This holding first appeared in July, 2015 in Nevada. A Federal Judge in a Nevada case held that Green Tree Servicing had the contract right under a homeowner's mortgage to place insurance premiums by force on a homeowner for periods of time when there was no insurance. Even though no recognizable insurance coverage could possibly be stretched backwards to cover those elapsed periods of time, yet Green Tree as the mortgage servicer could still force the homeowner to pay the premiums for those periods. It was so held in Morris v. Green Tree Servicing, LLC, No. 2:14-cv-01998-GMN-CWH, 2015 WL 4113212 (D. Nev. July 8, 2015).
This holding was concisely compared to previously settled principles of insurance law by Dennis J. Wall, "'Backdated' Insurance is Not Insurance At All. It is a Penalty," 37 Insurance Litigation Reporter 509 (November 20, 2015 issue). This article is ©2015 Thomson Reuters and posted with permission in accessible pdf on www.lenderforceplacedinsurance.com.
Now with a second opportunity to dismiss the plaintiff's claims, this time the Federal Judge dismissed 6 more of the plaintiff's claims with prejudice, in a more recent appearance of this case in Morris v. Green Tree Servicing, LLC, No. 2:14-cv-01998-GMN-CWH, 2015 WL 7573193, at *6 (D. Nev. November 25, 2015). The plaintiff's complaint is left with two (2) alleged claims for breach of contract and one (1) claim apiece for alleged "breach of the implied covenant of good faith and fair dealing" and "intentional misrepresentation."
It is not entirely clear after the latest iteration of Morris v. Green Tree Servicing whether the "backdated insurance" allegations are left to assist in stating one of the remaining claims, or whether these allegations are instead part of the dismissals with prejudice here. This time around the District Judge seemed to speak of them as surviving dismissal, but maybe not. See Morris v. Green Tree Servicing, LLC, No. 2:14-cv-01998-GMN-CWH, 2015 WL 7573193, at *3 (D. Nev. November 25, 2015).
Please Read The Disclaimer. ©2015 by Dennis J. Wall, author of Litigation and Prevention of Insurer Bad Faith (3d ed. Thomson Reuters West in 2 Volumes, with 2015 Supplements). For a special podcast of "Litigation and Prevention of Insurer Bad Faith" on the subject of Lender Force-Placed Insurance Practices, visit the West Legal Current Podcast here. All rights reserved.
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