Saturday, March 02, 2013

OK For Title Insurer To Stiff Homeowner By Failing To Defend Against 3rd Party's Adverse Possession Claim Based Solely On "Actual, Open, Notorious, Exclusive, Hostile & Continuous Possession" When 'Public Records Exception' Applies

The following facts have been abstracted from a recent decision of a U.S. District Court in Oregon in a case involving a homeowner-couple who sued their title insurer to recover costs and attorney fees, alleging that the insurer stiffed them on its duty to defend their title when the homeowners were sued for adverse possession by a third party on a purported claim that pre-dated the date the title insurance policy was issued:
  1. In 2004, a couple (the "Hansens") purchased property located in Wilsonville, Oregon.
    .................
  2. The Hansens obtained title insurance from Defendant Fidelity National Title Insurance Company.
    .................
  3. Six years later, on August 19, 2010, the Hansens were sued by the trustees of the Rogers Family Living Trust ("Rogers trustees"), alleging that they were fee simple owners of a portion of the Hansens' property.
    ................
  4. The Rogers trustees' adverse possession lawsuit against the Hansens was based on Rogers' allegation that "[they and their] predecessors in interest have had actual, open, notorious, exclusive, hostile and continuous possession...for more than ten years[.]."
    .................
  5. Further, the Rogers' trustees alleged in their adverse possession lawsuit against the Hansens that "[A]t the time [Rogers and their] predecessor in interest obtained ownership, the disputed property was surrounded by physical barriers with access only from [Rogers] property, it was represented to [Rogers] and their predecessors that their property line included the disputed property, ... and at no time ... did [the Hansens] or their predecessors in interest assert any ownership interest in the disputed property[.]"
    .................
  6. On September 1, 2010, the Hansens notified Fidelity that they had been sued and attached the complaint for the Rogers case. The Hansens also stated that they had retained counsel and requested Fidelity's assistance to defend against the Rogers trustees.
    ..............
  7. In a letter dated September 15, 2010, the Hansens again requested that Fidelity tender a defense in the Rogers case and attached a proposed amended complaint.
    .....................
  8. On October 4, 2010, after reviewing the amended complaint, Fidelity denied coverage under the title insurance policy, explaining that exceptions to the policy applied.
    ..................
  9. The Hansens responded to Fidelity, arguing that the policy exceptions did not apply. On November 3, 2010, Fidelity again denied coverage and declined to tender a defense.
    ....................
  10. The Hansens wrote once more to convince Fidelity that it was incorrect to deny coverage. On December 7, 2010, for the third time, Fidelity refused to tender a defense.
    ..................
  11. The Hansens ultimately filed suit against Fidelity seeking reimbursement for costs and attorney's fees incurred in their property title defense in the Rogers case.
In ruling in favor of the title insurer, the court found that the insurer was not responsible for tendering a title defense based on the so-called "public records exception" (also referred to as the "parties in possession exception")(1) set forth in the insurance policy, which excepted from coverage:
  • Any facts, rights, interests or claims which are not shown by the public records but which could be ascertained by an inspection of said land or by making inquiry of persons in possession.
The court found that Rogers' adverse possession claim fell within this exception in the policy, since the asserted claim could be ascertained by an inspection of said land or by making inquiry of persons in possession.(2)

For the ruling, see Hansen v. Fidelity National Title Insurance Company, No. 03:12-cv-00183-HZ (D. Or. January 31, 2013).

(1) The court explained the public records exception and the title insurer's duty to defend, as interpreted and applied in Oregon:
  • The public records exception was interpreted in Cooper v. Commonwealth Land Title Ins. Co., 73 Ore. App. 539 (Or. Ct. App. 1985).

    In Cooper, the court dealt with the same issue—whether the public records exception precluded an insurer's duty to defend.

    The facts of Cooper are very similar to this case. Cooper involved a title insurance company's refusal to defend the property owner against a claim over possession of disputed land. Id. at 541. The Cooper court reversed the granting of the title insurance company's motion to dismiss because the complaint included allegations that possession was based on "claim of right and pursuant to a deed." Id. at 543.

    In other words, the complaint alleged possession under two different theories—"own[ing] the land by adverse possession" or holding "the land pursuant to a deed". Id. Because of the ambiguity, the court could not determine whether the allegations about the deed or the allegation of adverse possession was surplusage. Id.

    Considering the public records exception, the Cooper court stated that "[i]n the absence of the language about the deed, there would be no duty to defend, because that duty only arises when there is some claim shown of record." Id. (emphasis added).

    Thus, if the complaint had not alleged ownership of the land by deed, then the public records exception would have precluded coverage under the title policy.

    In this case, the amended complaint does not include an allegation of ownership by deed.

    Instead, the Rogers trustees described their possession of the land as "actual, open, notorious, exclusive, hostile and continuous" and that the land was "surrounded by physical barriers with access only from Plaintiffs' property". Stines Decl. Ex. C at 2-3.

    These allegations support a claim of ownership by adverse possession, not by deed. Plaintiffs argue that there is an ambiguity in the initial complaint, as in Cooper, and that the Rogers trustees claim could have been based on a deed.[3] Pls.' Mem. Supp. Mot. Summ. J. 10. I have already found that the amended complaint supersedes the initial complaint. Plaintiffs focus on the initial complaint is misplaced. Plaintiffs do not address the adverse possession allegations in the amended complaint.

    Plaintiffs further argue that Defendant failed to show that the exceptions apply. Pls.' Reply 5. Plaintiff is correct that "[t]he insurer has the burden of proof that the loss is excluded." Stanford v. American Guaranty Life Ins. Co., 571 P.2d 909, 911 (Or. 1977).

    But the "burden of proof" referenced in Stanford concerns whether coverage was properly denied on the merits based on evidence, not in the context of whether there was a duty to defend, which is solely based on the complaint and the policy.

    Plaintiffs also fault Defendant for failing to introduce evidence in support of "pleadings filed after the initial complaint". Pls.' Resp. Def.'s Cross-Mot. Summ. J. 6. As stated earlier, the inquiry is whether a duty to defend arises based on the allegations in the amended complaint, and whether the policy exceptions preclude coverage in light of the factual allegations in the amended complaint.
(2) The trick here would have been for the homeowner to get the title insurer to delete the public records exception from the insurance policy when initially buying the premises & policy.

Frustrated Neighbors Suspect Family Who Moved Into Vacant Home In Foreclosure Are Squatting Under Adverse Possession Claim; Cops: Our Hands Are Tied!

In Miami, Florida, WTVJ-TV Channel 6 reports:
  • Some Midtown Miami neighbors are furious about what they call attempts by a family to use an archaic law to move into a home in the neighborhood where they don’t belong.

    The family is squatting at 210 NE 44th St. using Florida’s adverse possession law, Midtown resident Tom Joule said. ”We have called the police many times. We have called the utility company saying these people are stealing utilities,” Joule said. “The first time the police came out they entered the residence and told us there is nothing we can do.”

    Joule said he believes the people who have moved into the home filled out a form with the county indicating they were trying to gain ownership through adverse possession.

    “There's a one-page form that they downloaded from the Internet,” Joule said. “No one verified who these people were. They simply said OK, you’re in possession of the property.”

    The property appraiser said late Monday afternoon that that no one has filed a form to officially begin the adverse possession process, however.

    Florida Power & Light said it could not provide account information. The water department said that officially there is no water there, as there is no account for the address.

    A man who was in front of the home Monday told NBC 6 South Florida that he spoke to the owner of the property, and police, but he didn't have anything to say about how he ended up there. The man also didn’t answer questions about whether he filled out the form with the county.

    Both Joule and neighborhood resident Carlos Carrillo said they have called 911 about the situation. Carrillo said he and his wife did so when they felt concerned for their own safety. ”We have no power or no ability to get them out of the home,” he said.

    Miami Police confirmed that they have responded to the home on multiple occasions after calls to 911 about disturbances between the neighbors, as well as noise. Police said they cannot do anything about removal because that is up to the courts.

    The state’s adverse possession law says that for a person to be in exclusive possession of a home, it has to be done openly, notoriously, and they have to stay in the home for seven years.

    In a high-profile adverse possession case in Boca Raton recently, police eventually evicted Andre Barbosa after he lived in a mansion there.

    Tax records show the home in Midtown is owned by Dr. Smith Joseph, who is running to be the next mayor of North Miami. Court records show the bank is moving to foreclose on the home.

    NBC 6 looked for Joseph at medical practice and campaign office Monday, but could not find him for comment. Joseph came to the property to see who was there, according to Joule.

    ”He was out the first day with the police,” Joule said. “The police said oh there’s nothing we can do, even though the owner was right here saying I don't know these people.”

    Real estate attorney Ben Solomon there is a mortgage on the property, and that prevents any attempts at using the adverse possession statute there.

    His advice to residents that believe squatters are present in their neighborhood? ”Well, obviously identifying the problem, reporting it to the owner and the authorities is a first step,” said Solomon, of the Association Law Group. “The owner should call the police and have the illegal trespasser removed.”
Source: Midtown Miami Neighbors Say They're Powerless To Get Squatters out of Neighborhood Home.

For story update, see Alleged Squatters Leave Midtown Home:
  • Regardless of how the alleged squatters found a home in up-and-coming Midtown, police were in full force Tuesday as a man, several women and children all were seen exiting the home carrying their belongings. Their monthlong stay at 210 NE 44th St. apparently over for good. [... P]olice did not eject or remove the family. They left voluntarily and called a city homeless program to help them.

