[Disclosure: I represent the petitioner in this matter.] The Supreme Court today announced its first grant of review in the new Term. The case is West Pleasant-CPGT, Inc. v. U.S. Home Corp. The question presented, as phrased by the Supreme Court Clerk’s office, is “Among other issues, is a fair market value credit available to a mortgagor or debtor where the mortgagee or creditor does not pursue a deficiency action?”
The Law Division and a three-judge panel of the Appellate Division, in an unpublished opinion, each applied a fair market value credit. Though the two courts differed in their overall approach to this convoluted case, the result in both courts was that U.S. Home, the victim of defaults by a mortgagor and a debtor, ended up ordered to pay a seven-figure sum to one or both of those defaulting parties by virtue of the fair market value credit.
That result conflicted with a long line of appellate authority that a fair market value credit is available only in the context of a deficiency action, which U.S. Home did not pursue here. Now the Supreme Court will weigh in.