Riley v. Flagstar Bank, FSB
2009 WL 792716
Opinion by Judge Moore; Judges Clayton and Stumbo concurred.
The Court reversed and remanded an order of the circuit court granting a directed verdict
against appellants on their claims for penalties under KRS 382.365, due to appellee’s failure to release a lien on a mortgage.
The Court held that because the version of KRS 382.365 in effect at the time that a fax sent was sent to appellee regarding its failure to timely release the lien did not define what constituted written notice, only reasonable notice was required. Therefore, the trial court erred in holding that the fax could not constitute written notice under the statute in effect at the time.
The Court also held that the trial court erred in holding that the attorney’s signature stamp on the fax created doubt concerning the sufficiency of the notice, as this was a factual issue for the trier of fact. The Court then held that, because private parties were involved in the transmission of the fax, the circuit court erred in holding that appellee’s due process rights were violated.
The Court next held that the circuit court erred in finding that the original mortgage holder should have been given written notice, as the statute in effect at the time only required written notice to the lienholder.
The Court ultimately held that the evidence was sufficient to allow a jury to infer that appellee had received the fax and that such constituted written notice of its failure to release the lien. The determination of whether appellants’ acted in good faith was a question of fact for the jury. Therefore, the trial court erred in granting the directed verdict.