Bank of New York Mellon v. Georg

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The trial court in a second lawsuit against Defendants seeking reformation of a refinance deed of trust properly determined that the elements of res judicata and collateral estoppel were satisfied and thus barred Plaintiffs from bringing the claims. Financial Institution, the former owner of a note for a refinance mortgage loan, sued Defendants, a married couple, for reformation of the refinance deed of trust because the wife had not signed the refinance deed of trust, leaving Financial Institution unable to institute foreclose proceedings against Defendants’ property. The trial court ruled in favor of Defendants. Three years later, the current owner of the note and the title insurer of the refinance mortgage loan (collectively, Plaintiffs) sued Defendants for reformation of the refinance deed of trust. The trial court again in favor of Defendants, concluding that Plaintiffs were barred by res judicata and collateral estoppel from bringing and relitigating the claims in the second lawsuit. The Court of Appeals affirmed, holding that the trial court in the second lawsuit (1) properly declined to apply judicial estoppel to bar Defendants’ argument that Plaintiffs were in privity with Financial Institution; and (2) correctly determined that res judicata and collateral estoppel barred Plaintiffs from relitigating their claims in the second lawsuit. View "Bank of New York Mellon v. Georg" on Justia Law