Environmental YIR: 2024 Regulatory Legacies and Impacts
This report provides an overview of major federal environmental regulations and court decisions of 2024. Landmark U.S. Supreme Court decisions with lasting consequences for environmental policy include Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024),1 which ended judicial deference to administrative agencies, and Corner Post v. Federal Reserve, 603 U.S. 799 (2024), which opened the doors of federal courts to many more plaintiffs challenging regulations. These decisions have subsequently bolstered efforts to limit or rollback regulatory actions, both by industry and by members of the Trump administration. The Congressional Review Act (CRA), which allows Congress to rescind or invalidate new regulations, has also been used as the basis for invalidating many of the environmental regulations adopted since August 2024.
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HUD’s Enforcement of the Violence Against Women Act: What Housing Providers Should Know
The Violence Against Women Act (VAWA), enacted in 1994, was most recently amended in 2022. As part of its 2022 reauthorization, the U.S. Department of Housing and Urban Development (HUD) and the Attorney General of the United States are now mandated to implement and enforce the housing provisions of VAWA consistently and in a manner that affords the same rights and remedies as those provided for in the Fair Housing Act (FHA). This is reflected in new forms updated from HUB in February 2025 regarding the protections for victims of domestic violence.
Pursuant to VAWA, anyone who has experienced domestic violence, dating violence, sexual assault, and/or stalking:
Cannot be denied admission to or assistance under a HUD-subsidized or -assisted unit or program because of VAWA violence/abuse.
Cannot be evicted from a HUD-subsidized unit or have their assistance terminated because of VAWA violence/abuse.
Cannot be denied admission, evicted, or have their assistance terminated for reasons related to the VAWA violence/abuse, such as having an eviction record, criminal history, or bad credit history related to the VAWA violence/abuse.
Must have the option to remain in their HUD-subsidized housing, even if there has been criminal activity directly related to the VAWA violence/abuse.
Can request an emergency transfer for safety reasons related to VAWA violence/abuse.
Must be allowed to move with continued assistance (if the victim has a Section 8 Housing Choice Voucher).
Must be able to self-certify using the HUD VAWA self-certification form (Form HUD-5382) and not be required to provide additional proof unless the housing provider has conflicting information about the violence/abuse.
Must receive HUD’s Notice of VAWA Housing Rights (Form HUD-5380) and HUD’s VAWA self-certification form (Form HUD-5382) from the housing provider when:
Denied admission to a HUD-subsidized unit or HUD program
Admitted to a HUD-subsidized unit or HUD program and/or
Issued a notice of eviction from a HUD-subsidized unit or a notice of termination from a HUD program.
Has a right to strict confidentiality of information regarding their status as a survivor.
Can request a lease bifurcation from the owner or landlord to remove the perpetrator from the lease or unit.
Cannot be coerced, intimidated, threatened, or retaliated against by HUD-subsidized housing providers for seeking or exercising VAWA protections.
Has the right to seek law enforcement or emergency assistance for themselves or others without being penalized by local laws or policies for these requests or because they were victims of criminal activity.
EnforcementAs such, HUD’s Office of Fair Housing and Equal Opportunity (FHEO) now enforces VAWA by accepting and investigating complaints thereunder using its FHA complaint process. If a housing provider is found by HUD to have violated VAWA and the matter is not settled via HUD’s conciliation process, HUD may refer the matter to the Department of Justice (DOJ) for litigation and/or enforcement.
HUD issued a press release regarding two settlements of VAWA cases pursuant to its enforcement authority under the VAWA Reauthorization Act of 2022 in September of 2023.
THE FIRST CASE involved a tenant in Nevada who requested an emergency transfer after being stalked by a former partner. The complaint alleged that the respondent public housing agency in Nevada and its housing specialist (a) demanded confusing and contradictory documentation from the charging party that it was not permitted to request under VAWA, (b) threatened to revoke the charging party’s Housing Choice Voucher, (c) denied her request to extend her voucher, and (d) stopped paying its portion of the rent when the charging party prepared to move to protect her safety.
HUD found that the housing authority lacked an emergency transfer plan that would allow survivors who qualify to move quickly without losing their assistance. The case settled for an agreement to implement an emergency transfer plan, to hire outside experts to provide VAWA training, and to pay the charging party monetary compensation.
THE SECOND CASE cited in the 2023 press release involved a housing provider and property manager in California who were alleged to have denied the charging party’s application due to a history of violations of previous rental agreements that were allegedly related to her status as a survivor of dating violence. The housing provider maintained that the charging party did not disclose her status as a dating violence survivor, but acknowledged that it failed to provide information about her rights under VAWA or advise her about how she might appeal when it sent her the denial letter.
This settlement agreement involved (a) some monetary amount, (b) placing the charging party on the top of a waitlist for the next available unit at the property or a companion property, (c) a revision of the housing provider’s policies to include a VAWA policy, (d) the establishment of a VAWA Rights Coordinator position, and (e) the requirement that its employees undergo annual VAWA training.
HUD issued press releases regarding two more cases it settled under VAWA in 2024.
THE FIRST CASE addressed claimed violations of VAWA as well as Section 504 of the Rehabilitation Act, which prohibits discrimination in housing for residents in communities that receive federal funding. This matter involved multiple allegations that reasonable accommodation and modification requests were denied by housing providers in Tennessee, as well as allegations of failure to provide requested VAWA transfers. In addition to non-monetary components similar to those in the cases mentioned previously, this case settled for $50,000.
