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Defendant-borrowers Skip and Paris Watts appealed the trial court’s summary judgment decision in favor of plaintiff-lender Deutsche Bank National Trust Company in this mortgage foreclosure action. They argued that the trial court erred by finding that a dismissal with prejudice under Vermont Rule of Civil Procedure 41(b) was not an adjudication on the merits given preclusive effect in a foreclosure action. Lender argues in response that earlier decisions of this Court that gave preclusive effect to the dismissal of foreclosure actions should be applied only prospectively and not to this case. Defendants entered into the mortgage at issue here in 2006. They failed to make payments in 2008. The lender accelerated payments and called for the note in late 2008. Foreclosure proceedings were initiated, and publication by service was completed in early 2010. Borrowrs did not file an answer to the complaint. The case sat for approximately one year; the trial court dismissed the case in July 2011. Following the dismissal, the borrowers attempted to find a solution that would allow the borrowers to resume payments. The Lender then filed suit again in 2013, alleging the borrowers defaulted on the 2008 promissory note. Borrowers answered the complaint, arguing that the 2013 action was precluded by res judicata by the 2009 action. The trial court granted lender’s motion, applying equitable principles to find that the 2011 dismissal was not a preclusive adjudication on the merits but that lender was entitled to recover interest only if it was due after the date of lender’s first, 2009, complaint against borrowers. The Vermont Supreme Court reversed, finding that the lender did not advance a new default theory by refiling its 2009 case in 2013. Therefore, its claims were precluded by the dismissal of the 2009 case. View "Deutsche Bank National Trust Co. v. Watts" on Justia Law

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Reid founded Capitol, which owned commmunity banks, and served as its chairman and CEO. His daughter and her husband served as president and general counsel. Capitol accepted Federal Reserve oversight in 2009. In 2012, Capitol sought Chapter 11 bankruptcy reorganization and became a “debtor in possession.” In 2013, Capitol decided to liquidate and submitted proposals that released its executives from liability. The creditors’ committee objected and unsuccessfully sought derivative standing to sue the Reids for breach of their fiduciary duties. The Reids and the creditors continued negotiation. In 2014, they agreed to a liquidation plan that required Capitol to assign its legal claims to a Liquidating Trust; the Reids would have no liability for any conduct after the bankruptcy filing and their pre-petition liability was limited to insurance recovery. Capitol had a management liability insurance policy, purchased about a year before it filed the bankruptcy petition. The liquidation plan required the Reids to sue the insurer if it denied coverage. The policy excluded from coverage “any claim made against an Insured . . . by, on behalf of, or in the name or right of, the Company or any Insured,” except for derivative suits by independent shareholders and employment claims (insured-versus-insured exclusion). The Liquidation Trustee sued the Reids for $18.8 million and notified the insurer. The Sixth Circuit affirmed a declaratory judgment that the insurer had no obligation with respect to the lawsuit, which fell within the insured-versus-insured exclusion. View "Indian Harbor Insurance Co. v. Zucker" on Justia Law

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Plaintiffs filed suit against several financial entities for foreclosing on a mortgage loan. The district court granted summary judgment for defendants. At issue were plaintiffs' claims under the Missouri Merchandising Practices Act (MMPA), Mo. Rev. Stat. 407.020. The court affirmed and held that the foreclosure was justified because defendants had a right to foreclose on the house and thus the MMPA claim failed as a matter of law because the loss was not caused by any misconduct on behalf of defendants. Likewise, plaintiffs' tortious interference claim failed because the foreclosure was legal. View "Wheatley v. JP Morgan Chase Bank" on Justia Law

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The district court did not err in holding that plaintiffs Stanley and Zinaida Pohl were precluded from asserting a claim to rescind the foreclosure sale of their home, based on their lender’s alleged violations of the Truth in Lending Act (TILA). In May 2007 the Pohls refinanced the loan on their Denver home, securing the loan with a deed of trust. In 2008 they ran into financial difficulties, however, and in 2009 they went into default on the loan. In March 2010, believing that their lender had failed to make TILA-required disclosures, the Pohls delivered a notice of intent to rescind the loan. The lender responded that it would “exercise all appropriate remedies under the promissory note and security instrument in the event of the Borrower’s default.” In June 2011 the deed of trust was assigned to U.S. Bank, as trustee for a certain mortgage loan trust, and in July 2011 U.S. Bank commenced foreclosure proceedings. The Pohls promptly filed for Chapter 7 bankruptcy. In November 2011 the bankruptcy court granted U.S. Bank’s motion to lift the automatic stay as to the property so it could continue the foreclosure proceedings. It also granted the Pohls a discharge. In August 2012 the Pohls and a third party filed in Colorado state court a “Complaint to Quiet Title" alleging they had tendered a valid instrument in payment of the note, which U.S. Bank had rejected. U.S. Bank moved for dismissal of that action for failure to state a claim upon which relief could be granted. The state district court granted the motion and dismissed the action. The Pohls’ bankruptcy case was closed in December 2012. The property was sold in a foreclosure sale in January 2013, with U.S. Bank the highest bidder. The Pohls then filed suit that came before the Tenth Circuit Court of Appeals, still seeking to rescind the 2013 foreclosure in light of the 2010 notice of their intent to rescind to loan. The Pohls' motion was denied, with the district court finding the Pohls' claims were precluded because they could have used the state litigation to challenge the lender's failure to follow the TILA recission process. The Tenth Circuit found no error in that judgment, and affirmed. View "Pohl v. US Bank" on Justia Law