On Verge Of Title Closing, Crackpot Quickly Abandons Adverse Possession Claim On Unoccupied Home When Commission-Hungry Real Estate Agent Calls Cops; Investigators Punt On Criminal Trespass Probe, Say 'It's A Civil Matter!'

In Delray Beach, Florida, the South Florida Sun Sentinel reports:
  • Patrick Glover is no Loki Boy.

    Glover, a Delray Beach businessman, quickly aborted his bid to gain ownership of a vacant house in a working-class Delray Beach neighborhood after a Realtor on the verge of completing the sale of the 1,820-square-foot property called police.

    According to Delray Beach police incident reports, Glover tried to take over the one-story house in the 300 block of Southwest Third Street on Feb. 6 by claiming adverse possession — the same controversial real estate law that was made famous by a brazen Boca Raton mansion squatter earlier this year. In that case, Andre 'Loki Boy' Barbosa, 23, plunked himself into a $2.5 million house in an exclusive community around Christmas and wouldn't leave — until cops forced him out earlier this month.

    Luckily for Realtor Laura Rolinc, 44, of Premier Residential Group, Glover wasn't about to pull the same stunt.

    Instead, Glover told Rolinc it was all a "misunderstanding" and a "mistake" when she called him on Feb. 13, immediately after discovering that her lock box was missing and the door locks on the house had been changed.

    She also found a taped-up 'adverse possession' notice in the front window. The document listed the claimant as UrbanScrapMetal.com, of Northwest 10th Avenue in Delray Beach, according to police reports. Filed Feb. 6, the form was signed by Patrick Glover.

    Rolinc had a client set to close on the house that same day. She feared the worst: a long, drawn-out situation a la Barbosa's Boca caper.

    "I figured with all the hubbub of the story in Boca, that this was going to happen, because everybody thinks they can just walk into any vacant property and take it over," Rolinc said. "They don't realize what adverse possession entails."

    The obscure Florida real estate law allows for the right to claim possession of an abandoned property — but only after a claimant has lived there for seven years openly and while paying all the taxes.

    Rolinc called Glover and told him she would call police, which she did. He handed over the keys within an hour. She questioned Glover, who did not appear to have lived in the house. He said he didn't know what happened to the locks, nor could he say how he got into the property.

    A Delray Beach police officer inspected the property but "did not notice any significant signs of forced entry," according to the police report. The case was determined to be a civil matter. Glover was not charged.

    Reached by phone by the Sun Sentinel on Thursday, Glover briefly commented before hanging up. "It was all resolved," Glover said. Further attempts to reach him by phone and email were unsuccessful.

    Rolinc, glad the situation did not escalate, said the incident should have warranted a criminal investigation by police.

    Delray Beach police spokeswoman Sgt. Nicole Guerriero said police have little precedence with adverse possession cases, but since the Glover and Loki Boy incidents they have received more clarity from the Palm Beach County State Attorney's Office.
Source: Delray man drops claim on vacant house after Realtor calls police (Police warn would-be squatters that they could face arrest for trespassing).

South Florida Man Behind 7 Of 20 Open Adverse Possession Claims In Palm Beach County; Vacant Gas Station Included Among Squatter's 'Holdings'

In Palm Beach County, Florida, WPTV-TV Channel 5 reports:
  • On Northeast 4th Court in Boynton Beach, the neighborhood kids set up a basketball hoop. "(We play out here) everyday," said neighbor D.J. Joseph.

    On Sea Pines Way in Lake Worth, neighbors use the driveway in front of the abandoned house for extra parking.

    On Orange Street in Boynton Beach, neighbors are just sick of the abandoned house that is practically falling down. "Everybody comes in there smoking crack," said neighbor Les Roy. "It's bad for the neighborhood, we need the house broken down."

    The Orange Street property is one of seven properties being claimed by a man named Roody Silverlain. He's not just interested in homes. He is also squatting a gas station on Lake Worth Road.

    "It's a try to get rich quick scheme," said real estate attorney Larry Bray. Bray says it's unlikely any of the adverse possession claims will work, because the claimant has to prove they're not only paying property taxes, but taking care of the properties as if they lived there. "I think it's very doubtful they'll fill the requirements of the statute," said Bray.

    In Palm Beach County, there are twenty active claims by fourteen people, most in just the last year. The people living at a home on 21st Street in Boca Raton didn't want to comment on camera, but say the owners - relatives of theirs - asked them to live here after someone picked the locks and filed a claim with the county.

    Like the youngsters in Boynton Beach, their neighbors happen to like the attention the house has gotten. "At least its better than it was. Somebody is mowing the grass. They pay the kids next door to do it, but that's OK," said neighbor Ed Goetz.

    An attempt to reach Silverlain for comment on the seven homes on which he is squatting was unsuccessful.
Source: Palm Beach County has twenty open adverse possession claims (Squatters hitting countywide).

Friday, March 01, 2013

Another Lender's Lien Sunk By Seemingly Trivial Notary Screw-Up; Chapter 7 Trustee Successfully Voids Mortgage In Ohio Homeowner's Bankruptcy Proceeding

From a post on the blog Bankruptcy-RealEstate-Insights:
  • [In re] Lacy is one more in a long list of cases where an Ohio mortgage was attacked based on defects in execution. Although the Ohio statute requires only “substantial compliance” with the statutory execution requirements, mortgages are sometimes avoided based on seemingly trivial technical defects.

    The debtor, Mr. Lacy, had executed a valid power of attorney appointing Ms. Iacuzzo as his attorney-in-fact to execute documents in connection with the acquisition and financing of a property. Using the power of attorney, Ms. Iacuzzo executed a mortgage on behalf of Mr. Lacy.

    The first page of the mortgage included the following:
“Borrower” is CHARLES L. LACY , UNMARRIED

...........The signature block included the following:

– BORROWER – CHARLES L. LACY, BY, GINA MARIE IACUZZO
HIS ATTORNEY IN FACT – DATE –

...........The acknowledgment stated that it was acknowledged before the notary by:

CHARLES L. LACY , U [The court noted that this appeared to
be copied from the first page, where “U” was the
first letter of “Unmarried.”]
...............................
  • Since it was Ms. Iacuzzo, not Mr. Lacy, that appeared before the notary, the acknowledgement was incorrect.
***
  • After reviewing [the applicable Ohio case law], the Lacy court concluded that, while an argument could be made that the acknowledgment was sufficient, this case was closer to the cases holding that the certificate was invalid, causing the mortgage to be ineffective.

    When the notary stated that the instrument was “acknowledged before me,” the notary was purportedly certifying that Mr. Lacy appeared in person and that he was known to the notary or provided satisfactory evidence to the notary that he was the person taking the acknowledgment. That was incorrect.

    Although the court found it to be a close call, it concluded that the certificate was not in substantial compliance with the statutory requirements, and therefore the mortgage was avoidable. As a consequence, GMAC was treated as having an unsecured claim, and the lien of the mortgage was preserved for the benefit of the estate. (This means that the trustee could assert the lien for the benefit of the estate to obtain a distribution ahead of any junior lienholders.)

    As illustrated by these and other cases (see Bankruptcy “Strong Arm” Powers: Bye Bye Mortgage), details can be very important; and if you are going to make a mistake in execution of a mortgage, try not do it in Ohio.
For more, see Mortgage Execution Errors: If You Make a Mistake, Try Not To Do It in Ohio.

For the court ruling, see McClatchey v. GMAC Mortgage, LLC (In re Lacy), 483 B.R. 126 (Bankr. S.D. Ohio 2012).

    No-Kill Animal Shelter/Low-Cost Vet Clinic Temporarily Dodges Foreclosure As Sloppy Lender Fails To Submit Proper Loan Documentation In Court

    In Bloomington, Illinois, The Pantagraph reports:
    • A Bloomington bank must re-file its foreclosure action against a McLean County animal rescue group, a judge ruled Monday, citing the bank’s failure to submit certain documents.

      Heartland Bank and Trust is seeking foreclosure over $1.1 million it is owed by Central Illinois Small Animal Rescue in rural Colfax. CISAR owes $750,000 in principal and interest on its initial loan and $294,460 on a second mortgage, plus late fees and other charges, according to court records.

      Springfield attorney Paul Adami argued on behalf of CISAR operator Pat Burr that the bank did not attach paperwork showing modifications made to the loans, originally issued by Bank of Illinois. Heartland took over the CISAR obligation after Bank of Illinois failed in 2010.

      In his arguments, Adami told Judge Rebecca Foley that “we have two loans, multiple mortgages, but the same problem running throughout this case: Heartland Bank has not provided proper documents to support its loan.”

      Bank attorney Thomas Howard countered that the nonprofit group did not meet the terms of an agreement to avoid foreclosure and has admitted that the debt is owed.

      CISAR provides a service to the community, said Howard, but that contribution to save animals does not preclude the group from its financial obligations.

      After the hearing, Burr said CISAR will continue to operate the shelter. She said the group has made substantial payments toward its debt, including paying off a $250,000 loan from Heartland. Problems started when Heartland told Burr that its existing loans would need to be refinanced, something the group has been unable to do, according to Burr.

      CISAR operates a no-kill shelter and low-cost veterinary clinic.

      Howard said the bank will resubmit its foreclosure notice by next Tuesday. A May 3 hearing is set.

    Property Seller's Slick Maneuver To Jerk Around, Stiff Buyer On Oil/Gas Rights On Sale Of 138-Acre Property Fails; WV Supremes: Convey All Mineral Interests In Connection With Sale Of Premises Under Fully Consummated Land Contract

    From an Opinion Summary on Justia.com US Law:
    • Petitioners and Respondents executed a land contract whereby Respondents agreed to sell a piece of property to Petitioners. After the land contract had been fully consummated, Respondents refused to tender a deed to Petitioners.

