SW+B recently won a motion to bring a claim under the 2008 statute that prohibits an insurance company from unreasonably delaying or denying payment.

In the summer of 2006, SW+B’s client was struck by a hit and run driver while riding his bicycle. The impact launched the rider over 55 feet and resulted in grievous bodily injury including multiple spinal fractures and a debilitating head injury.

Despite the fact that SW+B’s client had uninsured motorist coverage in the amount of $1,250,000 with State Farm, State Farm refused to make any significant payments until nearly three years after the accident.

SW+B is now pursuing an action on behalf of the cyclist and against State Farm for bad faith and unreasonably delay. The statute that became effective August 2008 allows an insured to recover double the benefits due and attorneys fees when an insurance company unreasonably delays or denies payment.

State Farm argued that the cyclist should not be able to bring a claim under the statute, because the accident occurred before the statue was effective. SW+B argued that the cyclist should be able to bring a claim under the statute, because State Farm continued its unreasonable delay for over a year after the statute became effective. The Court agreed with SW+B. Please send us an email if you'd like to see a full copy of the Court’s order.

SW+B, LTD. Interviewed in Denver Post regarding Foreclosure Issues

Foreclosure paperwork miscues piling up

By Aldo Svaldi
The Denver Post

Posted: 11/14/2010 01:00:00 AM MST

Brent and Wendy Diers, pictured Thursday, Nov. 11, 2010, hung "No Tresspassing" signs around their home in Fruita, Colo., after it went into foreclosure. Although they paid off their mortgage in April, CitiMortgage never sent them their title and is proceeding with foreclosure. (Barton Glasser / Special to The Post)

Brent and Wendy Diers of Fruita thought their foreclosure nightmare would end in April when they sent a check to pay off their mortgage.

But more than six months later, CitiMortgage hasn't followed through on repeated assurances it would release the lien and give them title.

And despite a judge's ruling that they are not in default, the lender's law firm, Castle Meinhold & Stawiarski, continues to pursue a foreclosure sale.

"We are not in default and they do not have authorization to sell our house," a frustrated Wendy Diers said.

Although the Diers case is extreme, it is just one of several stories of borrowers in Colorado and elsewhere who find themselves trapped in a frustrating state of limbo.

Home of Susie and John Compo: After being denied modifications by GMAC Mortgage following a loss of business income, their situation improved and the Compos sought reinstatement. But additional fees were added after the requested amount was mailed, and their check was rejected as insufficient. (John Prieto | The Denver Post)

A surge in foreclosures has strained the system across the country, creating problems of lost paperwork, uncertain ownership on mortgages, and sloppy processing that has forced some lenders in recent weeks to pull back.

And those individuals who fall through the cracks like the Dierses find it hard to get out.

In a phone conversation, the Dierses recorded a CitiMortgage employee in May telling them "rest assured, we do have the check. Everything is fine."

In July, the couple were told the title was being contested. Another CitiMortgage representative, named Jennifer, in late July tells them, "We have the title clear. The mortgage has been paid."

A Mesa County judge cited the recordings in rejecting Castle Meinhold's request to sell the home at foreclosure auction.

"Under Colorado law, we cannot and will not take further action until we have authorization from the court," Mesa County Public Trustee Paul Brown said.

Still, the auction date has been postponed, not dismissed. The Dierses said they can't figure out what is going on. Public trustees don't have the authority to throw out foreclosure filings a judge has rejected or to sanction law firms pursuing illegitimate claims, Brown said.

The inability of Castle Meinhold and CitiMortgage to straighten out the situation is bordering on harassment, the Dierses said.

Neither firm responded to interview requests.

The couple don't deny missing payments after Brent suffered a work injury and lost his job in 2008.

But unlike most people in that predicament, they had a relative willing to lend them enough to pay off the mortgage, more than $212,000 in their case. "We did everything we were supposed to do," Wendy said. "This is such a boondoggle of a mess."

Fees of $1,000 added

On a smaller scale, the Compo family of Colorado Springs also found out how difficult it can be to escape foreclosure.

The family wanted to modify their mortgage payments after their business income dropped. A worker with GMAC Mortgage told them they couldn't do so unless they had missed two payments, Susan Compo said.

The Compos started missing payments, but set aside the mortgage money into savings. After three different rejections for a modification, the family, whose financial situation eventually improved, requested a reinstatement statement.

That statement tells borrowers what they owe to get caught up and escape foreclosure. Compo said she sent a check for the amount law firm Castle Meinhold requested, about $17,200, due Sept. 30.

But after the check was sent off, the law firm added about another $1,000 in charges. The payment didn't arrive at GMAC Mortgage until Oct. 12.

The Compo family didn't find out about the added fees until GMAC rejected the check as insufficient.

"We don't have the money for the fees," Compo said.

Castle Meinhold didn't return a phone call from The Denver Post. But the firm did call the Compos offering to waive the additional fees, she said.

"I am giving them an opportunity to make this right," Compo said. "Let's see what they do."