THE SECOND CASE, in June 2024, involved a HUD-negotiated settlement with a Michigan housing provider alleged to have violated VAWA.. That matter involved a landlord who allegedly did not respond to the charging party’s rental application due to her vision impairment and because she disclosed that a previous landlord had terminated her tenancy due to dating violence and stalking. The monetary component of that settlement agreement was $8,500, in addition to VAWA-related training and an agreement to ensure that the housing provider’s policies and procedures complied with VAWA.
TakeawaysAs noted above, housing providers should ensure that their employees are familiar with VAWA requirements and should incorporate these requirements into their regular fair housing training sessions. They also should take advantage of the website HUD released in 2023 to help navigate VAWA’s housing protections, as it features the latest updates, frequently asked questions about VAWA, and VAWA training resources. It appears that HUD’s enforcement of rights of domestic violence victims to housing pursuant to VAWA will continue to grow absent an indication from the new HUD Secretary of a change in this policy, which to date has not been announced.
MAKING SMART TCPA MOVES: Rocket Mortgage Follows Up Its Redfin Purchase With STUNNING $9.4BB Take Over of Mr. Cooper
So multiple outlets are reporting that Rocket is set to absorb the nation’s largest mortgage servicer Mr. Cooper.
With Rocket having just recently acquired Redfin it looks like the company is poised to be an absolute behemoth in the mortgage industry.
Just like with Redfin, however, the TCPA is likely driving this initiative.
Yes, mortgage servicing can be profitable in its own right but it is MASSIVELY valuable to an originator to have a large servicing pool.
Why?
Who is more likely to NEED mortgage or refinance than folks who already have a mortgage product? And with trigger leads now widely available (probably illegal under FCRA but don’t tell the CRAs that) having a massive servicing book means you can LEGALLY call folks who just submitted an application elsewhere and convince them to stay.
This is because the DNC rules will soon allow Rocket to call all of the MILLIONS of Mr. Cooper customers it just acquired WITHOUT CONSENT.
Pretty slick, eh?
So with Redfin providing consent on the front end and with access to a massive pool of mortgage customers now bolted on to the backend Rocket can make ready use of the phones to bring customers into its ecosystem–and keep them there.
Pretty clever. And it was all brought to you by the TCPA.
People think of the statute as a profit killer. But leveraged correctly it can actually drive profits by building a moat around your customers and a barrier-to-entry for others in your vertical.
Smart money uses the law as a competitive advantage. Nicely done Rocket.
Can Common Interest Communities Ban Religious Displays On Doors And Doorframes?
The Nevada legislature is currently considering a bill, SB 201, that would restrict, with certain exceptions, an association or unit’s owner who rents or leases his or her unit from prohibiting a unit’s owner or occupant of a unit from engaging in the “display of religious items”. The bill defines “display of religious items” as “an item or combination of items: (1) Made of wood, metal, glass, plastic, cloth, fabric or paper; and (2) Displayed or affixed on any entry door or doorframe of a unit because of sincerely held religious beliefs”. At the Senate Committee on Judiciary the bill was amended to, among other things, expand its application to include apartments.
The reference to doorframes caused me to think of mezuzot. A mezuzah consists of a case containing a small piece of parchment inscribed by hand with the first two sections of the Shema. The fixing of mezuzah to a doorframe is governed by a number of specific rules, including a requirement that it be visible (or there be a symbol indicating the presence of the mezuzah).
As noted, an item must be displayed “because of sincerely held religious beliefs”. Mezuzot and doorposts should meet this requirement because are specifically mentioned in Deuteronomy 6:9 (“וּכְתַבְתָּ֛ם עַל־מְזֻז֥וֹת בֵּיתֶ֖ךָ וּבִשְׁעָרֶֽיךָ׃ {ס} inscribe them on the doorposts of your house and on your gates”). In obedience of this divine command, Jews affix mezuzot to every doorway in their homes (other than bathrooms and small closets).
What about religious symbols of other faiths? The bill does not specifically refer to any particular faith or symbols (including a mezuzah). Crosses or crucifixes are generally recognized as Christian symbols and nothing in the bill excludes either. However, they do raise a question of what is meant by “sincerely held religious beliefs”. Does this simply require that the owner or occupant sincerely hold a belief in Christianity or does it require that the owner or occupant specifically believe that the display is religiously mandated? If the latter requirement is imposed, then it may be difficult for an owner or occupant to meet it, for I know of no Christian canon similar to Deuteronomy 6:9 that mandates a display of a cross or crucifix on a door or doorframe (if any reader is aware of such a requirement, please let me know). Thus, a Christian may choose to affix a cross to his or her doorway because they are a sincere believer, but they may not believe that they are required by their religion to do so.
I therefore find the requirement of a “sincerely held religious belief” to be problematical because it invites owners associations, landlords, and ultimately the courts to delve into religious law and belief. In addition, the requirement could invite challenges to the sincerity of an owner’s belief.
The bill also excludes, among other things, a display that “promotes discrimination or discriminatory belief”. As a content-based restriction on speech, this exclusion is highly problematical from a First Amendment perspective.
While SB 201 is well-intentioned, it does serve to illustrate how difficult it is to draft legislation that affects religious practices without entangling the government in questions of religious belief.
