- Motto v. State Farm Fire & Casualty Co., Case No. 13-2854 (8th Cir. August 28, 2014)
- Lender's motion to intervene in action between homeowner and insurance company was untimely, and district court's denial of motion was affirmed.
- Procedural context:
- U.S. Bank sought to intervene in action between homeowner and insurer regarding insurance proceeds from a home that had been destroyed by fire. The intervention request was submitted only after trial had commenced and the parties had reached a settlement. The district court ruled the motion was untimely; on appeal, the 8th Circuit affirmed.
- Homeowner sued insurance company, claiming she was entitled to receive the proceeds of an insurance policy after her home was destroyed by fire. The insurance company removed the suit to federal court. U.S. Bank claimed to hold the note for the homeowner's mortgage, but took no action in the case. Instead, matters were handled by Residential Funding Company and GMAC Mortgage LLC as the servicer and sub-servicer of the loans. During the pendency of the case, GMAC Mortgage and RFC both filed for bankruptcy; GMAC was dismissed from the suit. RFC subsequently sought to intervene, which was denied as untimely, as the district court found that RFC had known of the suit since it was filed and waited months after GMAC was dismissed from the case. U.S. Bank subsequently moved to intervene as well, but only after the trial had commenced and the parties had reached a settlement. The district court concluded that U.S. Bank had notice of the case through its "agents" and "representatives" and should have taken action more swiftly to intervene. The motion was denied. On appeal, the Eighth Circuit concluded that the bank had delayed too long, there was prejudice to other parties, and the bank still had a remedy (i.e., it could sue the homeowner under the note, even if it could directly claim an interest in the insurance proceeds). Affirmed.
- Murphy, Colloton, and Kelly.
The Security National Bank of Sioux City, IA v. Vera T. Welte Testamentary Trust
Summarizing by Amir Shachmurove
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