William B. Blanchard, Real Estate Attorney in Illinois

About

Mr. William Blanchard (“Bill Blanchard”) is a solo practice attorney with offices in St. Charles and Oakbrook Terrace, Illinois. Bill specializes in representing real estate clients for purchases and sales as well as home owner real estate tax assessment appeals.


Mr. Blanchard is General Counsel for Gaia Title, Inc. a title insurance agency and settlement services provider. The Company is owned by real estate attorneys who demand exemplary title insurance services and accurate and efficient settlement services. As General Counsel he is responsible for title examination, commitment and policy review, escrow settlement supervision and regulatory review.


Mr. Blanchard gained distinction as a real estate assessment attorney by representing 23 Will County senior citizen home owners before the Illinois Property Tax Appeal Board and winning every case; this in addition to several successful appeals before various County Boards of Appeal.


Bill is often interviewed for comments on significant legal and real estate news and is developing a blog for discussion of relevant judicial decisions affecting the title insurance industry.


Contact


William B. Blanchard, Attorney at Law

1700 Lincoln Hwy. Ste. K

St. Charles, IL 60174

(630) 253-9742

(630) 560-4940 fax


Professional Experience


General Counsel, Gaia Title, Inc., St. Charles, Illinois

January 2017 – Present

As General Counsel, Mr. Blanchard draws from his extensive real estate experience to provide supervision over legal matters impacting the title company’s policy production and settlement services.


Law Office of William B. Blanchard, Illinois (Kane, DuPage, Will, Lake, and McHenry Counties)

August 2013 - Present

Buyer and Seller representation for all types of real estate transactions. Residential and commercial real estate tax assessment appeals in all collar counties.


Education


Mr. Blanchard received his Juris Doctor from DePaul University College of Law in 1972 and was admitted to the practice of law in Illinois in 1973. He graduated with his B.S. in Business Administration from Southern Illinois University in 1969 and from Rich Central High School in South Suburban Olympia Fields, Illinois in 1964.


Charitable Work


Bill and his wife of 51 years, Judy, were the founders and major contributors of the Foundation for Support of Chemical Dependency Recovery Programs. During their several years of support they provided shelter and treatment for substance addicted adolescents in Illinois, Texas, Georgia and California. Young people benefitting from their generosity included teens from the inner city to children of Hollywood stars. Recently they provided below market rental housing for drug dependent single mothers with children sponsored by Catholic Charities and Cornerstone Services.


He was elected to the Sunnybrook School District 171 Board of Education and was appointed to the Marion Catholic High School Lay Advisory Council. During his service to the high school he sponsored the school’s competition golf program and was instrumental in development of the school’s endowment funding.


References

LinkedIn: https://www.linkedin.com/in/william-bill-blanchard-080a48b/

Listing in Attorney Directory: https://www.lawyer.com/william-byron-blanchard.html

Facebook: https://www.facebook.com/blanchardlawgroup/

Attorney Directory: https://solomonlawguild.com/william-b-blanchard%2C-esq

Blog: http://williamblanchardblog.blogspot.com/


News Update

  

“Respected Real Estate Lawyer comments on Illinois Appellate Decision finding Title Insurance Company not responsible for damages even though it took 18 months to clear liens,” https://www.einpresswire.com/shareable-preview/4T8VhCaQ2_qKKSHiQohogQ


“Will County Attorney Wins Reversal Before The Illinois Property Tax Appeal Board; County Board Decides Not to Appeal,“ https://www.einpresswire.com/shareable-preview/uK0wp3I5rq_aArAkJdRqfQ 


Three Different Courts Find CFPB and Agency Regulation of Title Insurance Companies Overall Intrusive, https://www.einpresswire.com/shareable-preview/pi3tLlLzrylmLB6T8m2ioQ


"Game changing “Real Estate Commissions and Title Insurance Services for a Flat Fee” are beginning in Illinois," https://www.einpresswire.com/shareable-preview/8tEZnWYu2mub9d-BKwXbVg

William B. Blanchard is General Counsel for Gaia Title, Inc.. See http://www.gaiatitle.com/

William B. Blanchard is General Counsel for Gaia Title, Inc.. See http://www.gaiatitle.com/

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Mr. William B. Blanchard (“Bill Blanchard”) is a Real Estate Attorney in St. Charles, Illinois.

Licensee Liable for Forwarding Fraudulent Wire Instructions

Avoid forwarding emails that contain wire transfer instructions for real estate transactions

William Blanchard, Esq. cautions agents to avoid forwarding emails that contain wire transfer instructions for real estate transactions


In light of the frequent scams involving wire transfers of funds for real estate transactions, real estate lawyer William “Bill” Blanchard alerts buyers and real estate businesses to this recurrent problem. The basic model of the scam is that scammers intercept and replace wire transfer instructions sent via email between the various parties to a real estate transaction. The buyer then wires the funds for the scheduled transaction, only to find that the funds were sent to the scammers’ accounts where they quickly disappeared.


Recently a court had to address such issue. A federal district court in Kansas upheld a jury verdict in this regard in the case of BAIN v. PLATINUM REALTY, LLC. There, a jury found a real estate licensee 85% responsible for the buyer’s losses, which occurred when the buyer transferred purchase money to fake account after licensee allegedly forwarded email containing fake wiring instructions to the buyer. In this case, a real estate buyer (“Buyer”) purportedly received an email from the listing broker (“Broker”) that provided new wiring instructions for the upcoming closing on a property. The Buyer used the false instructions to wire the purchase money to the fraudulent account and lost $196,622. The criminal had infiltrated the email exchanges between the parties to the transaction and created fake email accounts that were very similar to the email accounts used by the parties. The criminal had used these accounts to transmit the false wire instructions that were eventually sent to the Buyer.


The Buyer brought a lawsuit against a number of parties, including the Broker. The Broker claimed that she had never sent the email with the false wiring instructions. She had initially forwarded an email with the false wire instructions but she had sent it to one of the fake accounts set up by the criminal. She claimed that she had not sent the later email that the Buyer did receive and used to send the purchase money to the fraudulent account.


The case went to trial, and the jury found that the Broker was 85% responsible for the loss and the court entered judgment against the Broker for $167,129. The Broker filed a post-trial motion seeking a determination in her favor. Defendants argue that the evidence was insufficient to support the jury's finding in favor of plaintiff on his claim of negligent misrepresentation. The Court instructed the jury concerning the elements of that claim as follows:


One who, in the course of his or her business, supplies false information for the guidance of another person in such other person's business transactions, is liable for damages suffered by such other person caused by reasonable reliance upon the false information if:

1. The person supplying the false information failed to exercise reasonable care or competence in obtaining or communicating the false information; and,

2. The person who relies upon the information is the person for whose benefit and guidance the information is supplied; and,

3. The damages are suffered in a transaction that the person supplying the information intends to influence.


The district court affirmed the jury verdict. The court rejected the Broker’s argument that she did not send the email to the Buyer that was used to send the wire, finding this was an issue of fact for the jury to resolve as there was some evidence that the Broker had sent the later email. The jury determined that the Broker had sent the email, and so the court affirmed the jury verdict in favor of the Buyer.


William Blanchard notes that “theft of closing funds or sale proceeds is nationwide problem. The internet is everywhere, and it has become rather easy for a scammer to hack into email accounts and/or create fake identities to divert the funds for a real estate transaction. In some states, including Illinois, there are laws requiring a ‘Closing Protection Letter (CPL)’. This is a form of insurance issued by title insurance companies, insuring the actions of a particular attorney, agent, and/or closer in conducting a closing. 


To bolster lender confidence in agency closings, major title companies and underwriters issued CPLs indemnifying lenders and buyers from losses occurring during the closing process.” 


“Courts in many states without CPL legislation are struggling to justify decisions finding title companies and individual agency or agent’s errors and omission insurers responsible to the parties to real estate transactions that fail due to loss of funds or to sellers whose proceeds end up somewhere other than intended. Even though millions of dollars are being hijacked by unscrupulous closing agents, attorneys and hackers, there are no appellate or supreme court cases on the issue of title insurance company responsibility for loss due to fake wire transfer instructions involving CPLs,” concludes Mr. Blanchard.


The underlying case is JERRY BAIN, Plaintiff, v. PLATINUM REALTY, LLC and KATHRYN SYLVIA COLEMAN, Defendants, Case No. 16-2326-JWL United States District Court, D. Kansas (June 25, 2018). The Court’s memorandum and order upholding the jury verdict is at https://www.gpo.gov/fdsys/pkg/USCOURTS-ksd-2_16-cv-02326/pdf/USCOURTS-ksd-2_16-cv-02326-3.pdf

  

**** Mr. William B. Blanchard (“Bill Blanchard”) is a Real Estate Attorney with offices in St. Charles and Oakbrook Terrace, Illinois. Bill specializes in representing real estate clients for purchases and sales as well as home owner real estate tax assessment appeals. Mr. Blanchard is General Counsel for Gaia Title, Inc. a title insurance agency and settlement services provider. The Company is owned by real estate attorneys who demand exemplary title insurance services and accurate and efficient settlement services. As General Counsel he is responsible for title examination, commitment and policy review, escrow settlement supervision and regulatory review. - Attorney Profile: https://solomonlawguild.com/william-b-blanchard%2C-esq - Attorney News: https://attorneygazette.com/william-blanchard%2C-esq#40b43d7b-94b2-48d3-b055-1979a636f1e7

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More information about this and other issues is available on the Blog of William Blanchard (click below for Find Out More).