Privacy and Data Security in Community Associations: Navigating Risks and Compliance
Privacy and data security laws govern how organizations collect, handle, and protect personally identifiable information (PII) to ensure it is properly processed and protected.
For community associations, this is especially important as these organizations often manage large amounts of PII of homeowners and residents (e.g., name, address, phone number, etc.), including certain categories of sensitive PII, such as financial details. With identity theft and various cyber scams on the rise, cybercriminals frequently target this type of data. Once this data is accessed, a threat actor can do anything it wants with the data. For instance: the threat actor can sell the PII to the highest bidder; encrypt the data and hold it for ransom, meaning that a community association can no longer access the information and potentially must pay large sums in order to get it back; or make a copy of the PII and then extort the community association to return or delete the data instead of releasing it publicly, among other malicious acts.
With these risks in mind, data security breaches have become a widespread concern, prompting legislative action. All fifty states now have laws requiring organizations to notify individuals if unauthorized access to PII occurs. These laws apply to community associations in North Carolina under North Carolina General Statute § 75-65. In order to avoid being involved in a data security breach, North Carolina community associations should prioritize taking steps to protect PII of their residents and homeowners.
While North Carolina does not offer specific statutory guidance for community associations regarding personal data handling, federal frameworks can help. The National Institute of Standards and Technology (NIST) has developed comprehensive privacy and cybersecurity guidelines. To view their resource and overview guide, visit this link. The NIST’s frameworks assist organizations in identifying the data they possess, protecting it, managing and governing it with clear internal rules, and responding to and recovering from data security incidents. To summarize some of the key steps necessary for a community association to protect its data, please see the list below.
Key Steps for Strengthening Privacy and Data Security
Keep Technology Updated. Community associations should prioritize keeping their systems, networks, and software up to date. Oftentimes, software updates include patches for security vulnerabilities that threat actors can exploit. As technology evolves, new threats emerge, and these software updates are designed to address these risks by closing security gaps. In addition, community associations should change passwords periodically and be sure that passwords are not universal among all systems and websites. If presented with the option, it is recommended to use multi-factor authentication on various log-in platforms. By using multi-factor authentication, there is an extra layer of security beyond a password that can be guessed, stolen, or compromised.
Manage Access. Ensure that only necessary employees have access to residents’ and homeowners’ PII. For those who have access, be sure to adequately train those employees to confirm they are apprised of the community associations’ cybersecurity policies and procedures. Additionally, be sure these employees can recognize common attack methods of threat actors and are able to avoid and report any suspicious activity. One of the basic ways to manage access is to ensure the community association is only collecting information that it absolutely needs to carry out its operations. If less data is in the possession of the community association, less data can be accessed by a threat actor.
Regularly Review Vendor Contracts. It’s crucial for community associations to audit contracts with vendors, at least annually, to ensure they align with the association’s risk tolerance. Many breaches stem from third-party service providers who have access to PII and sensitive PII. Without clear contractual safeguards, a breach could result in significant remediation costs, with limited legal recourse against the responsible vendor. Always be sure that your contracts address data protection and breach response obligations.
Consider Cyber Insurance. Cyber insurance has become an essential risk management tool for community associations. However, it’s important to understand that cyber insurance is not a catch-all solution. Insurers are increasingly raising premiums and limiting coverage for organizations that fail to implement strong data protection practices. Cyber insurance should be seen as a safety net, not a substitute for a comprehensive privacy and security strategy. Community associations should also periodically review their cyber insurance policies to confirm they are providing coverage for any new or emerging threats that may arise.
Engage the Community. Transparency, especially regarding the categories of data collected and how they are used, is key in building trust with residents and homeowners. Community Associations should seek input from their stakeholders on privacy and data security policies. While legal obligations will not change based on community sentiment, understanding residents’ concerns can help guide decision-making and foster a sense of accountability. Discussing data security efforts and proactively addressing cybersecurity challenges at an annual meeting provides an opportunity to clarify expectations and show the association’s commitment to protecting personal information.
For guidance on strengthening a community association’s privacy and data security efforts, contact us to learn more about best practices and compliance strategies.
FHFA Rescinds UDAP Oversight Bulletin and SPCP-Based Renter Protections
The Federal Housing Finance Agency (FHFA) has taken two significant deregulatory steps affecting its oversight of the government-sponsored enterprises, Fannie Mae and Freddie Mac (GSEs). The agency rescinded a 2024 advisory bulletin asserting its authority to regulate unfair or deceptive acts or practices (UDAP) by Fannie Mae and Freddie Mac. Additionally, the FHFA withdrew renter protection requirements—previously scheduled to take effect on May 31—for multifamily loans made through Special Purpose Credit Programs (SPCPs) backed by the GSEs.
UDAP Advisory Bulletin Rescinded
FHFA stated that enforcement of unfair or deceptive acts or practices should remain with the FTC, which is the primary administrator of Section 5 of the FTC Act. The agency emphasized its focus on the safety and soundness of the GSEs, rather than duplicating existing consumer protection authority.
The rescinded bulletin had stated that FHFA would evaluate whether the GSE’s actions or inactions could be considered unfair or deceptive under established standards, and would hold the enterprises accountable if they facilitated or failed to prevent such conduct. It also emphasized UDAP concerns could arise in connection with third-party servicers or counterparties acting on behalf of GSEs. By revoking the bulletin, FHFA clarified that it does not intend to impose separate or parallel UDAP obligations on the enterprises beyond those enforced by the FTC or CFPB.
