Title Insurance Company – Dismissal of Claims
Successfully defended a title insurance company in an action brought by a commercial property owner seeking a payout for losses incurred due to a restrictive covenant on the purchased property. Herrick was granted a motion to dismiss and subsequently, and successfully, defeated a motion to reargue.
Appellate Division Affirms Summary Judgment in Litigation over Title Agent Theft of Escrow Funds
Secured a victory in the Appellate Division, First Department, which unanimously affirmed the trial court’s granting of summary judgment dismissing all claims against a title insurance company. Plaintiff sought to hold the insurer responsible for its title agent’s theft of escrow funds at a closing on the sale of a New York City building. In a decision of potentially significant import to the title insurance industry, the Appellate Division held that a title insurance underwriter cannot be held responsible for the escrow functions of its limited agent when the escrows are unrelated to the clearance of a defect in title.
All Claims Voluntarily Dismissed Following Award of Sanctions in Real Estate Dispute
Successful defense of an LLC in litigation over the breach of an alleged joint venture agreement which plaintiffs claimed entitled them to an ownership interest in a valuable Manhattan property. Herrick obtained an order canceling plaintiffs’ notice of pendency on the property, and successfully argued for sanctions based on frivolous litigation conduct. In addition to negotiating a substantial monetary settlement for attorneys’ fees and for costs associated with delays in refinancing a $32 million mortgage on the property, Herrick secured the voluntary dismissal of our client from the action and the plaintiffs’ unconditional and irrevocable release of any and all claims to ownership of the property.
Title Insurance Companies – Successful Resolution to Mortgage Fraud Litigation
Herrick achieved significant victories on behalf of 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. After negotiating a very favorable settlement with the corporate defendants, the firm obtained a decision referring an inquest on damages against the individual defendants to a Special Referee whose report, which recommended substantial damages, was ultimately confirmed by the court.
Title Insurance Company and 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. 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. Herrick is defending the owner's right to develop the property, arguing that the planned modern day apartment complex is not a "tenement or flat-house" within the meaning of the restrictive covenant, and that the restrictive covenant is unenforceable.
All Claims Dismissed in Litigation Challenging $9 Million Sale of Brooklyn Apartment Building
Secured a ruling dismissing all claims against the insured buyers of a Brooklyn apartment building in litigation seeking to strip them of their interests in the property. The plaintiff launched a multi-pronged attack on the $9 million sale of the building, claiming the transaction had violated his right of first refusal, that the individual who had signed the deed transferring title to the property lacked capacity, and that the deed itself was a forgery. In its ruling, a New York state court granted our motion to dismiss in its entirety and cancelled the notice of pendency.
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 Insurer – ARIAS UK Arbitration
Successfully represented a leading title insurance company in a London breach of contract arbitration initiated by the Cypress-based buyer of a $32 million Ukrainian property. Herrick negotiated a settlement resolving the dispute for a small fraction of the original claim.
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 – Fraud and Defalcation
Representation of a title insurance company in recovering $8 million in losses incurred by defalcation and fraud of a title agent.
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 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.
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.
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 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.
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.
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)