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William Blanchard (“Bill Blanchard”) is a lawyer in St. Charles and Oakbrook Terrace, Illinois.

Managing Credit During the Loan Process

“A Clear to Close Letter Doesn’t Mean You Are Clear to Close.”

Real Estate Attorney William “Bill” Blanchard Comments on Managing Credit During the Loan Process


Reminds home buyers that “A Clear to Close Letter Doesn’t Mean You Are Clear to Close.” Thus, buyers are advised to manage their credit wisely


William B. Blanchard, lawyer in Illinois, is publishing comments on issues related to the closing process, advising home buyers to pay particular attention to their credit during the loan process. His comments arose from a recent experience where Mr. Blanchard received notice from a lender that their customer’s loan was “clear to close” (CTC) and asked him, as the Seller’s attorney, to schedule a closing. The CTC is notice that all conditions required to fund the loan were completed, approved by the underwriter and the loan was ready to close.  It appeared the loan was ready for funding.


On the morning of the scheduled closing, Buyer’s attorney called and said that his client’s loan was being sent back to the underwriters because of a credit issue that appeared on their last credit inquiry. The borrowers were not aware that their loan required a minimum credit score. On the morning of our closing the lender ran a quick credit check and found the couple had 2 late payments on other credit obligations since making their loan application. The damage was a major drop in their FICO score and a cancelled closing. Now the buyers, who have movers scheduled, have no place to live or store furniture are facing the likelihood that the damage to their credit will take several weeks or months to fix.


Mr. Blanchard thus comments: “Lenders, attorneys, and real estate agents should warn their buyer clients of the consequences of using, not just abusing, credit during their loan application process. Equifax, a major credit reporting agency says that on-time payments and credit history, make up 35% of a credit score. Clients need to know that missing a payment is often fatal while an application is pending even if they’re pre-approved for a loan, have a loan commitment or are clear to close. Loan approval is always subject to last minute credit review.”


Mr. Blanchard explains that having a credit account sent to collections will certainly have a major impact on credit review as will credit utilization rate. This rate is the amount of outstanding debt relative to the total of all credit lines. Equifax suggests that anything over 30% credit utilization will damage a score significantly. Caution clients not to get anxious to buy new furniture for the new home or make any other major credit purchase. Seven percent of a FICO score is impacted by opening new credit lines. Advise clients to wait until they have the keys in hand before going on a shopping spree. Finally, a score can go down if you transfer balances or even pay off a card. Home buyers need to know not to do anything that has the potential to lower their credit score until their loan is closed and they own their new home.


Mr. Blanchard’s advice is that real estate attorneys make credit management warnings a visible part of your client’s home purchase counselling. If nothing more, provide your buyers with a copy of this article or your own warning as part of your engagement agreement. The following caution has a prominent position in my client engagement agreement. I don’t want to hear, “you never told me” if the loan is rejected. 


Mr. Blanchard suggests a written caution along the lines of:

“Congratulations on your contract to purchase a new home and your pre-qualification for a loan. A word of caution regarding managing credit during your loan process. Lenders use your FICO and credit reports for approving your loan and setting your interest rate. Your lender most likely reviewed both before providing your pre-approval letter. Be careful with your use of credit while your loan is being processed because your loan can be rejected for damaging changes to your score and report. This can happen up to the time you’ve completed your closing and have the keys to the new home. The following are credit situations to avoid during your application process:


· Do not use credit cards excessively. Keep balances below 30% of your credit limit and don’t make any major purchases;

· Do not let current accounts fall behind. Missing one payment during the loan process can lead to a substantial reduction to your score and loan rejection;

· Do not co-sign for anyone on a new account or loan.

· Do not give permission to anyone to run your credit (by applying for new credit accounts). The furniture for the new home can wait until you are holding the keys. New credit inquiries will reduce your score and can lead to denial of your credit application.”


The complete commentary on “Managing Credit During the Loan Process” by William B. Blanchard is available on his blog at https://williamblanchardblog.blogspot.com/

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The complete commentary on “Managing Credit During the Loan Process” by William B. Blanchard is available on his blog at https://williamblanchardblog.blogspot.com/ 

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Lawyer William Blanchard publishes first article in a series

Jurisdiction clauses in complex contract litigation

Attorney William B. Blanchard reviews the case of UBS AG v. HSH Nordbank AG, involving jurisdiction clauses in complex contract litigation


In the first article of his instructional series of articles, Real Estate Lawyer William B. Blanchard reviews the case of UBS AG v. HSH Nordbank AG, E.W.C.A. Civ. 585; WL 1657158: "Interpreting jurisdiction clauses in complex contract litigation over collateralized debt, where one party has sued in New York courts and opposing party has invoked jurisdiction of English courts, Court of Appeal upholds lower court’s ruling that rejected resort to English courts."


Mr. Blanchard first provides an overview of the case. This appeal turns on the construction of jurisdiction clauses. The principal issue is whether the English jurisdiction clause in one of the documents recording the complex transaction between the parties applies to the claims in the action in England for the negative declaration. The English court of first instance concluded that it did not. This dispute concerns derivatives in relation to the property market, or Collateralized Debt Obligations (CDOs). The contractual documentation in this matter consists of more than 500 pages; its size and complexity, which is no doubt duplicated in many other transactions, make it easier to understand, if not to excuse, why many senior banking figures throughout the world had little understanding of this market and of the very high risks their institutions were undertaking.


HSH Nordbank AG (HSH) is a commercial bank incorporated in Germany with dual headquarters in Hamburg and Kiel. The first claimant, UBS AG, is incorporated in Switzerland, where it has its head office, and has substantial offices worldwide, including in New York and London. 


The second claimant, UBS Securities LLC (UBS LLC), is an affiliate of UBS. It is incorporated in the United States and has its principal place of business here. The appellate court generally refers to either or both of them as “UBS.”


The relevant transactions took place in 2002/2003 between UBS and LB Kiel. HSH has assumed all material assets, rights and obligations of LB Kiel, and it is in that capacity that HSH has sued UBS in New York state court and is being sued by UBS in England. HSH is domiciled in Germany for the purposes of Council Regulation 44/2001 on jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the Brussels I Regulation).


UBS filed its English action for negative declaratory relief against HSH on February 25, 2008, in anticipation of proceedings which HSH was going to lodge against UBS in New York later the same day. In its complaint, HSH alleged mis selling and mismanagement of the securities which were the subject of the complex arrangements between the parties. The original complaint relied on the following causes of action: breach of contract; fraud; negligent misrepresentation; breach of fiduciary duty; breach of an implied covenant of good faith and fair dealing; unjust enrichment; and constructive trust.


“Plainly the parties did not actually contemplate at the time of the conclusion of the contracts that there would be litigation in two countries involving allegations of misrepresentation in the inception and performance of the agreements. But, in my judgment, sensible business people would not have intended that a dispute of this kind would have been within the scope of two inconsistent jurisdiction agreements. The agreements were all connected and part of one package, and it seems to me plain that the result for which UBS contends would be a wholly uncommercial result and one that sensible business people cannot have intended.”


“The New York complaint alleges, inter alia, that (a) UBS induced HSH to purchase the NS4 Notes by misrepresentations concerning the credit quality of the Reference Pool to which payments under the NS4 Notes were linked; (b) UBS failed to operate a Commitments Committee, as required by the RPSA, so as to select Reference Pool assets with stable or improving credit profiles, carefully monitor the credit status and quality of each asset, and avoid downgrades. As Justice Lowe stated in his decision of October 21, 2008: ‘HSH’s overarching claim is that UBS failed to maintain the promised high quality of the notes in the Reference Pool, by failing to ensure that the Commitments Committee keep an eye on the condition of the investments.’” [¶ 89].


“Whether a jurisdiction clause applies to a dispute is a question of construction. Where there are numerous jurisdiction agreements which may overlap, the parties must be presumed to be acting commercially, and not to intend that similar claims should be the subject of inconsistent jurisdiction clauses. The jurisdiction clause in the Dealer’s Confirmation is a ‘boilerplate’ bond issue jurisdiction clause, and is primarily intended to deal with technical banking disputes. Where the parties have entered into a complex transaction, it is the jurisdiction clauses in the agreements which are at the commercial centre of the transaction which the parties must have intended to apply to such claims as are made in the New York complaint and reflected in the draft particulars of claim in England.” [¶ 95].


“The action in England is intended to mirror the New York proceedings. I have already emphasised that the essence of the claims for misrepresentation in New York is that HSH was induced to purchase the NS4 Notes in reliance on the fraudulent and negligent misrepresentations, and would not have purchased them in the absence of those representations. No sensible commercial interpretation of the jurisdiction clause in the Dealer’s Confirmation could have the result that identical misrepresentation claims would fall both within that clause and within the non exclusive New York jurisdiction clauses, simply because the consideration for the transaction was the issue of the Kiel MTN Notes. 


The Court concludes that the standard form bond issue jurisdiction clause in the Dealer’s Confirmation does not apply to claims that the transaction as a whole, and in particular the purchase of the NS4 Notes, was induced by misrepresentation.