      Petitioners filed suit, seeking a delivery of a general warranty deed for the property, including all oil and gas rights.

      Two months later, Respondents tendered a deed to Petitioners reserving oil and gas rights. The deed was recorded on February 17, 2010.(1)

      Petitioners moved for summary judgment, arguing that because the land contract did not contained any language indicating Respondents' intention to except oil and gas rights, any questions of interpretation should be resolved in favor of the grantees.

      The trial court granted summary judgment for Respondents, finding that when the deed was recorded, the land contract was merged in the deed and any cause of action based upon the contract was extinguished.

      The Supreme Court reversed, holding (1) the contract was unambiguous, and Respondents failed to establish any legally sufficient basis for varying its terms; and (2) therefore, Respondents were obligated to convey their title and interest to the property, including their vested oil and gas rights. Remanded for entry of summary judgment in favor of Petitioners.
    Source: Opinion Summary - Spitznogle v. Durbin.

    For the ruling, see Spitznogle v. Durbin, No. 11-1132 (W. Va. February 8, 2013).

    (1) A slick maneuver the sellers attempted in this case in what ultimately turned out to be a failed effort to stiff the buyer out of the property's mineral rights on the sale of the entire fee interest of the 138-acre property was to tender the deed to the buyers while the litigation in the trial court was ongoing, specifically reserving all mineral rights from the conveyance, and then invoke the doctrine of merger to assert that, once the deed was accepted by the buyers, the existing land contract "merges" into the deed. In this way, if any terms in the land contract are in conflict with the terms in the subsequently-tendered deed, the deed will control (and thereby purportedly leaving the buyers out of luck).

    In fact, the sellers (the "Durbins") initially got away with it, as the trial court ruled in their favor.

    However, the screwed-over buyers (the "Spitznogles") appealed, giving the West Virginia Supreme Court an opportunity to address the merger doctrine, the lower court's erroneous ruling thereon, and its correct application under the facts and circumstances of this case:
    • The Spitznogles contend that the doctrine of merger should not be applied where litigation to enforce the provisions of the underlying contract is ongoing at the time a deed is tendered and accepted. Under the facts and circumstances of this case, we agree.

      We begin by examining the doctrine of merger. It has been established in our jurisprudence for almost one hundred years, although it is neither well known nor well understood. It was last mentioned by this Court more than seventy years ago, where we defined it in its most basic formulation: "Where an executory contract for the sale of land is followed by a conveyance thereof, the contract is merged in the deed of conveyance, and the deed will control." Syl. Pt. 1, Wolfe v. Landers, 124 W. Va. 290, 20 S.E.2d 124 (1942); see also Syl. Pt. 3, Harman v. Dry Fork Colliery Co., 80 W. Va. 780, 94 S.E. 355 (1917) ("A contract of sale is merged in a conveyance made in pursuance of it, and, if there is any conflict between the papers, the deed controls.").

      In practice, however, and indeed as evidenced by our analysis in both the Wolfe and Harman cases, the doctrine of merger seldom admits of hard-and-fast application. Not all antecedent agreements between grantor and grantee are extinguished upon acceptance of a deed, because merger is not an absolute rule but rather a rebuttable presumption.

      The presumption of law is that the acceptance of a deed, made in pursuance of an antecedent written agreement for the sale of land, is satisfaction of all previous covenants, and, although such acceptance may in some circumstances be but partial execution of the contract, to rebut the legal presumption the intention to the contrary must be clear and convincing.

      Until consummated by deed, an executory contract of sale is subject to modification by agreement of the parties; and where an act is done which without fraud or mistake is tendered by one of them, and accepted as full performance by the other with knowledge of his legal rights and equities, the acceptor and those claiming under him are not competent to assert that some part of the original agreement remains to be performed.


       Syl. Pts. 7 & 8, James Sons Co. v. Hutchinson, 79 W. Va. 389, 90 S.E. 1047 (1916) (emphasis supplied).

      In rebutting the presumption of merger, a litigant must establish that the case falls within one or more recognized exceptions to the doctrine.

      These exceptions include fraud, mistake, ambiguity, lack of knowledge of one's legal rights and equities, and acceptance as only partial performance of an antecedent agreement. James Sons Co., 79 W. Va. at 398-401, 90 S.E. at 1051-52; Wolfe, 124 W. Va. at 293, 20 S.E.2d at 125; see also Harrodsburg Indus. Warehousing, Inc. v. MIGS, LLC, 182 S.W.3d 529, 532 (Ky.App. 2005) ("exceptions to the merger doctrine are fraud, mistake, or contractual agreement clearly not intended to be merged into the deed."); Raymond v. Holliday, 2011 WL 2462671 (Mich.App., 2011) ("where delivery of the deed represents only partial performance of the preceding contract, the unperformed portions are not merged into it[.]").

      When the tender and acceptance of a deed is held to extinguish rights under an antecedent contract, it is most often in cases where the plaintiff/grantee was not a party to the underlying contract whose terms are urged as the basis for reformation. That was the factual situation in Harman, James Sons Co. and Wolfe. In Wolfe, this Court explained that:

      [I]f this were a case between the Charlton Development Company and its grantee, a showing that the restriction inserted in the deed was placed there by mutual mistake or through fraud might justify a reformation of the deed. But that is not asked for, and probably could not be granted to the prejudice of subsequent purchasers of lots in the same subdivision, and who made purchases in reliance on the covenant appearing in the deed as executed and recorded.

      124 W. Va. at 293, 20 S.E.2d at 125. Additionally, our precedents make it clear that the parties' knowledge and intent are important factual elements in determining whether a merger has occurred. See James Sons Co., 79 W. Va. at 400-401, 90 S.E. at1052 (where deed conveyed fewer acres than were specified in antecedent contract, doctrine of merger applied because undisputed facts showed that original grantee was fully aware that the deed conveyed only 141 acres and that he acquiesced in the reduction of acreage until his death thirty years later).

      In its order granting summary judgment to the Durbins, the circuit court treated merger as a principle of law admitting of no exceptions, citing the general rule articulated in Wolfe and Harman.

      Under the facts and circumstances of the instant case, the circuit court erred. The antecedent land contract, the terms of which the Spitznogles sought to enforce, was their own contract with the Durbins, not a contract into which some predecessor in interest had entered.

      The Spitznogles had filed suit on the contract months before the Durbins tendered the deed, and there is no evidence in the record to show that the Durbins tendered the deed, or that the Spitznogles accepted it, as resolution of the lawsuit.[4]

      To the contrary, it is clear from the record that the Spitznogles did not accept the deed as "full performance by the [Durbins] with knowledge of [their] legal rights and equities . . .," Syl. Pt. 8, James Sons Co., but rather accepted it as partial performance of the land contract, believing that they retained their right to pursue full relief in circuit court.

      Indeed, in light of the Durbins' failure to tender a deed to the property for almost five months after the purchase price was paid in full — and then only after the Spitznogles were forced to retain counsel and file suit — it would be manifestly unfair to conclude that by recording the deed, the Spitznogles unwittingly extinguished their right to full relief.

      Finally, the Durbins claimed, in their memorandum in opposition to the Spitznogles' motion for summary judgment, that the parties' lack of mutual understanding as to the conveyance of mineral interests "is undeniably apparent," an admission that fatally undermines their argument that summary judgment was appropriate on the issue of merger.

      In light of the foregoing, we conclude that the circuit court erred in granting summary judgment to the Durbins, as the undisputed material facts of record demonstrate that the land contract between the parties was not merged into the deed, and that the doctrine of merger does not extinguish the Spitznogles' right to seek enforcement of the contract.

    Thursday, February 28, 2013

    Complaints Identify Pair For Alleged Roles In Racket That Used Powers Of Attorney From Duped Homeowners To Take Control Of Underwater Homes, Then Lease Them Out & Pocket Rent

    In Tampa, Florida, Newschannel 8 reports:
    • For years now, real estate agent Sunnie Finkle and bail bondsman G.T. Wilson II have tried to make a living from Florida’s foreclosure crisis.

      Now they’re named in a complaint to the Pasco County Sheriff’s Office over a method they used with more than a dozen homeowners: Sign them up for a short sale, obtain power of attorney, rent the house to someone else, and keep the proceeds.

      “I do think I’ve been taken advantage of,” said Peggy Vieira, the New Port Richey homeowner who filed the complaint. “I blame both of them.”

      Vieira said she had no idea Wilson leased the home after she signed papers with Finkle to do a short sale, which involves persuading the bank to accept a payoff of less than the amount owed on the mortgage.

      David Wein, the renter, had no idea Vieira was the owner of the home and joined her in the Pasco complaint. “We got caught up in it,” Wein said.

      Finkle and Wilson were involved in similar deals in Hillsborough and Polk counties.

      A search of public records turned up more than a dozen cases in which homeowners granted Wilson power of attorney. Finkle put the number at 39. There is no evidence, however, that a short sale to Wilson was ever completed.

      “I’ve never had a closing with her,” said Lesley Lambert, regional manager for Universal Land Title, whose company has been handling paperwork on proposed short sales initiated by Finkle since October.
    For more, see Pasco foreclosure 'helpers' profit at owners' expense (A Tampa Bay couple may have swindled homeowners in three counties. They took advantage of homeowners facing foreclosure).