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This case arose from an allegedly forged home-equity loan. Plaintiff sued the lenders, bringing several claims, including statutory fraud and violations of the Texas Finance Code and Texas Deceptive Trade Practices Act. The trial court granted summary judgment for the lenders without stating its reasons. The court of appeals affirmed. The Supreme Court affirmed in part and reversed and remanded in part, holding that the court of appeals (1) properly affirmed summary judgment on Plaintiff’s constitutional forfeiture claim; and (2) erred in holding that Plaintiff’s remaining claims were barred on statute of limitations and waiver grounds. View "Kyle v. Strasburger" on Justia Law

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Sue Walters filed a lawsuit against Quicken Loans, Inc., alleging that Quicken Loans violated the “illegal loan” provision of the West Virginia Residential Mortgage Lender, Broker and Servicer Act, W. Va. Code 31-17-8(m)(8), in originating a primary mortgage loan for her. A jury found in favor of Walters and awarded her damages in the amount of $27,000. Walters sued additional defendants - an appraiser and the entity that serviced the loan - with whom she settled. In total, the court offset $59,500 of the $98,000 paid by the settling defendants against the total damages, costs and fees awarded against Quicken Loans. The Supreme Court affirmed in part, reversed in part and remanded, holding that the circuit court (1) did not err in allowing the illegal loan claim to go to the jury, as section 31-17-8(m)(8) applies to a single primary mortgage loan; (2) did not err in ruling that Walters was a prevailing party and thus entitled to an award of fees and costs; (3) erred in offsetting only a portion of the settlement monies received from the settling defendants against the total compensatory damages received by Walters. View "Quicken Loans, Inc. v. Walters" on Justia Law

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A group of hotel-related businesses, as well as investors and guarantors, filed suit alleging claims of fraud against the Royal Bank and two of its subsidiaries. The district court dismissed the claims because plaintiffs had failed to list their cause of action in a schedule of assets in their now-concluded bankruptcy proceeding, they lacked standing to bring the claim, and were barred by judicial estoppel. The claims of the investor and guarantors were dismissed as untimely and barred by the law of the case. The Second Circuit affirmed on the grounds of judicial estoppel and timeliness. The court held that, under Fifth Circuit law, the kind of LIBOR-fraud claim that BPP wanted to assert was "a known cause of action" at the time of confirmation, so that BPP's failure to list it in the schedule of assets was equivalent to a representation that none existed; the bankruptcy court "adopted" BPP's position; and BPP's assertion of the claims now would allow it to enjoy an unfair advantage at the expense of its former creditors. Furthermore, plaintiffs have not shown good cause for an untimely amendment, and the district court properly denied leave to amend. View "BPP Illinois v. Royal Bank of Scotland Group PLC" on Justia Law

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The Fourth Circuit affirmed the bankruptcy court's denial of Wells Fargo's motion to set aside the bankruptcy court's order. Wells Fargo filed the motion two years after the bankruptcy court cancelled its deed of trust covering a piece of real property, and several months after the property was sold in foreclosure to a bona fide purchaser for value. The court held that Wells Fargo failed to carry its burden under FRCP 60(b) by filing its motion within a reasonable time. Even if Wells Fargo did satisfy Rule 60(b)'s threshold requirements, it still did not meet the requirements of that Rule's enumerated sections for relief. View "Wells Fargo Bank, N.A. v. AMH Roman Two NC, LLC" on Justia Law

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Plaintiff filed suit alleging that GCF violated the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., by failing to clearly and conspicuously disclose the annual percentage rate (APR) and finance charge in his Retail Installment and Security Contract. The Eighth Circuit affirmed the district court's denial of plaintiff's motion for judgment as a matter of law where the Summary of Understanding was not completely integrated; the district court thus did not err in admitting parol evidence; and there was sufficient evidence to support GCF's affirmative defense of waiver. The court also affirmed the district court's denial of plaintiff's motion for a new trial where there was no record of what objections plaintiff would have raised had the district court turned on "white noise" during the initial portion of the trial, nor was he prejudiced; even if the district court erred by not sustaining plaintiff's objection to GCF's counsel's statement during closing argument, the statement was not such a magnitude that a new trial was warranted; the court rejected plaintiff's claims of error as to the discretionary evidentiary rulings; and there was no error in the district court's response to a jury question. View "Smiley v. Gary Crossley Ford, Inc." on Justia Law

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This appeal arose from a judicial decree of foreclosure granted in favor of U.S. Bank N.A. (Plaintiff) and against Joseph and Chanelle Meneses (Defendants). The intermediate court of appeals (ICA) affirmed the judgment of the circuit court, concluding that the circuit court properly granted Plaintiff’s motion for summary judgment and decree of foreclosure. Defendants appealed, arguing that Plaintiff lacked standing to foreclose. The Supreme Court vacated the ICA’s judgment on appeal and the circuit court’s order granting Plaintiff's motion for summary judgment and decree of foreclosure, holding (1) there was a genuine issue of material fact as to whether Ocwen Loan Servicing, LLC had the authority to sign a second assignment of mortgage to Plaintiff; and (2) in the judicial foreclosure context, a third party unrelated to a mortgage securitization pooling and servicing agreement lacks standing to enforce an alleged violation of its terms unless the violation renders the mortgage assignment void, rather than voidable. View "U.S. Bank N.A. v. Mattos" on Justia Law