The case citation is UBS AG v. HSH Nordbank AG, E.W.C.A. Civ. 585; WL 1657158. The complete commentary will be published on the Blog of Mr. Blanchard at Blog: https://williamblanchardblog.blogspot.com/


About William B. Blanchard


Mr. William Blanchard (“Bill 

Blanchard”) is a solo practice attorney with offices in St. Charles and Oakbrook Terrace, Illinois. Bill specializes in representing real estate clients for purchases and sales as well as home owner real estate tax assessment appeals.


Mr. Blanchard is General Counsel for Gaia Title, Inc. a title insurance agency and settlement services provider. The Company is owned by real estate attorneys who demand exemplary title insurance services and accurate and efficient settlement services. As General Counsel he is responsible for title examination, commitment and policy review, escrow settlement supervision and regulatory review.


Mr. Blanchard gained distinction as a real estate assessment attorney by representing 23 Will County senior citizen home owners before the Illinois Property Tax Appeal Board and winning every case; this in addition to several successful appeals before various County Boards of Appeal.


Bill is often interviewed for comments on significant legal and real estate news and is developing a blog for discussion of relevant judicial decisions affecting the title insurance industry.

William B. Blanchard, Real Estate Attorney in Illinois

William B. Blanchard, Real Estate Attorney in Illinois

Mr. William Blanchard (“Bill Blanchard”) is a real estate attorney in Illinois.

Real Estate Attorney William B Blanchard announces discount

Discount for real estate services for USAA members, veterans, active duty, police, fire fighters

Bill Blanchard offers special discount for real estate legal services to USAA members, veterans, active duty, police, fire fighters, and senior citizens.


St. Charles, Illinois (August 2018) Real Estate Attorney William B Blanchard announced that beginning immediately he will be offering a special discount for those who have served the country. “We would like to honor those who serve or served (USAA members, veterans, active duty, police, fire fighters, and senior citizens) a reduced rate at one half the usual fee,” says Bill Blanchard. 


Bill stated, “I have great respect and admiration for those that wear the uniform and keep us safe. These men and women are this country’s unsung heroes and I want to give back to them for all the sacrifices they have made in order to keep us safe. Therefore, I am offering a reduced rate of my fees. A $500 fee will be reduced to $250 beginning immediately and continuing at least to the end of the year.” He went on to add “my wife Judy and I just feel the passion to help others. Several years ago, Judy and I started Foundation for Support of Chemical Dependency Recovery Programs, we feel so blessed that we wish to pass that on to others.”


Bill and his wife of 51 years, Judy, were the founders and major contributors of the Foundation for Support of Chemical Dependency Recovery Programs. During their several years of support they provided shelter and treatment for substance addicted adolescents in Illinois, Texas, Georgia and California. Young people benefitting from their generosity included teens from the inner city to children of Hollywood stars. Recently they provided below market rental housing for drug dependent single mothers with children sponsored by Catholic Charities and Cornerstone Services.


Bill is a solo practice attorney with offices in St. Charles and Oakbrook Terrace, Illinois. He specializes in representing real estate clients for purchases and sales as well as home owner real estate tax assessment appeals. He is also General Counsel for Gaia Title, Inc. a title insurance agency and settlement services provider. The Company is owned by real estate attorneys who demand exemplary title insurance services and accurate and efficient settlement services. As General Counsel he is responsible for title examination, commitment and policy review, escrow settlement supervision and regulatory review.


Since gaining distinction as a real estate assessment attorney by representing 23 Will County senior citizen home owners before the Illinois Property Tax Appeal Board and winning every case; this in addition to several successful appeals before various County Boards of Appeal.


Bill is often interviewed for comments on significant legal and real estate news and is developing a blog for discussion of relevant judicial decisions affecting the title insurance industry.


He received his Juris Doctor from DePaul University College of Law and was admitted to the practice of law in Illinois. He graduated with his B.S. in Business Administration from Southern Illinois University.

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Real Estate Attorney William B. Blanchard commented on the loss of funds due to wire transfer scams.

Illinois’ Closing Protection Letters

Illinois is holding the major title companies and underwriters responsible

St. Charles, Illinois (August 2018) - Real Estate Attorney William B. Blanchard commented that the loss of funds due to wire transfer scams is now the Number 1 insurance claim category for title companies, escrow closing services and their attorney/agents. Cunning hackers can intercept and replace wire transfer instructions sent via email between the various parties to a real estate transaction and have now diverted over a billion dollars in the U.S. alone. Cyber thieves and unscrupulous closing agents make off with closing funds or proceeds belonging to buyers, sellers and lenders involved in real estate transaction at a rapidly increasing rate. Once gone, the money is virtually impossible to recover as it moves quickly through a maze of domestic and foreign accounts. Criminals are having greater success now than ever before, with a large percentage of thefts taking place in Northern Illinois.


Mr. Blanchard explains that a “Closing Protection Letter” (CPL) which must now be used is a form of insurance issued by title insurance companies, insuring the actions of a particular attorney, agent, and/or closer in conducting a closing. The business of issuing title insurance commitments, owner’s and lender’s policies and administering closings in Illinois, underwent a dramatic change during the 1980s and ‘90s.  Residential real estate contracts, following established practice in Northern Illinois, provide that seller’s attorney is responsible for selecting the title company to provide title and escrow settlement services for the transaction. Title companies, attempting to increase title orders, took steps to build a base of loyal attorneys in a competitive market by entering into independent agent agreements. These agreements provided financial rewards to attorney/agents through generous premium splits in exchange for placement of title orders.


By the turn of the Century major title companies engaged in fierce competition to attract new agents until now virtually all real estate attorneys have affiliated business arrangements with at least one title underwriter. As a result, attorney policy premium splits quickly reached 80-20%. Attorney revenue continued to grow rapidly as title companies had to increase premiums in order to remain a competitive attorney recruitment program.  


Title companies dealt with lost revenue from lower premium margins by increasing the cost of other services such as escrow settlement and closings fees. After profits from providing ancillary services and products grew, attorneys and investors opened full service title agencies allowing them to enter the lucrative escrow and settlement business. Most new agencies were and continue to be undercapitalized and are staffed by real estate attorneys and administrative staff having little hands-on title experience. Mistakes before, during and after closings increased as did the volume of claims. Dissatisfied lenders complained as they had to look to undercapitalized independent agencies to recover losses resulting from title errors and mishandling or theft of escrow funds. The result was a reluctance amongst mortgage lenders to recognize these new agencies as approved vendors for their closings. 

Facing a need to bolster lender’s confidence in agency closings, major title companies and underwriters issued CPLs indemnifying lenders and buyers from losses occurring during the closing process.  Underwriters paid or settled claims quickly in order encourage lenders to accept the newer agencies as approved vendors. 


At first, CPLs were issued by underwriters to lenders and later to buyers upon request. Later Illinois enacted statutory coverage for CPLs and provided that title company underwriters must issue letters to buyers and lenders in all residential real estate transactions. Then on September 1, 2011 the Illinois legislature added CPLs for sellers under the Act and provided for payment of fees to title companies that issued CPLs (Illinois Public Act 96-1454) (“Act”).

Attorney William Blanchard notes that “theft of closing funds or sale proceeds is not just an Illinois problem as losses are prevalent throughout the country. Courts in many states without CPL legislation are struggling to justify decisions finding title companies and individual agency or agent’s errors and omission insurers responsible to the parties to real estate transactions that fail due to loss of funds or to sellers whose proceeds end up somewhere other than intended. Other state courts have moved in the opposite directions finding underwriters and insurers free from legal responsibility for losses.”


Even though millions of dollars are being hijacked by unscrupulous closing agents, attorneys and hackers, there are no appellate or supreme court cases on the issue of title insurance company responsibility for loss due to fake wire transfer instructions involving CPLs. Statutory defenses are provided in the Act, but for now it appears that underwriters are accepting claims under CPLs with a reservation of right to deny the claims. Therefore, if buyer, lender or seller closing funds are misappropriated and the closing does not occur, insurers are still settling claims very early in the process to prevent courts from interpreting issuer’s liability under the Act. The obvious desire not to litigate may be realization that it would be rare for a claim of diversion of funds to result from settlement actions by closing agents or attorney/agents who were completely free from negligence, error, fraud, or intentional taking.


Mr. Blanchard concludes that “the language of the Illinois Act makes it clear that the legislature is holding the major title companies and underwriters responsible for creating a situation which makes it easier for unscrupulous parties to steal funds and will now hold insurers strictly responsible for the damages.”


About William B. Blanchard, Real Estate Attorney


Bill Blanchard is a solo practice attorney with offices in St. Charles and Oakbrook Terrace, Illinois. He specializes in representing real estate clients for purchases and sales as well as home owner real estate tax assessment appeals. He is also General Counsel for Gaia Title, Inc. a title insurance agency and settlement services provider. The Company is owned by real estate attorneys who demand exemplary title insurance services and accurate and efficient settlement services. As General Counsel he is responsible for title examination, commitment and policy review, escrow settlement supervision and regulatory review.


