Justia Banking Opinion Summaries

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TD Bank, National Association and TD Bank US Holding Company (collectively, "TD Bank") petitioned the Alabama Supreme Court for a writ of mandamus to direct the circuit court to dismiss claims filed against them by Bolaji Kukoyi and Dynamic Civil Solutions, Inc., on the basis of a lack of personal jurisdiction. In January 2017, Kukoyi retained Jessyca McKnight, a real-estate agent and broker employed with A Prime Location, Inc., d/b/a A Prime Real Estate Location ("Prime"), to assist him in purchasing a house. Kukoyi made an offer on a house, the offer was accepted, and the closing was scheduled to take place at attorney David Condon's office in Birmingham. Before the closing date, McKnight and Prime received an e-mail purportedly from Condon's paralegal instructing Kukoyi to wire funds for the closing costs one week before the closing date to an account at a TD Bank location in Florida. According to Kukoyi, he questioned the instructions but was assured by McKnight and Prime that wiring the funds was necessary for the closing to go forward. Kukoyi initiated a wire transfer in the amount of $125,652.74 from an account he owned jointly with Dynamic Civil Solutions with ServisFirst Bank ("ServisFirst") to the account at TD Bank as instructed in the e-mail McKnight and Prime had forwarded to Kukoyi. Unbeknownst to plaintiffs, the account to which Kukoyi wired the funds had been opened by a company known as Ozoria Global, Inc. ServisFirst discovered that the wire transfer was fraudulent and had not been completely processed. Kukoyi requested that ServisFirst put a stop-payment on the wire transfer, and ServisFirst advised TD Bank that the transfer had been fraudulent and requested that TD Bank reverse the transfer. In late 2017, plaintiffs sued, asserting various causes of action against TD Bank and other defendants in relation to the wire transfer. By March 2019, TD Bank filed a motion to dismiss the claims against it based on a lack of personal jurisdiction. The Alabama Supreme Court determined TD Bank demonstrated that it had a clear legal right to mandamus relief, and granted the writ. The trial court was directed to grant TD Bank's motion to dismiss. View "Ex parte TD Bank US Holding Company" on Justia Law

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In a prior dispute between plaintiff and her lender, Feddie Mac, the Fifth Circuit certified to the Supreme Court of Texas the following question: "Is a lender entitled to equitable subrogation, where it failed to correct a curable constitutional defect in the loan documents under section 50 of the Texas Constitution?" The Texas Supreme Court answered in the affirmative. In light of the Texas Supreme Court's answer, the court reversed the district court's holding to the contrary and remanded for further proceedings. View "Zepeda v. Federal Home Loan Mortgage Corp." on Justia Law

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The Supreme Judicial Court affirmed the judgment of a single justice of the court denying Petitioner's complaint for relief in the nature of mandamus and for extraordinary relief under Mass. Gen. Laws ch. 211, 3, holding that the single justice did not err or abuse her discretion in denying relief. On March 31, 2017, judgment entered against Petitioner in the underlying superior court case. Petitioner filed a motion to vacate the judgment. After the motion to vacate was denied Petitioner filed a motion for reconsideration and a motion to recuse. Both motions were denied. Petitioner then filed her complaint for relief in the nature of mandamus and for extraordinary relief pursuant to Mass. Gen. Laws ch. 211, 3. The single justice denied relief. The Supreme Judicial Court affirmed, holding that where Petitioner had an adequate alternative avenue to obtain the relief sought - an appeal to the Appeals Court - and chose not to pursue that avenue, Petitioner was not entitled to invoke the extraordinary relief set forth in Mass. Gen. Laws ch. 211, 3. View "Harrington v. Deutsche Bank National Trust Co." on Justia Law

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The owner of the unencumbered 25 percent interest in the real property is entitled to a proportionate share of surplus proceeds. The Court of Appeal's conclusion is based on Caito v. United California Bank (1978) 20 Cal.3d 694. The court held that the 1990 enactment of Civil Code section 2924k did not change the principles set forth in Caito. Applying this principle about the rights of junior lienors to the undisputed facts of this case, the court held that the creditor holding the second deed of trust encumbering an undivided 75 percent interest in the real property was entitled only to a 75 percent share of the surplus funds. The court held that the remaining 25 percent must be distributed to the person who owned the interest that was not encumbered by the second deed of trust. Accordingly, the court reversed the trial court's judgment. View "Zieve, Brodnax & Steele, LLP v. Dhindsa" on Justia Law

