(Image by Donna Bruno, ©Dennis J. Wall)
In Foster v. PNC Bank, N.A., 52 F.4th 315 (7th Cir. 2022) (page numbers not available from Westlaw at this time), an investor in real estate in Fort Lauderdale tried to counter the summary judgment motion of the bank that force-placed insurance. The mortgage that the investor gave to the bank was apparently a Uniform Mortgage because under Section 5 the bank had the right to force-place insurance in the event that the investor did not maintain the required insurance on the Fort Lauderdale property or was not current in his payments, in part here pertinent.
The investor filed his own affidavit (so described by the appellate court, not a declaration) that he obtained required flood insurance and that he was current on his loan payments. (He also testified in his affidavit about his purchase of required wind insurance, which was held sufficient to rebut the bank's motion in the trial court as to the investor's purchase of wind insurance, so that it was not an issue on appeal.)
The trial court ruled that this affidavit testimony did not present a triable issue of fact as to the flood insurance and the current loan payments issues, however, and so the district judge granted the bank's motion for summary judgment in the investor's lawsuit against the bank for damages. The appellate court agreed.
Holding that the investor's testimony in the face of the bank's contrary records was conclusory and not worthy of consideration even on summary judgment, the appellate court affirmed the summary judgment. To dig a little deeper, although the investor did file what was called an affidavit, the investor's testimony was only that he spoke to a bank representative on the telephone. He did not state anything about the limits and provisions or any other facts of the flood insurance policy he said he purchased, only that he purchased flood insurance, and he did not say anything in his affidavit testimony about how much he paid on his loan, or when, or how, just that he was current. He did not provide any documentation to prove his conclusory statements either that he obtained flood insurance or that he was current on his loan payments.
For these reasons, the trial court entered summary judgment for the bank and the appellate court affirmed. The lessons for practitioners are clear: More will be required of mortgagors contesting the forced placement of insurance by lenders than just the mortgagors' unsupported conclusions that they purchased the required insurance and that they were current on their loan payments. Parenthetically, this federal case was filed in Illinois because the investor, who is a resident of Florida, also purchased property in Chicago, Illinois that was the subject of his lawsuit in the trial court but not the subject of this appeal.
Please read the disclaimer. ©2022 Dennis J. Wall. All rights reserved.
Comments