    County Treasurer Warns Locals Of Scammers Claiming To Be Gov't Reps Who Target Property Owners With Unpaid Taxes With Talk Of Foreclosure, Eviction

    In Allegany County, New York, the Wellsville Daily Reporter reports:
    • If someone has come to your door in the last few weeks about foreclosure or eviction over unpaid taxes, it’s nobody from the county treasurer’s office, Treasurer Terri Ross says.

      “The office of the Allegany County treasurer has received several complaints resulting from unsolicited and deceptive practices directed towards landowners with outstanding delinquent taxes,” Ross said in a notice sent out near the end of January. “These practices have been performed by unknown parties claiming to be county representatives.

      “It is not the practice of Allegany County to contact landowners in person, nor does the Allegany County treasurer execute or threaten to execute eviction notices,” she said in the notice. “If an additional notice is to be posted upon a delinquent tax parcel, the notice will be posted by a uniformed Allegany County sheriff’s deputy.”
    For more, see County treasurer cautions residents about home visits over delinquent taxes (Ross: Those who visit residences are falsely representing the treasurer's office).

    California Counties Consider Boosting Land Document Recording Fees To Fund Prosecutions Of Deed Theft & Other Real Estate Rackets

    In San Diego, California, The San Diego Union Tribune reports:
    • San Diego County is eyeing a fee hike for certain property filings to raise more money for real estate fraud investigations.

      The assessor’s office is studying that possibility in light of a new state law that aims to help counties, especially those hard-hit by the foreclosure crisis, catch up on backlogs of housing-fraud cases.

      As of Jan. 1, the maximum fee amount counties can tack on for filing select real estate transaction paperwork rose to $10 from $3 for each filing. The money generated from this fee has long gone toward a trust fund for real estate probes and prosecution.

      The previous maximum of $3 per filing was “insufficient to adequately fund real estate fraud prosecutions and needs to be increased,” according to SB 1342.

      Affected documents include notices of default, which signal the start of the foreclosure process, and trustee deeds, which are filed when a foreclosure is completed.

      So far, at least two counties in California, Riverside and Ventura, have recently upped their filing fees. Riverside increased its fee to $6 per filing. In Ventura, it’s now $10.

      Other counties are expected to follow suit. Some are proceeding with caution because the fee hike may be challenged in court by the Sacramento-based Howard Jarvis Taxpayers Association. The group argues the fee increase is a special tax that’s unconstitutional if it’s put in place without a two-thirds vote of county residents.

      “It’s certainly grounds for a lawsuit,” said David Wolfe, the group’s legislative director, who called the fee hike massive.

      Twenty-two counties in the state, including San Diego, charge filing fees to maintain real estate prosecution funds, based on an October report from the Legislative Analyst’s Office.

      Because of the fund, California counties were able to lock in 200-plus real estate-crime convictions from 2011-2012, the report states, including 23 in San Diego County. Those convictions represent $656.6 million in monetary losses.

      If no legal challenges surface, San Diego County Clerk-Recorder-Assessor Ernie Dronenburg would like to propose a filing-fee hike to the county Board of Supervisors early in the year for approval.

      Foreclosures and mortgage defaults in the county have fallen drastically since the height of the recession, but the fallout from the housing crisis still lingers. “We’re always struggling for resources to try to combat the (real estate fraud) problem,” said Stephen Robinson, who heads the economic crimes division for the San Diego County.

      Robinson said the fund is important because it has helped pay for a real estate unit that includes three lawyers, three investigators, two paralegals and a secretary.

      Additional resources are welcome because mortgage-fraud cases are time-consuming and complex.

      “There are definitely cases that we could work if we had additional resources,” Robinson said. “It would be difficult for a police department to say, ‘I’m going to give a detective one case to work on for six months.’”

      Foreclosure-scam victim Frank Washburn supports raising fees if it means increased prosecution of real estate criminals.

      Washburn, of Chula Vista, admits he was duped out of $2,500 from a solicitor who claimed he could buy Washburn more time in his home, which was going through foreclosure. Washburn found the solicitor convincing because he came bearing official-looking documents.

      “I mean, more power to them,” said Washburn, 46, referring to counties that have implemented fee increases. “I hope they put an end to it.”

      Los Angeles County also hopes to propose a filing-fee increase to its Board of Supervisors as early as the spring, said David R. Lopez, deputy in charge of the real estate fraud unit in Los Angeles County. “Any increase would help,” Lopez said. “One additional body would help. (Caseloads) are stacking up in Riverside, here, and all over the state.”

    Wednesday, February 27, 2013

    Criminal Robosigning Charges Against Vegas Pair Dismissed; Judge Says State AG's Office Used Misleading Language To Dupe Grand Jury When Scoring Indictment On 306 Counts

    In Las Vegas, Nevada, KLAS-TV Channel 8 reports:
    • A judge dismissed all felony charges Monday against two people accused of robo-signing.

      The judge decided the Attorney General's office mislead the grand jury to indict two former home loan title officers. This was Nevada's largest criminal case against foreclosure fraud.

      Gerry Sheppard and Gary Trafford were former employees with Lender Processing Services. They faced 306 felony counts of falsifying foreclosure notices.

      Defense attorney John Hueston said Las Vegas Judge Carolyn Ellsworth decided the charges should not have been brought to criminal court and that prosecutors used misleading language to obtain a grand jury indictment.

    No Equitable Relief For Hapless Homeowner Who Lost Ownership Of His Newly-Constructed House Because It Created 1.1 Acre Encroachment On Neighbor's Land

    From an Opinion Summary from Justia.com US Law:
    • Appellant Peter McGlashan and appellee Terrell Snowden own adjacent lots of real property in Ware County.

      McGlashan contracted to build a home on his lot and took exclusive possession of the completed home in July 2010. In March - April 2011, McGlashan discovered that his home encroached 1.11 acres onto Snowden's lot.

      After being informed by McGlashan of the encroachment, Snowden filed a complaint for ejectment, seeking to recover possession of his lot and the dwelling house and improvements located on it as well as damages for trespass, and seeking to be awarded fee-simple title to the home and improvements.

      McGlashan filed a counterclaim in which he raised an equitable claim for unjust enrichment and sought permission to remove the home and improvements from Snowden's lot.

      McGlashan also filed a third-party complaint against the builders of the home, seeking to recover from them the full value of McGlashan's loss should he lose the ejectment action or the cost of removing the dwelling and improvements from Snowden's lot should McGlashan have prevailed.

      After a hearing, the trial court granted summary judgment to Snowden. McGlashan appealed the judgment to the Supreme Court.

      The sole issue on appeal was whether the trial court erred when it granted summary judgment to Snowden on McGlashan's counterclaim for equitable unjust enrichment.

      Upon review, the Court disagreed with McGlashan's contention that the trial court erred.(1)

    For the ruling, see McGlashan v. Snowden, S12A1896 (Ga. February 18, 2013).

    (1) The court's ruling was short and sweet:
    • The sole issue on appeal is whether the trial court erred when it granted summary judgment to Snowden on McGlashan's counterclaim for equitable unjust enrichment.[2]

      We disagree with McGlashan's contention that the trial court erred. "Equity will grant relief only where there is no available adequate and complete remedy at law" (Cantrell v. Henry County, 250 Ga. 822 (1) (301 SE2d 870) (1983)), and "[t]he availability of money damages affords ... an adequate and complete remedy...." Besser v. Rule, 270 Ga. 473, 475 (510 SE2d 530) (1999).

      McGlashan's third-party complaint against the allegedly-negligent builders of the home seeks monetary damages for McGlashan's loss of the home should he lose the ejectment action filed by Snowden.

      Since McGlashan could recover money damages from the builders in this action, it would be inappropriate for the trial court to grant him equitable relief. See Coleman v. Retina Consultants, 286 Ga. 317 (3) (687 SE2d 457) (2009). See also Century Bank of Georgia v. Bank of America, N.A., 286 Ga. 72 (1) (685 SE2d 82) (2009).

      Accordingly, the trial court did not err when it granted summary judgment to Snowden on McGlashan's counterclaim seeking equitable relief.
    In footnote 2 of the ruling, the court appears to give a subtle hint that, rather than bringing an equitable claim for unjust enrichment, the hapless homeowner who just lost his newly-constructed home due to an alleged builder screw-up should have simply urged the trial court establish:
    • that he was acting in good faith when having the home built on the neighbor's lot, and
    • the value of the home,
    and then apply the state statute applicable in matters such as these. Then, in the event of a ruling in favor of the ejectment-seeking landowner, the landowner, pursuant to the Georgia ejectment statute, would have the option of either:
    • snatching the home, subject to the payment to the hapless homeowner, who acted in good faith, for the value of the improvements, such payment to be made within such time as may be fixed by the court in the decree, or
      ......................
    • relinquish, to the homeowner, title to the 1.1 acre of land upon which the house sat, and to receive from said homeowner, the value of the land found by the jury to be due him, such payment to be made by the homeowner to the landowner within such time as the court may direct by its decree.
    Under either option, "equity" will have been done by simply applying the statute, as opposed to asking a court to grant "equitable relief."

