Latest 3 Cases This Week: Harrell v. Freedom Mortgage Corp. (4th Cir.), Degroot v. Client Services, Inc. (7th Cir.), County of Sonoma v. U.S. Bank ...

“Might as Well Carry a Purse with That Mask, Joe”: COVID-19, Toxic Masculinity, and the Sad State of National Politics

JOANNA L. GROSSMAN, LINDA C. MCCLAIN

SMU Dedman School of Law professor Joanna L. Grossman and Boston University law professor Linda C. McClain comment on COVID-19, toxic masculinity, and the state of national politics today. Grossman and McClain contrast President Trump’s reckless bravado that endangers the lives of Americans with the empathy of Democratic presidential nominee former Vice President Joe Biden’s in asking people to be patriotic by doing their part by wearing masks to protect other Americans.

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Should Department of Justice Lawyers Defy William Barr?

AUSTIN SARAT

Austin Sarat—Associate Provost, Associate Dean of the Faculty, and William Nelson Cromwell Professor of Jurisprudence and Political Science at Amherst College—comments on an open letter addressed to the 100,000 professionals working in the U.S. Department of Justice and published by Lawyers Defending Democracy. In the letter, more than 600 members of the bar from across the United States call on their DOJ colleagues to refrain from “participating in political misuse of the DOJ in the elction period ahead.” Sarat argues that the letter rightly recognizes that Attorney General Barr’s blatant partisanship endangers the integrity of the DOJ itself and its role in preserving the rule of law.

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Harrell v. Freedom Mortgage Corp.

Court: US Court of Appeals for the Fourth Circuit

Docket: 19-1379

Opinion Date: October 2, 2020

Judge: Richardson

Areas of Law: Banking, Real Estate & Property Law

After his taxes were paid late from his mortgage escrow account, causing him to incur $895 in penalties, the homeowner-borrower filed a putative class action against the company that serviced his mortgage. Under the Real Estate Settlement Procedures Act of 1974 (RESPA), 12 U.S.C. 2601, if a mortgage contract requires the borrower to place property tax payments in escrow, “the servicer” must make those tax payments on time. The right to service a mortgage is subject to purchase and sale. The rights to service the plaintiff’s mortgage had been transferred between the time of the plaintiff’s payment into the escrow account and the tax’s due date. Reversing the district court, the Fourth Circuit concluded that when servicing rights are transferred in the window between the borrower’s payment to escrow and the tax’s due date, RESPA requires taxes to be paid by the entity responsible for servicing the mortgage at the time the tax payment is due. By requiring “the servicer” to make tax payments “as [they] become due,” RESPA connects the servicer’s obligation to a payment’s due date, not the date of payment into escrow by the borrower.

Degroot v. Client Services, Inc.

Court: US Court of Appeals for the Seventh Circuit

Docket: 20-1089

Opinion Date: October 8, 2020

Judge: Joel Martin Flaum

Areas of Law: Banking, Consumer Law

Degroot defaulted on a debt owed to Capital. AllianceOne sent Degroot a letter, stating: The amount of your debt is $425.86 ... interest and fees are no longer being added. Degroot understood that Capital had “charged-off” his account, meaning that his debt would no longer accrue interest or other fees for any reason. Capital subsequently transferred the account to CSI. CSI's 2019 letter stated: BALANCE DUE: $425.86 and “NEW INFORMATION ON YOUR ACCOUNT,” indicating that Capital had placed the account with CSI for collections, with an itemized summary of Degroot’s balance. After offering to resolve the debt, with disclosures required by certain states, concluded by stating “no interest will be added to your account balance through the course of” CSI collection efforts Degroot filed a purported class action, alleging that CSI’s letter misleadingly implied that Capital would begin to add interest and fees to previously charged-off debts if consumers failed to resolve their debts with CSI and that he was “confused.” Degroot asserted that CSI violated the Fair Debt Collection Practices Act. 15 U.S.C. 1692. The Seventh Circuit affirmed the dismissal of the suit. The 2019 letter accurately disclosed the amount of the debt and did not imply fees or interest would be added in the future. Even if CSI’s letter did imply that fees and interest could begin to accrue if the debt remained outstanding, the statement was not misleading given that Wisconsin law provided for the assessment of fees and interest on “static” debts in certain circumstances.

County of Sonoma v. U.S. Bank N.A.

Court: California Courts of Appeal

Docket: A155837(First Appellate District)

Opinion Date: October 8, 2020

Judge: Sanchez

Areas of Law: Banking, Government & Administrative Law, Real Estate & Property Law, Zoning, Planning & Land Use

Quail's 47,480-square-foot unincorporated Sonoma County property contained two houses, garages, and several outbuildings. In 2013, a building with hazardous and unpermitted electrical wiring, hazardous decking and stairs, unpermitted kitchens and plumbing, broken windows, and lacking power, was destroyed in a fire. Two outbuildings, unlawfully being used as dwellings, were also damaged. One report stated: “The [p]roperty . . . exists as a makeshift, illegal mobile home park and junkyard.” After many unsuccessful attempts to compel Quail to abate the conditions, the county obtained the appointment of a receiver under Health and Safety Code section 17980.7 and Code of Civil Procedure section 564 to oversee abatement work. The banks challenged a superior court order authorizing the receiver to finance its rehabilitation efforts through a loan secured by a “super-priority” lien on the property and a subsequent order authorizing the sale of the property free and clear of U.S. Bank’s lien. The court of appeal affirmed in part. Trial courts enjoy broad discretion in matters subject to a receivership, including the power to issue a receiver’s certificate with priority over pre-existing liens when warranted. The trial court did not abuse its discretion in subordinating U.S. Bank’s lien and confirming the sale of the property free and clear of liens so that the receiver could remediate the nuisance conditions promptly and effectively, but prioritizing the county’s enforcement fees and costs on equal footing with the receiver had no basis in the statutes.