Tuesday, August 04, 2015

Bankster's Failure To Give Proper Notice Of Intent To Accelerate Debt & Allow Opportunity To Cure Default On Loan Secured By High-Equity Property Leads To $1 Million+ Victory In Wrongful Foreclosure Cases For Austin Business Owner

In Austin, Texas, the Austin Business Journal reports:
  • An Austin small business owner who claimed his commercial property was wrongfully foreclosed on has won judgments totaling more than $1 million from a mortgage lender.

    A state court and a federal court both ordered DCR Mortgage III Sub 1 LLC to pay the judgments to Larry Mathis, owner of SmartMail of Austin Inc. — a direct mail and printing company.

    Both cases were initiated by Mathis — one in 2009 to try and stop a foreclosure sale after he fell behind in payments and a second case alleging wrongful foreclosure actions after the property was taken back by the lender.

    The case is complicated, but Mathis' attorney Steve Skarnulis of Cain & Skarnulis PLLC, an Austin boutique litigation firm, said he hopes lenders take notice of the judgments and carefully consider the merits of aggressive foreclosure actions. He called the case "a rare plaintiff victory" in a wrongful foreclosure case.(1)


    Mathis filed suit on April 29[, 2009] to prevent the sale — a measure that staved off foreclosure for nearly two year until February 2011.

    But by then the court had ruled in favor of DCR, determining that the lender had every right to foreclose. The temporary injunction was lifted and DCR foreclosed, selling it for a $500,000 credit bid. Mathis claimed he never received any formal notice of the acceleration clause and the foreclosure action.

    He also accused claimed that the amount was far below market value.

    Mathis appealed that court's ruling in favor of DCR and eventually won.(2) He was awarded about $230,000 in 2014 in association with that appeal.

    In the meantime, Mathis filed a wrongful foreclosure action, which was heard before a jury this April. The jury found in favor of Mathis' claim of wrongful foreclosure in that case, as well.

    U.S. District Court Judge Sam Sparks distilled the complexities down to one basic issue — the lender failed to provide formal notice that it was accelerating the term of the note.

    In order signed June 25, Sparks wrote, "All of this evidence, taken together, raises the plausible inference that DCR failed to give Mathis the required notice and opportunity to cure before foreclosing in order to turn a healthy profit on the Tillery Property."

    Sparks order DCR to pay Mathis more than $803,000.
For the story, see Austin business owner wins $1 million+ in wrongful foreclosure case.

(1) See Cain & Skarnulis' press release - Rare Plaintiff Victory in Wrongful Foreclosure Case ("We are grateful that the jury recognized the unfairness of the foreclosure, and we are glad to recover some of Mr. Mathis’ equity in his property”).

(2) See Mathis v. DCR Mortgage III Sub I, LLC, 389 SW3d 494 (Tex. App. 2012).

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