Court finds Washington County foreclosure lawsuit requires full hearing
The Arkansas Court of Appeals overturned and dismissed a foreclosure case on Thursday, saying a Washington County circuit judge should have reviewed a couple’s claims that they signed agreements under duress and that the actions of a bank had prevented them from repaying their loans.
The case involves many interrelated parties and entities and involves several loans, but the main players are Jacob and Paige Levitt, who appealed, and Today’s Bank, which seized their loans. The Levitts lost their business and home in foreclosures and bankruptcy actions.
The appeals court said Judge John Threet erred in granting summary judgment to the bank. The court said Threet should have looked at evidence the couple entered into a loan modification under duress, which could void the contract.
Jacob Levitt said in his affidavit that he was threatened by bank officials with civil and criminal lawsuits if the Levitts did not immediately place their home as collateral. The Levitts also alleged that the bank threatened to file a foreclosure suit if it refused to change the terms of the loan.
“We believe the circuit court erred in finding that the facts were not sufficient to constitute duress or at least in finding that there was no dispute of material fact,” the court said. call. “Here, the evidence in support of the Levitts’ coercion claim was sufficient to raise material factual issues to survive summary judgment.”
The Levitts presented evidence that they only agreed to the loan modification after the bank threatened to bring criminal charges against them for the misrepresentations in a collateral agreement for a loan. They also said they were worried the bank would recall their note and foreclose on their home, the opinion said.
The bank’s claims that Levitts ratified the contract while remaining silent about the alleged duress until the bank initiated foreclosure proceedings are a matter for a jury to decide, the opinion says.
Likewise, the bank’s argument that the Levitts were not harmed by the modification of the loan but in fact benefited from its conversion to a traditional loan is open to interpretation and remains a question of fact to be decided by a jury. , according to the opinion.
Finally, the appeals court said the Levitts presented evidence that the bank failed to transfer the titles to the trailers the Levitts used in their business, resulting in the trailers being repossessed. The loss of the trailers devastated their business, resulting in an inability to repay their loans, the couple claimed. The court found that there were genuine issues of material fact as to whether the bank’s actions prevented the Levitts from performing the contracts.