SPCP-Based Tenant Protections Withdrawn
FHFA has formally reversed course on renter protections that were previously tied to multifamily loans issued through SPCPs backed by GSEs. These conditions, which had been scheduled to take effect on May 31, would have required landlords to implement a five-day grace period before charging late fees and to provide at least thirty days’ notice before modifying lease terms.
The protections were introduced as part of the GSEs’ Equitable Housing Finance Plans and were aimed at improving housing stability for very low-, low-, and moderate-income renters. FHFA’s current leadership characterized the requirements as exceeding the agency’s role and stated that lease-related protections should be governed by state and local law.
Putting It Into Practice: The FHFA’s recission of its UDAP bulletin and SPCP-based renter protections reflects a shift toward a narrower role for the agency, centered on institutional supervision and market stability. Financial institutions should continue look to the FTC, CFPB, and state regulators for UDAP enforcement, tenant protection standards, and other consumer-facing compliance obligations.
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Import-Tariffs: Acts of God or just another Thursday?
Many of us are quietly watching and waiting to see how newly imposed tariffs will affect the U.S. and global economy in the coming weeks, months, and potentially – years.[i] Anticipating these changes and protecting your transactions is going to be crucial, but what about deals that have already been negotiated and signed? Which party will bear the greater risks and burdens of tariff-related cost increases? There are several theories that may provide relief.
A widely used contract provision that will bear considerable scrutiny is the ‘Force Majeure Clause,’ which allows a party to avoid liability if it cannot fulfill its obligations due to circumstances beyond their control or unforeseen events.[ii] The motivator behind this provision is to protect parties against defined disasters, calamities, and acts (and wraths) of God.[iii] Numerous courts have considered such clauses, and many have declined to invoke the force majeure clause.
Kyocera Corp. v. Hemlock Semiconductor, LLC:
In 2015, the Michigan First District Court of Appeals considered this question in Kyocera Corp. v. Hemlock Semiconductor, LLC.[iv] This case arose in the midst of upheaval within the solar industry caused by tensions between the United States and China. Chinese companies began engaging in the process known as “large-scale dumping,” in which a foreign producer, perhaps with state support, sells a product at a price that is lower than its cost of production to intentionally manipulate an industry and capture market share. Global solar prices began to decline (including the price of polysilicon, a critical component used in solar panels), causing numerous manufacturers to go out of business. In response, the United States imposed anti-subsidy and anti-dumping import tariffs.[v]
Kyocera, a Japanese solar panel manufacturer, had previously entered into a ten year, take-or-pay supply contract with Hemlock Semiconductor, a Michigan based polysilicon manufacturer, to purchase its polysilicon. The very nature of a take-or-pay contract allocates the risk of a rise in prices to the seller (Hemlock) and a fall in prices to the buyer (Kyocera). Kyocera argued that purchasing polysilicon at this higher price would cause its “solar business to cease to exist.” Kyocera tried and failed to negotiate a satisfactory price change with Hemlock and ultimately provided Hemlock with notice that it was excused from performance under the contract’s force majeure clause.[vi]
The Michigan First District Court of Appeals was unsympathetic, finding that economic hardship and unprofitability alone, including increased costs due to tariffs, are insufficient to invoke force majeure unless explicitly covered by the clause. The risk of falling prices fell squarely on Kyocera under its contract, and Kyocera “opted” not to protect itself.[vii] The court refused to “manufacture a contractual limitation that it may in hindsight desire by broadly interpreting the force majeure clause to say something that it does not.”[viii]
Further, the court addressed the issue of foreseeability. The court rejected Kyocera’s argument that they did not foresee the illegal actions of the Chinese government, simply stating that “markets are volatile” and that the fact that “prices may rise and fall was known to both parties and such risk was precisely allocated by the take-or-pay nature of [a]greement.”[ix]
Kyocera is one of many cases illustrating that unless very carefully drafted to say otherwise, economic hardship and decreasing profits may not be enough for a court to intervene and apply the protections of a force majeure clause. Under these cases, the most that an aggrieved party may receive is more time to comply with its contractual obligations.
So, what type of language would a court consider explicit enough to apply the force majeure clause against tariffs? We will consider this issue in an upcoming post!
[i] See Robert McClelland et al., Tariffs, Trade, China, and the States, Tax Pol’y Ctr, Urb. Inst. & Brookings Inst. (Oct. 17, 2024), https://taxpolicycenter.org/briefs/tariffs-trade-china-and-states.
[ii] See Force Majeure, Legal Info. Inst., Cornell L. Sch., (last visited Mar. 26, 2023) https://www.law.cornell.edu/wex/force_majeure#:~:text=Force%20majeure%20is%20a%20provision,or%20both%20parties%20from%20performing.
[iii] See Mark Trowbridge, Acts of God and Other Force Majeure Events, Supply Chain Mgmt. Rev. (May 2, 2022), https://www.scmr.com/article/acts_of_god_and_other_force_majeure_events.
[iv] See Kyocera Corp. v. Hemlock Semiconductor, LLC, 886 N.W.2d 445 (Mich. Ct. App. 2015).
[v] See id. at 449.
[vi] See id. at 447, 450.
[vii] See id. at 453.
[viii] See Kyocera Corp, 886 N.W.2d at 453.
[ix] See id. at 452-53.
