– 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
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
X. OTHER LAWS AFFECTING COMMERCIAL TRANSACTIONS