In "Vinings Bank v. Brasfield & Gorrie, LLC," (759 SE2d 886 (2014)), the Court of Appeals affirmed, among other rulings, the trial court’s determination that Vinings Bank was not entitled to summary judgment with regard to a counterclaim for conversion brought against the Bank by Brasfield & Gorrie, LLC ("B&G"). This case stemmed from a defaulted $1.4 million business loan. The bank made the loan to Wagner Enterprises, Inc., which used as collateral, a security interest in all of its accounts and accounts receivable, including Wagner's contract to provide drywall services for general contractor B&G. Wagner defaulted on the loan, and the Bank filed suit against B&G seeking to collect on Wagner's accounts receivable. B&G counterclaimed for conversion, and the parties filed cross-motions for summary judgment. The bank appealed the denial of its motion. The Supreme Court affirmed in part, reversed in part, and remanded. In affirming the trial court's judgment, the Court of Appeals did not consider whether B&G had any right to assert a counterclaim against the bank for conversion of funds due to Wagner's subcontractors. The Supreme Court found that B&G had no direct relationship with the Bank, B&G was not, itself, a subcontractor of Wagner entitled to any of Wagner's funds, B&G did not have direct contractual relationships with any of Wagner's subcontractors, and B&G had no fiduciary relationship with any of Wagner's subcontractors. Furthermore, there was no evidence that Wagner or Wagner's affected subcontractors assigned B&G any of their rights. "Therefore, even if we assume without deciding that funds in [Wagner's] account were held in a constructive trust for the benefit of [Wagner's] subcontractors, B&G is not the party to assert those rights and had no standing to do so." View "Vinings Bank v. Brasfield & Gorrie, LLC" on Justia Law

Under Nev. Rev. Stat. 104.4406, a customer generally must exercise reasonable promptness in examining a bank statement and within thirty days notify the bank of any unauthorized transactions. Plaintiff, a law firm, sued Bank of America after discovering that the firm’s employee had used unauthorized signatures to withdraw funds from the firm’s operating account with the bank. The district court granted summary judgment in favor of Bank of America, concluding that all claims were time-barred under section 104.4406 because there was no dispute that the bank statements received by the firm were sufficient to notify it of the unauthorized activity on the firm’s account. The Supreme Court reversed, holding (1) genuine issues of material fact remained as to the delivery method of the bank statements, the content of online and received-in-branch statements, and Bank of America’s exercise of due care in paying certain unauthorized transactions; and (2) unauthorized account transactions that occur within the one-year period before the customer gives notice to the bank are not time-barred under section 104.4406(6)’s one-year period of repose because the statute does not differentiate between a single forgery and multiple forgeries by the same wrongdoer, and therefore, the one-year period of repose begins to run with each successive forgery. View "C. Nicholas Pereos, Ltd. v. Bank of Am." on Justia Law

The Butte Local Development Corporation (BLDC) filed a complaint against Masters Group International alleging that Masters had failed to pay its obligations under a loan agreement, as modified. Masters filed a third-party complaint against Comerica Bank, alleging, among other claims, that Comerica breached a Forbearance Agreement. A jury found Masters liable to BLDC for $275,251 and found Comerica liable to Masters for a total of $52,037,593, which included punitive damages. The Supreme Court reversed the judgment against Comerica, holding (1) the district court did not abuse its discretion by implicitly denying Comerica’s severance motion; (2) the district court erred in applying Montana law despite the existence of a contractual Michigan choice-of-law provision, and had the district court properly applied Michigan law, Masters’ tort claims would not have been permitted to go to the jury as stand-alone tort claims, and the jury’s award of $10.5 million in punitive damages must be vacated; (3) the law of both Montana and Michigan supports the district court’s decision to submit the companion questions of contract formation and waiver to the jury; and (4) the district court abused its discretion by allowing Troubled Asset Relief Program (TARP) evidence to be presented to the jury. Remanded for a new trial on the contract claims applying Michigan law. View "Masters Group Int’l v. Comerica Bank" on Justia Law

At issue in this case was the correct interpretation of two different state statutes concerning defects in real estate titles. A Chapter 7 bankruptcy trustee filed this action to avoid a mortgage held by a bank that contained a material defect: the certificate of acknowledgement did not include the names of the mortgagors. After the mortgage was recorded, the notary on the mortgage executed an affidavit, later recorded, attesting that the debtors had personally and voluntarily signed the mortgage. The debtors later went into bankruptcy. At issue in this case was whether, under Massachusetts law, the affidavit could cure the defective acknowledgement or otherwise provide constructive notice to a bona fide purchaser. If not, the bankruptcy trustee could avoid the mortgage. Because the state law questions were dispositive and unresolved by the Massachusetts Supreme Judicial Court (SJC), the First Circuit certified the questions for resolution by the Massachusetts SJC. View "Bank of America, N.A. v. Casey" on Justia Law

