Litigation

Title Insurance

Matters

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 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 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.

HSA Residential Mortg. Services of Texas v. Stewart Title Guaranty Co., 7 A.D.3d 426, 776 N.Y.S.2d 791 (1st Dep't 2004) -- achieved dismissal of $50 million lawsuit brought by warehouse funder based on acts of alleged agent)

In re AppOnline.com, Inc., 284 B.R. 181 (E.D.N.Y. 2002)

Countrywide Home Loans, Inc. v. Lafonte, 2003 WL 1389089, 2003 N.Y. Misc. Lexis 127 (Sup. Ct. Nassau County 2003)

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)

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 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))

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))

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 – 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 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 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.

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.  

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 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. 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, in any event, the restrictive covenant is unenforceable.

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 – 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.