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Collections

Green Tree Servicing, LLC v. Adams, 375 S.C. 583, 654 S.E.2d 100 (Ct. App. 2007).
Opinion No. 4311, decided November 20, 2007.

A mortgagee foreclosed on a mortgage and purchased the subject property at a public auction. The mortgagee subsequently discovered that a judgment creditor had a lien against the property due to a judgment he obtained against the former mortgagor and filed this action to clear the title to the property. The South Carolina Court of Appeals held that the judgment creditor’s absence from the foreclosure action did not prejudice him because it did not extinguish the judgment but merely removed the lien from the subject property. The judgment creditor could still seek relief on his judgment from some other source.

Bostic v. American Home Mortg. Servicing, Inc., 375 S.C. 143, 650 S.E.2d 479 (Ct. App. 2007).
Opinion No. 4278, decided July 18, 2007.

A property owner paid off a mortgage on a piece of property but never received any payoff documents. Four months after the payoff, the property owner filed suit against his mortgage company alleging breach of contract and violation of S.C. Code Ann. § 29-3-310. Section 29-3-310 requires that a mortgagee, at the request of a mortgagor who has paid off his loan, must record satisfaction of the mortgage. The penalty for noncompliance is $25,000 or half of the original mortgage loan amount, whichever is less. The South Carolina Court of Appeals held that the term “request,” as used in the statute, does not require a written request, but merely one that informs the mortgagee of the mortgagor’s desire for the satisfied mortgage to be recorded. Because the property owner merely sent a payoff check but never actually requested satisfaction to be filed, the court held that he was not entitled to statutory damages.

Mid-South Mgt. Co. Inc. v. Sherwood Development Corp., 374 S.C. 588, 649 S.E.2d 135 (Ct. App. 2007).
Opinion No. 4271, decided June 29, 2007.

The plaintiff obtained a judgment against a corporation and a trial was held to determine whether the corporation’s individual officers or its parent companies should be liable for the judgment. The South Carolina Court of Appeals upheld the trial court’s determination that neither the individual officers nor the parent companies should be held liable. The plaintiff was not entitled to pierce the corporate veil because it did not show that the corporation had failed to observe corporate formalities or that failure to pierce would result in fundamental unfairness. The court also found that the alter ego and amalgamation of interest theories were inapplicable in this case.

Lever v. Lighting Galleries, Inc., 374 S.C. 30, 647 S.E.2d 214 (2007).
Opinion No. 26353, decided June 25, 2007.

The plaintiff sought a ruling that a mortgage he had executed in favor of the defendant should be extinguished. He argued that because the defendant had sought to collect on the note secured by the mortgage and its judgment had expired, the defendant had elected its remedy and the mortgage should be marked satisfied. The South Carolina Supreme Court held that until a mortgage debt is satisfied, any judgment on the debt secured by the mortgage has no effect on the mortgage lien and does not preclude foreclosure. Therefore, the court held that the defendant may maintain a foreclosure action against the plaintiff.

Sayyed v. Wolpoff & Abramson, 485 F.3d 226 (4th Cir. 2007).
Docket No. 06-1458, decided May 9, 2007.

The plaintiff sued a law firm for violations of the Fair Debt Collection Practices Act. The law firm argued that it had absolute immunity from claims based on statements made in the course of judicial proceedings. The United States Court of Appeals for the Fourth Circuit reversed the district court’s finding that the law firm was immune from suit. The court held that the Act clearly applies to law firms acting as debt collectors, even where their debt-collecting activity is litigation, and that any common law immunity that may have previously existed has been trumped by the Act.



 

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