Justia Banking Opinion Summaries

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The Ninth Circuit affirmed the district courts' grants of summary judgment in favor of the HOA in an action brought by the Bank, seeking to set aside the HOA's foreclosure sale of real property in Nevada. The district court held that, because the mortgage savings clause in the applicable covenants, conditions, and restrictions (CC&Rs) did not affect the sale, the sale could not be set aside. Therefore, title vested with SFR Investments, the purchaser at the HOA sale.The panel predicted that the Nevada Supreme Court would adhere to its unpublished decisions, and hold that a mortgage-savings clause, by itself, did not constitute unfairness that affects a sale. The panel held that the clause was void as a matter of Nevada law, because it plainly conflicted with Nev. Rev. Stat. 116.3116(2), which required liens for unpaid assessments to have superpriority status, and Nev. Rev. Stat. 116.1104, which provided that the priorities cannot be modified by agreement. The panel also held that the mortgage-savings clause was void under the terms of the CC&Rs themselves. The panel explained that the Bank did not introduce any evidence whatsoever in this case that the mortgage-savings clause affected this sale. The panel rejected the Bank's remaining arguments and concluded that no unfairness arose from the HOA's processing of payments. Finally, the notice at issue did not violate due process. View "U.S. Bank, N.A. v. White Horse Estates Homeowners Ass'n" on Justia Law

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The Supreme Court reversed the judgment of the court of appeals concluding that a refinancing lender's failure to timely foreclose its property lien precluded the lender from seeking recourse from the borrowers' default through equitable subrogation, holding that a lender's forfeit of its lien does not preclude the lender's equitable right to assert a preexisting lien discharged with the proceeds from its loan.After Borrowers defaulted, Lender sought foreclosure of its lien and alternatively sought a judgment declaring its right to foreclosure of the underlying liens on the property through equitable subrogation. The trial court declared that Lender's lien was unenforceable. The court of appeals affirmed, thus rejecting Lender's assertion of an equitable right to enforce the liens. After the court of appeals issued its opinion, the Supreme Court decided Fed. Home Loan Mortgage Corp. v. Zepeda, 601 S.W.3d 763 (Tex. 2020). The Supreme Court reversed the portion of the judgment declaring Lender's equitable subrogation rights unenforceable, holding that the Court's opinion in Zepeda required reversal. View "PNC Mortgage v. Howard" on Justia Law

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The overarching issue here presented for the Tenth Circuit's review centered on whether the economic-loss rule prevented use of tort remedies for a lender’s failure to carry out its promises. The claims grew out of Plaintiff-appellant Mary Mayotte’s mortgage with U.S. Bank, which used Wells Fargo to service the loan. Mayotte sought modification of the loan and alleged that Wells Fargo had agreed to modify her loan if she withheld three payments. Based on this alleged understanding, Mayotte withheld three payments. But Wells Fargo denied agreeing to modify the loan, and U.S. Bank eventually foreclosed. The foreclosure spurred Mayotte to sue U.S. Bank and Wells Fargo, asserting statutory claims (violation of the Colorado Consumer Protection Act), tort claims (negligence, negligent supervision, and negligent hiring), and a claim for a declaratory judgment. The district court granted summary judgment to U.S. Bank and Wells Fargo, relying in part on the economic-loss rule and Mayotte’s failure to present evidence of compensatory damages. The district court ultimately entered judgment in favor of defendants-lenders, rejecting Mayotte's effort to recover tort remedies for wrongful conduct consisting solely of alleged contractual breaches. To this, the Tenth Circuit agreed with the district court and affirmed judgment. View "Mayotte v. U.S. Bank" on Justia Law

