Nationwide Bank Resolves Numerous Disputes
Prominent nationwide bank selects Reed Hamzeh to mediate numerous disputes pertaining to real estate litigation, including mortgage default litigation, title disputes, bankruptcy and foreclosure actions with SoCal DRC already settling the first two matters provided to them. SoCal DRC settles first two mediations brought to them and looks forward to settling more.
Complex Traffic Collision Dispute
Facts: SoCal DRC settles a four vehicle chain reaction rear-end traffic collision involving subrogation claims by two of the largest insurance companies against the at fault driver who’s insurance policy limits exceeded the damages. The case had already been through an unsuccessfully mediation.
Approach: Liability was not at issue. The parties had disputes as to the amount of damages at issue. As to the amount in excess of the at fault driver’s policy limits, the parties analyzed the financial situation of the driver and came up with a fair settlement as to the amounts owed.
Mortgage Dispute
Facts: SoCal Dispute Resolution Center settles two separate actions between a bank and borrower pertaining to defaults on refinanced mortgage loans that had a second liens on homes that had already been foreclosed upon and sold. The bank alleged that the loan applications in both cases contained false information, were fraudulent and entitled them to collect the entire amount from defendants personally. The bank had purchased the loans in bundle purchases of loans and did not discover the fraud until years since the loan was made. These cases involved numerous complexities and legal issues that are still grey areas in California state court.
Case 1: In one case, the Defendant alleged that the seller had approached him and asked him to obtain two loans to buy a home in the defendant’s name and subsequently refinanced the second loan which defendant did out of kindness to seller. Defendant later learned that (1) many of the loan documents were forged by the original seller and it was the seller that committed fraud and (2) that the statute of limitations had lapsed for a fraud claim because the original lender had a duty to discover the fraud at the time of making the loan.
We discussed with the lender the case weaknesses that (1) there was a possibility that the original lender from whom they acquired the loan could be found to have failed to discover the fraud in the loan (the listed employer in the loan application had the same last name as the seller) meaning that the subject action is untimely and (2) even if the claim is found timely, that the original lender may be found to be liable for not discovering the fraud. We also discussed the weaknesses in defendant’s case in that he agreed to purchase a home in his name that he did not intend to buy using false information to obtain the loan which could easily result in the inference that he was a co-conspirator in fraudulently and be found to be partly or fully liable to personally re-pay the loan. The parties agreed to a settlement involving an upfront payment to be paid within 30 days and a five year payment plan for a remaining amount agreed to by the parties.
Case 2: In the second case, the Defendant (borrower) alleged that it had financial proof of providing accurate information in obtaining the loan and that California law is unclear on whether the bank even had standing to bring such an action. The bank alleged that that the borrower was unable to prove her income provided on the loan application and that borrower never used the residence as her primary residence.
We discussed the various strengths to settling this matter: the ambiguities in the case law pertaining to the matter, necessary discovery required and that the need to bring in additional parties would result in litigation costs that could easily exceed the amount in dispute which could still result in an uncertain outcome for both parties. The parties worked in good faith to come up with a mutually agreed upon settlement involving a single lump sum payment involving a reduction in the amount in dispute.
Complex Lender Dispute
Facts: SoCal DRC settles an action brought by a buyer against prominent worldwide bank to quiet title and seeking declaratory relief that a home she purchased at a trustee sale (foreclosure sale) was owned free and clear. The previous owner of a home refinanced two loans on a home, the second loan was a line of credit (“LOC”) which requires written confirmation to be closed. The new bank providing the refinancing paid the bank issuing the LOC but the borrower did not officially close the LOC and continued to use it. When the borrower defaulted on both the new loan and the LOC, the new bank foreclosed and sold the home. The bank that had the LOC brought action against the new owner claiming it still had a first lien against the home because it moved into first place when the original loan was paid off and that the new bank moved into second place. The owner alleged that the new bank intended to pay off the LOC bank in full and move into first place.
Approach: Significant litigation was still required to depose the original parties involved and bring in additional parties that were potentially liable as well. After much good faith work, the mediator made a mediator’s proposal, which the parties accepted.