More information:


There are numerous news reports about this type of scam elsewhere in the U.S., for example:

http://www.chicagotribune.com/classified/realestate/ct-re-1105-kenneth-harney-20171030-story.html

http://time.com/money/5062964/this-sneaky-home-buying-scam-is-on-the-rise-heres-how-to-spot-it/

https://abc7chicago.com/realestate/wired-away-couple-loses-life-savings-during-home-purchase/2630496/


The Illinois Statutory CPL now reads as follows: 


Illinois Agent Issued Seller Closing Protection Letter

7/19/2018

[…] Transaction File Number (hereafter, “the Real Estate Transaction”): Buyer/Borrower: 

Property Address: 

Loan Number: 

Name of Issuing Agent or Approved Attorney ("title insurance agent"): 

Re: Seller Closing Protection Letter

Dear Sir or Madam:

___________________ Title Insurance Company (the “Company”) agrees, subject to the Conditions and Exclusions set forth below, to reimburse you for actual loss not to exceed the amount of the settlement funds deposited with the title insurance agent and incurred by you, the Seller/Lessor in connection with the closing of the Real Estate Transaction conducted by the title insurance agent of the Company provided:

(A) A title insurance policy of the Company is issued in connection with the closing of the Real Estate Transaction;

(B) You are to be the (i) Seller of an interest in land, or (ii) Lessor of an interest in land; and

(C) The aggregate of all funds you transmit to, or are to receive from the title insurance agent for the Real Estate Transaction does not exceed $2,000,000.00 on a nonresidential transaction; and provided the loss arises out of:

1. Failure of the title insurance agent to comply with your written closing instructions to the extent that they relate to (a) the status of the title to that interest in land or including the obtaining of documents and the disbursement of funds necessary to establish the status of title, or (b) the obtaining of any other documents, specifically required by you, but only to the extent the failure to obtain the other documents affects the status of the title to that interest in land and not to the extent that your instructions require a determination of the validity, enforceability or the effectiveness of the other documents, or

2. Fraud, dishonesty, or negligence of the title insurance agent in handling funds or documents in connection with closings to the extent that the fraud, dishonesty, or negligence relates to the status of the title to the interest in land or, in the case of a Seller/Lessor, to the extent that the fraud, dishonesty, or negligence relates to funds paid to the Seller/Lessor or on behalf of the Seller/Lessor.

Conditions and Exclusions:

1. The Company will not be liable for loss arising out of:

A. Failure of the title insurance agent to comply with your written closing instructions which require title insurance protection inconsistent with that set forth in the title insurance binder or commitment issued by the Company. Instructions which require the removal of specific exceptions to title or compliance with the requirements contained in the binder or commitment shall not be deemed to be inconsistent.

B. Loss or impairment of your funds in the course of collection or while on deposit with a bank due to bank failure, insolvency or suspension, except as shall result from failure of the title insurance agent to comply with your written closing instructions to deposit the funds in a bank which you designated by name.

C. Defects, liens, encumbrances, mechanics' and materialmen's liens, or other matters in connection with the Real Estate Transaction if it is a sale, lease or loan transaction except to the extent that protection against those defects, liens, encumbrances or other matters is afforded by a policy of title insurance not inconsistent with your closing instructions.

D. Fraud, dishonesty or negligence of your employee, agent, attorney, broker, buyer/borrower/lessee, borrower’s lender or warehouse lender.

E. Your settlement or release of any claim without the written consent of the Company.

F. Any matters created, suffered, assumed or agreed to by you or known to you.

G. The title insurance agent of the Company acting as a Qualified Intermediary/Accommodator pursuant to IRC 1031, Like Kind Exchanges. However, the Company is liable for the acts or omissions of the title insurance agent pursuant to the coverage’s afforded by this Closing Protection Letter if the title insurance agent fails to follow written instructions directing the disbursement of exchange funds to a third party Qualified Intermediary/Accommodator. The terms and conditions of this Closing Protection Letter extend only to the disbursement of exchange funds to a designated Qualified Intermediary/Accommodator disclosed in written instructions and not to the subsequent acquisition of the replacement property as defined in IRC 1031, Like Kind Exchanges.

2. When the Company shall have reimbursed you pursuant to this Closing Protection Letter it shall be subrogated to all rights and remedies which you would have had against any person or property had you not been so reimbursed. Liability of the Company for such reimbursement shall be reduced to the extent that you have knowingly and voluntarily impaired the value of this right of subrogation.

3. The title insurance agent is the Company’s agent only for the limited purpose of issuing title insurance policies. The title insurance agent is not the Company’s agent for the purpose of providing other closing or settlement services. The Company’s liability for your losses arising from closing or settlement services is strictly limited to the protection expressly provided in this Closing Protection Letter. Any liability of the Company for loss does not include liability for loss resulting from the negligence, fraud or bad faith of any party to the Real Estate Transaction other than the tile insurance agent pursuant to this Closing Protection Letter; the lack of creditworthiness of any borrower connected with the Real Estate Transaction, or the failure of any collateral to adequately secure a loan connected with the Real Estate Transaction. However, this letter does not affect the Company’s liability with respect to its title insurance binders, commitments or policies issued by the title insurance agent in connection with the Real Estate Transaction

4. You must promptly send written notice of a claim under this letter to the Company at its principal office, First American Title Insurance Company, Attn: Claims National Intake Center, 1 First American Way, Santa Ana, CA 92707. The company is not liable for a loss if the written notice is not received within one year from the date of the closing. from the date of the closing.

Any previous Closing Protection Letter or similar agreement is hereby cancelled with respect to the Real Estate Transaction.

William B. Blanchard is General Counsel for Gaia Title, Inc.  See http://www.gaiatitle.com/

Reversal Before The Illinois Property Tax Appeal Board

Home owner appealed real estate tax assessment for his home with help of attorney

St. Charles real estate attorney William “Bill” Blanchard successfully appealed a determination by the Will County Board of Review (“BOR”) regarding the real estate tax assessment for a Homer Township homeowner (“Appellant”). On May 15, 2018 the Illinois Property Tax Appeal Board (“PTAB”) unanimously adopted the request by the Appellant for a reduction of his 2015 tax assessment. The BOR decided not to appeal the decision which now becomes final. 


The Homer Township Assessor originally determined the fair market value of value of the 3,455 square foot, 2-story home in Hidden Valley Estates as $436,207, while the homeowner, represented by Mr. Blanchard at the BOR hearing, requested an assessment based upon a value of $380,800. The BOA issued a “No Change” opinion which Mr. Blanchard appealed to PTAB. 


PTAB’s decision in favor of the homeowner to reduce the fair market value by $55,407 resulted in a 13% tax bill reduction for the homeowner on his 2015 real estate tax bill. The over payment will be refunded by the Will County Treasurer. Mr. Blanchard said, “the homeowner was extremely happy with the outcome especially when told that the decision would entitle him to similar refunds for tax years 2016 and 2017 as well.” Blanchard continued, “I’ve now received reductions for 24 Will County homeowners who appealed decisions by the Will County Board of Review.”


William Blanchard represents residential, commercial and industrial property owners who feel they are entitled to assessment reductions in Will, Kane and DuPage Counties in Illinois.


Further information about the Illinois Property Tax System is available at http://tax.illinois.gov/publications/localgovernment/ptax1004.pdf. Specifically about Will County, Illinois, additional real property tax information is at http://www.willcountysoa.com/search_address.aspx.

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Further information about the Illinois Property Tax System is available at http://tax.illinois.gov/publications/localgovernment/ptax1004.pdf. Specifically about Will County, Illinois, additional real property tax information is at http://www.willcountysoa.com/search_address.aspx.

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Real Estate Lawyer William Blanchard comments on Illinois Appellate Decision

Illinois Decision finding Title Insurance Company not liable

Though it took 18 months to clear liens, Title Insurance Company not liable

Real Estate Attorney William B. Blanchard, general counsel for Gaia Title, Inc., spoke about a recent case where the Illinois Appellate Court held that the standard ALTA Owner’s Policy gives a title insurance company wide latitude in how to remove liens from the title, and protects it from liability for damages. This court opinion may affect any real estate purchaser who seeks to have liens or other encumbrances removed from a title insurance policy after closing.


The case of Wade v. Stewart Title Guaranty Company arose from a breach of contract regarding a title insurance policy for a multi-unit residential building in Chicago, Illinois. Plaintiff Josephine Wade, the purchaser of the property, filed suit against Stewart Title Guaranty Company (“Stewart Title”), alleging that it had failed to timely remove defects on the property’s title. As a consequence of the delays, according to Ms. Wade, the building was demolished because she could not comply with the City of Chicago’s building code. The trial court ruled in favor of Stewart Title, finding that the title company did not breach any duties under the policy. The Illinois Appellate Court affirmed, noting that the Plaintiff did not meet the burden of proof needed to establish that the 18 months Stewart Title took to clear the defects was not “reasonably diligent.”


Apparently, the title insurance company pursued lengthy litigation during which time the building’s value quickly deteriorated. The litigation was designed to settle the liens for less money, rather than immediately paying the liens in full. Section 9. of the title insurance policy, “Limitation of Liability,” provided: “If the (Title) Company establishes the title, or removes the alleged defect, lien or encumbrance *** in a reasonably diligent manner by any method, including litigation and the completion of any appeals therefrom, it shall have fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused hereby.”


Section 4 of the policy gave the title insurance company the right to determine how to defend or settle the claims. On ambiguity of provisions in insurance contract, the Court stated, “…an insurance contract will be liberally construed in favor of the insured. First Chicago Insurance Co. v. Molda, 2015 IL App (1st) 140548, ¶ 33.” Then, ironically, the Court held that Plaintiff had the burden of proof to show the defense was not “reasonably diligent.” Note that the trial court heard evidence that the defense provided by Stewart Title was for its own benefit, and to the detriment of their policy holder. 


