Justia Banking Opinion Summaries

This case arose when Meritage submitted an administrative claim to the FDIC. The FDIC disallowed Meritage's administrative claim and Meritage then filed suit. Meritage obtained a default judgment against the FDIC and the FDIC provided Meritage with a receiver's certificate in the amount of the judgment. The FDIC also filed with the district court a Satisfaction of Judgment. Meritage sought to have the district court strike the FDIC's Satisfaction of Judgment and instead direct the FDIC to pay the judgment in cash. Subsequently, on appeal, Meritage challenged the district court's judgment and challenged orders denying its motion to strike or, in the alternative, issue a summons to certain third parties to this action and denying its motion for reconsideration. The court held that the district court's denial of Meritage's request for a summons was to be reviewed for clear error. On the merits, the court held that the district court did not abuse its discretion in ruling that the receiver's certificate satisfied the judgment against the FDIC. The court also held that the district court did not commit clear error in declining to issue a summons to Rescon and Stearns. Accordingly, the court affirmed the judgment of the district court. View "Meritage Homes of Nevada v. FDIC" on Justia Law

Plaintiffs filed suit against Wells Fargo, raising multiple causes of action under state and federal law pertaining to plaintiffs' home loan and deed of trust. At issue was whether, under 28 U.S.C. 1348, a national bank is a citizen of both the state in which its principal place of business is located as designated in the banks' articles of association. The court concluded that, under section 1348, a national bank is a citizen only of the state in which its main office is located. Therefore, the district court had diversity jurisdiction because there was complete diversity between plaintiffs, citizens of California, and Wells Fargo, a citizen of South Dakota. Accordingly, the court reversed the district court's judgment to the contrary and remanded for further proceedings. View "Rouse, et al. v. Wachovia Mortgage" on Justia Law

Deutsche Bank appealed the dismissal of its claims against the FDIC. At issue was whether Deutsche Bank's claims were general unsecured claims under 12 U.S.C. 1821(d)(11) and thereby prudentially moot because of the lack of sufficient funds in the estate to pay unsecured claims. The court concluded that, because Deutsche Bank was a quintessential creditor, its claims were third-tier general unsecured liabilities under section 1821(d)(11)(A)(iii), and the district court properly held that Deutsche Bank's claims were prudentially moot, as there were insufficient funds to satisfy general unsecured liabilities. Accordingly, the court affirmed the judgment of the district court. View "Deutsche Bank Nat'l Trust Co. v. FDIC" on Justia Law

Plaintiff appealed the district court's dismissal of his claim under Rule 12(b)(6), alleging that Nationstar violated section 533 of the Servicemembers Civil Relief Act (SCRA), 50 U.S.C. app. 533, when it maintained certain fees related to a rescinded Notice of Default on his account while he was on active duty. Because the state-law statutory definition of foreclosure contemplates the inclusion of specified fees as part of the foreclosure proceeding, and because the Supreme Court has unambiguously required courts to give a broad construction to the statutory language of the SCRA to effectuate the Congressional purpose of granting active-duty members of the armed forces repose from some of the trials and tribulations of civilian life, the court held that the attempted collection of fees related to a Notice of Default on a California property constituted a violation of section 533. In this case, plaintiff has pled sufficient facts to allege that Nationstar's continuing failure to remove the fees incidental to the Notice of Default was a continuation of that foreclosure proceeding while plaintiff was on active duty service in violation of section 533. Accordingly, the court reversed and remanded. View "Brewster v. Sun Trust Mortgage" on Justia Law

Plaintiffs, a class of cardholders who paid credit card penalty fees, challenged those fees on constitutional grounds. Plaintiffs argued that the fees are analogous to punitive damages imposed in the tort context and are subject to substantive due process limits described in BMW of North America, Inc. v. Gore. The court concluded that the due process analysis developed in the context of jury-awarded punitive damages was not applicable to contractual penalty clauses. Further, there was no derivative liability under the Unfair Competition Law. Accordingly, the district court did not err in dismissing the complaint where constitutional due process jurisprudence did not prevent enforcement of excessive penalty clauses in private contracts and the fees were permissible under the National Bank Act, 12 U.S.C. 85-86, and the Depository Institutions Deregulation and Monetary Control Act (DIDMCA), 12 U.S.C. 1831d(a). View "In re: Late Fee & Over-Limit Fee Litigation" on Justia Law

