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Business Law

II. Real Property Secured Transactions

Black Sky Capital v. Cobb, _ Cal.App.4th _ (2017) – A “sold-out junior” that held both the senior and the junior term debt each secured by a deed of trust on the same property could bring an action on the note (now unsecured) that had been secured by a junior deed of trust. The court declined to follow Simon where the court held that the holder of both the first and the second could not use the “sold-out junior” rule. The court concluded that either Simon was wrong or that because the two loans in Simon v. Superior Court, 4 Cal.App.4th 63 (1992) were made at the same time, the lender was trying to “circumvent” the anti-deficiency laws. In this case, the loans were made two years apart, so there was not a “circumvention” issue.

AgStar Financial Services, ACA v. Northwest Sand & Gravel, Inc., 391

P.3d 1271 (Idaho 2017) – A mortgagee that purchased the mortgaged real property at a foreclosure with a credit bid of less than the full debt, but which was denied a deficiency judgment because the value of the property exceeded the debt, could not thereafter foreclose on the personal property collateral. The debt was extinguished by the foreclosure sale.

Chatham Square Owners Corp. v. Roth, 52 N.Y.S.3d 245 (N.Y. Dist. Ct. 2017) – The buyer of a condominium at an Article 9 foreclosure sale could not use summary proceedings to evict the debtor. The debtor was not a licensee but instead a tenant under the proprietary lease, even if that lease had been terminated by the sale.

Arsr Solutions, LLC v. 304 East 52nd Street Housing Corp., 48 N.Y.S.3d 510 (N.Y. Sup. Ct. 2017) – Because the lender that had a security interest in shares of stock associated with three cooperative apartment units purchased the shares at an Article 9 disposition, the lender’s successor was entitled to an order requiring the cooperative housing corporation to recognize the successor as the owner of the stock, to deliver to the successor a new stock certificate naming the successor as the owner, and to issue to the successor proprietary leases for the apartment units associated with those shares.

3432 West Henderson Building, LLC v. Gizynski, 81 N.E.3d 94 (Ill. Ct. App. 2017) – A mortgagee was entitled to default interest on amounts paid for attorney’s fees incurred in connection with the mortgage because the mortgage expressly provided that such expenses “shall become a part of the Indebtedness payable on demand and shall bear interest at the Note rate from the date of the expenditure until repaid.”

2017-2018 Commercial Law Developments

I. PERSONAL PROPERTY SECURED TRANSACTIONS 
II. REAL PROPERTY SECURED TRANSACTIONS
III. GUARANTIES
IV. FRAUDULENT TRANSFERS AND VOIDABLE TRANSACTIONS
V. CREDITOR AND BORROWER LIABILITY
VI. U.C.C. – SALES AND PERSONAL PROPERTY LEASING
VII. NOTES AND ELECTRONIC FUNDS TRANSFERS
VIII. LETTERS OF CREDIT, INVESTMENT SECURITIES, AND DOCUMENTS OF TITLE
IX. CONTRACTS
X. OTHER LAWS AFFECTING COMMERCIAL TRANSACTIONS

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