    For the homeowner to seek relief in this case through a counterclaim seeking "equitable relief" when, as just described, there was an adequate remedy at law available to him suggests that he (or his attorney) may have committed a tremendous screw-up in the approach taken in litigating this case. The court, in footnote 2, stated:
    • [W]e do not in any way address the propriety of the trial court's rulings on other matters such as the proper ownership of the home in question or McGlashan's alleged "good faith" in building the home in a manner that encroached upon Snowden's property. See, e.g., Small v. Irving, 291 Ga. 316 (729 SE2d 323) (2012); OCGA § 44-11-9(a).
    By the way, in another footnote, the court suggests that if the landowner was aware of the fact that the home was being built on his land and sat silently, doing nothing to object in the process, the landowner may not be entitled to keep the home. In footnote 1, the court stated:
    • It is undisputed that Snowden, living in Florida, had no knowledge of the construction on his property until McGlashan informed him of the encroachment. Compare Ga. Railroad &c. Co. v. Hamilton, 59 Ga. 171 (1877) (railroad was estopped from denying Hamilton's title and recovering Hamilton's house since officials knew Hamilton was building on railroad land and did not object, and Hamilton acted in good faith).

    Myrtle Beach Life Insurance Peddler "A Financial Assassin," Says Attorney Whose Elderly, Unsophisticated, High-Equity Homeowner-Clients Were Allegedly Targeted For Mortgage Refinance Racket Where Proceeds Were Illegally Used To Indirectly Finance $2M+ In Unnecessary Policies, Annuities

    In Myrtle Beach, South Carolina, The Sun News reports:
    • Peggy Allen was born and raised across the street from the house where she now lives – a house that her grandfather built by hand, using timber he cut from his own land, more than 100 years ago.

      Bakers Chapel Road was a dirt road when Allen was a child, and Allen said she remembers “running across the field to Grandma’s house” to play when the weather was warm. Allen’s father and his four siblings grew up in the two-bedroom home, which still has its original, unpainted exterior.

      Today, a bank is threatening to foreclose on the home that’s been in Allen’s family for three generations. What should have been a comfortable, albeit modest, retirement with her husband, Charles, has instead turned into a gut-churning, constant worry over money.

      “We used to be able to pay all our bills and we could go out to eat whenever we wanted,” said 80-year-old Charles Allen, whose health has been in steady decline ever since he suffered a stroke in 2000. Charles Allen said that when the couple splurges on a restaurant meal these days they split a sandwich to save money. “I never dreamed something like this would happen to me.”

      The Allens blame Rick McDavid, a Myrtle Beach life insurance salesman, for their financial problems.

      They aren’t alone – nearly two dozen lawsuits have been filed against McDavid by families who say the insurance salesman scammed them by talking them into mortgaging their homes and properties for high-dollar life insurance policies they didn’t need and didn’t understand. The allegations include fraud, breach of contract and negligent misrepresentation.

      “I hope he goes to jail,” said Wanda Causey, whose husband Jackie uses a wheelchair to get around due to years of diabetic neuropathy and other health problems. The Causeys have been served with a foreclosure lawsuit on their property, which they say McDavid convinced them to mortgage for a whole-life insurance policy. Jackie Causey, who was used to making the financial decisions as the man of the house, was on methadone for pain when McDavid made his sales pitch.

      “Anybody that takes advantage of sick people and elderly people, I don’t know what’s good enough for them,” Wanda Causey said.

      Jackie Causey puts it more bluntly: “If I weren’t in this wheelchair, I’d go after him.”
    ***
    • McDavid is not facing any criminal charges and he denies any wrongdoing in his answers to the civil lawsuits. McDavid declined to talk to The Sun News. His lawyer, Stephen Brown of Charleston, said he has “a standing policy that I do not discuss litigation.”
    ***
    • Sid Connor, a Surfside Beach lawyer who represents the families suing McDavid, said the salesman preyed on elderly people and others who had plenty of equity in their homes but lacked financial sophistication.

      Rick McDavid is a financial assassin,” said Connor has spent nearly two years building cases against McDavid at no cost to his clients. “He comes armed with everything he needs to take your money, and these people don’t know it.”

      Connor estimates his clients have paid more than $2 million for insurance they didn’t need, in addition to mortgage payments they would not have had and the emotional trauma each of them has suffered. Connor spends more than half his time working on the McDavid lawsuits, with the rest of his schedule spent working on “a lot of routine stuff that pays the bills.”
    ***
    • The Allens were living on about $38,000 a year in Social Security and pension income when McDavid convinced them in August 2008 to mortgage their 100-year-old, debt-free home for $102,500 at 9.3 percent annual interest. Charles Allen, who retired to Aynor after working in a Rock Hill textile plant for more than 30 years, said his brother introduced McDavid as “someone who might be able to help us, so he [McDavid] called us and came over.”

      Charles Allen’s brother, Larry Allen – along with his wife, Betty – had taken out $3.5 million in life insurance polices just two months earlier, mortgaging their home for $320,000. Flush with cash from the mortgage, Larry and Betty Allen were singing McDavid’s praises, Charles Allen said. They now are among the clients suing McDavid after having paid $160,000 for insurance they can no longer afford.

      Charles and Peggy Allen, who recently celebrated their 59th wedding anniversary, said they did not fully understand McDavid’s sales pitch – “The stroke messed up my brain; I can read something but I don’t know what I’ve read,” Charles Allen said – yet the couple went through with the deal, figuring Charles Allen’s brother must know what he’s doing and counting on McDavid’s church-going background for assurances.

      The mortgage closing was a blur – “He [the lawyer] had a stack of papers and he kept flipping them, saying, ‘Sign here . . . sign here’,” Charles Allen said.

      Court records show proceeds from the mortgage were used to purchase three whole life insurance policies with death benefits totaling $350,000 for Peggy and Charles Allen. Because of Charles Allen’s poor health, the premiums for those policies totaled nearly $3,000 a month.

      “I told him [McDavid] I’ve had a stroke, that I can’t get life insurance,” Charles Allen said, adding that a nurse who conducted a physical for the insurance company initially told him he didn’t qualify for coverage. “He [McDavid] just said, ‘I’ll take care of it’. He told us we could buy whatever we wanted and we could put some money in the bank.”

      Things went fine for more than a year, despite McDavid’s repeated requests for premium payments. The Allens’ bank records show the couple made five payments totaling $66,500 for their insurance policies between August 2008 and December 2009. That is in addition to an $847 monthly mortgage payment the Allens now had to pay.

      When the Allens’ bank account ran low, McDavid urged them to refinance their home. In December 2009, McDavid arranged a new mortgage that netted about $30,000 but also carried a lower interest rate that cut the Allens’ house payment to $716 a month.

      Connor said the lower interest rate was by design, because an anti-churning law in South Carolina forbids multiple refinancings in a short period of time unless there is a tangible benefit to the consumer. That’s one reason McDavid initially arranged a high-interest mortgage.

      “By lowering their monthly payment, it counted as a tangible benefit,” Connor said.

      There was another reason: McDavid was getting a kickback from the yield spread premium – the difference in the actual interest rate paid versus the market rate a borrower qualifies for – on the initial, high-interest mortgage, according to court documents.

      All told, the Allens paid $94,000 on their life insurance policies and kept up with their mortgage for more than two years before the money ran out.

      “He wanted some more money and I told my wife we just can’t afford to make these payments any more,” Charles Allen said.
    ***
    • Connor said McDavid typically had the policies mailed to his office instead of his clients’ homes. McDavid then held onto the policies until after the cancellation period had expired and his clients could no longer get back their money.
    ***
    • Connor’s clients say they are confident they’ll eventually get their money back – if they live long enough to make it through all the court proceedings and their homes aren’t taken first. So far, Connor has been able to fend off the foreclosures by filing counterclaims against the lenders.
    ***
    • Connor is hedging much of his case on a state law that made it illegal, beginning in 2005, for a home lender to finance – either directly or indirectly – life insurance premiums. Although insurance premiums weren’t paid directly at the mortgage closings, Connor said the policies were written within weeks of the closings, sometimes within days, and his clients would not have been able to afford the premiums except for the proceeds from the mortgages that were arranged by McDavid.

      The law says directly or indirectly – that’s not a mistake, someone wrote that in there for a purpose so you can’t get around it,” Connor said. “If you are selling life insurance and orchestrating the mortgage, that is an indirect violation of the law.”

      Connor hopes to cancel the mortgages, recoup the insurance premiums his clients already have paid and get punitive damages against McDavid and the insurance companies.

      Connor said he knows some critics will argue that his clients should have been more careful, that they should have read and understood any document before they signed it, but he bristles at the notion of blaming the victims.

      “Is that what they’d say if it was their mom or dad?” Connor said. “These are simple, country people who go to church and trust people. Wouldn’t everyone like to have a little more money? Sure. That’s how McDavid got his foot in the door. But when you get older, your ability to think about these kinds of things diminishes and it becomes more difficult to fight off someone who wants to take advantage of you.”

    Tuesday, February 26, 2013

    Pro Bono Law Firm Files 13th Lawsuit On Behalf Of Homeowners Allegedly Screwed Over By Loan Modification Rackets

    In Atlanta, Georgia, the Lawyers' Committee for Civil Rights Under Law recently announced:
    • On February 15, 2013, the Lawyers’ Committee for Civil Rights Under Law (Lawyers’ Committee) and pro bono counsel King & Spalding filed a lawsuit in the United States District Court for the Northern District of Georgia, Atlanta Division, against a purported loan modification company and other individuals.

      The case is brought on behalf of 18 African American plaintiffs, 17 of whom live in the Atlanta metro region and one who lives in Alabama. The suit alleges that the defendants, who operate in the metro Atlanta area, defrauded African American homeowners by inducing them to pay up to thousands of dollars in up-front fees for mortgage loan modification services that were never provided.

      Plaintiffs seek both monetary damages, including recovery of the illegal up-front fees, and injunctive relief to put an end to the defendants’ deceptive practices. The Lawyers’ Committee and King & Spalding are representing the plaintiffs free of charge. (Click here to view Complaint.)

