Justia Banking Opinion Summaries

Brian Cook entered a bank in Roseville, Illinois, wearing a disguise and armed with what appeared to be a gun, later identified as an air pistol. He threatened two tellers, directing one to retrieve money from the vault and instructing the other to stay put. Cook fled with a bag of cash but was quickly apprehended by law enforcement, who found the stolen money and the air pistol in his vehicle. Cook pleaded guilty to bank robbery under 18 U.S.C. § 2113(a).The United States District Court for the Central District of Illinois sentenced Cook to 144 months of imprisonment and three years of supervised release. The court applied a four-level enhancement under § 2B3.1(b)(2)(D) of the United States Sentencing Guidelines, finding that Cook had "otherwise used" the gun during the robbery. Cook contested this, arguing that he had only "brandished" the gun, which would warrant a lesser, three-level enhancement under § 2B3.1(b)(2)(E). The district court also considered Cook's extensive criminal history and his deliberate targeting of a small-town bank in its sentencing decision.The United States Court of Appeals for the Seventh Circuit reviewed the case and affirmed the district court's judgment. The appellate court found no procedural error in the application of the four-level enhancement, agreeing that Cook's actions constituted "otherwise using" the gun. The court also upheld the above-Guidelines sentence, noting that the district court had provided a thorough explanation for its decision, including Cook's extensive criminal history and the need for deterrence and public protection. The appellate court concluded that the sentence was neither procedurally erroneous nor substantively unreasonable. View "USA v. Cook" on Justia Law

Michigan First Credit Union reimbursed its customers for unauthorized electronic fund transfers resulting from a SIM Swap scam involving T-Mobile USA, Inc. Michigan First sought to recover these funds from T-Mobile, claiming indemnification or contribution under the Electronic Fund Transfer Act (EFTA) and state law. The district court dismissed the complaint, ruling that Michigan First failed to state a claim for indemnification or contribution under both the EFTA and state law.The United States District Court for the Eastern District of Michigan dismissed Michigan First’s claims, finding no basis for indemnification or contribution under the EFTA or state law. Michigan First appealed, arguing that the EFTA implies a right to indemnification or contribution, that the Michigan Electronic Funds Transfer Act (MEFTA) is not preempted by the EFTA, and that its state common-law indemnification claim should stand.The United States Court of Appeals for the Sixth Circuit reviewed the case de novo. The court held that the EFTA does not imply a right to indemnification or contribution for financial institutions, as the statute is designed to protect consumers, not financial institutions. The court also found that the EFTA preempts the MEFTA and any state common-law claims for indemnification or contribution, as allowing such claims would conflict with the EFTA’s comprehensive regulatory scheme. Consequently, the Sixth Circuit affirmed the district court’s dismissal of Michigan First’s complaint. View "Michigan First Credit Union v. T-Mobile USA, Inc." on Justia Law

Dr. Igor DeCastro, a neurosurgeon, worked at the Hot Springs Neurosurgery Clinic for seven years. He claimed that after his initial 18-month salary period, he was supposed to receive compensation based on the net proceeds of his production, less 33% of the clinic's overhead. However, he alleged that he never received more than his base salary because Dr. James Arthur, the clinic's owner, diverted the funds into a "secret account." DeCastro also sued Bank OZK, where the account was held, leading the bank to request the court to determine the rightful owner of the funds.The United States District Court for the Western District of Arkansas dismissed DeCastro's amended complaint for failing to include essential facts, such as specific amounts received, production details, and overhead costs. The court also disbursed the funds to Arthur and denied DeCastro's motions for reconsideration, discovery, and leave to file a second amended complaint. DeCastro's subsequent attempts to revive the case, including a counterclaim in an unrelated contribution action, were dismissed based on res judicata.The United States Court of Appeals for the Eighth Circuit reviewed the case and affirmed the district court's decision. The appellate court agreed that DeCastro's amended complaint lacked sufficient factual matter to state a plausible claim for relief. The court noted that the complaint was filled with legal conclusions rather than specific facts about the alleged breach. Additionally, the court found no abuse of discretion in the district court's denial of DeCastro's post-dismissal motions, as the employment agreement he later produced did not support his original claims. The court also upheld the dismissal of DeCastro's counterclaim based on res judicata, as it was identical to the previously adjudicated claims. View "DeCastro v. Arthur" on Justia Law

