Commercial Banking, Collections, and Bankruptcy

Dist. Ct. did not err in finding that defendants violated Truth in Lending Act (TILA) by failing to supply correct number of copies of notice of right to cancel mortgage prior to plaintiffs closing on mortgage to purchase home. However, Dist. Ct. did not err in dismissing plaintiffs’ action seeking to rescind mortgage under TILA by proposing to repay balance of loan via interest-free installments over time frame of original mortgage loan, since Dist. Ct. had discretion to require plaintiffs to make full repayment of loan as condition to enforcing plaintiffs’ rescission rights under TILA and then dismissing their rescission claim when plaintiffs failed to repay loan within 90-day period. Ct. rejected plaintiffs’ claim that, in spite of their inability to satisfy instant tender requirement, they had unconditional right to rescission based on defendants' violation of TILA, and that they were entitled to both reduction of all interest and fees associated with loan and had right to make installment payments over life of loan as part of their rescission rights.

Dist. Ct. did not err in granting plaintiff-insurance company’s motion for summary judgment in action alleging that defendant breached indemnity agreement by failing to pay plaintiff for losses where: (1) plaintiff settled claims made by subcontractors against surety bonds that plaintiff had issued on behalf of defendant regarding defendant’s performance on construction project; and (2) plaintiff completed construction project after said project had been delayed due to plaintiff’s non-payment for work on project performed by subcontractors. Terms of indemnity agreement allowed plaintiff to make payments to subcontractors and to step into shoes of defendant to complete construction project and obtain remaining proceeds from third-party for plaintiff’s work on project, where project had been delayed by defendant. Ct. rejected defendant’s argument that plaintiff’s authority to settle subcontractors’ claims on surety bonds could not be triggered prior to any finding that defendant was actually liable for breach of instant surety bonds.

Bankruptcy Ct. did not err in denying motion by debtor’s excess insurer to intervene in debtor’s bankruptcy case for purposes of opposing proposed $4.125 million settlement of debtor’s claim against its primary insurer to provide coverage for $10 million in asbestos claims filed against debtor. Excess insurer failed to establish any certainty that it would benefit from any rejection of proposed settlement and further failed to show that its status as non-creditor qualified as “party in interest” under Bankruptcy Code. As such, fact that excess insurer could face collateral damage from ruling on proposed settlement was insufficient to afford it standing to oppose settlement.