A Sacramento bankruptcy judge issued a hard hitting judgment against Bank of America for the way it handled a single residential foreclosure in Lincoln, California.  Referring to the famous novelist whose works evoke oppressive and nightmarish characteristics, Judge Klein wrote: “Franz Kafka lives… [and] he works at Bank of America.”  This ruling has been widely discussed for the hefty award recovered by the plaintiff.  In addition to the harsh ruling, Judge Klein memorialized a rule that was not previously addressed in case law – the affirmative duty of an attorney to search bankruptcy filings to confirm whether a violation of a stay order was likely.  While this rule could arguably be characterized as dicta, because there were no claims against the attorneys in the suit, all attorneys should take note of this rule or risk serious consequences.  The relevant facts are summarized below.

In 2008, the plaintiffs entered into a loan with the expectation that they could refinance or modify the loan immediately after closing. However, after closing, Bank of America said that it would not consider a loan modification request unless and until the homeowners ceased making payment.  Accordingly, in 2009, the homeowners defaulted on their loan payments, which triggered a series of troublesome events.  During the course of the ensuing years, Bank of America strung along the homeowners with multiple “lost” loan modification requests, while at the same time pursuing foreclosure.

Last week, the California Court of Appeal ruled that a property owner was entitled to a jury trial in a dispute with a lender despite the fact that the loan agreement contained a jury waiver provision and a New York choice-of-law provision.

The case involved the San Francisco apartment complex known as the Rincon Towers. In 2007, the plaintiffs borrowed $110 million on a two-year loan to finance the acquisition.  In 2009, the plaintiffs failed to repay the loan. The plaintiffs claimed that under the terms of the loan agreement they were entitled to a one-year extension of the maturity date.  The lender disagreed and instead completed a nonjudicial foreclosure sale.

This post was guest authored by Stoel Rives partner Martin Banks.

A record number of bills were introduced during the 45-day Utah Legislative Session for 2016. While many of the bills dealt with education and legalizing medical marijuana, a few dealt with the foreclosure and the mortgage lending industry.  The bills listed below were

In Pioneer Construction, Inc. v. Global Investment Corp. (Dec. 21, 2011, No. B225685), Cal.App.4th [2011 WL 6382113], the Second District Court of Appeal recently affirmed a timely topic in this depressed construction market:  lien claimants must protect their rights, and buyers of property out of bankruptcy must verify the validity of lingering lien claims.

Developer insolvencies are unfortunately becoming more and more common in our current economic climate and often result in partially completed projects being stopped. The consequences to contractors can be significant. A number of recent resort projects illustrate what the contractors and subs can typically expect.

First, the obvious, immediate problem is nonpayment, which in turn requires the