The case involves Corner Post, a merchant that accepts debit cards as a form of payment. Debit card transactions require merchants to pay an "interchange fee" to the bank that issued the card. The fee amount is set by the payment networks (such as Visa and MasterCard) that process the transaction. In 2010, Congress tasked the Federal Reserve Board with ensuring that interchange fees were "reasonable and proportional to the cost incurred by the issuer with respect to the transaction." In 2011, the Board published Regulation II, which sets a maximum interchange fee of $0.21 per transaction plus .05% of the transaction’s value.In 2021, Corner Post joined a suit against the Board under the Administrative Procedure Act (APA), challenging Regulation II on the ground that it allows higher interchange fees than the statute permits. The District Court dismissed the suit as time-barred under 28 U. S. C. §2401(a), the default six-year statute of limitations applicable to suits against the United States. The Eighth Circuit affirmed the decision.The Supreme Court of the United States reversed the decision of the Eighth Circuit. The Court held that an APA claim does not accrue for purposes of §2401(a)’s 6-year statute of limitations until the plaintiff is injured by final agency action. The Court disagreed with the Board's argument that an APA claim “accrues” under §2401(a) when agency action is “final” for purposes of §704; the claim can accrue for purposes of the statute of limitations even before the plaintiff suffers an injury. The Court held that a right of action “accrues” when the plaintiff has a “complete and present cause of action,” which is when she has the right to “file suit and obtain relief.” Because an APA plaintiff may not file suit and obtain relief until she suffers an injury from final agency action, the statute of limitations does not begin to run until she is injured. View "Corner Post, Inc. v. Board of Governors" on Justia Law

A mortgage company, Approved Mortgage Corporation, initiated two wire transfers, but the instructions for the transactions were altered by a third party. The funds were transferred to Truist Bank, which deposited the funds into an account it had previously flagged as suspicious. The funds were then withdrawn in the form of cashier’s checks. Approved Mortgage sued Truist, seeking damages in the amount of the transfers. The company asserted two claims under the Indiana Uniform Commercial Code (UCC), which governs the rights, duties, and liabilities of banks and their customers with respect to electronic funds transfers, and a common law negligence claim.The district court dismissed the UCC claims due to lack of privity between Approved Mortgage and Truist, and dismissed the negligence claim as preempted by the UCC. The court held that the UCC does not establish an independent remedy and must be read with another section of the UCC, which entitles a sender to a refund only from the bank which received its payment.On appeal, the United States Court of Appeals for the Seventh Circuit affirmed the dismissal of the UCC claims, agreeing with the lower court that the UCC does not establish an independent remedy and must be read with another section of the UCC. However, the appellate court reversed the dismissal of the negligence claim, holding that to the extent the negligence claim arises from Truist’s issuance of the cashier’s checks after Truist credited the funds to the suspicious account, the claim is not preempted by the UCC. The case was remanded to the district court for further proceedings. View "Approved Mortgage Corporation v. Truist Bank" on Justia Law

The case revolves around a dispute between Treslong Dairy, LLC, First Merchants Bank, the Earl Goodwine Trust, and Jeffrey and Kathie Foster. Treslong Dairy had executed promissory notes with all parties, granting them security interests in various properties. After Treslong defaulted on its note with the Bank, the Bank sued to collect its debt. The Trust and the Fosters (collectively “Farmers”) intervened in the action. When Treslong failed to sell its property, the Bank sought final judgment on its unpaid balance. The Bank sold the haylage and corn silage for $230,000, which was insufficient to satisfy the full judgment. As junior lienholders, the Farmers received no proceeds from the sale. The Farmers then sued the Bank for money damages, claiming that the sale was not conducted in a commercially reasonable manner.The trial court granted the Bank's motion to dismiss the Farmers' case under Rule 41(E), which allows for dismissal of a civil case for a party's failure to move the case along. The Farmers appealed, arguing that the Bank's motion was untimely for Rule 41(E) purposes. The Court of Appeals reversed the trial court's decision as to Rule 41(E) but affirmed based on laches.The Indiana Supreme Court agreed with the Farmers. It held that the Bank's motion for dismissal under Rule 41(E) was untimely because it was filed after the Farmers had resumed prosecution by requesting a case-management conference. Therefore, the case could not be dismissed under that rule. The court also rejected the Bank's alternative argument that the equitable doctrine of laches applied. The court reversed the lower court's dismissal order and remanded for proceedings consistent with its opinion. View "Foster v. First Merchants Bank, N.A." on Justia Law

The case involves a dispute over a foreclosure judgment. The plaintiff, Susanne P. Wahba, had a loan secured by a mortgage on her property. The defendant, JPMorgan Chase Bank, N.A., acquired the loan and later counterclaimed to foreclose the mortgage. The trial court rendered a judgment of strict foreclosure in favor of the defendant. The plaintiff appealed, but the Appellate Court affirmed the judgment and remanded the case for the setting of new law days. On remand, the plaintiff objected to the defendant's motion to reset the law days, arguing that the judgment of strict foreclosure did not account for the substantial increase in property values that had occurred during the appeal. The trial court concluded that it had no authority to revisit the merits of the strict foreclosure judgment, as it was bound by the Appellate Court’s rescript order requiring the setting of new law days. The plaintiff then filed a second appeal with the Appellate Court, which affirmed the trial court's decision.The Connecticut Supreme Court held that the trial court was not barred by the doctrine of res judicata from entertaining the plaintiff’s request to modify the judgment of strict foreclosure and order a foreclosure by sale. The court also held that the Appellate Court incorrectly concluded that the trial court lacked authority to entertain the plaintiff’s request. The court further held that the Appellate Court incorrectly concluded that the plaintiff was required to file a motion to open the judgment of strict foreclosure and to present evidence that the value of the subject property had substantially increased since the date of the original judgment before the trial court could exercise that authority. The judgment of the Appellate Court was reversed and the case was remanded for further proceedings. View "Wahba v. JP Morgan Chase Bank, N.A." on Justia Law

