Distressed Debt Buyer’s Claims as Purported Successor in Interest Get Thrown Out Against Real Estate Lawyer
Shannon Sprinkle, and Joe Kingma prevailed on a motion for summary judgment in favor of a local real estate lawyer. Carlock Copeland successfully argued that the Plaintiff, who was attempting to stand in the shoes of an original lender, was not a successor in interest and was not entitled to bring the malpractice claims asserted.Plaintiff, a distressed debt buyer, had purchased loans from a failing bank with a book value of more than $20M. As to one of the defaulted loans, Plaintiff alleged malpractice against the closing lawyer because certain title exceptions were not included as exceptions to a title insurance policy and allegedly not disclosed to the lending bank. Carlock Copeland succeeded in getting the case dismissed by demonstrating that Plaintiff lacked standing, because although it had purchased the rights to the loans, there was no written assignment of any malpractice claims.This case may be appealed so watch for further updates.