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Scammed: How Arbitration Can Lead to the Courtroom it's Supposed to Avoid When Los Angeles Attorney Kent Mouton received a fax from the Southern California Arbitration Association (SCAA) in late January 1996 he felt utterly confident of its contents. Less than two weeks earlier he had appeared at an arbitration on behalf of a commercial property landlord to resolve a dispute with one of the tenants, Omni Medical Centers. Omni, an alcohol rehabilitation facility, claimed that the landlord owed money for tenant improvements and for a penalty assessed against the tenant by a contractor. Read Article> Mortgage Broker Indemnity Agreements Do Not Violate California Anti-Deficiency Law In Trust One Mortgage Corporation v. Invest America, the California Court of Appeal (4th District) decided that a non-resident (Georgia) mortgage broker was liable to a California (Irvine) mortgage lender for indemnity under the broker agreement where the loan was foreclosed upon in Georgia and the property was sold for substantially less than the loan. In reaching its decision that the trial court properly granted the lender's motion for summary judgment, the appellate court held that (1) California law, rather than Georgia law, applied since the broker agreement so stated and the lender was based in California, (2) the indemnification obligation did not transgress California's anti-deficiency law (generally prohibiting a lender from seeking a deficiency judgment from a borrower following a non-judicial foreclosure or where the loan is a purchase money loan. The Court discussed the difference between an indemnity agreement and a guaranty and why the former would not be construed as an attempt to get around the anti-deficiency law. This case will surely be important to those mortgage lenders here in California (whether or not the property is located in California) since the case provides a lender with greater security for realizing a full recovery when the property is foreclosed upon. Mortgage brokers and those advising brokers or lenders are well advised to make sure that they fully understand their Broker agreements and that they reflect what the parties intended under the indemnification clause. G035111 (Super. Ct. No. 03CC14762) TRUST ONE MORTGAGE CORPORATION v. INVEST AMERICA MORTGAGE CORPORATION et al. Home | Practice Areas | Firm Background | Our Attorneys | Firm News | Contact Us |
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