      “This case provides a sad example of how minority communities have been hit hard by foreclosure rescue scams and, in some cases, targeted for such scams,” said Linda Mullenbach, senior counsel, Fair Housing and Fair Lending Project of the Lawyers’ Committee. “We hope this action will send a message that targeting minority communities for scams will not be tolerated.”

      The defendants named in the complaint are All American Home Assistance Services, Inc. (All American) and 12 individuals: Derek Harris,(1) Lawrence Spear, Timothy Spear, Asim Spear, Lynette Townes, Taylor Yvet Bailey, Rick Davidson, Karen Johnson, Saleemah Cannon, ShAunta Moore, Tenephius Williams and Derrick Millin. The plaintiffs allege that the individual defendants initially operated the loan modification scam through National African American Relationships Institute, Inc. and NAARI Housing Counseling Agency, Inc. (the NAARI Entities).

      The complaint alleges that the individual defendants, through the NAARI Entities, engaged in a scheme to defraud and extract thousands of dollars from African American homeowners by promising to obtain loan modifications in exchange for up-front fees ranging from $900 to $3,500. The individual defendants represented that they would work with plaintiffs’ lenders to obtain mortgage loan modifications that would reduce their monthly payments, it is alleged. In most instances, the individual defendants instructed plaintiffs not to make their mortgage payments during the loan modification process.

      The individual defendants often guaranteed they would obtain a loan modification or touted a 90-99 percent success rate. The complaint alleges that instead of securing the loan modifications, the defendants performed little or no work on behalf of the plaintiffs. Rather, the individual defendants quickly became hard to reach. Eventually, the NAARI Entities closed their offices with no notification to plaintiffs beyond a recording on their old phone number. The NAARI Entities then filed a petition for bankruptcy.

      After the NAARI Entities filed for bankruptcy in 2012, the fraudulent and illegal scam operation continued through a new corporation—Defendant All American, according to the complaint. The complaint alleges that the key individual defendants who operated the NAARI Entities —Timothy Spear, Lawrence Spear, and Derek Harris — together with Asim Spear, continue “business as usual” at Defendant All American, where they operate the same or substantially similar mortgage modification scamming activities to those that they previously engaged in through the NAARI Entities.

      The complaint also alleges that the individual defendants, operating through the NAARI Entities and then All American, targeted their scam operations on African American homeowners, in violation of the federal Fair Housing Act and other federal and state laws.

      The plaintiffs’ claims against the defendants include violations of the Fair Housing Act and the Credit Repair Organizations Act, and claims of false advertising, unfair or deceptive practices, deceptive practices toward the elderly, fraud, breach of fiduciary duty, negligent misrepresentation, and unjust enrichment.(2)

      Sampson, et al. v. All American Home Assistance Services, Inc., et al., Civil Action No. 1:13-cv-495-WSD, is the Lawyers’ Committee’s 13th loan modification-scam lawsuit filed nationally as part of its work with the Loan Modification Scam Prevention Network (LMSPN). LMSPN is a broad coalition that includes representatives from key governmental agencies, such as the Federal Trade Commission, the U.S. Department of Housing and Urban Development (HUD), the U.S. Department of Justice, the U.S. Department of the Treasury, the Federal Bureau of Investigation and the offices of numerous state attorneys general.

    Ex-Loan Peddler Cops Guilty Plea In I.D. Theft Scam Where He Used His Position To Process Mortgage Applications For Unwitting Victims Who Hadn't Applied For Credit; Defendant 'Sold' His Own Home To One 'Buyer-Borrower' For $300K+ Profit

    From the Office of the U.S. Attorney (Alexandria, Virginia):
    • Kenneth H. DiPasquale, 37, of Morgantown, W.V., pleaded guilty [...] to conspiracy to commit mail, wire, and bank fraud and aggravated identity theft in connection with his role in fraudulent mortgage loan transactions, including the sale of his own home to a buyer whose identity he had stolen and to whom he “sold” the property for a nearly $320,000 profit
    ***
    • According to court records, DiPasquale was employed in 2007 as a loan officer at Citywide Mortgage, a mortgage lender located in Landover, Md. DiPasquale used that position to process loans based on false and fraudulent information, including for borrowers who had not even applied for loans and who had no idea their names and identities had been used as the borrowers in the transactions.

      In particular, when DiPasquale had trouble selling his own home in Bowie, Md., in October 2007, he stole the identity of an individual living in Arlington, Va., and “sold” this victim his house at a nearly $320,000 profit. The transaction involved fraudulent loan documents and an associate playing the role of the buyer at closing. The victim had no idea the property had been purchased in his name until the loans defaulted, the lenders came collecting, and the homeowner’s association sued the unsuspecting victim for unpaid dues.

    Homeowner Who Filed Fraudulent Mortgage Lien Release On His Underwater House, Then Unloaded Premises, Pocketing Full Sales Price & Stiffing Lender Gets 37 Months In Federal Can

    From the Office of the U.S. Attorney (Hartford, Connecticut):
    • David B. Fein, United States Attorney for the District of Connecticut, [] announced that ERIC S. SCHERZ, 44, of Stuart, Fla., formerly of Barkhamsted, was sentenced [...] 37 months of imprisonment, followed by three years of supervised release, for mortgage fraud offenses.

      According to court documents and statements made in court, in October 2007, SCHERZ secured a $417,000 mortgage loan to finance the purchase of a property in Barkhamsted. In April 2008, SCHERZ created a fraudulent release of mortgage on the property stating that the lender, a fictitious company SCHERZ created, had received full payment of the loan. SCHERZ subsequently filed the fraudulent release of mortgage with the Town of Barkhamsted.

      SCHERZ stopped making payments on his mortgage in March 2009 but, in April 2009, he made three fraudulent payments via wire transfer to his mortgage lender that he knew would be and were, in fact, reversed for insufficient funds.

      In May 2009, SCHERZ sold the Barkhamsted property for $299,000 to a buyer who relied on the fraudulent release of mortgage as being genuine. At the time of the sale, SCHERZ’s unpaid principal balance on his mortgage was $410,718.56. SCHERZ did not use any of the $299,000 from the fraudulent sale to his pay his outstanding mortgage debt.

      On January 6, 2012, SCHERZ waived his right to indictment and pleaded guilty to three counts of wire fraud.

      SCHERZ has previously served a 70-month federal term of imprisonment for his role in a mortgage fraud scheme in Florida in the 1990s.

    Monday, February 25, 2013

    Another Operator Gets Bagged By Feds For Allegedly Using 'Fractional Interest' Deed Transfers Of Financially Distressed Homes To Gum Up Foreclosure, Bankruptcy Process

    From the Office of the U.S. Attorney (San Francisco, California):
    • A federal grand jury in San Francisco indicted Walter Bruce Harrell, of Montara, with eight counts of bankruptcy fraud and two counts of making false statements in bankruptcy proceedings, United States Attorney Melinda Haag announced.

      The Indictment alleges that Harrell devised and executed a scheme to defraud creditors who were attempting to lawfully foreclose on numerous properties, and that he did so by delaying and obstructing foreclosure sales through the improper use of the federal bankruptcy process.

      According to the Indictment, Mr. Harrell, 71, is alleged to have arranged for property owners to grant fractional interests of between 2% and 20% of their properties to individuals whom Harrell had paid to file bankruptcy cases in the U.S. Bankruptcy Court for the Northern District of California. These actions invoked the “automatic stay” provision of the U.S. Bankruptcy Code, which halts foreclosure sales until the creditor seeks relief from the stay or until the bankruptcy case is dismissed.

      The Indictment alleges that Harrell’s scheme forced creditors to file motions to lift the automatic stays, or to wait until the debtors’ bankruptcy cases were dismissed, in order to proceed with the foreclosure sales.(1) A number of the creditors affected by the scheme were recipients of funds under the Troubled Asset Relief Program.

      The Indictment identifies at least six properties involved in the scheme, one of which was occupied by Harrell. The Indictment also charges Harrell with making false statements in bankruptcy proceedings with respect to two bankruptcy cases that Harrell paid an individual identified as “T.W.” to file.
    For the U.S. Attorney press release, see Montara Man Charged With Running Bankruptcy Fraud Scheme.

    Go here for other posts on fractional interest deed transfer, foreclosure rescue bankruptcy scams.

    (1) See Final Report Of The Bankruptcy Foreclosure Scam Task Force for a discussion of fractional interest deed transfer scams and other foreclosure rescue rackets involving the abuse of the bankruptcy courts.

    State Supremes: Failure To Include "Unofficial Witness" On Georgia Mortgage Sinks Bankster In Homeowner's Bankruptcy Where Trustee Successfully Voided Lender's Lien

    From Justia.com US Law:
    • In 2006, debtor Denise Codrington executed a security deed with appellant Wells Fargo that was recorded with the Clerk of the Superior Court of Fulton County on October 13, 2006. The deed provided: "[i]f one or more riders are executed by Borrower and recorded together with this Security Instrument, the covenants of each such rider shall be incorporated into ...this Security Instrument as if the rider(s) were a part of this Security Instrument."

      The security deed specifically identified the "ARM Rider" as being incorporated. The last page of the deed was signed by the debtor, the co-debtor (Alvina Codrington), and a notary, but the signature line for an "Unofficial Witness" was left blank.(1) Contemporaneously recorded with the security deed were a number of other exhibits, including a "Waiver of Borrower's Rights."

      The waiver provided that "the provisions hereof are incorporated into and made a part of the security deed." The parties agreed that the waiver was signed by the debtor, the co-debtor, an unofficial witness, and a notary. In June 2008, the debtor filed for Chapter 7 bankruptcy.

