Flagstar Bank, F.S.B. v. Airline Union’s Mortgage Co.
Annotate this CaseAppellee John Reinhold is an appraiser. He performed appraisals on three properties in 2001 and 2002 that served as collateral for three separate mortgage loans made by Airline Union’s Mortgage Company (AUM). Appellee completed the last of these appraisals on June 12, 2002. In these various transactions, Appellant Flagstar Bank received and reviewed Appellee’s appraisals and accordingly purchased the mortgage loans from AUM. These properties were later subjected to foreclosure actions leaving deficiencies on the loans. Flagstar filed a complaint against AUM and Appellee. In the complaint, Flagstar alleged that the three appraisals were materially inaccurate and that the actual fair market value of each of these properties was significantly lower than the appraised values. Appellee denied any professional negligence and filed a motion for summary judgment which was granted. Flagstar appealed this decision. The appellate court affirmed the trial court’s judgment. The Supreme Court found that the record supported the lower courts’ decisions to grant Appellee summary judgment. The Court disagreed with Flagstar that the state “delayed damages” rule applied in this case, and used the “discovery rule.” The Court affirmed the appellate court’s decision.
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