, the purchasers of real estate, in a transaction where the email account maintained by the seller's counsel's had been hacked shortly before the closing of title in furtherance of a fraudulent scheme. 
Owner of Large NJ Commercial Property - Easement Dispute
Represented the owner of two commercial parcels of property totaling approximately eleven acres in a dispute involving the defendants' efforts to obstruct and control the plaintiff's use of its right-of-way easement with two forty-foot gates. Although the defendants conceded that the easement was valid to the extent that it serviced a one-acre parcel that merged into the eleven acres that our client owned, the defendants argued that they should be permitted to preserve the gates nonetheless to prevent the plaintiff from using or accessing the easement for the benefit of the remaining 10 acres. On cross-motions for summary judgment, the trial court granted partial summary judgment in favor of our client, the plaintiff, and denied the defendants' motion for summary judgment in its entirety, concluding that the plaintiff has an absolute, unfettered right to use the easement. The trial court reserved for trial its determination of whether the defendants' efforts to limit the plaintiff's use of the easement were reasonable. The parties successfully settled all remaining claims shortly before trial. 
Lender/Title Insurance - NY Supreme and Appellate Division Victory
Obtained reversal of a New York Supreme Court ruling finding that the deed transferring title to a property was void ab initio. Our client, a lender with a first priority mortgage lien on the property, had not been named as a party in the underlying action, but was sued in a subsequent action filed by plaintiffs seeking to use the ruling to extinguish our client's $2.5 million lien on the property. We successfully intervened in the underlying lawsuit on behalf of the lender and argued that the Judge's original ruling -- finding that the deed was void ab initio -- was incorrect as a matter of law. The Judge agreed, vacated her own prior order and reinstated clean title in the mortgagor.  The ruling was subsequently affirmed on appeal by the Appellate Division, First Department.
Title Insurance Underwriter and Agent - Summary Judgment Dismissing All Claims
Obtained summary judgment dismissing all claims against a title insurance underwriter and its agent following a coverage dispute arising out of a tax sale certificate that was not properly redeemed and discharged at the time of closing in accordance with the statute that governs redemptions after tax foreclosure proceedings have been commenced.  The plaintiff in the action alleged that the title insurance underwriter and agent failed to advise its closing counsel how to comply with a statute designed to prevent "heir hunters" from preying upon parties vulnerable to foreclosure in the tumultuous period following the death of a predecessor owner, as occurred here. 
Title Insurance Company - Class Action Defense
Representation of a title insurance company in a class action alleging overcharges on premiums for policies sold to consumers in New Jersey.  We settled—on terms favorable to our client—early enough in negotiations to minimize our client's legal fees.  
Stewart Title Guaranty Co. - New Jersey Supreme Court Victory
Representation of Stewart Title Guaranty Co. in its New Jersey Supreme Court victory limiting the scope of a title insurance company's liability for attorney misconduct. The homebuyers' attorney stole their escrow funds in conjunction with a real estate transaction.  The New Jersey Lawyers Fund For Client Protection paid the victims for the attorney's theft, and then sued Stewart Title for reimbursement, in keeping with NJLF's long-held belief that a title insurer's liability should blanket all aspects of the closing process. The attorney here, however, had stolen the money before he contacted Stewart Title's agent to request a title insurance commitment and policy on behalf of the homebuyers. The trial court dismissed NJLF's lawsuit, but the Appellate Division reversed, ruling that in order for Stewart Title to avoid liability, it would have had to provide the homebuyers with direct notice informing them that their title insurance policy did not cover attorney theft.  The Supreme Court unanimously reversed, ruling that the lack of notice was irrelevant, since the attorney was not acting as an agent of the title company at the time that he committed his crime.
Title Insurance Agency - Frivolous Claim Defense
Representation of a title insurance agency in a suit brought by a property seller. We won summary judgment and a dismissal of all claims. The court also ruled that the plaintiff had committed fraud in connection with the transaction, and imposed sanctions against him and his counsel, including attorney's fees, for frivolous litigation. 
Title Insurance Company - Agent’s Fraud Imputed to Lender
Representation of a title insurance company against a lender whose agent committed a fraud that caused the loss of the insured mortgage. Our client successfully argued that since the agent acted on behalf of the bank, the fraud could be attributed to the bank and therefore fell under the policy’s exclusion for “acts of the insured.” The court’s ruling will have ramifications in the title insurance and mortgage lending industry since many sub-prime lenders relied upon unscrupulous agents to close their loans, and to the extent any frauds committed by those agents lead to a title loss, the lenders cannot look to the title insurers for indemnification.