This case concerned the Home Affordable Modification Program (HAMP), a government program created to help distressed homeowners with delinquent mortgages. At issue was whether Wells Fargo was contractually required to offer plaintiffs a permanent mortgage modification after they complied with the requirements of a trial period plan (TPP). Following the Seventh Circuit, the court held that Wells Fargo was required to offer the modification. The district court should not have dismissed plaintiffs' complaints when the record showed that Wells Fargo had accepted and retained the payments demanded by the TPP, but neither offered a permanent modification, nor notified plaintiffs they were not entitled to one, as required by the terms of the TPP. Accordingly, the court reversed and remanded. View "Corvello v. Wells Fargo Bank N.A." on Justia Law

Plaintiff sought injunctive relief and damages against the Bank after it filed an unlawful detainer action against her in state court without giving 90 days notice to vacate the foreclosed property. At issue on appeal was whether the Protecting Tenants at Foreclosure Act of 2009 (PTFA), Pub. L. No. 111-22, 701-04, 123 Stat. 1632, 1660-62, provided a private right of action. The court concluded that dismissal of the state unlawful detainer proceedings did not moot plaintiff's claim; the court agreed with the Third Circuit that the regulation of eviction proceedings "does not implicate an important state interest" under Younger v. Harris; but plaintiff had no cognizable interest under the PTFA. Accordingly, the court affirmed the district court's dismissal of the complaint. View "Logan v. U.S. Bank" on Justia Law

Plaintiffs filed suit against Wells Fargo under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p, and the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691-1691f. The court affirmed the district court's dismissal of plaintiffs' FDCPA claim because the complaint did not plausibly allege that Wells Fargo was a debt collector under section 1692a(6). The court reversed, however, the district court's dismissal of the ECOA claim where the complaint's allegations that Wells Fargo took an adverse action without complying with ECOA's notice requirements were enough for the ECOA claim to survive a motion to dismiss because the parties agreed that Wells Fargo did not send plaintiffs an adverse action notice. View "Schlegel v. Wells Fargo Bank" on Justia Law

Plaintiffs appealed the district court's dismissal of their first amended complaint and the district court's denial of leave to further amend their complaint. Plaintiffs claimed that defendants improperly initiated non-judicial foreclosure proceedings after plaintiffs failed to comply with the mortgage obligations financing their residence. Because the provisions of the deed of trust foreclosed the pleading of a plausible "show me the note" claim by plaintiffs, the district court appropriately dismissed this claim; the district court properly dismissed plaintiffs' claims premised on the unauthorized appointment of a successor trustee and/or the lack of proof of ownership of the note where these claims lacked legal and factual plausibility; because Arizona law countenances the trustee sale as conducted, plaintiffs failed to allege any plausible claims premised on the PEB Report or the UCC; plaintiffs' constitutional challenges of A.R.S. 33-811(b) were rejected by the court; plaintiffs' fraud and misrepresentation claims were barred by A.R.S. 12-543(3); and denial of leave to amend was within the district court's discretion. Accordingly, the court affirmed the judgment. View "Zadrozny, et al. v. Bank of New York Mellon, et al." on Justia Law

FHFA, the regulator and conservator of Freddie Mac and Fannie Mae (the Enterprises), issued a "directive" preventing the Enterprises from buying mortgages on properties encumbered by liens made under so-called property-assessed clean energy (PACE) programs. Plaintiffs contended that FHFA was acting as a regulator, and not a conservator. As a regulator, plaintiffs contended that FHFA must issue a regulation to effectuate its order. The court concluded that FHFA's decision to cease purchasing mortgages on PACE-encumbered properties was a lawful exercise of its statutory authority as conservator of the Enterprises. Because the courts have no jurisdiction to review such actions, the court vacated the district court's order and dismissed the case. View "County of Sonoma, et al v. FHFA, et al" on Justia Law