CFPB Moves to Vacate ECOA Settlement Against Illinois-based Mortgage Lender
On March 26, the CFPB filed a motion to vacate its recent settlement against an Illinois-based mortgage lender accused of engaging in discriminatory marketing practices in violation of the Equal Credit Opportunity Act (ECOA) and the Consumer Financial Protection Act (CFPA). The lawsuit, initially filed in 2020, alleged that the lender’s public radio advertisements and commentary discouraged prospective applicants in majority- and minority- Black neighborhoods from applying for mortgage loans.
In its original complaint, the CFPB claimed the mortgage lender had violated fair lending laws by making repeated on-air statements that allegedly discouraged individuals in certain predominantly minority neighborhoods from seeking credit, and by failing to market its services in a manner that would affirmatively reach those communities. According to the CFPB, this conduct constituted unlawful discouragement under the ECOA and CFPA, even where no formal credit application had been submitted. That decision was challenged on appeal and later upheld by the 7th Circuit which found that ECOA also applies to prospective applicants. After losing on appeal, the lender settled the action for $105,000.
Acting Director Russel Vought explained in a March 26 press release that the CFPB “abused its power, unfairly tagged the lender as racist with “zero evidence”, and spent years persecuting and extorting the lender “all to further the goal of mandating DEI in lending via their regulations by enforcement tactics.”
Putting It Into Practice: The CFPB’s order is the latest example of the Bureau reversing course on enforcement actions initiated under the previous administration (previously discussed here and here). This is the rare instance of a federal regulator ripping up an action that was already settled. Perhaps even more noteworthy, the lawsuit against the mortgage lender was filed under the first Trump administration.
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Commercial Insurance Offerings to Mitigate Fire-Related Risks
Businesses and people around the world are reeling from the aftermath of shutting down Heathrow Airport in London—one of the world’s busiest travel hubs—due to a fire at a nearby electrical sub-station. Early projections of the economic fallout and related travel disruptions are staggering. The fire at the sub-station not only disrupted travel plans for passengers, but also interrupted countless businesses that rely on the airport, such as airlines, logistics and freight companies, and retailers. Fortunately, these businesses may be able to mitigate their losses through their commercial property policies and policies covering supply chain disruptions. We discuss some of the insurance offerings that may respond to fire-related losses (as well as other losses from other perils) and ways to maximize coverage.
Property Coverage—Covering Physical and Economic Losses From Fire Damage to Your Property
Physical damage to a business’s property imposes costs to repair or replace the damaged property and can disrupt the business resulting in economic losses. Fortunately, many commercial property policies provide “all risks” coverage, meaning any cause of physical loss or damage—fire, wind, hail, etc.—is covered unless it is otherwise excluded. In addition, many commercial property policies also cover the loss of profits resulting from disruption to the business caused by the covered peril. In the case of the electrical fire at the sub-station, the policyholder may be covered for the cost of repairing the damaged property and the profit that would have been earned if the fire did not occur.
Contingent Business Interruption (CBI) Coverage—Covering Economic Losses Resulting From Fire Damage to Someone Else’s Property
Even if a business’s property is not physically damaged, it may be able to recover economic losses resulting from disruptions to another business on which it depended. This type of coverage is commonly known as contingent business interruption coverage, and it is triggered when physical loss or damage to another business causes a disruption to the policyholder’s business resulting in economic loss. Issues may arise, however, concerning which third-party businesses qualify as suppliers or customers on which the policyholder is dependent; this issue often turns on whether the impacted business had a “direct” relationship with the insured business and the specific policy language. Businesses reliant on Heathrow Airport to fulfill their business obligations may have a claim if they experienced a loss due to, for example, delivery delays, order cancellations or the need to arrange for other ways to transport cargo.
Extra Expense Coverage—Covering the Added Costs Incurred as a Result of the Fire Damage to Your or Someone Else’s Property
Many commercial property policies also cover the “extra expenses” a policyholder incurs after it sustains a direct physical loss or damage, or when it sustains a covered contingent business interruption loss. “Extra expenses” are those added expenses that the policyholder incurred as a result of the covered event. For example, extra expenses can include the added costs to receive goods for sale or replacement goods, as well as increased transportation, labor and logistical costs. In the case of the fire at the electrical sub-station that shutdown Heathrow Airport, extra expense coverage could pay for temporary relocation, and costs associated with alternative logistical arrangements like the rerouting of goods.
Supply Chain Coverage
When a business that serves as an element in a supply chain experiences a disruption, the result is usually delays and the need to reassess logistics and operations that rely on the impacted business for deliveries, transactions and just-in-time inventory. While there is no “standard” form for “supply chain insurance,” this insurance is available as an “all risks”-type coverage. Besides covering disruptions caused by property damage to a supplier or a dependent property, supply chain insurance can be customized to cover losses caused by a wide range of events, including production issues (e.g., supplier assembly line malfunctions). For example, supply chain insurance may respond to events like natural disasters and regulatory changes that disrupt a business’s operations.
Tips to Maximize Insurance if Loss Occurs
Ensure You Have Proper Limits: Policyholders should review their commercial insurance policies to make sure, for instance, that all structures (including new ones) are covered, the amount of coverage provided has kept pace with the increasing costs to rebuild property in the area, and the available policy limits can cover the value of the inventory currently at hand. Policyholders should also consider identifying the third-party businesses on which their businesses depend so they can avoid an after-the-fact dispute over whether a business qualifies. Policyholders should also leverage brokers and other business partners to ensure that their coverage aligns with industry standards.