Real Estate Development Company - Land Purchase Dispute
Representation of  real estate development company in an appeal arising from its $3 million purchase and development of 7.5 acres of land from Hebrew Huntington Congregation. A faction of the congregation challenged the court's order that permitted our client to purchase the land under the Religious Corporations Law. The Second Department upheld the order and dismissed the appeal as moot, recognizing that our client was a bona fide good faith purchaser.
Title Insurer - Fraud and Defalcation
Representation of a title insurance company in recovering $8 million in losses incurred by defalcation and fraud of a title agent.
Title Insurer - Victory in Litigation Against the U.S. Government
Representation of an insured real property owner in defending against a large and complicated lawsuit by the U.S. Government over the purchase of a piece of real estate from the government. The case dragged on for three years before the insurer brought us in, and we won it on a motion for summary judgment.
RM 14 FK Corp. v. Bank One Trust Company - K-Mart Mortgage Dispute Appeal
Representation of a title insurer in its appeal of a trial court’s decision permitting a litigant to proceed with its claim seeking to void $30 million in mortgages, held by Merrill Lynch, encumbering 14 K-Mart stores throughout the US. The Appellate Division unanimously reversed the lower court, granting summary judgment for our client. (RM 14 FK Corp. v. Bank One Trust Company, 831 N.Y.S.2d 120 (1st Dept. 2007))
Title Insurer - Frivolous Claim Defense
Defended a title insurer in an action by a property owner seeking title insurance coverage. The court found the owner's damages to be attributable to its own actions, and impressed sanctions against the owner and its counsel, which included attorneys' fees, for prosecuting frivolous litigation.
Title Insurer - Mortgage Fraud Litigation
Representation of an insured lender in litigating the validity and enforceability of a multi-million dollar mortgage lien that was alleged to have been forged. Herrick overcame the fraud allegation and succeeded in enforcing the mortgage.
Title Insurance Company - Fraud Action
Representation of a title insurance company in obtaining a $1.4 million judgment and attachment of the defendants' bank accounts in a fraud action.
Title Insurer/Secured Lender - Priority Dispute
Representation of a secured lender in its claim to the proceeds of the sale of a borrower's principal asset. The court granted our motion for summary judgment, ruling that our client's claim had priority over competing claims asserted by produce sellers under the Perishable Agricultural Commodities Act. D.M. Rothman Co., Inc. v. Cohen Marketing Int'l, Inc., 2005 U.S. Dist. Lexis 14449, 2005 WL 1690524 (S.D.N.Y. 2005).
Title Insurer/Secured Creditor - Lien Priority Dispute
Representation of a title insurance company which was a secured creditor in a lien priority dispute with another creditor. After the properties securing the debt were sold, the bankruptcy court authorized payment of our client's claim, dismissing the competing secured creditor's claim. In re Litas International, Inc., 2004 WL 1488114, 2004 U.S. Dist. LEXIS 12151 (S.D.N.Y. 2004).
Title Underwriters - Island Mortgage Network Chapter 11
Representation of several national title underwriters in connection with the Chapter 11 cases of Island Mortgage Network, Inc. and related litigation in various courts.
Title Insurance Companies - Class Action Defense
Representation of two title insurance companies in two class actions alleging overcharges on premiums for policies sold to consumers in New York.  After extensive litigation, we settled on terms favorable to our clients.
In Re 455 CPW Associates - Mortgage/Mechanic’s Lien Priority Dispute
Representation of a title insurance company in its defense of a mortgage lender from Section 22 claims made by a mechanic lienor, in Bankruptcy Court, asserting that its lien took priority over an earlier filed mortgage. The Bankruptcy Court ruled in our client’s favor and both the District Court and the Second Circuit affirmed. (In Re 455 CPW Associates; Herbert Construction v. The Greater New York Savings Bank, 192 B.R. 85 (Bank. S.D.N.Y. 1996), aff. 2000 U.S. App. Lexis 23470 (2d Cir. 2000))
Congregation Yetv Lev D'Satmar, Inc. v. 26 Adar N.B. Corp. - Religious Corporations/Title Dispute
Appearance as amicus curiae on behalf of the New York State Land Title Association in an important appeal involving issues under New York's Religious Corporations law.  Congregation Yetev Lev D'Satmar, Inc. v. 26 Adar N.B. Corp., 641 N.Y.S.2d 680 (2nd Dep't 1996)