The case involves plaintiffs Ronnie and Sharon Llanes and Michael and Lauren Codie (collectively, Borrowers) who purchased homes with mortgages from Bank of America, N.A. (Lender). After the Borrowers defaulted on their mortgages, the properties were foreclosed upon and sold in nonjudicial foreclosure sales. The Borrowers then sued the Lender for wrongful foreclosure, alleging that the Lender's foreclosures did not comply with Hawai‘i Revised Statutes (HRS) § 667-5 (2008) (since repealed).The case was initially heard in the Circuit Court of the Third Circuit, where the Lender moved for summary judgment, arguing that the Borrowers did not prove damages. The circuit court denied the motion due to factual disputes and lack of clarity in existing law. However, after the Supreme Court of Hawai‘i issued its decision in Lima v. Deutsche Bank Nat’l Tr. Co., the Lender renewed its summary judgment motion, arguing that under Lima, the Borrowers’ claims failed as a matter of law because they did not provide evidence of damages that accounted for their pre-foreclosure mortgage debts. The circuit court granted the Lender's renewed motion for summary judgment, concluding that the Borrowers had not proven their damages after accounting for their debts under Lima.On appeal to the Supreme Court of the State of Hawai‘i, the Borrowers argued that the circuit court erred by concluding that they bore the burden of proving their damages and did not meet that burden. The Supreme Court affirmed the circuit court's decision, holding that outstanding debt may not be counted as damages in wrongful foreclosure cases. The court concluded that the Borrowers did not prove the damages element of their wrongful foreclosure claims, and therefore, the circuit court properly granted summary judgment to the Lender. View "Llanes v. Bank of America, N.A." on Justia Law

The defendant, Christopher Johnson, was indicted and pleaded guilty to wire fraud and aggravated identity theft after purchasing stolen credit card data and using it to produce counterfeit cards. The district court, when calculating the loss under U.S.S.G. § 2B1.1, deferred to the guidelines commentary and assessed a $500 minimum loss for each card. Johnson argued that the guidelines commentary was not entitled to deference as an interpretation of § 2B1.1, citing the Supreme Court's decision in Kisor v. Wilkie.The district court denied Johnson's objection, holding that the term "loss" in the context of § 2B1.1 was genuinely ambiguous and that the minimum loss amount was a reasonable interpretation of that term. The court also stated that even without deferring to the guidelines commentary, it would still have assessed a loss of $500 per card. Johnson was sentenced to 58 months' imprisonment: 34 months for wire fraud and the mandatory 24 months for aggravated identity theft.On appeal to the United States Court of Appeals for the Seventh Circuit, Johnson challenged the district court's deference to the guidelines commentary. The court, however, affirmed the judgment of the district court. The court held that the Supreme Court's decision in Kisor v. Wilkie did not disturb the Supreme Court’s holding in Stinson v. United States that guidelines commentary is “authoritative unless it violates the Constitution or a federal statute, or is inconsistent with, or a plainly erroneous reading of” the guideline it interprets. The court concluded that the guidelines commentary assessing $500 minimum loss per credit card therefore remains binding under Stinson. View "USA v. Johnson" on Justia Law

The case involves American Collection Systems, Inc. (ACS), a Wyoming corporation, and Lacy D. Judkins. ACS had obtained a default judgment against Judkins in 2010. However, ACS failed to execute the judgment for over five years, causing it to become dormant under Wyoming law. In 2022, ACS filed a motion to revive the dormant judgment. The district court revived the judgment but declined to award post-judgment interest. ACS then filed a motion to alter or amend the judgment to include post-judgment interest, which the district court denied. ACS appealed, arguing that the district court was legally required to award post-judgment interest.The Supreme Court of Wyoming found that it only had jurisdiction to review the district court's denial of ACS's motion to alter or amend the judgment, not the underlying judgment itself. The court noted that ACS's notice of appeal specifically identified only the post-judgment order as the order being appealed.Upon review, the Supreme Court of Wyoming determined that the district court had misapprehended the controlling law when it denied ACS's request for mandatory post-judgment interest. The court held that the district court abused its discretion because its decision to deny the motion to alter or amend the judgment was based on erroneous legal conclusions. The Supreme Court of Wyoming reversed the district court's decision and remanded the case with instructions to enter an amended judgment that includes the post-judgment interest through the date the judgment became dormant. View "American Collection Systems, Inc. v. Judkins" on Justia Law