Consult Outside Coverage Counsel: Policyholders should engage coverage counsel that can help analyze insurance terminology, and provide specialized guidance and assistance on improving policies’ terms and conditions to maximize coverage if a loss occurs. Increased limits are helpful only if the underlying coverage terms are strong and there are no problematic exclusions to allow the policyholder to access the full limits.
Document All Aspects of the Loss: Policyholders should keep records on the losses suffered, including documenting all physical damage, the amounts paid to prevent further damage or to remedy existing damage, and the amounts lost because of the disruption of business activities, including lost income.
Document All Claim-Related Communications: Policyholders should also keep a record on all claim-related conversations and communications with insurers and other parties involved in handling the insurance claim. This can be helpful, for example, if litigation is necessary.
Mitigate the Losses: Policyholders should consider taking all reasonable efforts to mitigate the property and business losses following a loss as such efforts can be a condition to coverage. Policyholders should also keep track of and document all those mitigation efforts.
Be on Time: Insurance policies generally place a time limit on filing claims. Indeed, insurers commonly cite late notice of a claim as the basis for denying a claim. Policyholders should thus submit insurance claims within the time periods identified by their policies and pay particular attention to other policy deadlines, such as the time to submit proof of loss and suit limitations provisions.
Takeaway
Events like fires at major hubs of global travel and trade can cause significant physical loss or damage, lost profits, extra expenses and supply-chain disruptions. Commercial policyholders operating such businesses must ensure they are able to protect against these events and resultant losses. Policyholders should carefully review their existing insurance policies to determine which coverages exist, and whether additional or modified terms are warranted if a loss occurs. Each line of coverage should be carefully analyzed and, if needed, modified before a fire-related claim arises.
Oregon Court of Appeals Issues Three Different Defense Opinions
Oregon’s Court of Appeals was busy issuing three different defense opinions on March 19, 2025. Circuit court errs by awarding attorneys’ fees based on a contingency fee.The first was Griffith v. Property and Casualty Ins. Co. of Hartford, where a homeowner submitted a fire loss and alleged the insurer did not pay the benefits owed quickly enough. The insureds filed a complaint, the insurer answered, and then a global settlement occurred. The insureds then filed a motion for summary judgment seeking prejudgment interest per ORS 82.010 as well as attorneys’ fees per ORS 742.061(1). They also sought costs as a prevailing party. The circuit court denied interest because no judgment had been entered and costs because there was no prevailing party, but granted $221,179.27 in attorneys’ fees. Both sides appealed. The insureds’ appeal about prejudgment interest was rejected for procedural reasons. The circuit court order on costs was affirmed because there was no prevailing party. Griffith is noteworthy only for its ruling about attorneys’ fees. The insurer did not dispute that ORS 742.061(1) applied or that the insureds were entitled to attorneys’ fees. It disputed only how the circuit court calculated the amount of the award. The circuit court determined that amount was a percentage of the insureds’ recovery. The Court of Appeals held that this was error.
When an award of attorneys’ fees is permitted, ORS 20.075 provides factors to determine the amount to award. Its factors generally align with the lodestar method. Although a percentage of the recovery might be appropriate in some circumstances, Griffith concluded the “lodestar method is the prevailing method for determining the reasonableness of a fee award in cases, such as this, involving a statutory fee-shifting award, even when, as here, the insured has retained counsel on a contingency-fee basis.” Further, the award “must be reasonable; a windfall award of attorney fees is to be avoided.” The Court of Appeals concluded using a percentage of the recovery was inappropriate in this instance. This is because coverage was never disputed, and the claim was immediately accepted. By the time the complaint was filed, the insurer had made several payments and was still adjusting the loss. There was minimal litigation and the delay paying the full claim “was caused by circumstances outside of the parties’ control.” The Court of Appeals ultimately concluded that the insureds had not met their burden to demonstrate the fees they sought were reasonable. The case was remanded to redetermine the fees owed.
No really, the recreational use statute applies to a city park.In Laxer v. City of Portland, the plaintiff entered Mount Tabor Park to “walk its trails” but tripped and fell due to a hole in the pavement. The plaintiff sued the City, but the circuit court granted the City’s motion to dismiss based on Oregon’s recreational use statute, ORS 105.682. The plaintiff appealed. Among other arguments, the plaintiff argued the paved road in the park was like a public sidewalk and thus exempt from ORS 105.682. The Court of Appeals concluded that while there are limits to ORS 105.682, “generally available land connected with recreation” is still typically protected. Since Mount Tabor Park is clearly connected with recreation, the dismissal was affirmed.
Defense verdict affirmed in slip-and-fall case.In Fisk v. Fred Meyer Stores, Inc., where a customer slipped “on a three-foot by five-foot laminated plastic sign, which had fallen from its stand onto the public walkway.” The sign belonged to the store and was placed there by store employees. The case was tried and produced a defense verdict.
On appeal, the customer conceded there was no evidence to prove the store (1) placed the sign on the ground, (2) knew the sign was on the ground and did not use reasonable diligence to remove it, or (3) the sign had been on the ground for enough time that the store should have discovered it. The customer instead argued the circuit court erred by not giving a res ipsa loquitur instruction. Although Oregon case law has concluded res ipsa loquitur does not apply to slip and falls, the customer argued this was not a slip and fall because an object caused the fall.