Confusion over true creditor

Even when borrowers simply ask a lender to clear up confusion regarding who really owns their mortgage, they can face a major headache.

Most mortgages are sold and resold and eventually land in investment pools owned by thousands of investors. Several lenders and investment banks also collapsed in 2007 and 2008, complicating ownership.

A Longmont couple, William Hough and Jacqueline Resaul, faced that problem when they got behind on mortgages they took out with Washington Mutual for their home and two rental properties.

They received letters from Washington Mutual, JP Morgan Chase and LaSalle Bank all claiming to be the creditor on their loans, said Michael Wussow, an attorney with Stigler Wussow & Braverman in Boulder.

Hough, a developer, got into financial trouble after suffering a heart attack that put him into a coma.

LaSalle Bank, trustee of the investment pools that claimed to be holding the mortgages in question, initiated the original foreclosures.

Hough, who once worked as a mortgage broker, asked what he thought was a simple request — produce the original notes to clear up any confusion.

LaSalle's law firm in the case, Robert J. Hopp & Associates of Denver, failed to produce the notes, although it obtained an affidavit from JP Morgan Chase claiming LaSalle was the holder, Wussow said.

A Boulder County judge had enough doubts to throw out two of the foreclosures filed in that county. After months of legal wrangling, the foreclosures were refiled under JP Morgan Chase, which had inherited the note from the failed WaMu.

While Hopp was conceding in Boulder County court that JP Morgan Chase was the actual owner, Wussow alleges they didn't tell a Larimer County judge, who approved a foreclosure under LaSalle.

Wussow said he was so ticked off that he filed a motion for sanctions against the Hopp law firm and the lenders involved.

He wants them to pay the $52,000 in attorney fees his clients incurred because the paperwork wasn't straight.

"That is what I said all along — come with the notes and we are done. They made us go through a year of litigation," he said.

In a response to the motion, Denver law firm Kutak Rock, now representing the lenders, claims Wussow's motion can't be brought up under the limited scope of a Rule 120 hearing, where judges determine the merits of a foreclosure action. A call to the Hopp law firm was not returned.

After losing their home, Hough and his wife moved to South America, where the cost of living was lower, Wussow said.

But they fought because they felt it important to ensure the proper parties foreclose and to not let the big banks run roughshod over the system.

"I think there should be some sort of requirement that you show up with the original note or with a detailed document showing the transfers," Wussow said. "They should have the right parties foreclosing. They should have been recording documents."

---

Wendy and Brent Diers

Fruita

They were assured their payment of more than $212,000 had been received as payoff of their loan with CitiMortgage, but foreclosure proceedings continued. A Mesa County judge has halted matters while the parties investigate.

Photo by Barton Glasser, Special to The Denver Post

Susan and John Compo

Colorado Springs

After being denied modifications by GMAC Mortgage following a loss of business income, their situation improved and the Compos sought reinstatement. But additional fees were added after the requested amount was mailed, and their check was rejected as insufficient.

Photo by John Prieto, The Denver Post

Jacqueline Resaul and William Hough

Longmont

Three banks claimed to be creditors when their home and two rental properties were foreclosed upon following a heart attack that put Hough in a coma. Two foreclosures were rejected by a Boulder County judge and refiled under JP Morgan Chase, which inherited the note from Washington Mutual. The couple lost their home and have since moved to South America.

Photo special to The Denver Post

More Struggles for Cyclists

Driver in fatal bike accident sues parents for letting boy ride without a helmet

• By VeloNews.com
• Updated: Nov 16th 2010 5:06 PM EST
• 
  

A Connecticut man serving a manslaughter sentence for striking and killing a 14-year-old boy is suing the victim’s parents, the Associated Press is reporting.

David Weaving was convicted in the 2007 collision that killed Matthew Kenney. Prosecutors say he was recklessly passing another car when he hit Matthew while traveling more than 80 mph in a 45 mph zone. Weaving was sentenced last year to 10 years in prison. Matthew’s parents, Stephen and Joanne, then sued Weaving for more than $15,000 in damages.

Now Weaving is countersuing the parents for “contributory negligence” because they allowed the boy to ride without a helmet. He is looking for more than $15,000 in damages.

“Enough is enough,” Joanne Kenney told the AP. Directing a question to Weaving, she asked, “Can you just leave us alone and serve your time?”

Congress May Impose Retroactive Estate Tax

Congress May Impose Retroactive Estate Tax

February 8th, 2010

There is currently no tax on the estates of those dying during 2010. Although Congress may reinstate the tax retroactively in 2010, perhaps as part of broader tax reform, this is by no means a certainty.

If Congress fails to act, a few thousand very wealthy families will have reason to celebrate, while tens of thousands of taxpayers of more modest means will pay capital gains on inherited assets — and executors will face additional and confusing administrative burdens. And if Congress does change the law retroactively, extensive litigation over inheritances is almost guaranteed.