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Wilmington Trust financed construction projects. Extensions were commonplace. Wilmington’s loan documents reserved its right to “renew or extend (repeatedly and for any length of time) this loan . . . without the consent of or notice to anyone.” Wilmington’s internal policy did not classify all mature loans with unpaid principals as past due if the loans were in the process of renewal and interest payments were current, Following the 2008 "Great Recession," Wilmington excluded some of the loans from those it reported as “past due” to the Securities and Exchange Commission and the Federal Reserve. Wilmington’s executives maintained that, under a reasonable interpretation of the reporting requirements, the exclusion of the loans from the “past due” classification was proper. The district court denied their requests to introduce evidence concerning or instruct the jury about that alternative interpretation. The jury found the reporting constituted “false statements” under 18 U.S.C. 1001 and 15 U.S.C. 78m, and convicted the executives.The Third Circuit reversed in part. To prove falsity beyond a reasonable doubt in this situation, the government must prove either that its interpretation of the reporting requirement is the only objectively reasonable interpretation or that the defendant’s statement was also false under the alternative, objectively reasonable interpretation. The court vacated and remanded the conspiracy and securities fraud convictions, which were charged in the alternative on an independent theory of liability, View "United States v. Harra" on Justia Law

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SE Property Holdings, LLC ("SEPH"), the successor by merger to Vision Bank, and FNB Bank ("FNB") separately appealed a circuit court's judgments on their breach-of-contract claims against Bama Bayou, LLC, formerly known as Riverwalk, LLC ("Bama Bayou"), and Marine Park, LLC ("Marine Park"), and the individuals and entities guaranteeing Bama Bayou's and Marine Park's contract obligations, challenging the trial court's damages awards. Bama Bayou and Marine Park were the developers of a planned mixed-use development in Orange Beach consisting of a marine park, residential condominiums, retail shops, hotels, and commercial entertainment venues. Marine Park specifically intended to develop a special-use facility for the exhibition of marine animals. Vision Bank made four loans to Bama Bayou and Marine Park related to the development project. The Marine Park loan was fully funded by FNB pursuant to a participation agreement with Vision Bank. The participation agreement provided that the Marine Park parcel would be owned by FNB in the event it was acquired by foreclosure. Bama Bayou and Marine Park were having financial problems with regard to the project by August 2007. Vision Bank demanded payment at that time, and Bama Bayou, Marine Park, and the guarantors failed and/or refused to pay the indebtedness owed on the loans. In 2009, Vision Bank conducted a public auction to separately foreclose the mortgages. No bids were submitted; Vision Bank purchased the properties. Neither Bama Bayou, nor Marine Park, nor the guarantors exercised their rights to redeem the properties. Vision Bank sued Bama Bayou and its guarantors, and Marine Park and its guarantors for amounts owed under those loans, including all principal, accrued interest, late charges, attorney's fees and collection costs. After review, the Alabama Supreme Court reversed the trial court's judgments in these consolidated cases and remanded for a determination of the appropriate awards on the breach-of-contract claims. "Such awards should account for all accrued interest, late charges, attorney's fees, collection costs, and property- preservation expenses owed." View "FNB Bank v. Marine Park, LLC, et al." on Justia Law

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The Supreme Court concluded that a unilateral attorney's fee provision in a note and mortgage was made reciprocal to a borrower under Fla. Stat. 57.105(7) where the borrower prevailed in a foreclosure action in which the plaintiff bank established standing to enforce the note and mortgage at the time of trial but not at the time suit was filed, holding that the statutory conditions were met.The Fourth District Court of Appeal held that a borrower who successfully argues that the bank lacked standing at the time suit was filed could not rely on the contract to obtain attorney's fees under section 57.105(7). The Supreme Court reversed, holding that the borrowers were eligible to recover reciprocal fees under the statute because the conditions in the statute's two clauses were satisfied here. View "Page v. Deutsche Bank Trust Company Americas" on Justia Law

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The Supreme Court affirmed the district court's judgment dismissing this case on the pleadings, except for slander of title, holding that slander of title was adequately alleged.Debtor brought this case against Bank, alleging breach of contract, breach of the implied duties of good faith and fair dealing, fraud, and slander of title. The district court granted Bank's motion to dismiss, ruling that the contract and fraud claims were time-barred, rejecting Debtor's discovery rule and equitable estoppel arguments, and concluding that the slander of title claim failed to allege publication to a third party. The court of appeals reversed and reinstated all claims. The Supreme Court vacated the decision of the court of appeals in part and affirmed the district court's judgment except as to the slander of title claim, holding (1) the contract, good faith, and fraud claims were time-barred, and the equitable estoppel argument failed as a matter of law; and (2) the slander of title claim was adequately alleged. View "Benskin, Inc. v. West Bank" on Justia Law