Fisk affirmed the circuit court’s refusal to give the res ipsa loquitur instruction. The customer’s attempted legal distinction was meaningless. “We agree with defendant that because plaintiff slipped on an object on the ground, plaintiff’s claim is correctly characterized as a slip-and-fall claim.”
Demystifying the Swamp: Executory Process in Louisiana
Some commentators are predicting that the declining foreclosure rates witnessed in 2024 could begin to trend upward this year. This potential upward trend underscores the importance of banking institutions and other mortgage holders understanding the foreclosure process and the costs associated therewith. This understanding is essential to making sound lending decisions.
While the foreclosure process varies state to state, Louisiana is (likely to nobody’s surprise) an outlier in this area of the law. While Louisiana requires foreclosure be accomplished through judicial means, it provides a unique and expedited procedure for doing so, known as executory process. While this unique procedure may seem intimidating to the unfamiliar, when examined and understood, it reveals itself to be a useful and cost-effective procedural tool for banks and other mortgage holders to exercise their foreclosure rights.
Executory Process vs. Ordinary Process
Unlike some other states, Louisiana does not allow nonjudicial foreclosure. As an alternative, Louisiana has the mechanism of executory process. Executory process is an accelerated summary procedure authorized under the Louisiana Code of Civil Procedure. It allows the holder of a mortgage or privilege, evidenced by an authentic act importing a confession of judgment, to effect an ex parte seizure and sale of the subject property without previous citation, contradictory hearing, or judgment.[1] This process is designed to be simple, expeditious, and inexpensive, enabling creditors to seize and sell property upon which they have a mortgage or privilege. This is in contrast to foreclosure by ordinary process, in which the general rules applicable to ordinary lawsuits are followed.
Executory process is considered a harsh remedy, requiring strict compliance with the letter of the law. Each step must be carried out precisely as outlined in the Louisiana Code of Civil Procedure and applicable jurisprudence. The Louisiana Code of Civil Procedure outlines specific requirements and protections to ensure due process for the debtor. The procedure is in rem, meaning it is directed against the property itself rather than the person, and no personal judgment is rendered against the debtor.
How It Works
The process begins with the filing of a petition supported by certain self-proving documents that are accurate and explicit in nature. The creditor must provide authentic evidence of the debt, the act of mortgage or privilege importing a confession of judgment, and any other necessary instruments to prove the right to use executory process. The trial judge must be convinced that these requirements are met before issuing an order for executory process. Following amendments in 1989, not every document submitted in support of the petition needs to be in authentic form. Under current law, certain signatures are presumed to be genuine and certain documents may be submitted in the form of a private writing.
Once the court grants the order, the property is seized and sold, with the proceeds credited against the indebtedness secured by the property. If the property was appraised prior to sale, then the creditor retains the right to pursue the debtor for any deficiency remaining after the sale. The creditor is entitled to bid at the judicial sale of the property, and if the creditor’s bid is the winning bid and is the same or lower than the indebtedness of the creditor, the creditor will only be obligated to pay the sheriff’s costs of sale. If the creditor has the winning bid on the property, the creditor obtains the property free and clear of all inferior encumbrances, but the property will remain subject to any superior encumbrances.
After the recordation of the sheriff’s sale or process verbal, a sale through executory process may only thereafter be attacked by direct action alleging procedural defects in the process of such substance that they strike at the foundation of the executory proceeding.[2]
Debtors have protections under this process. They can arrest the seizure and sale of their property by seeking an injunction if (i) the debt is extinguished, (ii) the debt is legally unenforceable, or (iii) the procedural requirements for executory process have not been followed. This petition for injunction must be filed in the court where the executory proceeding is pending. Additionally, the law provides for certain delays in the process to benefit the debtor, although these delays have normally been waived by the debtor in the act of establishing the security interest.
Executory process is designed to be a swift and cost-effective method for creditors to enforce their rights, but it is surrounded by safeguards to protect the debtor’s interests, ensuring that the process is not misapplied and that due process is maintained.
Conclusion
While executory process is a unique creature of Louisiana law, it is not as alien as it may first appear. The Louisiana executory process essentially combines elements of ordinary and summary process to create a streamlined judicial foreclosure process. While not as expedient as the nonjudicial foreclosure available in some other states, it is not as onerous as seeking foreclosure through ordinary judicial process. Banks and other mortgage holders should be comfortable in understanding that, while unique, executory process in Louisiana is not something to be feared.
[1] Louisiana Code of Civil Procedure art. 2631; see also Liberty Bank & Tr. Co. v. Dapremont, 803 So. 2d 387, 389 (La. Ct. App. 2001).
[2] Louisiana Revised Statute 13:4112; Deutsche Bank Nat’l Tr. Co. ex rel. Morgan Stanley ABS Capital I, Inc. v. Carter, 59 So.3d 1282, 1286 (La. Ct. App. 2011).
Mississippi Foreclosure Basics
Lenders facing loan defaults on residential or commercial properties in Mississippi are often forced to pursue foreclosure measures if the default is not cured. Compared with other states, Mississippi has a relatively easy and streamlined foreclosure process for situations involving routine defaults with few complications. In more complex cases, Mississippi also affords lenders the right to pursue formal legal action through the filing of a complaint for judicial foreclosure. This article will provide a basic overview of each process, including some of the pros and cons of each.