Congress has had nine years to prevent this from happening but hasn’t been able to. Under the provisions of a Bush-era tax-cut bill enacted in 2001, the value of estates exempt from the tax has been gradually raised over the past eight years while the tax rate on estates has been reduced, so that in 2009 only an individual estate worth $3.5 million or more is taxed, at a rate of 45 percent. For the year 2010, according to the 2001 law, the estate tax disappears entirely, only to be restored in 2011 at a rate of 55 percent on estates of $1 million or more, which is where things stood before the 2001 change.

Loss of Step-Up Means Step Down for Many Taxpayers

The catch for taxpayers of more modest means, however, is that for 2010 the estate tax is replaced with a 15 percent capital gains tax on inherited assets that are later sold. Normally someone inheriting property at an individual’s death gets a “step-up in basis” in the property. That is, the value of the property for determining capital gains tax due is calculated at the time it is inherited, not when it was originally bought.

But the law eliminating the estate tax in 2010 also largely does away with the basis step-up rules. This means that those inheriting estates will have to pay capital gains taxes on any assets sold based on the original price paid for the asset, after an exemption for the first $1.3 million in capital gains (plus $3 million for assets transferred to a surviving spouse).

Let’s say your father dies and leaves you a home worth $1.5 million and a $500,000 portfolio of stocks purchased at various times over the past 40 years. If you decided to sell any of these assets, you’d normally pay little or no capital gains tax on the sales. The new provisions mean that you have to calculate capital gains based on the value of the home and the stocks when your father bought them, not when you inherited them. That could be very expensive, not to mention time-consuming in trying to ascertain the original price your father paid for everything.

“If we do not extend our estate tax law, all taxpayers, all heirs will be subject to massive, massive confusion in trying to determine the value of their underlying asset,” Senate Finance Committee Chairman Max Baucus (D-MT) said on the Senate floor.

The chief tax counsel for the House Ways and Means Committee estimates that while extending the 2009 estate tax law would affect about 6,000 estates, 71,400 estates could face new capital gains taxes if the estate tax disappears. According to the Center on Budget and Policy Priorities, “at least 62,500 of these are estates that would not owe any estate tax if the 2009 rules were continued and that thus would be adversely affected by estate tax repeal. Farm and business estates would constitute a disproportionately large share of this group.” Small farms and businesses are the groups whose interests opponents of the estate tax have claimed they are defending.

Couples With Credit Shelter Trusts at Risk

The new world of no estate tax places at particular risk couples who have so-called “credit shelter” or “bypass” trusts that are designed to allow both spouses to take advantage of their respective estate tax exemptions. These are common arrangements used in estate planning for married couples. With the estate tax gone, the wording of these trusts could be interpreted as completely bypassing the surviving spouse when the first spouse dies, meaning a surviving spouse would get nothing without the expensive process of claiming her “elective share.” For explanations of all this, click here and here. Married couples with such trusts should consult their attorney.

The House passed a bill in early December permanently extending the 2009 estate tax rules, which will bring in an estimated $25 billion for 2009 by imposing the 45 percent rate on estates over $3.5 million (or $7 million for a couple). The Senate’s Democratic leadership wanted to pass a similar bill and put it on President Obama’s desk before the estate tax expired at the end of 2009, but they were blocked by united Senate Republicans who prefer a lower tax rate of 35 percent and a higher exclusion amount of $5 million ($10 million for couples).

The Perils of Going Retroactive

Sen. Baucus has pledged to try to restore the estate tax retroactively in 2010. This would undo the capital gains increase, but it could also create fertile ground for lawsuits by those whose family members die between January 1, 2010, and the date when any retroactive law is enacted.

“I can guarantee this: if they succeed in getting retroactive in hiking the death tax from zero to 45 percent, there are going to be lawsuits,” said Dick Patten, president of the American Family Business Foundation, which opposes the estate tax. “Its going to be messy, its going to be noisy.” (For an excellent discussion by Forbes.com of the mess that a lapse in the estate tax could create, click here. “Beneficiaries will deal with uncertainty for years,” warns one tax expert.)

In a 1994 decision, the U.S. Supreme Court ruled that the Constitution’s ban on the enactment of ex-post facto laws doesn’t apply to tax legislation, provided the retroactive application is “supported by a legitimate legislative purpose furthered by rational means”. United States v. Carlton, 512 U.S. 26 (1994). Since most estates don’t file tax returns until about nine months after someone dies, if Congress can come to an agreement quickly in 2010 the problems caused by a retroactive law may be limited. But Bloomberg.com notesthat “The pressure to reach agreement may breathe new life into” the Republicans’ “compromise proposal” of a 35 percent tax on couples’ estates worth more than $10 million.

For more on the implications of the disappearance of the estate tax, see CBS MoneyWatch’s “Estate Tax: What You Need to Know for 2010,” SmartMoney’s “The Federal Estate Tax Is Dead: Now What?,” and Kiplinger’s “FAQs on the Death of the Estate Tax.”

The new website is now being beta tested

This is very exciting. For the next few days you will only see sample text on this blog. It will be used to set the text formatting of headers, sub heads and body copy. We should have our first real post in the first week of January. Please come back each month for new posts.