Thursday, December 8, 2011

Two Recent State Supreme Court Opinions In Foreclosure Cases

As discussed HERE, the Florida Supreme Court declined to accept a settlement stipulation today and will answer the question certified by the Fourth District in a foreclosure lawsuit. Therefore, I thought it was worth posting two state supreme court opinions relating to foreclosure that were sent to me in the past days/weeks. 

Previously, HERE, I noted the Maine Supreme Judicial Court's opinion in JPMorgan Chase Bank v. Harp  (Jan. 6, 2011), and the Massachusetts Supreme Judicial Court's decision in U.S. Bank National Association v. Ibanzez (Jan. 7, 2011). Two other state supreme courts were released in the last couple of weeks. The Arizona Supreme Court released THIS opinion in Vasquez v. Saxon Mortgage, Inc., and answered a certified question from the United States Bankruptcy Court.  Additionally, the Maine Supreme Judicial Court released THIS opinion in Federal National Mortgage Association v. Bradbury

In Bradbury, the Maine Supreme Judicial Court stated that "Bradbury challenges the court’s failure to find loan servicer GMAC Mortgage, LLC in contempt pursuant to M.R. Civ. P. 56(g) after sanctioning Fannie Mae for submitting a bad faith affidavit for purposes of summary judgment. She also contends that the court erred in failing to award her attorney fees and costs associated with opposing Fannie Mae’s motion for a protective order."

The court stated that "The affidavit in this case is a disturbing example of a reprehensible practice. That such fraudulent evidentiary filings are being submitted to courts is both violative of the rules of court and ethically indefensible. The conduct through which this affidavit was created and submitted displays a serious and alarming lack of respect for the nation’s judiciaries."

Notwithstanding that criticism, the court affirmed the lower court's refusal to award additional sanctions. The court stated that:
In the circumstances of this case, however, we do not disturb the sanctions fashioned by the court for the bad faith affidavit. Courts have rule-based, as well as inherent, power to hold parties in contempt.....but the decision of whether or not to do so rests in the considerable discretion of the trial court.
Our decision is supported by substantial authority—or rather, the lack thereof—from other jurisdictions. To date, no published opinion shows that a court in Maine or any other state has imposed a contempt finding pursuant to Rule 56(g) for submitting a bad faith affidavit. Further, although M.R. Civ. P. 56(g)—in effect without amendment since 1959—largely duplicates the language of Fed. R. Civ. P. 56(h)5—in effect since 1937—no federal court has ever issued a finding of contempt on this basis.

In Vasquez, the Arizona Supreme Court answered one of two certified questions from the United States Bankruptcy Court. A brief description of the case and the two certified questions are included in the court's oral argument summary which can be viewed HERE. Regarding the question it chose to answer, the court stated:
The first certified question is whether “the recording of an assignment of deed of trust [is] required prior to the filing of a notice of trustee’s sale under A.R.S. § 33-808 when the assignee holds a promissory note payable to bearer.” The answer is no; Arizona law imposes no such requirement.
The court declined to answer the second certified question because it determined that answering the question would not dispose of an issue in the case pending before it. The oral argument, held at the University of Arizona, can be viewed HERE


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