Nonjudicial Foreclosure
The vast majority of foreclosures in Mississippi are conducted through the process of nonjudicial foreclosure, also known as “straight foreclosure.” Nonjudicial foreclosure is a relatively quick and easy process whereby a lender declares a default, accelerates the loan balance, and gives the borrower an opportunity to cure, typically 30 days. At the end of the 30-day period, if the borrower has not cured the default, the lender can move forward by transmitting, posting, and publishing a notice of foreclosure sale.
Prior to doing so, the lender will need to have title work performed on the property in question to determine if there are any uncured tax sales, encroachments, unauthorized conveyances, or other issues that need to be addressed. In most cases, the lender will also need to file a “Substitution of Trustee,” to designate a new trustee of the deed of trust to perform the foreclosure. Consequently, most foreclosure notices are captioned as “Substitute Trustee’s Notice of Sale.” Notice must be sent to the borrower, posted at the courthouse in the place commonly used for posting legal notices, and published in an authorized legal publication for the county where the property is located. Publication must be made once a week for three consecutive weeks, which has been defined as 21 continuous and uninterrupted days. For that reason, in practice, most foreclosure attorneys will run their notices in the local paper once a week for four weeks to ensure continuous presence of the notice for the statutory period.
On the date set for the sale, the foreclosing attorney and a lender representative should appear at the courthouse. Sales must be conducted between 11:00 a.m. and 4:00 p.m. on days the courthouse is open. In other words, a sale should not be set on a weekend or a recognized holiday. Most sales are conducted a few minutes after 11:00 a.m. Upon arriving at the courthouse, the attorney or the lender’s representative should pull the foreclosure notice from the posting board. The attorney or lender’s representative will also need to get the proof of publication from the local newspaper before or after the sale. The proof of publication must be attached to the substitute trustee’s deed in order to effectuate proper filing of the deed and conveyance of the property. Filing fees will vary, based on the number of notations that must be made in the margins to reflect proper recordation. Payment methods can also vary, so it is always advisable to have cash on hand if recording the deed in person.
After the sale, the lender has one year to file suit against the borrower for any remaining deficiency. The deficiency is calculated as the balance of principal, interest, attorneys’ fees, and costs of sale minus the foreclosure sale price. Entitlement to a deficiency is not automatic. Borrowers have certain defenses based on the commercial reasonableness of the sale, which involves examination of the sale price based on the appraised value and other factors. Under the case law, these types of defenses are not available to guarantors, at least in theory. Nevertheless, such issues are typically raised by guarantor defendants in post-foreclosure actions seeking to collect the balance. The one-year limitation on suing the borrower is also inapplicable to guarantors — again, at least in theory.
Judicial Foreclosure
Although Mississippi does not require judicial foreclosure, Mississippi law allows lenders to proceed by court action. A property conveyance made in conjunction with a judgment of judicial foreclosure should be accorded the highest level of insurability, because of the court decree associated with a finding that the lender has the right to foreclose, the resulting judgment granting the lender permission to do so, and the subsequent deed recorded. An extra level of assurance is also provided by the requirement of a post-sale report and approval by the court. The drawback to judicial foreclosures is that they are much more expensive and time-consuming than straight foreclosures. Thus, when the facts are straightforward, a straight foreclosure is preferable.
Judicial foreclosure comes into play when title work reveals an encroachment, an uncured interest, a matured tax sale, or some other cloud or issue that cannot be remedied through nonjudicial foreclosure. In addition, the judicial foreclosure process is valuable if there are problems with a property description, or problems with the documentation surrounding a loan. For example, if there is an error in the name of a party, a discrepancy in a maturity date, or a misdescription of the property in the deed of trust, a lender is well advised to file a complaint for judicial foreclosure coupled with a count for a declaratory judgment in order to cure such problems.
Judicial foreclosure complaints must be filed in the chancery court in the county where the property is located. The borrower and anyone else appearing in the chain of title whose interest will be affected must also be named. Borrowers have a right to defend against a judicial foreclosure action just as any defendant has a right to defend any sort of lawsuit filed against it. In most cases where the lender can show that money was loaned and that the property in question was intended to be taken as security for the loan, the lender can prevail. Problems arise when there is a fundamental disagreement over the scope of collateral, the particulars of a tract of property, whether payment was made, and those types of disputes. In addition, certain problems with deeds of trust are simply not curable (e.g., the omission of the beneficiary of the deed of trust) and must be dealt with in other ways.
Even if a borrower does not aggressively defend a judicial foreclosure action, the process can still be lengthy, even where the borrower defaults and the petitioning lender is entitled to seek a default judgment. In such cases, most chancery courts still require counsel and a lender’s representative to set the matter for hearing and to appear in court to make a record of the entitlement to relief in order to get the judgment of judicial foreclosure.
Obtaining that judgment is not the final part of the process, though. The judgment simply allows the lender to publish notice and conduct a sale in the same way as it would conduct a nonjudicial foreclosure sale. The judicial foreclosure process also requires the “special commissioner” (as opposed to the substitute trustee in nonjudicial foreclosures) to file a post-sale report with the court, to seek approval of the sale. Once that final order is entered, the special commissioner can prepare a deed to transfer the property and can apply the funds received at the sale.
Summary and Conclusion
The overview of each process set forth above is not a comprehensive guide to Mississippi foreclosure practice. It is merely intended to acquaint readers with the basics of each method and the issues that will be faced. As with any legal issue presented, it will be necessary to consult with counsel to ensure proper handling.