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The Supreme Judicial Court vacated the judgment of the superior court in favor of Matthew Needham on a foreclosure complaint filed by Wilmington Savings Fund Society as Trustee for Hilldale Trust (Wilmington) and remanded the matter for entry of judgment for Wilmington, holding a mortgagee may delegate to an agent its duty to provide a notice of the right to cure pursuant to Me. Rev. Stat. 14, 6111(1). After Needham defaulted on his loan, loan servicer BSI Financial Services sent Needham a notice of the right to cure on behalf of Ventures Trust, the then-holder of the note and mortgage. Thereafter, Ventures Trust filed a foreclosure complaint. Wilmington, which was assigned the mortgage and note, was subsequently substituted as Plaintiff. The trial court entered judgment for Needham, concluding that because the notice was sent by the loan servicer rather than the mortgagee, the notice was insufficient to satisfy the requirements of section 6111. The Supreme Judicial Court disagreed, holding that neither the mortgage contract nor Me. Rev. Stat. 6111(1) prohibited the mortgagee from delegating to an agent loan servicer its duty to give a notice of the right to cure to Needham. View "Wilmington Savings Fund Society, FSB v. Needham" on Justia Law

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This case came to the Georgia Supreme Court by way of three certified questions from the United States Court of Appeals for the Eleventh Circuit. As the receiver of the Buckhead Community Bank, the Federal Deposit Insurance Corporation (FDIC) sued nine former directors and officers of the Bank in federal district court, alleging that the former directors and officers were negligent and grossly negligent under Georgia law for their approval of ten commercial real-estate loans. At the conclusion of the trial, the jury found that some of the former directors and officers were negligent in approving four of ten loans at issue, and awarded the FDIC $4,986,993 in damages. The district court entered a final judgment in that amount and held the former directors and officers jointly and severally liable. They timely appealed to the Eleventh Circuit, arguing the district court erred by failing to instruct the jury on apportionment, which, they say, was required by OCGA 51-12-33 because purely pecuniary harms (such as the losses at issue here) were included within “injury to person or property” under Georgia’s apportionment statute. Concluding that these arguments required answers to questions of law that “have not been squarely answered by the Georgia Supreme Court or the Georgia Court of Appeals,” the Eleventh Circuit certified questions of Georgia law to the Georgia Supreme Court. The Georgia Court concluded OCGA 51-12-33 did apply to tort claims for purely pecuniary losses against bank directors and officers, but did not abrogate Georgia’s common-law rule imposing joint and several liability on tortfeasors who act in concert insofar as a claim of concerted action invokes the narrow and traditional common-law doctrine of concerted action based on a legal theory of mutual agency and thus imputed fault. View "Federal Deposit Insurance Corporation v. Loudermilk" on Justia Law

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The Supreme Court reversed the district court's judgment determining that a foreclosure sale extinguished a bank's deed of trust when an homeowner's association (HOA) agent told a deed of trust beneficiary's agent that it would reject a superpriority tender if made, holding that such a representation excludes the formal requirement of making a formal tender sufficient to preserve the first deed of trust under Bank of America, N.A. v. SFR Investments Pool 1, LLC, 427 P.3d 113 (2018). Here, the HOA told the deed of trust beneficiary that it would reject a superpriority tender if made. The district court ruled that the foreclosure sale extinguished Bank’s deed of trust and that the HOA's offer was insufficient to constitute a tender. The Supreme Court reversed, holding (1) an offer to make a payment at some point in the future cannot constitute a valid tender; (2) a formal tender is excused when the party entitled to payment represents that if a tender is made, it will be rejected; and (3) the deed of trust beneficiary’s agent was excused from making a formal tender in this case, and therefore, the foreclosure sale did not extinguish the first deed of trust. View "Bank of America, N.A. v. Thomas Jessup, LLC Series VII" on Justia Law