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Plaintiffs filed two pre-foreclosure actions against MERS and the banks holding their mortages, challenging their authority to foreclose on plaintiffs' properties. The Ninth Circuit affirmed the district courts' dismissal of the complaints for failure to state plausible claims for relief under California law. The panel followed the decisions of the California appellate courts in holding that California law does not permit preemptive actions to challenge a party's authority to pursue foreclosure before a foreclosure has taken place. The panel held that plaintiffs' pre-foreclosure judicial actions preemptively challenging the banks' authority to foreclose on the their properties in the future are not viable under California law. The panel also held that the district court did not abuse its discretion by denying plaintiffs leave to amend where the proposed amendments would not have changed the determination. View "Perez v. Mortgage Electronic Registration Systems, Inc." on Justia Law

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Freelance bookkeeper Elizabeth Mulder perpetrated a nearly five-year fraud against her client, plaintiff Kurtz-Ahlers. Both Kurtz-Ahlers and Mulder coincidentally had their checking accounts at defendant Bank of America (the Bank). Mulder ran her scam through her account at the Bank. After discovering the fraud, Kurtz-Ahlers notified the Bank and made a claim for its losses. The Bank denied the claim and Kurtz-Ahlers sued the Bank for negligence. After a two-week jury trial, the trial court granted the Bank’s motion for nonsuit, essentially holding the Bank owed Kurtz-Ahlers no duty to investigate or monitor Mulder’s account. Finding no reversible error in that conclusion, the Court of Appeal affirmed. View "Kurtz-Ahlers, LLC v. Bank of America N.A." on Justia Law

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Brad Dupree sued PeoplesSouth Bank ("PeoplesSouth"), alleging that PeoplesSouth wrongfully gave the proceeds of a $100,000 certificate of deposit to his father, not him. Jimmy Dupree was Brad's father. In 1993, Jimmy opened the CD at issue here; it was issued in both Brad's and Jimmie's names. Handwritten edits on the CD later reversed the order of the names to "Jimmy Dupree and Brad Dupree" and also replaced Brad's taxpayer ID number with Jimmy's taxpayer ID number. A handwritten note, dated December 1993 on the back of the CD stated "changed order of names to report interest under Jimmy's SS#." No evidence was offered as to who made the handwritten changes, and they were not initialed by either Jimmy or Brad. Brad was a minor at the time the CD was issued and did not contribute any money to the purchase of the CD. In November 2010, before filing this case, Brad, his mother, and his stepbrother sued Jimmy alleging Jimmy had wrongfully converted certain personal property, including the CD. In 2012, while the 2010 action was pending, Jimmy cashed the CD without notifying Brad. PeoplesSouth issued a cashier's check payable to the order of "Jimmy Dupree or Brad Dupree" for the amount of the CD less amounts set off by PeoplesSouth related to Jimmy's business loan. Jimmy cashed the check and then spent the funds. Brad learned during mediation of the 2010 action that Jimmy had cashed in the CD and was advised by the mediator to sue PeoplesSouth. The circuit court entered judgment in favor of the bank. Brad appealed, arguing he should have won on his breach-of-contract claim and awarded $100,000 in damages. The Alabama Supreme Court determined that without any rights in the CD by virtue of an inter vivos gift, Brad could not show he was damaged by PeoplesSouth's alleged nonperformance, and he was therefore unable to prevail on his breach-of-contract claim. Judgment in favor of the bank was affirmed. View "Brad Dupree v. PeoplesSouth Bank" on Justia Law

