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In its recent opinion in Deutsche Bank National Trust Company v. Walker County, the Alabama Supreme Court held Alabama Code § 35-4-50 does not impose a mandatory duty to record assignments of beneficial interests in residential mortgages. In the underlying action, Walker County brought suit against Deutsche Bank National Trust Company, Mortgage Electronic Registration Systems, Inc. (“MERS”), and CIS Financial Services, Inc., after the Bank allegedly relied on Walker County’s real property recording system, but used MERS to record subsequent transfers of the beneficial interests in residential mortgages.

Continue Reading MERS Procedure Not Violation of Alabama Law – Alabama Supreme Court Looks Beyond Punctuation in Interpreting Recording Statute

Last October, we reported here how the Eleventh Circuit in Muransky v. Godiva had broken with other circuits regarding the application of the Supreme Court’s opinion in Spokeo v. Robins. Last week, the Eleventh Circuit sua sponte vacated its October 2018 opinion and issued a new opinion.

Continue Reading Eleventh Circuit sua sponte vacates prior Spokeo opinion

In September 2018, the Alabama Supreme Court issued an opinion in GHB Constr. and Dev. Co., Inc. v. West Alabama Bank and Trust, No. 1170484, that caused considerable concern for Alabama lenders. The Court held that future-advance mortgages do not come into existence until funds are actually advanced regardless of when the mortgage was recorded. Last Friday, the Alabama Supreme Court reversed its September 2018 opinion and held that the priority of a future-advance mortgage is based on the date of recording, not when the lender advances funds. A link to the March 2019 decision can be located here. This decision should ease the uncertainty created by the Court’s September 2018 decision.

Continue Reading Alabama Supreme Court changes course on validity of future-advance mortgages

Last week, the U.S. District Court for the Middle District of Alabama denied Southern Independent Bank’s (“Southern Independent’s”) motion for class certification following a data breach which allegedly affected over 2,000 financial institutions across the country. Southern Independent, a community bank located in south Alabama, brought a class action complaint against Fred’s in response to a data breach in which hackers, using malware installed on servers, harvested payment data from consumer debit cards used at Fred’s stores.

Continue Reading Class certification denied for data breach claim brought by bank against retailer

Last month, the Eleventh Circuit revisited the U.S. Supreme Court’s controversial decision in Spokeo, Inc. v. Robins, and appears to have set a low bar for plaintiffs to clear in establishing standing.

The case, Muransky v. Godiva Chocolatier, Inc., Case No. 16-16486 (11th Cir. October 3, 2018) came before the Eleventh Circuit on appeal from the United States District Court for the Southern District of Florida after the district court approved a settlement plan between the class of plaintiffs and Godiva. The named plaintiff in the underlying suit, Dr. David Muransky, filed a class action lawsuit against Godiva, which had given Muransky a receipt showing the first six and last four digits of his credit card number. The complaint alleged violations of the Fair and Accurate Credit Transactions Act (“FACTA”), which prohibits merchants from including “more than the last 5 digits of the card number . . . upon any receipt provided to the cardholder at the point of the sale or transaction.” 15 U.S.C. § 1681c(g)(1). The District Court approved a class action settlement in the underlying case, over objections from appellants James Price and Eric Isaacson.


Continue Reading Eleventh Circuit Breaks from Sister Circuits on Spokeo

In Patel, et al v. Specialized Loan Servicing LLC, et al, No. 16-12100 (11th Cir. 2018), the Eleventh Circuit held that claims against a loan servicer for “artificially inflated” force-placed insurance premiums were barred by the filed rate doctrine. In Patel, the plaintiff alleged that loan servicers and insurance companies breached implied covenants of good faith and fair dealing, as well as various deceptive and unfair trade practice statutes, by purchasing force-placed insurance for the plaintiffs’ mortgaged properties. Plaintiffs alleged that the premiums were “artificially inflated”, “unreasonably high”, and that they reflected the “costs of kickbacks” to the loan servicers. The Court affirmed the Southern District of Florida’s dismissal of the plaintiff’s complaint for failure to state a claim, finding that the allegations in the complaint were “textbook examples of the sort of claims” barred by the filed-rate doctrine.

Continue Reading Eleventh Circuit: Filed-Rate Doctrine bars claims over lender’s force-placed insurance

Alabama has joined approximately 17 other states in adopting the Uniform Voidable Transactions Act (the “VTA”) to replace the Uniform Fraudulent Transfer Act (the “FTA”). The VTA will govern transactions occurring on or after January 1, 2019. The VTA clarifies issues that had become points of contention in avoidance actions under the FTA.

Balch recently authored an article for Law 360 regarding the conundrum the Telephone Consumer Protection Act poses for electric utilities. While their article does not involve the financial industry, it does shed insight on the many problems created by the TCPA. For example, electric utilities are often required by state law to call customers before

It is now more important than ever for lenders to not allow real estate to be sold for delinquent taxes at a tax sale—whether it is real estate owned by the lender or mortgaged to the lender. New case law has complicated and often made more costly the procedure for redeeming property from a tax