Riley Pope & Laney attorneys successfully argued against the expansion of the Matrix Financial Services Corp. v. Frazer decision with the South Carolina Supreme Court.  A favorable result for the firm’s creditor client as well as all mortgage creditors conducting business in South Carolina.  Congratulations to Riley Pope & Laney’s own Mullen Taylor and the firm’s litigation team for defending creditors’ rights at the highest level.

In a closely watched decision by national lenders, servicers, and industry groups, the South Carolina Supreme Court ruled in favor of a mortgage creditor represented by Riley Pope & Laney.  The Court rejected an effort by the borrower to overturn Matrix Financial Services Corp. v. Frazer, 714 S.E.2d 532 (SC 2011).  The Matrix Court had ruled that lenders may be barred from enforcing mortgage loans if the note and mortgage were executed without attorney supervision after the date of the August 8, 2011, Matrix opinion.  Counsel for the borrower in this U.S. Bank National Trust Association, as Trustee, as successor to U.S. Bank Trust National Association, as Trustee, for Conseco Finance Home Equity Loan Trust 2001-C v. Frances L. Mack n/k/a Frances L. Mack-Marion case argued that the note and mortgage executed in 2001, approximately ten (10) years before the Matrix decision, should be deemed unenforceable because the loan was allegedly closed without attorney supervision.  The borrower wished to have the Court expand the Matrix decision to apply retroactively to any loan closed without attorney supervision regardless of the recording date; thus, drastically expanding the number of mortgages which could be challenged if not closed with attorney supervision.  In lower court rulings, Riley Pope & Laney attorneys succeeded in its motions to dismiss the claim based on the holding in Matrix.  The Borrower and borrower’s counsel continued to appeal judicial orders dismissing the claim. 

Following oral arguments by the parties plus amicus briefs filed by the ALFN and protracted deliberations by the South Carolina Supreme Court, the Court sided with Riley Pope & Laney’s argument made by attorney Mullen Taylor that the Matrix decision be affirmed; thus limiting this potential exposure for lenders not being able to enforce certain mortgages closed without attorney supervision.  In addition, the Court reaffirmed that South Carolina does not recognize a private right of action for the unauthorized practice of law; another important affirmation for lenders in South Carolina.  Finally, the Supreme Court clarified that lower courts possess subject matter jurisdiction to hear civil claims such as fraud or negligence involving factual allegations of conduct that the Supreme Court had previously deemed to be the unauthorized practice of law. 

Riley Pope & Laney and its attorneys will vigorously defend the rights of our creditor clients to our state’s highest court.