Mr. Blanchard stated, “this decision is important for anybody in a real estate transaction where a lien or other encumbrance is first discovered after closing. Basically, the standard title insurance policy provides that you must let the insurer do the job in any manner it chooses.  The appellate court concluded that if the policy owner suffers damages while the title company engages in its defense, a policy holder cannot prevail in a claim damages absent clear and convincing evidence that the defense did not act in a “reasonably diligent” manner.”


“This is an important case also for what the Court didn’t consider in reaching its opinion,” adds Mr. Blanchard. “The Appellate Court affirmed because the reasonableness and diligence of the title insurance company’s defense was a matter for the trial court to determine based upon the evidence presented. Before this case, a plaintiff was required to present evidence that it suffered damages during the time it took the title company to remove title defects, and it was then up to the title company to present evidence that its efforts were reasonably diligent.”


“Title insurance companies defending similar actions in the future will cite this case as precedent for a broad interpretation of both Section 4’s grant of discretion and Section 9’s protection from liability. The ruling is contrary to Illinois precedent establishing that unclear terms in insurance policies should be interpreted in favor of Plaintiffs, and shifts the burden of proof on the question of “reasonable diligence” from Defendants to Plaintiffs,” opines Mr. Blanchard. 


The case is Wade v. Stewart Title Guaranty 2017 ILAP (1st) 161765. The full opinion is on the court website http://www.illinoiscourts.gov/Opinions/AppellateCourt/2017/1stDistrict/1161765.pdf


William B. Blanchard is General Counsel for Gaia Title, Inc. and a real estate law attorney representing clients in the Western suburbs of Chicago in all types of real estate transactions including real estate closings, short sales, and real estate tax appeals. See http://www.gaiatitle.com/


As General Counsel, Mr. Blanchard provides title insurance examinations, commitment and policy reviews, supervises closing activities and regulatory compliance issues. Mr. Blanchard received his Juris Doctor Degree from DePaul University College of Law in 1972, and was admitted to the practice of law in Illinois in 1973. His LinkedIn Profile is at https://www.linkedin.com/in/william-bill-blanchard-080a48b/

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The case is Wade v. Stewart Title Guaranty 2017 ILAP (1st) 161765. The full opinion is on the court website http://www.illinoiscourts.gov/Opinions/AppellateCourt/2017/1stDistrict/1161765.pdf

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Three Different Courts Find CFPB and RSPA Intrusive

Attorney William Blanchard elaborated on court decisions that limit or abolish regulatory efforts

St. Charles, Illinois (July 2018) William Blanchard, a St. Charles, Illinois real estate attorney and General Counsel of Gaia Title, Inc., spoke about three recent court cases each ending with a decision to limit or abolish regulatory efforts by the Consumer Financial Protection Bureau (CFPB) or proceedings under the Real Estate Settlement Procedures Act (RESPA). 

The significance of these decisions is that together they demonstrate that the pendulum is swinging away from broad agency regulatory authority toward less intrusive business oversight.


On May 18, 2017, the Illinois Supreme Court deadlocked in the matter of Chultem vs. Ticor Title Insurance Co. (2017 IL 120448). Plaintiffs in that case alleged that the title company defendants paid excessive commissions to attorney agents who referred title business to defendants. The complaint recognized that RESPA permitted payment to attorneys who provide core services during the title production process but argued that the quantity and quality of services provided did not justify agent commissions of up to 80% of policy premiums. The trial court rejected plaintiffs' assertion that the attorney agents must perform all of the core title services to avoid violating section 2607 of RESPA, and that under Freeman v. Quicken Loans, Inc., 132 S. Ct. 2034 (2012), it was irrelevant whether an attorney agent was overpaid for their services when performing less than all core title services.


The Illinois Supreme Court justices deadlocked decision resulted in the decision by Appellate Court Judge Mary Mikva to stand, which favored title companies (Appeal from the Circuit Court of Cook County, Nos. 06-CH-09488, 06-CH-09489).


In particular, Judge Mikva noted that “legal precedent holds attorneys need only perform some title services to allow them to be legally paid by the title companies as a “title agent.” In the Appellate Opinion Chultem v. Ticor Title Insurance Co., 2015 IL App (1st) 140808, the majority held that the federal law at issue, known as RESPA, doesn’t spell out how much work attorneys must perform to receive payment, or control the amounts attorneys can collect in return for their work on a title.


“…RESPA is not concerned with whether the attorney agents were paid too much for their actual services, but asks only whether actual services were rendered,” the majority wrote. “Thus, the title companies' payments were not unlawful.”


The next example of a recent court decision that limits regulatory oversight is the decision of Judge Eileen Rakower of the Manhattan Supreme Court of July 6, 2018. In the case of the New York Land Title Association v. the New York Department of Finance, Judge Rakower found that regulations adopted by the DFS were overly broad and therefore invalid. This case dealt with title insurance company’s practice of giving gifts of meals, event tickets, hotel rooms, and other perks to real estate brokers, bankers, attorneys and others who provided title insurance orders to title companies. The Department took the position that these gifts were things of value that increased premiums to consumers and amounted to unpermitted referral fees or kickbacks. The rules preventing such gifts had gone into effect earlier this year and were an attempt to lower real estate closing costs for New York consumers. The Court thus struck down a state regulation that prevented title insurers from passing along marketing and client-relation expenses to customers. See https://www.law.com/newyorklawjournal/2018/07/06/supreme-court-strikes-down-ny-title-insurance-regulation/ 


“To construe [the law] in this manner is to hold that the Legislature intended to prohibit title insurance corporations from marketing themselves for business is an absurd proposition," Judge Rakower wrote, validating many of the arguments made by title insurers and lawmakers who attempted to defang the regulations through legislation. 


In the third case, a federal district judge ruled on June 21, 2018 that the structure of the Consumer Financial Protection Bureau (CFPB) violates the Constitution, countering a January ruling from a federal appeals court.


Judge Loretta Preska of the Southern District of New York (a Republican judge), in the case of Consumer Financial Protection Bureau et al v. RD Legal Funding LLC et al (No. 1:2017cv00890 - Document 80, S.D.N.Y. 2018) ruled that the CFPB’s creation as an independent agency with a director that could only be dismissed for wrongdoing was unconstitutional. In her written opinion, Judge Preska noted that the Bureau was virtually free from Congressional or Executive oversight and was in fact created as another branch of government not permitted by the Constitution.


However, this decision conflicts with an earlier decision by the Court of Appeals of the District of Columbia which found that the President’s ability to fire the CFPB Director at will was sufficient oversight to make its structure constitutional. Judge Preska failed to mention the United States Supreme Court’s reasoning in May of this year in Murphy vs. NCAA which discussed the issue and inferred most judges feel that it would be more logical to rule on specific CFPB actions or powers than to find the entire Act unconstitutional.


These three post-election decisions highlight the differences in attitude concerning business regulation between the previous and current administrations. The CFPB was originally staffed by Senator Elizabeth Warren of Massachusetts while President Trump recently appointed his choice to lead the Bureau. 


Mr. Blanchard pointed out that, “Future court decisions including a determination by the United States Supreme Court will determine if this trend continues. An appeal of the conflicting findings by Judge Preska and the DC Court could determine that the Dodd Frank Wall Street Reform and Consumer Financial Protection Act is unconstitutional as currently structured.  Presumably the political make-up of the Supreme Court will be more conservative with a second appointment by President Trump. All factors point to another point of contention between Republicans and Democrats after the mid-term elections.”


Mr. Blanchard received his Juris Doctor from DePaul University College of Law in 1972 and was admitted to the practice of law in Illinois in 1973. He graduated with his B.S. in Business Administration from Southern Illinois University. Attorney profile at https://solomonlawguild.com/william-b-blanchard%2C-esq

William B. Blanchard is General Counsel for Gaia Title, Inc. See http://www.gaiatitle.com/

William B. Blanchard is General Counsel for Gaia Title, Inc. See http://www.gaiatitle.com/

William B. Blanchard is General Counsel for Gaia Title, Inc.  See http://www.gaiatitle.com/

“Real Estate Commissions and Title Insurance for a Flat Fee”

Game changing “Real Estate Commissions and Title Insurance Services for a Flat Fee” in Illinois

Game changing “Real Estate Commissions and Title Insurance Services for a Flat Fee” are beginning in Illinois


St Charles, IL (June 2018) William B. Blanchard real estate attorney and general counsel for Gaia Title, Inc. spoke about a game-changing development of great significance to Realtors® and title agents in Illinois.

Home Bay, a California real estate technology company is expanding its operation to seven additional states including Illinois. Home Bay has been successful in the California real estate market by offering discounted flat fee brokerage commissions in the range of $2,500 to $3,000.  

Home Bay announced this week that its getting into the title insurance and settlement services business by acquiring OnTitle, a full-service title insurance and settlement company. Mr. Blanchard stated, “this is a game changer for Illinois residents, real estate agents and title agencies because Home Bay’s fees are significantly below prevailing rates in our market. OnTitle is registered to provide title and closing services in 31 states including Illinois.” Home Bay’s spokesman says, “the flat fee platform will allow the company to become a one-stop-technology-shop for brokerage, title and escrow.” He went on to add, “the recent addition to our portfolio permits us to streamline the sales and settlement process.” 