The Federal National Mortgage Association (“FNMA”) purchased Russell Hafer’s home at a non-judicial foreclosure sale. FNMA filed an eviction suit when Russell and his wife, Sandra, refused to vacate. The Hafers claimed that the foreclosure sale was invalid because their loan servicer, American Home Mortgage Services, Inc.(now known as Homeward Residential, Inc.), agreed to modify the terms of Russell’s loan just prior to instituting foreclosure proceedings. They claimed that Russell was therefore not in default at the time of the sale. The Hafers filed a third-party complaint against Homeward, stating eleven causes of action and asking the district court to quiet title in Russell. FNMA and Homeward filed a joint motion for summary judgment, arguing that there was no agreement to modify the loan terms because Russell did not sign and return a permanent loan modification agreement to Homeward by the specified deadline. The district court granted the motion in favor of FNMA and partially granted the motion in favor of Homeward, holding that there was no agreement between Homeward and Russell modifying Russell’s loan because no Homeward representative signed an agreement. The Hafers appealed, arguing: (1) the district court erred in considering the question whether an agreement had to be signed by a Homeward representative when that issue was not raised in the joint motion for summary judgment; and (2) that the district court erred substantively in concluding that there was no agreement to modify Russell’s loan absent a signature from a Homeward representative. Upon review, the Supreme Court concluded that the district court erred in dismissing the Hafers' first, third, and fourth causes of action against Homeward, as well as granting FNMA's claim for possession. The case was remanded for further proceedings. View "Federal National Mortgage Association v. Hafer" on Justia Law

Respondents, three married couples, obtained home equity lines of credit from Petitioners, a bank and its loan officer. Approximately four years later, Petitioners filed a putative class action alleging that these transactions were part of an elaborate “buy-first-sell-later” mortgage fraud arrangement carried out by Petitioners and other defendants. Petitioners alleged numerous causes of action, including fraud, conspiracy, and violations of Maryland consumer protection statutes. The circuit court granted summary judgment for Petitioners, concluding that the statute of limitations barred several of Respondents’ claims and that no Petitioner violated the Maryland Secondary Mortgage Loan Law as a matter of law. The Court of Special Appeals reversed. The Court of Appeals reversed, holding that the Court of Special Appeals (1) erred in concluding that Respondents stated a claim upon which relief could be granted under the Maryland Secondary Mortgage Loan Law; and (2) erred in concluding that it was a question of fact to be decided by the jury as to whether Respondents’ claims against Petitioners were barred by the relevant statute of limitations. View "Windesheim v. Larocca" on Justia Law

Plaintiffs filed suit against Ocwen after their lender's purchase of their residence at a nonjudicial foreclosure sale, alleging that Ocwen violated Civil Code section 2923.6, the prohibition on "dual tracking" contained in the Homeowners Bill of Rights, when it conducted a foreclosure sale of plaintiffs' property while their loan modification application was pending. The trial court sustained Ocwen’s demurrer. However, the court concluded that by alleging the submission of the loan modification application three days after receipt of the Offer Letter, and the transmittal of the additional documents requested by Ocwen on the date of request, plaintiffs have sufficiently alleged that a complete loan modification application was pending at the time Ocwen foreclosed on their home in violation of section 2923.6. Accordingly, the court reversed the judgment of the trial court. View "Valbuena v. Ocwen Loan Servicing" on Justia Law

This dispute stemmed from a house that Debra Stevenson and her son Eugene Smith both own. After Stevenson refinanced her mortgage twice and then filed for bankruptcy, HSBC filed suit in Bankruptcy Court seeking equitable subrogation, which permits courts to declare that the owner of a mortgage (HSBC) has the same rights as an earlier-in-time owner of another mortgage (Wells Fargo). Only Stevenson signed the paperwork for the second refinancing with HSBC and Smith refused to sign because he thought the interest rate was too high. HSBC went ahead with the mortgage in full without Smith's signature. The court affirmed the Bankruptcy Court's conclusion that HSBC is entitled to equitable subrogation and rejected Stevenson and Smith’s claims that the mortgage is invalid under D.C. and federal lending laws. The court affirmed the judgment. View "In Re: Debra M. Stevenson" on Justia Law

In 2004, CashCall, a licensed lender, issued Montgomery a consumer credit account. In 2011, CashCall sold that debt to GCFS for collection. In 2012, GCFS sold the debt to Mountain Lion. Neither GCFS nor Mountain Lion is a licensed finance lender under the Finance Lenders Law. These entities are also not institutional investors within the meaning of section 22340. Mountain Lion subsequently sued Montgomery for payment on the debt. Montgomery filed a cross-complaint challenging the validity of her debt under Financial Code section 22340(a), which provides that “A licensee may sell promissory notes evidencing the obligation to repay loans made by the licensee pursuant to this division or evidencing the obligation to repay loans purchased from and made by another licensee pursuant to this division to institutional investors, and may make agreements with institutional investors for the collection of payments or the performance of services with respect to those notes.” The court of appeal affirmed dismissal of her cross-complaint. The legislative history indicates no intent to prohibit the sale of debt to noninstitutional investors. View "Montgomery v. GCFS, Inc." on Justia Law

Claiming that they were uncertain as to which entity held an enforceable mortgage on their home, Plaintiffs brought actions against numerous potential mortgagees, seeking “interim relief,” “quieting of title,” and “credit reporting.” The district court granted Defendants’ motions to dismiss for failure to state a claim. The First Circuit affirmed but for different reasons than those stated by the district court, holding that because Plaintiff relinquished legal title to the property and because Plaintiff’s assertions respecting uncertainty over the mortgage speak solely to the legal title and not to her equitable interest in the property, there was not the requisite adversity to cloud her claim of equitable title as required by the quiet title statute. View "Lister v. Bank of America, N.A." on Justia Law