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Jatera filed suit against the Bank and SPS in state court, seeking a judgment declaring the lien on the property at issue void because defendants failed to initiate foreclosure proceedings within the four-year statute of limitations. After removal to federal district court, the district court held that the homeowner lacked standing as a plaintiff because she no longer retained an interest in the property. The district court also concluded that detrimental reliance runs to the benefit of the party asserting it, and Jatera had failed to show it detrimentally relied on the acceleration notice. The Fifth Circuit affirmed the district court's denial of Jatera's motion for summary judgment and granted defendants' summary judgment motion. The court held that detrimental reliance was not an exception to the lender's right to unilaterally withdraw an acceleration notice under Texas law. Therefore, in this case, the court need not determine whether there was such reliance, including whether Jatera was assigned the homeowner's detrimental-reliance claim, or whether the homeowner suffered such reliance. View "Jatera Corp. v. US Bank National Assoc." on Justia Law

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In 2006 Trinity borrowed about $2 million from a bank, secured by a mortgage. The bank sold the note and mortgage to ColFin, which relied on Midland to collect the payments. In 2013, Midland recorded a “satisfaction,” stating that the loan had been paid and the mortgage released. The loan was actually still outstanding. Trinity continued paying. In 2015, ColFin realized Midland’s mistake and recorded a document canceling the satisfaction. Trinity stopped paying. ColFin filed a state court foreclosure action. Trinity commenced a bankruptcy proceeding, which stayed the foreclosure, then filed an adversary action against ColFin, contending that the release extinguished the debt and security interest. The bankruptcy court, district court, and Seventh Circuit rejected that argument and an argument that the matter was moot because the property had been sold under the bankruptcy court’s auspices. There is a live controversy about who should get the sale proceeds; 11 U.S.C. 363(m), which protects the validity of the sale, does not address the disposition of the proceeds. Under Illinois law, Trinity did not obtain rights from the 2013 filing, which was unilateral and without consideration; no one (including Trinity) detrimentally relied on the release, so ColFin could rescind it. ColFin caught the problem before Trinity filed its bankruptcy petition, so a hypothetical lien perfected on the date of the bankruptcy would have been junior to ColFin’s interest. View "Trinity 83 Development LLC v. Colfin Midwest Funding LLC" on Justia Law

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The City brought an action against homeowners and their mortgage lender, SunTrust, and sought the appointment of a receiver to undertake the remediation of a public nuisance created by the homeowners on their residential property. Determining that the appeal was not moot, the Court of Appeal held that the trial court did not abuse its discretion in authorizing a super-priority lien to secure the loan taken by the receiver to fund remediation of the homeowners' property. In this case, because neither the homeowners nor SunTrust was willing to fund the costly remediation and the property did not produce any income, the receiver had to borrow money in order to proceed with the remediation. Because no lender would loan money to the receiver unless the loan was secured with a super-priority lien on the property, the only way to effect the remediation was to authorize the receiver's request to issue such a receiver's certificate. The court held that SunTrust's contention that it should remain the senior lienholder—and benefit from the increased property value provided by the remediation while bearing none of the cost—was simply untenable. View "City of Sierra Madre v. SunTrust Mortgage" on Justia Law

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SE Property Holdings, LLC ("SEPH") appealed the grant of summary judgment entered in favor of Bank of Franklin ("BOF") on BOF's claim demanding specific performance of a contractual provision. In March 2005, Vision Bank, a Florida company, loaned Bama Bayou, LLC, formally known as Riverwalk, LLC ("the borrower"), $6,000,000. Multiple individuals allegedly personally guaranteed repayment of the loan ("the guarantors"). In June 2008, pursuant to a "participation agreement," Vision Bank conveyed to BOF a 25 percent interest in the loan. Vision Bank conveyed additional participation interests in the loan to other banks. The borrower and the guarantors allegedly defaulted on their obligations with respect to the loan, and in January 2009 Vision Bank filed suit against them. The borrower and the guarantors asserted counterclaims against Vision Bank and brought BOF into the action as an additional counterclaim defendant. In April 2009, Vision Bank foreclosed on a mortgage securing the loan. Vision Bank was the highest bidder at the foreclosure sale and thereafter executed foreclosure deeds in favor of BOF and the other participating banks. In 2012, Vision Bank sold its operating assets to Centennial Bank and relinquished its Florida bank charter. Vision Bank and SEPH entered into an "agreement and plan of merger," whereby Vision Bank merged "with and into" SEPH. In October 2016, the trial court entered an order setting aside the foreclosure sale and declaring the foreclosure deeds void. Among other things, BOF asserted in its cross-claim that SEPH had an obligation to repurchase BOF's participation interest in the loan. In support, BOF pointed to the participation agreement between BOF and SEPH's predecessor, Vision Bank. The court granted BOF's motion for summary judgment on its claim for specific performance based on the participation agreement. SEPH argued on appeal that the trial court erred in determining that a "proceeding" involving Vision Bank's termination of existence was "commenced," so as to invoke the contractual provision; it asserted Vision Bank's voluntary merger with SEPH was not a "proceeding." The participation agreement in this case stated that BOF's participation interest was conveyed without recourse, but the contract provision provided BOF at least some security in the form of a right to force the repurchase of its participation interest in the event of the financial deterioration of the originating bank, i.e., Vision Bank. The Alabama Supreme Court concluded the voluntary merger like the one entered into by Vision Bank and SEPH is not a "proceeding" as that term is used in the participation agreement, and reversed the trial court's judgment ordering SEPH to purchase BOF's participation interest. View "SE Property Holdings, LLC, f/k/a Vision Bank v. Bank of Franklin" on Justia Law