The question becomes, will Home Bay with the recent acquisition of OnTitle bring real savings to consumers, and Mr. Blanchard believes it will. “There is no doubt that consumers working with Home Bay in its current markets have realized lower commissions and settlement fees.” added Mr. Blanchard.

William B. Blanchard is General Counsel for Gaia Title, Inc. and a real estate attorney representing clients in the Western suburbs of Chicago in all types of real estate transactions including real estate closings, short sales, and real estate tax appeals. As General Counsel, Mr. Blanchard provides title insurance examinations, commitment and policy reviews, supervises closing activities and regulatory compliance issues.

Mr. Blanchard received his Juris Doctor Degree from DePaul University College of Law in 1972, and was admitted to the practice of law in Illinois in 1973

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News episode from '60 Minutes' describing a Flat Fee Listings and the impact on the Real Estate Market.

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UK Court decision on real estate in the Bahamas

UK-Bahamas dispute over real estate

U. K. Privy Council surveys judgment of Bahamas Court of Appeals; Florida chapter 11 judge entered orders that indicated that the matter related to real estates.

 

This very muddled case before the Privy Council manages an offer of Bahamas genuine property under a court arrange. The property being referred to is a one story living arrangement on a plot of land known as Lot 32, North Cat Cay. In spite of the fact that in an alluring area, the house is in a poor condition of repair and appears to have been vacant for extensive stretches. 


Some portion of the trouble is that despite the fact that the suit has so far delivered seven requests (some interlocutory and some last) made by Bahamas first occasion Judge Lyons, it was just at the hearing paving the way to Order (6) that the judge heard oral proof from deponents took after by round of questioning. 


Another inconvenience has been the simultaneous Florida insolvency case including Mr. James F. Walker, one of the Petitioners, at first with flawed respect to the standards of worldwide comity. 

The initial 5 orders incorporate Order (1) of September 3, 2002 for the offer of Lot 32 (at that point possessed by the bankrupt and his better half) to Susan Lundborg (Respondent); Order (2) of July 7, 2003 that the gatherings finish the deal inside 14 days; Order (3) of July 21, 2003 (not in the record) exemplifying an endeavor that Respondent would not continue pending an application for a stay of the request available to be purchased made by Mr. Walker's Florida trustee in chapter 11; Order (4) of March 23, 2004 permitting Respondent's mediation and dismissing the trustee's application for a stay; and Order (5) dated July 26, 2004 and connected for by Mrs. Walker which remained the request available to be purchased until the point when the court could resolve the questioned issues by interviewing the deponents. 

Two more requests require thought: Order (6) of December 7, 2004 (after the lower court had heard some oral proof) putting aside the request available to be purchased; and Order (7) dated February 28, 2005 putting aside a cash judgment which an insolvency Plaintiff, Eleanor C. Cole, had gotten against Mr. Walker in the Supreme Court of the Bahamas on December 3, 1996, which indicated to implement a before Florida judgment against the bankrupt. 

The Petitioners' interest to the Judicial Board of the Privy Council is from a November 15, 2005 request of the Bahamas' Court of Appeal It put aside Orders (6) and (7). The Board needs to determine the interest in view of the focuses at issue, and, deficient as they seem to be, on Judge Lyons discoveries of actuality. 

Offended party, the Petitioners and the Respondent are all U.S. residents living in Florida. The Petitioners, nonetheless, at one time resided in the Bahamas. In 1983, they purchased Lot 32 as joint inhabitants. They promptly sold it back to the past proprietors and have since paid off that home loan. 

In October 1990, Plaintiff sued Mr. Walker in the Bahamas' court to uphold a November 1989 Florida judgment for about $300,000 which she had gotten against him. Mr. Walker had entered an unlimited appearance and the court had given synopsis judgment against him in April 1991. Multi month later, notwithstanding, he got a request putting aside the judgment on the ground that he was testing the first Florida judgment. Five years passed by yet the Florida judgment in fact stayed essentially. On December 3, 1996, Plaintiff again got rundown judgment in her authorization procedures in the Bahamas. 

Under Section 63 of the Supreme Court Act, this judgment set an enforceable impartial charge on Mr. Walker's enthusiasm for Lot 32. The charge did not influence Mrs. Walker's advantage, however it enabled Plaintiff to apply to the court under Order 31 of the Supreme Court Rules for a request to offer every one of the interests in Lot 32. This charging request separated the joint tenure. A large portion of the net continues would go to Mrs. Walker and the court would have connected the other half to fulfill Plaintiff's judgment obligation. 

There was then a further postponement before Plaintiff's lawyers, Callenders and Co. of Nassau, found a way to uphold the fair charge. Offended party's lawyers acquired an expert evaluation in June 1997 that esteemed Lot 32 at $326,250. On June 18, 1999 they at last looked for a request available to be purchased. Those are the procedures in which the lower court made everything except the remainder of the seven requests; the court issued Order (7) in Proceedings 1355 of 1990. 

At the point when the Court practices its capacity to arrange a deal, the typical course is to make a request by and large terms, entrusting the lead of the deal to a predefined gathering, and giving general headings with regards to the way of offer (e.g. by open sale or private arrangement), the base cost, et cetera. That was the help Plaintiff looked for by the starting summons with Petitioners as the first respondents, and previous proprietor Mrs. Krafft Keims, now a dowager, included as a third respondent in June 1999. 

On August 18, 1999, Sidney Collie, a Nassau lawyer, entered an appearance for Petitioners through Gary Rotella, a Florida lawyer, whom Mr. Walker had trained; them three met at Rotella's office in Fort Lauderdale on August 14, 1999. Mr. Walker approached Collie to represent the two Petitioners. Collie's confirmation, which the judge acknowledged, was that his solitary contact was with Mr. Walker (and not his significant other) and even those contacts were rare. 

Whatever is left of 1999, the entire of 2000 and a large portion of 2001 passed by with no advance. Offended party's Nassau lawyer, a Mr. Turnquest of the Callenders firm, kept in touch with her on July 31, 2001 apologizing for the deferral. His letter expressed that he didn't imagine that another examination of the property was fundamental. 

Offended party (who was at this point an elderly woman in weakness) at last swore her first sworn statement in help of the starting summons on January 9, 2002. Offended party's testimony asserted that Respondent, who lived in Florida, had connected with her and said she was keen on purchasing Lot 32. On January 27, 2002, Respondent sent Plaintiff a record portrayed as a "letter of purpose" for the deal and buy of the property for $400,000. Offended party appeared to be, at first in any event, to have been appreciative to Respondent for her mediation. 

Amid the mid-year of 2002, there was restored contact between the bankrupt and Collie. The bankrupt appears to have gotten some answers concerning Respondent's enthusiasm for the property and about the possibility of the beginning summons in the end preceding the court. The preliminary court heard the starting summons on the evening of September 3, 2002. That morning, Saunders, a Nassau lawyer, swore out a sworn statement displaying the multi year old examination. In his first sworn statement, he requested that the court set a hold cost of $326,250. 

Mr. Saunders at that point pledged to a second sworn statement, the content of which to some extent was as per the following: "1. I am approved by the Plaintiff ... [to present] to this Honorable Court ... a true blue offer to buy [Lot 32 by "private contract"], the Plaintiff being inhabitant out of the Bahamas in the State of Florida. There is presently delivered and appeared to be stamped 'JMS 1' a genuine duplicate of a composed offer dated September 3, 2002 made by [Respondent] a U.S. National, to purchase Lot 32 for $400,000. ... In the premises I implore that this Honorable Court approve an offer of the subject property to the said [Respondent] at the cost showed." 

Neither Saunders nor Turnquest has since clarified how this offer had fortunately touched base at their association's office on the simple morning of the hearing, or how he had gotten Plaintiff's power to show the offer to the Court. Respondent swore an oath on May 22, 2003 ousting that Turnquest “represents Plaintiff generally but myself as well for the purposes of this transaction.”

   

Against that, Plaintiff’s daughter, Caroline, deposed on July 26, 2004: “I also assisted my mother in communicating with her then lawyer, Stephen Turnquest. Mr. Turnquest was not authorised to represent to this Court on September 3, 2002, that my mother consented to the $400,000 offer, which she had rejected on numerous occasions over the course of the previous eight months.”

Judge Lyons (as to Order (6)) accepted Petitioners’ and Collie’s evidence about this: “ ... I have had the opportunity of observing Petitioners. What they both said was that they never gave Collie express instruction to accept the $400,000 offer from Respondent.”

“It seems therefore that ... Collie came to court full of good intentions. On November 3, he had ... general instructions to do what he could to help Bankrupt’s predicament. But he accepts he never had express instructions to bind the Petitioners to Respondent’s $400,000 offer ...” Judge Lyons then ordered the sale of Lot 32 ... to Respondent within the terms of her offer. 

Turnquest, whose evidence in Florida was that he had started to act for Respondent at Plaintiff’s express request but found himself in the awkward position of having two clients with sharply conflicting interests.

Mr. Walker’s bankruptcy in Florida had a great influence on the U.S. parties’ conduct in the Bahamas litigation. In retrospect, it had only a marginal relevance to the issues that the Board has to decide. Nor has the Board heard any argument about any issues of private international law.

“In the Bahamas, there are no statutory provisions for cross‑border assistance in insolvency with an international element involving the U.S. Under general principles of private international law, one country will usually recognise the status of a trustee in bankruptcy (or similar officer) appointed by another country, and will also recognise his title to moveable (but not to immoveable) property situated in the recognising country.”

