In a recent case, the cast of characters has all been found in lender force-placed insurance cases, but in this case we do not know from the Tenth Circuit's opinion whether the cast played out in an underlying LFPI case. We have a bank and mortgage servicers. The only party we may be lacking is the insurance company that offered the lender force-placed insurance policy: Long v. Wells Fargo Bank, N.A.; ETitle Ins. Agency; Homeward Residential f/k/a American Home Mortgage Servicing, Inc.; and Ocwen Mortgage Inc., ___ F. App'x ___, No. 15-4131D.C. & No. 2:14-CV-00463-DN, 2016 WL 6803706 (10th Cir. November 17, 2016).
What we do know from the appellate opinion is that the underlying case involved a foreclosure and the homeowner's lawsuit to stop it. That lawsuit was removed to Federal Court, where the homeowner filed a first amended complaint which alleged claims for "quiet title; negligent and intentional misrepresentations; violations of the statute of frauds, Utah Mortgage Fraud Act, and the FDCPA; and breaches of fiduciary duty. The amended complaint also sought a declaratory judgment."
The District Court in Utah dismissed all claims with prejudice. The homeowner appealed only the one claim for dec relief. The District Court and the Tenth Circuit panel agreed that the claim for dec relief could not stand alone without the substantive claims that had been alleged along with it: "No such “judicially remediable right” exists here because Mr. Long chose not to appeal the district court's dismissal of any substantive claim—including the action for quiet title that overlaps with his request for declaratory relief. Because Mr. Long's substantive claims have failed, his request for declaratory relief in relation to those claims is not viable." Long v. Wells Fargo Bank, N.A, ___ F. App'x ___, No. 15-4131D.C. & No. 2:14-CV-00463-DN, 2016 WL 6803706 (10th Cir. November 17, 2016) (emphasis by the Court; page numbers not yet available from Westlaw but quotation appears just before the appellate court's "CONCLUSION").
Counsel and insurance companies and policyholders are all well advised to prepare for use of this case by opposing counsel on a motion to dismiss a dec action where the only claim alleged or remaining, for whatever reason, is a claim to declare insurance coverage in Federal Court.
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