      Appellee Neil Gordon, Trustee for the debtor's bankruptcy estate, commenced an adversary proceeding against Wells Fargo seeking to avoid Wells Fargo's interest in the property. Appellee asserted that because the security deed lacked the signature of an unofficial witness, it was not duly recorded and it did not provide constructive notice to a subsequent bona fide purchaser, rendering the security deed avoidable per 11 U.S.C. 544. Wells Fargo moved for summary judgment, the bankruptcy court denied the motion, and the bankruptcy court entered judgment in favor of appellee.

      Wells Fargo appealed to the Eleventh Circuit Court of Appeals which certified two questions to the Georgia Supreme Court: (1) whether a security deed that lacks the signature of an unofficial witness should be considered "duly filed, recorded, and indexed" as required by OCGA 44-14-33; and (2) if no, whether such a situation would nonetheless put a subsequent hypothetical bona fide purchaser on inquiry notice.(2)

      Upon review, the Supreme Court answered both certified questions in the negative.(3)
    Source: Justia.com Opinion Summary - Wells Fargo Bank, N.A./Gordon, S12Q2067 (February 18, 2013.

    For the ruling of the Georgia Supreme Court, see Wells Fargo Bank, N.A. v. Gordon, S12Q2067 (February 18, 2013).

    (1) From the bankruptcy court ruling in In re Codrington, 430 BR 287 (Bankr. N.D. Ga., 2009), which ruled that it was proper to void the defectively-executed mortgage:
    • The signatures of the grantors appear on lines labeled "Borrower." Below the signatures of the grantors is the signature and seal of a notary public.

      A signature line, labeled "Unofficial Witness," is blank. Other than the notary's signature and seal, there is no language or other signal to indicate that anyone saw the grantors sign the deed. The deed was recorded in the real estate records of Fulton County, Georgia on October 13, 2006.
    (2) See In re Codrington, 691 F3d 1336 (11th Cir. 2012) (order certifying questions).

    (3) The Georgia Supreme Court's analysis follows:
    • We address each certified question in turn.

      1. In order for a security deed to be in recordable form, it must be attested by an official witness and an unofficial witness. OCGA §§44-14-61 and 44-14-33. Specifically, OCGA §44-14-33 provides that a security deed "must be attested by or acknowledged before an officer as prescribed for the attestation or acknowledgment of deeds of bargain and sale; and, in the case of real property, a [security deed] must also be attested or acknowledged by one additional witness."

      This Court has recently held that "a security deed is `duly filed, recorded, and indexed' only if the clerk responsible for recording determines, from the face of the document, that it is in proper form for recording, meaning that it is attested or acknowledged by a proper officer and (in the case of real property) an additional witness." U.S. Bank N.A. v. Gordon, 289 Ga. 12, 15 (709 SE2d 258) (2011).

      A deed that is not properly attested is ineligible for recording. Id. The recording of a properly attested security deed serves as constructive notice to all subsequent bona fide purchasers. OCGA § 44-14-33.

      In this case, because the eight-paged security deed lacked the signature of an unofficial witness, it was not in recordable form as required by OCGA § 44-14-33 and did not provide constructive notice. See U.S. Bank N.A. v. Gordon, supra, 289 Ga. at 15; Higdon v. Gates, 238 Ga. 105, 107 (231 SE2d 345) (1976). See also In Re Yearwood, 318 B.R. 227, 229 (M.D. Ga. 2004) (a patently defective security deed does not provide constructive notice).

      Despite the facial defect in the security deed at issue, Wells Fargo urges that because the waiver was attested in accordance with OCGA § 44-14-33 and because the waiver was incorporated into the security deed by reference, the security deed was thereby properly attested and in recordable form.

      We disagree. While we are not bound by the United States bankruptcy courts' interpretations of Georgia law, we nevertheless find In re Fleeman, 81 B.R. 160 (M.D. Ga. 1987) to be analogous to this case and persuasive to our resolution of the question before us.

      In Fleeman, the debtor executed a security deed and an adjustable rate rider. While the rider contained the signature of an unofficial witness, the security deed did not. As with the instant case, the deed and rider were contemporaneously submitted to the superior court for recording.

      After the debtor filed for bankruptcy, the unofficial witness issued and recorded with the superior court an affidavit stating that she had witnessed the debtor sign the security deed.

      One of the arguments advanced by the lender was that the attached and fully attested rider was sufficient to validate the security deed, in particular because the security deed incorporated the covenants and agreements of the rider. Id. at 162-163. The United States Bankruptcy Court for the Middle District of Georgia rejected this argument reasoning as follows:

      By attesting a document, an individual signifies that he has witnessed the execution of the particular document. Black's Law Dictionary 117 (5th ed. 1979) (citations omitted). Thus the signature of [the unofficial witness], which appears on the adjustable rate rider, attests to the proper execution of that document only. Although the adjustable rate rider is incorporated into the terms of the deed to secure debt, the deed to secure debt itself remains improperly attested and ineligible for recordation.

      Id. at 163.[3]

      We agree with the above analysis. As in Fleeman, the attestation of the waiver in this case cannot be substituted for the proper attestation of the security deed. Such a construct would be false and contrary to the purpose of attestation, namely for the witness to verify that the document in question has been executed by the signatories. Allowing a more lenient rule as Wells Fargo urges would likely lead to more complications than it would resolve for lenders, debtors, and subsequent purchasers alike.

      As we admonished in Bank N.A. v. Gordon, supra, 289 Ga. at 17, it costs nothing for lenders or their agents to review their paperwork to make sure the proper signatures are in place before submitting documents to the superior court clerk for recording.

      Accordingly, we answer the first certified question in the negative.

      2. Having answered the first certified question in the negative, we now address the second certified question. Wells Fargo argues that the fully executed, attested, and recorded waiver in and of itself was sufficient to provide "inquiry notice"[4] such that a bona fide purchaser would be prompted to make inquiries as to the existence of a security deed in the property's chain of title.

      We disagree. The rule regarding inquiry notice is summarized as follows:

      [A] purchaser of land in this state "is charged with notice of every fact shown by the records, and is presumed to know every other fact which an examination suggested by the records would have disclosed." [Cits.] ... Although "it is essential that the description of the land in the conveyance should be reasonably certain and sufficient to enable subsequent purchasers to identify the premises intended to be conveyed; but while the description may be inaccurate, meager or erroneous, yet if it is expressed in such a manner or connected with such attendant circumstances as that a purchaser should be deemed to be put upon inquiry, if he fails to prosecute this inquiry he is chargeable with all the notice he might have obtained had he done so." [Cit.] Deljoo v. SunTrust Mortgage, 284 Ga. 438, 439-440 (668 SE2d 245) (2008). When, however, a property description is "manifestly too meager, imperfect, or uncertain to serve as adequate means of identification," a court may adjudge it "insufficient as a matter of law" for a subsequent purchaser to be put upon inquiry. Id. at 440.

      In this case, while the waiver identifies the lender and grantors (debtor and co-debtor), it only generically references a security deed and fails to identify or describe the property purportedly to be conveyed or encumbered by the referenced security deed. In the total absence of identification or description of the property subject to the security deed, the waiver itself would not place a bona fide purchaser on notice that he should make further inquiry.

      Accordingly, we answer the second certified question in the negative.

      Certified questions answered. All the Justices concur.

    Notary's Failure To Insert Borrowers' Names In Certificate Of Acknowledgement Leads To Voided Mortgage In Homeowner's Bankruptcy Proceeding

    From a blog post from the law firm Pepper Hamilton LLP:
    • [In re] Kebe provides a classic example of the exercise of bankruptcy “strong arm” powers. Based on a defective notarization, the lien of a mortgage was avoided, and the bankruptcy court left open the possibility that the value of the lien could be recovered from the mortgagee in the future. Not a happy prospect.

      Section 544 of the Bankruptcy Code gives the debtor or trustee the ability to assert the rights and powers of, and to avoid transfers that are voidable by, a bona fide purchaser of real estate as of commencement of the bankruptcy. To the extent that a bona fide purchaser would have been able to void or take clear of an interest, the debtor or trustee will be able to do the same. State real estate law commonly provides that a bona fide purchaser of real estate can take free of unrecorded interests. In that case, if a mortgage is not recorded, the lien of the mortgage can be avoided in bankruptcy.

      Kebe is one of a long string of cases that finds that defective or improper notarization of a mortgage results in the mortgage being treated as unrecorded under Ohio law.

      In this case the mortgage was properly executed by the mortgagors, but the notary failed to insert the name of the mortgagors so that the acknowledgement block read “This instrument was acknowledged before me this 20th of September, 2004 by ________.”

      Interpreting Ohio law, the bankruptcy court held that the mortgage was not properly recorded, and consequently did not provide constructive notice to a bona fide purchaser of the property. It was not persuaded by arguments that there would have been actual notice because any reasonable purchaser would have searched the land records and found the mortgage even though it didn’t have a legal status as properly recorded.

      Thus the court granted the Chapter 7 trustee’s request to avoid the lien of the mortgage. In case you wonder what happened to the lien, it was preserved for the benefit of the estate. Whatever the mortgagee could have recovered as a result of the mortgage lien would be for the benefit of the bankruptcy estate instead. However, that was not the only relief requested by Chapter 7 trustee.

      Under Section 550 of the Bankruptcy Code, when a transfer is avoided the value of the property transferred may be recovered from the transferee if the court orders. In connection with avoided mortgages, trustees and debtors have been using this section to attempt to recover the amount of the mortgage lien from the mortgagee.