“Mr. Walker’s interest constituted immoveable property. Even if, under Florida bankruptcy law, Mr. Walker’s world‑wide estate, moveable and immoveable, vested in his bankruptcy trustee, courts in the Bahamas would not recognise the trustee’s title to immoveable property within its jurisdiction.” [¶ 25]

On January 10, 2003 a Florida bankruptcy judge (FBJ) appointed Linda Walden as receiver for Plaintiff to get hold of Mr. Walker’s assets. During February, the FBJ subpoenaed Respondent to produce documents for the purposes of the receivership. On April 25, 2003, Mr. Walker (through his Florida attorney, Rotella) filed for Chapter 7 bankruptcy.

Plaintiff proved in the bankruptcy and proposed Ms. Walden as trustee, an appointment the FBJ confirmed on July 9, 2003. On July 17, (as a direct result of the Walkers finally finding out about the sale order), the FBJ held an emergency hearing at which he took it upon himself to declare that “the orders issued on or about July 7 2003 by the Commonwealth of the Bahamas” were null and void. The FBJ ordered that there should be no sale of the property without his authority.

Ms. Walden faxed a copy of the Florida order directly to Judge Lyons, who was “understandably affronted.” On May 5, 2004, the FBJ withdrew his declaratory order after a hearing.

   

Although Plaintiff had proved in the bankruptcy, she seems to have become increasingly disillusioned about legal processes both in the Bahamas and in Florida. At some point, the Florida court removed Ms. Walden from office. Plaintiff herself ceased to take part (either personally or by a legal representative) in either branch of the litigations.

The FBJ discharged Mr. Walker from bankruptcy on September 21, 2005. On November 20, 2007, there was a further order setting aside the original Florida judgment of November 14, 1989.

Meanwhile, back in the Bahamas, Turnquest found himself with two clients, Plaintiff and Respondent with conflicting interests. Plaintiff was telling him (through Ms. Gwynn, her Florida attorney,) not to deal with Respondent. Her later evidence to Judge Lyons (which he accepted) was that, in the course of giving the deposition, she became aware of a sale of the property, to which she was not a party. Petitioners both claimed persuasively that they only became aware of the full facts on July 25, 2003, when an associate of Collie passed the information to Rotella.

Shortly before this, Turnquest had obtained Order (2) of July 7, 2003. This order raised a number of puzzling questions. It still listed Turnquest as appearing on behalf of Plaintiff although the relief he applied for was contrary to her instructions. Petitioners knew nothing about it either.

On or about July 11, 2003, Respondent deposited $402,000 with the Callenders firm. According to Turnquest’s evidence to the FBJ on May 5, 2004, the above sum about equaled the full purchase price. Turnquest deducted about $44,000 for professional fees due to him from Plaintiff – but without telling her. He ceased to act for her on July 21, 2003. Mr. Knox, QC for Petitioners, told the Board that the balance of the $402,000 has since been repaid to Respondent.

The Florida bankruptcy now began to directly impact the Bahamas litigation. Ms. Walden, the then trustee, faxed the nullifying declaratory order to Judge Lyons on July 17, 2003. Ms. Walden arrived in Nassau soon after. She hoped to have the local court vacate the Lot 32 sale order. On July 21, 2003, there was a hearing before Judge Lyons attended by Turnquest (for Respondent), Moxey (for the trustee), Collie (for the Petitioners) and Ms. Gwynn and another Florida attorney (for Plaintiff).

Turnquest agreed on behalf of Respondent not to go ahead with the sale pending resolution of Ms. Walden’s formal application to intervene and seek a stay. On the same day, the Callenders firm gave notice of their appointment as attorneys for Respondent, although she was not yet a party to the proceedings. She moved to intervene on January 14. 2004.

In March 2004, Respondent deposed that she was fairly experienced in, and knowledgeable about, business matters, including property values, and she did not look upon Lot 32 as worth even $326,000.

Plaintiff’s daughter Caroline (who lived with her), however, contradicted this evidence. She deposed that her mother was not willing to sell for $400,000 and that Respondent “persisted in harassing my mother by calling at our house until I obtained a restraining order prohibiting her from contacting my mother.”

   

Only Petitioners and Collie have been cross‑examined on their affidavits in these proceedings. On March 23, 2004, Judge Lyons heard the applications by Ms. Walden and Respondent together, Order (4). Turnquest, Moxey and Collie were present. Judge Lyons gave a short judgment which suggests that he was still annoyed about the FBJ having purported to nullify his sale order. He concluded that there was “absolutely no doubt in my mind that there is a binding contract for purchase/sale between Respondent and Petitioners.” 

On April 27, 2004, Plaintiff made an affidavit in the bankruptcy proceedings averring that she had never met Saunders and had never given him authority to make his affidavit dated September 3, 2002. She also made an affidavit sworn on June 15, 2004 in the Board’s proceedings. It deposed that Turnquest had been acting contrary to Plaintiff’s instructions when the first and second orders were made.

In June of 2004, Mrs. Walker, acting through new attorneys, Lockhart & Munroe of Nassau, applied for an order staying the sale to Respondent under Orders (1) and (2) on the grounds (1) that the attorneys’ representations to the court on her behalf lacked her knowledge or authority; (2) that the orders had first come to her attention long after they were made; and (3) that Respondent’s offer was far below the true value of the property. She added that she would rely on affidavits by herself, her husband and Rotella. There were also affidavits from Collie, Miss Cole, and the local appraiser, a Mr. Lowe of HG Christie Real Estate.

Mr. Lowe valued Lot 32 at $950,000 as of June 16, 2004, with a retrospective valuation of $640,000 as of September 3, 2002. Mrs. Walker made her application eleven months after she had learned the full facts and just under three months after the rejection of the trustee in bankruptcy’s application.

Finally, on February 28, 2005, Judge Lyons set aside Order (7) dated December 3, 1996 made in the proceedings 1355 of 1990. The judge based his decision on the fact that Mr. Walker was not a resident in the Bahamas at the time of service but Plaintiff had not obtained leave to serve him out of the jurisdiction.

At the hearing on Order (6), Mr. Lockhart’s skeleton arguments relied on two main points: first, that Plaintiff had no cause of action against Mrs. Walker, since the charging order did not bind her share; and second, that Mr. Collie had no authority, actual or ostensible, to agree or consent to the sale order on behalf of Mrs. Walker.

Mr. Turnquest’s skeleton arguments relied on four main points: first, that the court had no jurisdiction to set aside the first and second orders because there had been no “new occurrence” within Order 45 rule 11; second, that Mr. Collie had implied or ostensible authority to bind Mrs. Walker; third, that the first order had been perfected for more than two years; and fourth, that the order was not impeachable, as against Respondent under Section 57 of the Conveyancing and Law of Property Act.

“... [T]he only oral evidence was from Collie, Mr. Walker and Mrs. Walker. The judge accepted their evidence. In his heavily edited “extempore” judgment , the judge held that he must set aside Order (1) because Collie had no authority to bind Mrs. Walker to it. That was effectively the only surviving ground of Mr. Lockhart’s application. Mr. Turnquest clung to the four main points in his skeleton argument. The judge ... seems to have forgotten, or not to have accepted, Mr. Lockhart’s concession about Order 31. ...” That was an error because, although Plaintiff’s security extended only to Mr. Walker’s share in the property, Order 31 enabled the court to authorise a sale of the property as a whole. An undivided share of a residential property is not a marketable asset. ...”

“Their Lordships consider that the judge made a further error in his analysis ... of Order (1) He treated the order not as a judicial exercise of the court’s inherent and statutory jurisdiction, but essentially as a contractual document. This led to his making contradictory findings: that Turnquest initialled the order ... on behalf of Respondent as well as Plaintiff and later that he was acting for Respondent and not Plaintiff. ... [T]hey were simply not an issue before the judge.”

“Judge Lyons did consider the issue of delay, but he did so ... exclusively on behalf of Mr. Walker. He referred to Mr. Walker’s bankruptcy and to his having taken the ‘reasonable step’ of approaching the Florida court for a stay of the sale order ... He concluded that Mr. Walker’s delay in coming to his court was ‘explainable’.”

Respondent lodged separate appeals against Orders (6) and (7). The Court of Appeal allowed both appeals.

“We pause here to comment briefly on these grounds in the context of Order 31 which gives the court an unqualified power to order a sale of land. Petitioners had retained Collie to represent both Petitioners. He entered an appearance on behalf of both. His instruction was to agree on a sale of the property. He now says he had no specific instruction from Mrs. Walker to accept a sale to the intervener with whom he had no dealings. As Order 31 makes clear, there is no need for there to be a contract of sale or a consent by the owners to a sale.”

“Once a buyer has been identified who is prepared to pay the best price to the satisfaction of the Court, the procedural provisions for the sale can be invoked. Collie’s attempt to resile from the terms of the order which he consented to, and in which the purchaser’s name is mentioned, cannot be a ground for setting the order aside. Relying on Collie’s representation that the offer of the Respondent was acceptable to Petitioners; the Court was satisfied that the price offered was the best one in the circumstances, so as to properly make an order of sale disposing of Mr. Walker’s beneficial half interest, which must necessarily involve a sale of the property.”

