Some urban myths just will not die. Remember Stella Liebeck? She won $2.7 million from suing McDonald’s in 1994, after spilling a cup of coffee in her lap and suffering third-degree burns.
It’s a story that became the rallying cry for tort reform and led to an HBO documentary, “Hot Coffee,” which featured politicians and celebrities… and in October of 2013, a “Retro Report” video published by the New York Times about the story and how it changed drinking coffee over the years. The video received over one million views, and reignited the debate all over the Internet.
The only problem with the story is that it’s not really true… it’s what you’d call an “urban myth.”
Stella didn’t actually win millions of dollars. First of all, a judge reduced the amount of the judgment to $640,000 and then McDonald’s ended up settling for “an undisclosed amount,” which mean’s something less than that. Her medical bills were $160,000, so you can make your own assumptions… maybe she walked away with a hundred grand, would be my guess.
And yet… most people still think some woman won millions of dollars from a cup of hot coffee at McDonald’s.
Well, last Friday I came across a story on ForeclosureDefenseNationwide.com about a recent decision by the Arizona Court of Appeal… Steinberger v. IndyMac that was issued on January 30, 2014. Among other things, the decision apparently will allow homeowners fighting foreclosure to claim that an FDIC’s Shared Loss Agreement (SLA), or other third party, paid off 80 percent or more of their mortgage.
I recognized the issue immediately because it had come up before… like, four or five years ago, when I was one of the first to write about the SLA in place at One West Bank as a result of taking over failed IndyMac. But, I never said that SLAs paid off 80 percent of anyone’s securitized loan, or that it was a way to fight a foreclosure. That part is an urban myth.
“In a 33-page decision, the Arizona Court of Appeals reversed the trial court’s dismissal of a homeowner’s Complaint challenging a foreclosure instituted by Deutsche Bank as Trustee of an IndyMac securitization. The decision in Steinberger v. IndyMac was issued on January 30, 2014.”
It was a couple of paragraphs later that everything went completely off the rails.
“However, perhaps the most significant portion of the holding …read more