      In a world of seriously underwater mortgages, this presents an opportunity for the trustee or debtor to recover more than they would be able to get from selling the property, and leaves the mortgagee coping with the fact that it may be required to pay the estate more than it will be able to recover itself.

      In this case, the court concluded that recovery was not yet appropriate. The trustee was seeking to sell the property, so that avoiding the mortgage was potentially a sufficient remedy. However, the court left the door open for the trustee to renew its request for recovery of the value of the lien if the trustee was unable to sell the property.

      This case illustrates that formalities can really matter. There is certainly room to litigate various issues, including how to value the grant of the mortgage lien, but no lender will want to find itself in this position in the first place.
    Source: Bankruptcy “Strong Arm” Powers- Bye Bye Mortgage.

    For the court ruling, see Rhiel v. Central Mortgage Co. (In re Kebe), 469 B.R. 778 (Bankr. S.D. Ohio 2012).

    Sunday, February 24, 2013

    Screw-Up In Preparing Loan Document Invalidates Lender's Lien In Borrower's Bankruptcy Proceeding; Contention That Trustee Had Constructive Notice Of Mortgage Falls On Deaf Ears

    From a post on the blog Bankruptcy-RealEstate-Insights.com:
    • Typically an unrecorded mortgage will be void as against a bona fide purchaser under state law. This in turn will allow an unrecorded mortgage to be avoided in a bankruptcy using the "strong arm" powers under Section 544 of the Bankruptcy Code.Thulis reaches this result after a discussion of circumstances that may provide notice to a purchaser besides constructive notice from a recorded document.

      The debtors owned two adjoining parcels described as Lot 1 and Lot 2.The mortgage securing a loan to finance construction of a residence on Lot 1 was supposed to encumber both lots. Unfortunately for the bank, only Lot 2 was included in the legal description attached to the mortgage. When the construction loan was refinanced, the new mortgage also referenced only Lot 2.

      Although all parties acknowledged that the bank intended to take a mortgage on Lot 1, the bankruptcy trustee pointed out that "it is not the thought that counts, but what is recorded with the register of deeds." (The court commented in a footnote that a Google search of this phrase turns up a response attributed to Winnie-the-Pooh that: "If it is the thought that counts, why are there fingers?"However, it also noted that in many situations the observation of a 19th century naturalist that "the smallest deed is better than the greatest intention" is more applicable.)

      This case involves a typical state statute that provides that unrecorded mortgages are void as against subsequent good faith purchasers. Normally a purchaser receives constructive notice of prior interests through recorded documents. However, the court acknowledged that there are limited circumstances in which a purchaser is deemed to have notice of interests through other sources (which would mean that it would not be a good faith purchaser).

      Under applicable state law if a purchaser has actual notice of the prior interest, it would not be entitled to the benefit of the statute providing that unrecorded interests are void. However, this does not apply in the context of exercising the rights of a bona fide purchaser under Section 544 of the Bankruptcy Code since this section specifically provides that the rights are "without regard to any knowledge of the trustee or of any creditor."

      The court acknowledged that a purchaser could also be held responsible under state law for things that would be revealed by the public record or the property itself. One example was a sale involving a boundary dispute. The court concluded that the key was possession. Another similar example was a purchaser under an unrecorded land contract that was in sole possession of the property. The focus is on "use or occupancy" of the property that would provide notice of the interest.(1)

      Although the court characterized it as "possible" that a visit to the property or discussion with the owners might happen to lead a buyer of Lot 1 to learn about a mortgage on the adjacent Lot 2, that was not legally relevant. The court determined that there was nothing in the circumstances of this case that would have provided affirmative notice of the bank's intent to encumber Lot 1.

      The bottom line is that the bank was out of luck: It could have protected itself by recording a mortgage with a proper legal description. The bank's mortgage was outside Lot 1's chain of title and a subsequent good faith purchaser would not have had any notice of the bank's mortgage. Consequently, the mortgage was void as against a bona fide purchaser, and the bank's claim was treated as unsecured.

      As illustrated in several prior blogs (for example, Strong Arm Powers: Bye Bye Mortgage), minor errors in a mortgage can have major consequences in a bankruptcy. Thulis serves as a reminder that attention to detail is critical since the mortgage lien itself is at stake.
    Source: Mortgage Legal Descriptions: When Is A "Boo-Boo" Fatal (Round 1)?

    For the court ruling, see In re Thulis, 474 B.R. 668 (Bankr. W.D. Wis. 2012).

    (1) With regard to the effects on the bankruptcy trustee, the court made the distinction between "actual notice" and "constructive notice", and the effect on the trustee of the rights of others arising from use or occupancy of real estate by others pursuant to some unrecorded property interest:
    • In addition, Wis. Stat. § 706.09(2)(a) describes the limited situations in which a purchaser is deemed to have notice of a prior claim apart from the title record. A purchaser is presumed to have affirmative notice of a prior claim apart from the title record only if there is "notice, actual or constructive, arising from use or occupancy of the real estate by any person at the time such purchaser's interest therein arises."[13]

      Actual notice means exactly what it says. Someone who actually knows about a prior claim or interest cannot claim the benefit of the recording statute.

      However, actual notice is no defense against the bankruptcy trustee. In re Sandy Ridge Oil Co., 807 F.2d 1332, 1336 (7th Cir. 1986) ("actual knowledge is irrelevant under § 544(a)").

      Constructive notice is a different story. Courts have typically concluded that a bankruptcy trustee's avoidance powers are subject to any state law limitations regarding constructive notice. See In re Probasco, 839 F.2d 1352 (9th Cir. 1988); Brown v. Job (In re Polo Builders, Inc.), 433 B.R. 700 (Bankr. N.D. Ill. 2010). In that regard, Wisconsin law reflects a public policy that prospective purchasers are subject to any liabilities or interests which could have been discovered through a reasonable degree of care in consulting certain "avenues of information." Bump, 133 N.W.2d at 299.

      The relevant avenues are the records in the office of the appropriate register of deeds, other public records, and the land itself, by which it is possible to "discover by observation the rights which arise outside of the recording system by virtue of possession or use." Bump, 133 N.W.2d at 300 (emphasis added). If it is possible to discover something (such as evidence of a competing claim) by reviewing one of these resources, a subsequent purchaser cannot rely on the recording statute.
    ***
    • The purpose of the recording statute is to ensure a "clear and certain system of property conveyance." Brown, 656 N.W.2d at 61. Wis. Stat. § 706.09(2)(a) addresses situations in which a purchaser is deemed to have notice of a prior claim "apart from the record." Because the bank's mortgage is outside the chain of title, it is void against the claim of the trustee as a subsequent purchaser unless such a purchaser would have had constructive notice of the mortgage "arising from use or occupancy of the real estate by any person at the time such purchaser's interest therein arises."

      As Wisconsin courts have noted, "No other types of constructive notice are detailed." See Bank of New Glarus v. Swartwood, 2006 WI App 224, 297 Wis. 2d 458, 725 N.W.2d 944, 956 (2006). The policy behind this provision is a compromise between two competing goals — namely, merchantability of title and the protection of legitimate but otherwise hidden land interests. Id. (citing Lubahn, 365 N.W.2d at 621).

      In balancing these goals, Wisconsin courts have imputed notice to purchasers only in limited situations, such as instances involving the adverse rights of someone actually in possession of the property or where the purchaser was deemed to have notice of issues with the property that were visible upon physical inspection.

      In this regard, the land is a "universal manuscript, open to the eyes of all," and a purchaser is expected to read that manuscript to discover any evidence of the rights of third parties. See Horicon State Bank v. Kant Lumber Co., 165 Wis. 2d 543, 478 N.W.2d 26, 28 (Wis. Ct. App. 1991) (citation omitted).

      Bump, for example, involved a boundary dispute. The defendant purchased part of an adjoining lot and landscaped the property to "physically incorporate" it into his yard. The sale was not recorded and the subsequent purchasers of the adjoining property contended that they owned the entire lot. The court concluded that the subsequent purchasers had constructive notice of the initial purchaser's claim because they could have located the actual boundaries of the property with relative ease and did not do so.

      The court observed that the possession of land is constructive notice of "whatever rights the possessor may have in the land if such possession is visible, open, clear, full, notorious, unequivocal, unambiguous, inconsistent with, or adverse to the title or interest of the vendor." Id. at 298.[20] The key to this inquiry is possession, as an occupant with an adverse interest isn't likely to hide it when asked.

      This concept fueled the result in both Fitzpatrick (which was cited by the bank) and this Court's own Fibison decision, both of which involved a dispute between a bankruptcy trustee and purchasers who acquired their interests pursuant to unrecorded land contracts.

      In each case, the trustee was found to have constructive notice of the land contract interests because the property was held by someone whose interest was inconsistent with record title.[21] A land contract purchaser who has sole possession of the property is clearly the sort of "inconsistent or adverse interest" that could be discovered through a simple inquiry.

      Under Wisconsin law, a bankruptcy trustee would clearly have constructive notice of such an interest. See Wis. Stat. § 706.09(2)(b) (a purchaser has notice apart from the record arising from "use or occupancy of the real estate by any person at the time such purchaser's interest therein arises"); Fitzpatrick, 29 B.R. at 704; Fibison, 2011 WL 6149269, at *4.
    ---------------------------------
    For the rights of persons in possession of real estate pursuant to an unrecorded interest, or by reason of some equity, see generally, Bona Fide Purchaser Doctrine, Possession Of Property By Occupants Other Than The Vendor & The Duty To Inquire.