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Pentagon Federal Credit Union ("PenFed") appealed a circuit court judgment entered in favor of Susan McMahan. McMahan and her husband purchased property in Loxley, Alabama in 2005. The purchase mortgage was provided by Wells Fargo bank, and a second mortgage was granted in favor of PenFed. In pertinent part, the PenFed mortgage stated "At no time shall this mortgage, not including sums advanced to protect the security of this mortgage, exceed $55,000.00. ... [PenFed] shall be subrogated to the rights of the holder of any previous lien, security interest, or encumbrance discharged with funds advanced by [PenFed] regardless of whether these liens, security interests or other encumbrances have been released of record." In 2014, the McMahans filed for Chapter 13 bankruptcy protection, listing both the Wells Fargo and PenFed mortgages. Both Wells Fargo and PenFed ultimately foreclosed on the mortgages. The McMahans' bankruptcy case was dismissed in late 2015. The Wells Fargo debt/lien and the PenFed debt were not discharged in the bankruptcy proceedings. PenFed filed suit against Wells Fargo to quiet title as the first lien holder to the McMahan property by virtue of the PenFed mortgage, the foreclosure deed, and the erroneous legal description in the Wells Fargo mortgage. PenFed did not notify or make McMahan a party to that lawsuit. That lawsuit was never tried to conclusion but was settled, and PenFed paid Wells Fargo $91,256.54 to satisfy the [Wells Fargo] note and in exchange for a cancellation and release of the Wells Fargo mortgage. PenFed did not acquire the right to enforce the Wells Fargo note and/or mortgage. Within one year of the foreclosure, PenFed sold the property, leaving the McMahans with a deficiency balance of $14,433.41. PenFed's calculation of the post-foreclosure-sale surplus proceeds excluded the $91,256.54 that PenFed paid to Wells Fargo to satisfy the Wells Fargo note and cancel the Wells Fargo mortgage. In 2018, McMahan sued PenFed, alleging PenFed's sale of the property to third-party purchasers created excess proceeds greater than what PenFed was entitled to received under the original note. The circuit court concluded PenFed could not exclude the surplus proceeds it paid to Wells Fargo to settle the Wells Fargo mortgage. The Alabama Supreme Court concluded the circuit court erred in characterizing the doctrine of unjust enrichment as an affirmative defense. Accordingly, PenFed did not waive the defense of unjust enrichment by failing to plead it in its responsive pleadings. Instead, PenFed raised the argument to the circuit court at trial and in its trial brief; the argument was properly before the circuit court. Judgment was reversed for further consideration of the merits of PenFed's unjust-enrichment argument. View "Pentagon Federal Credit Union v. McMahan" on Justia Law

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The Bateses lost their condominium through a nonjudicial foreclosure. They claim the condo complex’s management company and its law firm violated the Fair Debt Collection Practices Act, which generally defines “debt collectors” to cover parties who operate a “business the principal purpose of which is the collection of any debts” or who “regularly collect[] or attempt[] to collect” debts owed another, 15 U.S.C. 1692a(6). The Act contains a separate debt-collector definition for subsection 1692f(6), regulating parties who operate a “business the principal purpose of which is the enforcement of security interests.” General debt collectors must comply with all of the Act’s protections; security-interest enforcers need only comply with section 1692f(6). In 2019, the Supreme Court held (Obduskey) that parties who assist creditors with the nonjudicial foreclosure of a home fall within the separate definition, not the general one. Obduskey left open the possibility that these parties might engage in “other conduct” that would transform them from security interest enforcers into general debt collectors, subject to all of the Act’s regulations. The Sixth Circuit affirmed a judgment on the pleadings for the defendants. The Bateses’ complaint did not plead enough facts to take the defendants outside the separate definition for security-interest enforcers and bring them within the general debt-collector definition; there were almost no well-pleaded allegations about the principal business or regular activities of either. View "Bates v. Green Farms Condominium Association" on Justia Law

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The Ninth Circuit certified to the Nevada Supreme Court the following questions: (1) When a lienholder whose lien arises from a mortgage for the purchase of a property brings a claim seeking a declaratory judgment that the lien was not extinguished by a subsequent foreclosure sale of the property, is that claim exempt from statute of limitations under City of Fernley v. Nevada Department of Taxation, 366 P.3d 699 (Nev. 2016)? (2) If the claim described in (1) is subject to a statute of limitations: (a) Which limitations period applies? (b) What causes the limitations period to begin to run? View "U.S. Bank, N.A. v. Thunder Properties, Inc." on Justia Law