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Suit Over Fallen Tree Highlights Bane of Foreclosure

Submitted by Amaris Elliott-Engel on Mon, 08/15/2016 - 00:18

Here is a freelance piece published last month by the Connecticut Law Tribune:

Vacant, foreclosed homes have become a bane in many neighborhoods in the United States. There are currently 896,913 properties in some stage of foreclosure in the United States, according to RealtyTrac.

The impact of vacant, foreclosed homes is affecting Connecticut too. Two homeowners in Wyndham County have been living through the experience of having a foreclosed home in their neighborhood.

HSBC Bank owns the property at 231 Ballouville Rd. in Killingly, after foreclosing on the prior owners in April 2014. The property has been listed for sale through real estate agent David Izzo.

Neighbors Clinton Corbin II and Barbara Bouthillier complained to HSBC's realtor in February 2015 that a tree on the property was damaged, decaying and a danger. Izzo came out to take pictures of the tree.

A month to the day that the realtor had been out to inspect the tree, it fell onto Corbin's and Bouthillier's work shed. The shed, which was appraised for $28,000, was destroyed and all of the work tools and other personal items were destroyed, according to the plaintiffs' complaint.

The property owners sued, claiming that HSBC was negligent in not taking reasonable care to remove the damaged tree from the foreclosed property. They also argued that the tree was a nuisance which created an unreasonable interference with their use and enjoyment of their property.

Corbin and Bouthillier, however, ran into the barrier of the common-law rule, which started in England, that landowners are only liable for artificial conditions they create on their land, not for trees and other natural conditions on their land.

Connecticut Superior Court Judge Harry E. Calmar ruled that Connecticut continues to follow the common-law rule, which is reflected in the Restatement (Second) of Torts law treatise. The Second Restatement says that a property owner is not "liable for physical harm caused to others outside of the land by a natural condition of the land," except for trees falling on public highways when properties are in urban areas.

"Natural condition of the land is used to indicate that the condition of the land has not been changed by any act of a human being," Calmar wrote. "There is nothing in the plaintiff's complaint to suggest the tree in question is anything more than a natural condition upon the land, and for such reason the rule of the Restatement applies."

Corbin and Bouthillier were unsuccessful in their effort to change Connecticut law and obtain a ruling that private landowners can be liable for damages when a tree falls on private property.

Matthew-Alan Herman, of the Law Office of Alan Scott Herman in Putnam and counsel for the homeowners, argued that Connecticut should follow a different legal treatise, The American Jurisprudence Second Edition. That treatise says that "a landowner who knows or should know of a dangerous condition of a tree on one's property may be held liable for the injuries caused or damage done when the tree falls on an adjoining landowner's property."

"An extensive search of case law shows that the law has moved away from the traditional approach recited in the Restatement," Herman argued. "Connecticut, while not yet ruling directly on the issue, has also indicated it has adopted the more modern approach establishing liability."

Herman said in an interview he was disappointed that his client's case was dismissed at the motion to strike stage even though the trend in other jurisdictions has been to recognize liability for property owners when they have constructive or actual notice that a tree is in defective condition.

The idea that property owners have no liability for a natural condition "doesn't add up in fairness or equity," Herman said. "They should be held responsible for something they knew … and were aware of was in defective condition."

Herman noted in the homeowners' brief that the Restatement only allowed liability for a fallen tree near a highway, while the American Jurisprudence treatise permits liability when a tree falls onto an adjoining landowner's property.

Some courts have followed a similar line of reasoning as the American Jurisprudence treatise. For example, the New Hampshire Supreme Court ruled in an issue of first impression just five years ago that a landowner who knows a tree is decayed or defective has a duty to eliminate the tree's dangerous condition.

Connecticut courts, however, view the Restatement extremely favorably, Herman said.

Thomas A. Kaelin, of Woodbury and counsel for HSBC, argued in court papers that "the general rule still governs and the rule is that in cases not involving public highways, there is no liability on a landowner for damages caused by a tree falling on a neighbor's property."

Counsel for HSBC declined to comment.


Foreclosed Homeowner Can Sue Over Defective Assignment, Court Rules

The California Supreme Court has ruled that a homeowner who lost her home to foreclosure can challenge the defective transfer of ownership of her mortgage, The Intercept's David Dayen reports. The court held that "'a homeowner who has been foreclosed on by one with no right to do so has suffered an injurious invasion of his or her legal rights at the foreclosing entity’s hands."'

The homeowner's mortgage was transferred into a trust by a bankrupt company four years after new loans were no longer supposed to be added to the trust. The Supreme Court ruled that, even though the homeowner was not a direct party to the transfer of ownership, that she could challenge the defects in the assignment of the deed of trust in order to bring an action for wrongful foreclosure.

CFPB: Panic Over Real Estate Disclosure Rule Unfounded

Consumer Financial Protection Bureau Director Richard Corday says that new disclosure rules for mortgage lenders have not turned out to be a problem, HousingWire's Ben Lane reports. In a speech last week, Cordary compared the panic about the TILA-RESPA Integrated Disclosures rule to the panic about Y2K. The disclosure rule did not paralyze the market when it came into effect in October, Corday added.

Foreclosure Filings Staying Strong in New York

The number of foreclosure cases in New York State are not letting up, The New York Law Journal's Joel Stashenko reports. Stashenko was reporting on Comptroller Thomas DiNapoli's report that the number of new foreclosure filings in the state is only down by 6 percent between 2013 and 2014. DiNapoli attributed the fall in the number of cases to court rules designed to end problematic foreclosure practices by lenders.

Big Banks Facing New Restrictions on Mortgage Businesses

JPMorgan Chase, Wells Fargo, HSBC, US Bank, Santander and EverBank are facing new restrictions on their mortgage-lending businesses for failing to clean up their foreclosure practices, The Washington Post's Danielle Douglas-Gabriel reports. The restrictions were announced this week by the Office of the Comptroller of the Currency.

The banks are being barred from servicing loans for which they handle payments on behalf of other financial institutions that hold those mortgages on their books.

Wells Fargo failed to comply with 15 of 98 items banks have been asked to fix by regulators, while HSBC failed to comply with 45 of 98 items, Douglas-Gabriel reports..

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