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The First Circuit reversed the judgment of the district court granting Bank’s motion to dismiss this case alleging that Bank failed to comply with the notice requirements in Plaintiffs’ mortgage before foreclosing on their property, holding that Bank’s failure to strictly comply with paragraph 22 of the mortgage invalidated the foreclosure. Paragraph 22 required that prior to accelerating payment by Plaintiffs, the mortgagee had to provide Plaintiffs with notice specifying certain elements. After Bank sent default and acceleration notices to Plaintiffs Plaintiff failed to cure the default, and Bank conducted a foreclosure sale. Plaintiffs then filed a complaint alleging that Bank failed to comply with the paragraph 22 notice requirements prior to foreclosing on their property. The district court granted Bank’s motion to dismiss for failure to state a claim, concluding that Bank’s default and acceleration notice strictly complied with paragraph 22. The First Circuit disagreed, holding (1) the mortgage terms for which Massachusetts courts demand strict compliance include the provisions in paragraph 22 requiring and prescribing the preforeclosure default notice; and (2) because the default letter omitted certain information that rendered the notice potentially deceptive the Bank violated the strict compliance requirement, thus invalidating the foreclosure. View "Thompson v. JPMorgan Chase Bank, N.A." on Justia Law

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After plaintiff obtained a home equity loan from Countrywide, he filed a pro se complaint alleging five causes of action against Bank of America, the company that acquired Countrywide. The Eighth Circuit affirmed the district court's dismissal of two claims based on Bank of America's failure to honor plaintiff's alleged early payoff right. In this case, plaintiff's claims were barred by the doctrine of res judicata because he had been a member of a global class action settlement that included a broad release of claims by all class members. The court also held that the district court did not abuse its discretion by promptly setting the remaining claims for trial. The court explained that, at minimum, Bank of America failed to establish that the statute of frauds barred these claims as a matter of law on the record. Accordingly, the court affirmed in part, reversed in part, and remanded. View "Calon v. Bank of America Corp." on Justia Law

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Plaintiff filed suit against Propel, alleging violations of the Truth in Lending Act (TILA), the Electronic Funds Transfer Act (EFTA), and the Virginia Consumer Protection Act (VCPA). Plaintiff's action stemmed from a tax payment agreement (TPA) he entered into with Propel under Virginia Code section 58.1-3018. Propel then moved to dismiss the TILA and EFTA claims. The Fourth Circuit affirmed the district court's denial of Propel's motion to dismiss, holding that plaintiff had standing to bring claims under EFTA because the harm that he alleged was a substantive statutory violation that subjected him to the very risks that EFTA, a consumer protection statute, was designed to protect against. The court also held that the TPA was subject to TILA and EFTA because the TPA was a consumer credit transaction. In this case, the TPA was a credit transaction because it provided for third-party financing of a tax obligation. Furthermore, the TPA was a consumer transaction because, as financing of a real property tax debt, it was a voluntary transaction that plaintiff entered into for personal or household purposes. View "Curtis v. Propel Property Tax Funding, LLC" on Justia Law