“Furthermore, the purchaser had partly conformed or complied with the order by paying over the purchase price to the persons appointed to conduct the judicial sale. Liberty to apply could not, in our view, give the Court a jurisdiction to set aside the order in the circumstances of this case when all the requirements of a judicial sale had been satisfied.”

   

“ ... But in concluding that all the requirements of a judicial sale had been complied with, the Court of Appeal was paying insufficient regard to the judge’s findings of fact ...and other credible evidence. Collie had gone beyond his instructions from Mr. Walker, and had no instructions whatsoever from Mrs. Walker. The sale had not been completed either by a conveyance or by payment of half of the net proceeds to Mrs. Walker. The $402,000 must have been held by Turnquest as Respondent’s attorney since he apparently repaid most of it to her without the authority of the court. Turnquest was plainly not an appropriate person to have conduct of the sale. On the occasion of Order (3), Respondent had, through Turnquest, given an undertaking not to proceed with the sale, and that undertaking remained in force until it was overtaken by Order (5).”

The Court of Appeal pointed out that, in making Order (7), Judge Lyons had been wrong in supposing that, in the proceedings 1355 of 1990, Plaintiff needed leave to serve process out of the jurisdiction. “At the material time, Mr. Walker had a residence in the Bahamas and voluntarily submitted to the jurisdiction. The judge fell into error in setting aside a regularly obtained summary judgment to which Plaintiff was entitled on the pleadings.”

Counsel agreed that there are two main issues in the appeal to the Board relating to Order (6): (1) did the judge have jurisdiction to make the order? and (2) if so, was he right to exercise his discretion in favour of Mrs. Walker? The first issue raises, apart from common law and procedural issues as to jurisdiction, a point of statutory construction on Section 57 of the Conveyancing and Law of Property Act.

“Mr. Dingemans QC (for Respondent) contended that there was no jurisdiction to set aside Order (6). He pointed out that neither Petitioner had appealed against Orders (1), (2) or (4). In reply, Mr. Knox contended that an appeal would have been inappropriate in a case like this.”

Order (1) was based on consent. ... “An order made by consent can be set aside at common law if sufficient grounds are shown, subject to the well‑known principles which always constrain the court in granting discretionary relief.”

“Their Lordships are satisfied that Judge Lyons did have jurisdiction, at common law, to set aside the first order on the ground of a mistake, ... as to Collie’s authority to act for Mrs. Walker. None of [the precedents] permits a first‑instance judge to set aside a final order, ... without some special reason, usually involving a material change of circumstances. But a change of circumstances is not, in this context, to be interpreted narrowly. It can include the discovery of new information, even if that information was, in a sense, always available.”

“As a separate and ... conclusive point, Mr. Dingemans relied on Section 57 of the Conveyancing and Law of Property Act . ...The judge’s omission to refer to it was probably because he analysed the order for sale as essentially a contract which happened to be embodied in an order. ...”

“Section 57(1) is in the following terms: ‘An order of the Court under any statutory or other jurisdiction shall not, as against a purchaser, be invalidated on the ground of want of jurisdiction, or of want of any concurrence, consent, notice, or service, whether the purchaser has notice of any such want or not.’”

   

“In all the English authorities, ... there was unquestionably a contract, sometimes completed by conveyance, sometimes still uncompleted (hence the reference to .. intending purchaser). Where the contract remained uncompleted , the purchaser was questioning whether the statutory provisions were wide enough to ensure that he would get a good title ...”

If, on the other hand, the contract had been completed, the purchaser or his successor in title would be relying on the statutory provisions to defend his title. Whether they did provide protection depended, in short, on whether the alleged defect in title was in the court order (or the way in which it was obtained) on the one hand or was anterior to the order, on the other hand. But in either case there was no doubt about the party’s status as a purchaser.

“In the present case, there is real doubt about Respondent’s status as a purchaser. It is the central issue in the case. Respondent is seeking to use Section 57 to confer on herself the status of purchaser or intending purchaser which is the precondition of obtaining protection under Section 57. That is a circular and question‑begging process of reasoning which their Lordships do not accept.”

“Mr. Dingemans’ strongest resistance to the appeal was on the issue of discretion. He relied on seven [overlapping] points ...: [1] the need for finality in litigation; [2] the submission that Collie had ostensible authority to agree to a compromise on behalf of Mrs. Walker; [3] the Respondent’s failure to appeal against any of the Orders (1), (2) or (4); [4] Mrs. Walker’s delay in making her application to set aside Orders (1) and (2); [5] the prejudice to third‑party rights (those of Respondent), [6] the part‑performance of the transaction by Respondent and [7] the absence of notice to Respondent of the alleged deficiencies in the sale order.”

“The need for finality in litigation is an important general principle. [Cite]. But it has to be balanced against the need to remedy injustice wherever possible. The need for finality means that the court starts with a disinclination to reopen concluded transactions. But it cannot by itself be decisive. There is a balancing exercise to be performed.”

“Once the Court of Appeal recognised that the transaction was essentially a judicial sale, albeit under a consent order, the crucial questions were whether a mistake had been made, and whether (as a matter of discretion) the mistake should be put right. An attorney’s consent given with ostensible but not actual authority would still be a mistaken consent, although one which the court would be less ready to correct at the expense of third‑party rights.”

“The failure of Petitioners to appeal Orders (1) and (2) was excusable, since (as the judge found) they knew nothing about them until long after the time for appealing had expired. In any event, it is doubtful whether an appeal against those orders would have been more appropriate than the course that Mrs. Walker eventually took. Order (4) is more problematical, because by then Petitioners did know the facts but were still apparently represented ... by Collie.”

  

“As to delay, their Lordships have already noted that in dealing with the issue of delay the judge focussed on Mr. Walker to the exclusion of his wife. That was an error ... His share was subject to the charging order but hers was not. He was made bankrupt but she was not. He instructed Collie ... but she never actually instructed him. The application made by Mr. Lockhart on June 15, 2004 was her application, and it is Mrs. Walker who had the burden of explaining and excusing her delay. ... [T]here is still a period of eleven months’ delay to be accounted for.”

“The only explanation given by Mrs. Walker was in her affidavit sworn on June 15, 2004. Almost the whole of that affidavit is concerned with emphasising the absence of instructions and communications between herself and Collie. By contrast she said little about the period after she learned about the sale order. ... It would be remarkable if her husband had not kept her informed about his financial problems, including his bankruptcy, and the steps which his trustee in bankruptcy was taking in the Bahamas. Mr. Rotella, who was acting as Mr. Walkers U.S. attorney, was also acting for Mrs. Walker. But in her affidavit she gave no explanation for her inactivity after July 2003.”

“Mrs. Walker seems to have done nothing for eight months after learning the facts to stop Collie from continuing to claim to act for her. The most likely inference is that Mrs. Walker stood back, from July 2003 until March 2004, to see whether the trustee in bankruptcy would be successful in her application, and that when it failed, Mrs. Walker decided to launch her own application through Mr Lockhart.” 75 “... [I]t was for Mrs. Walker to satisfy the court, by a full and detailed explanation, that it should show exceptional indulgence to her. Her affidavit did not do that.”

“Mr. Dingemans’ last three points all concern aspects of prejudice to Respondent’s third‑party rights. They are another factor to be taken into account, .... Respondent was not cross‑examined and the judge’s findings about Mr. Turnquest acting for Respondent (rather than Mrs. Cole) are not supported by either side. It would not be right for their Lordships to draw any serious adverse inferences against Respondent.”

“Nevertheless it seems likely that [Respondent] as an experienced business woman, must have realised from an early stage that this was an unconventional transaction. She was on notice from July 21, 2003 at the latest, and probably a good deal sooner, that it was being seriously challenged. On or before July 11, 2003, she had paid $402,000 to Turnquest, but ... he must have received it as her attorney, and he has since, it seems, repaid most of it. Nevertheless Respondent has certainly suffered some prejudice by the disruption of her financial affairs during this protracted litigation.”

“The judge considered the issue of delay but his analysis was flawed because he concentrated on Mr. Walker. Moreover, he did not pay sufficient regard to the prejudice to [Respondent]. He misdirected himself in exercising his discretion. In their Lordships’ opinion, Mrs. Walker, as a litigant asking for an extraordinary exercise of discretion in her favour, failed to act sufficiently promptly and failed to provide the court with a full and frank explanation of her delay. On those grounds the judge should have declined to make [Order (6)] and the Court of Appeal were right to set it aside (although their Lordships do not concur in all the Court of Appeal’s reasons).” The Court of Appeal was also right, for the reasons which it gave, in setting aside the seventh order. 

“The judicial sale to [Respondent ] has still to be completed. Even at this late stage it may be appropriate for a wholly independent attorney to be appointed to have conduct of the sale and see it through to completion. That course may be particularly desirable if there is to be yet more litigation as to the effect on the charging order of the Florida orders of April 12, 2005 and November 29, 2007. Their Lordships express no opinion whatever on that matter. For these reasons, their Lordships will humbly advise Her Majesty that both appeals should be dismissed.” [¶¶ 41‑80].

Citation: Walker v. Lundborg, 2008 WL 576820 (Privy Council No. 79, 2008)

William B. Blanchard is General Counsel for Gaia Title, Inc.  See http://www.gaiatitle.com/

William B. Blanchard is General Counsel for Gaia Title, Inc. See http://www.gaiatitle.com/