Litigation Involving Municipal Harm
Facts: SoCal Dispute Resolution Center settles an action brought by a plaintiff against the City of Los Angeles when plaintiff moved to avoid a falling tree branch which resulted in him hitting a light pole and suffering injuries to left lateral chest area and a rib fracture. The City denied having notice of a dangerous condition and the amount of the special and general damages.
Approach: We started by analyzed the facts regarding prior notice pertaining to this tree and other trees in the area. It was discovered that the City had timely attended to a complaint regarding a tree branch on the same area and had no record of any complaints pertaining to this tree.
The plaintiff alleged that the manager of the apartment building in which plaintiff lived, and other tenants, had made several calls to complain about the subject tree located in front of this apartment building. We discussed the significant uncertainty as to how a jury may decide this issue. We also discussed the issues pertaining to the medical history and charges pertaining thereto. The parties were ultimately able to settle the matter in good faith.
SoCAL DRC Recognized by Riverside Court for Excellent Services
Reed Hamzeh recognized by the Riverside Superior Court for his “excellent” services as a mediator on the Alternative Dispute Resolution panel.
Residential Personal Property Dispute
Facts: SoCal DRC settles a suit brought by a homeowner against his neighbor and the pool company that drained a pool that allegedly caused significant damage to his property, including landscaping consisting of valuable trees and a lawn. The plaintiff alleged having a sample of the water and estimates for repair and defendants alleged following city procedures, including checking that the water was safe to drain. The parties were thousands of dollars apart in settling the dispute.
Approach: We worked with the parties to understand the strengths and weaknesses of each case, including that a jury could easily find
for either side in this action because the facts were subject to such a wide interpretation. We discussed the strengths of settling the matter now since the amount in dispute was relatively small in comparison to the mounting legal bills that could far outweigh such amount. The parties settled the dispute in an amicable manner and were pleased with the outcome.
Insurnace Dispute
Facts: SoCal DRC settles a dispute between an insurance company and an insured wherein the insurance company alleged that the insured breached a former settlement agreement requiring insured to make minimal monthly payments for an car accident for which she agreed she was responsible. The insured was a young women that was in college and also assisting her mother that had been recently laid off and could not afford the payments.
Approach: We worked with the parties to understand the concerns and positions raised by both sides. After establishing trust with the parties in the mediation process, we were able to settle the dispute resulting in a new settlement acceptable to both parties.
Software Dispute
Facts: SoCal DRC settles a dispute involving allegations that defendant fraudulently represented that he developed route tracking software inducing plaintiff to form a limited liability company, hire employees and incur costs in furtherance of the company. Plaintiff alleged that, through the course of over two years, the software was faulty and was finally discovered not to be developed by defendant. Defendant alleged that plaintiff failed to perform the marketing and sales roles he alleged he would undertake, that the software functioned properly and only required some licensing for certain algorithms of the code which could be done if the company had any sales. He alleged that he himself had lost tens of thousands of dollars in damages in the company as well.
Approach: We worked with both sides to go over the strengths and weaknesses of both parties’ cases pertaining to liability and damages as well as the practical implications of settling the case. Mr. Hamzeh and the parties were able to develop trust in the mediation process which enabled the parties to work in good faith and arrive at a fair settlement.
Fraud Dispute
Facts: SoCal DRC settles an action involving a dispute between over 70 investors and an attorney regarding forming a company for the purpose of establishing a Native American Casino. The plaintiffs’ action brought seven claims seeking a million dollars in damages for: (1) fraudulent inducement and negligent representation for (a) representing the project would succeed and that he would not accept payment until it realized significant profits while concealing the tremendous complexity and uncertainty of the project and (b) fraudulent inducement to give defendant authority as Manager to access funds which he paid to himself as dual role of general counsel and manager of the LLC; (2) breach of fiduciary duties and negligence as an attorney for failing to disclose the conflicts of interest for serving as general counsel and manager of LLC;
(3) conversion and misappropriation of LLC assets. Defendant’s insurance policy was for $100,000 and most of that amount had already been consumed in legal fees. The parties were over $500,000 apart in settlement discussions.
Approach: We worked with the parties to understand the case complexities, discuss the strengths and weaknesses for each party regarding the legal and practical aspects of their case. After establishing trust with both parties regarding the methodology being implemented, both parties worked together to devise a strategy to settle the case.