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In 1971, Perna was hired by Health One, a federally-insured, Michigan-chartered credit union. Perna signed an employment agreement with an arbitration clause; it was set to expire in 2015. In 2014, the state concluded that Health One was operating in an “unsafe and unsound condition. The federal National Credit Union Administration Board was appointed as Health One’s liquidator and terminated Perna’s employment, 12 U.S.C. 1787(c)(1). The Board sold Health One’s assets.Perna sought unpaid benefits. The Michigan Department of Licensing and Regulatory Affairs dismissed Perna’s claim, citing the arbitration clause. Perna then submitted a claim to the Board under the claims-processing rules that apply when the Board acts as a credit union’s liquidating agent. 12 U.S.C. 1787(b)(5). The Board denied his claim as untimely under its notice to creditors. In 2018, Perna filed a claim for unpaid wages with the American Arbitration Association. Health One and the National Credit Union Administration refused to participate. The arbitrator found that Perna's firing was “without cause” and awarded him $315,645.02 but found that this decision could bind only Health One, not the Administration.Perna sued Health One and the Administration, seeking to confirm the award and make the Administration subject to it. The Sixth Circuit affirmed summary judgment in favor of the defendants. The Federal Credit Union Act provides that “no court shall have jurisdiction over” claims against covered credit unions asserted outside its exclusive framework, 12 U.S.C. 1787(b)(13)(D). View "Perna v. Health One Credit Union" on Justia Law

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The Supreme Court affirmed the judgment of the superior court in favor of Plaintiff, Bank of America, in this consolidated appeal, holding that the hearing justice did not err.Defendants were the sole principles of an LLC. The LLC executed a promissory note to Plaintiff secured by a first-position mortgage on the property. On the same day, Defendants executed a guaranty of the loan agreement. When the LLC failed to pay the note, Plaintiff filed complaints in Connecticut Superior Court and in Rhode Island Superior Court seeking to foreclose on the property and arguing that Defendants were jointly and severally liable for the indebtedness due under their guaranty. In both actions, final judgment was entered in favor of Plaintiff. The Supreme Court affirmed, holding that the hearing justice did not err when he (1) granted Plaintiff's motion for partial summary judgment as to Defendants' liability on the guaranty; (2) found that Defendants were bound by the Connecticut Superior Court's deficiency calculation; and (3) denied Defendant's motion to amend his answer without holding a hearing. View "Bank of America, N.A. v. Fay" on Justia Law

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The First Circuit affirmed the judgment of the district court granting JPMorgan Chase Bank's (Chase) motion to dismiss Mark and Beth Thompson's action for breach of contract and for violating the statutory power of sale Massachusetts affords mortgagees, holding that the foreclosure sale was not void.The Thompsons alleged that Chase failed to comply with the notice requirements in their mortgage before foreclosing on their property. The mortgage terms for which Massachusetts courts demand strict compliance include the provisions in paragraph 22 of the mortgage requiring and prescribing the pre-foreclosure default notice. The Thompsons argued that because paragraph 19 of the mortgage included conditions and time limitations on the Thompsons' post-acceleration reinstatement right, Chase failed to strictly comply with paragraph 22's notice requirement by failing to inform the Thompsons of those conditions and limitations. The district court dismissed the case for failure to state a claim. The First Circuit held that the paragraph 22 notice the Thompsons received was potentially deceptive and, therefore, the foreclosure sale was void. The Court then withdrew its decision and certified a question to the Massachusetts Supreme Judicial Court (SJC). Because the SJC held that the paragraph 22 notice could not have been misleading for omitting paragraph 19's deadline, the First Circuit affirmed the judgment of the district court. View "Thompson v. JPMorgan Chase Bank, N.A." on Justia Law