Justia Banking Opinion Summaries

In 2006, Michael and Connie Jo Zimmerman obtained two separate commercial loans from Eagle National Bank, the predecessor in interest to Customers Bank. The Zimmermans later defaulted on these loans and entered into a forbearance agreement. In addition to the Forbearance Agreement, the Zimmermans each executed a Disclosure for the Confession of Judgment acknowledging that a Confession of Judgment provision in the Forbearance Agreement had been called to their attention, that they understood that the provision permitted Customers Bank to enter judgment against them without notice or opportunity for a hearing, and that the waiver of the right to notice and a hearing was knowing, intelligent, and voluntary. The Forbearance Agreement also provided that all notices, requests, demands, and other communications were to be sent to the Zimmermans at an address in Dover, Delaware with a copy sent to their attorney. Based on the Warrant of Attorney to Confess Judgment in the Forbearance Agreement, Customers Bank filed a complaint seeking the entry of a judgment by confession against the Zimmermans. The Zimmermans opposed the entry of a judgment by confession and a hearing was held where the Zimmermans argued, among other things, that at the time the Forbearance Agreement was executed they were residents of Florida and that Customers Bank had not complied with the requirements for entry of judgment by confession against a non-resident under Rule 58.1. The Zimmermans also argued that they did not knowingly, intelligently, and voluntarily waive their right to notice and a hearing before judgment could be entered against them. After deliberation, the superior court found the Zimmermans’ waiver of their right to notice and a hearing had been knowing, intelligent, and voluntary, and entered judgment by confession against the Zimmermans. The Zimmermans appealed. Finding no reversible error, the Supreme Court affirmed.View "Crothall, et al. v. Zimmerman, et al." on Justia Law

Plaintiff signed an adjustable-rate note evidencing a loan from Bank of America and executed a mortgage on property that secured the loan. Bank of America was designated as the Lender and the mortgagee. After Plaintiff defaulted on his loan, a foreclosure auction was held at which Celtic Roman Group placed a successful bid. Before Celtic could close on the property, Plaintiff filed a notice of lis pendens in the land evidence records. Plaintiff subsequently filed a complaint challenging Bank of America’s authority to foreclose on the property. The superior court granted summary judgment for Defendants. The Supreme Court affirmed, holding (1) there was no genuine issue of fact as to whether Plaintiff defaulted on his loan; (2) the foreclosure sale was lawfully noticed; and (3) Bank of America was the holder of the note at the time of foreclosure.View "McGovern v. Bank of Am., N.A." on Justia Law

Makowka owns a home in a Pike County, Pennsylvania, planned community and, in 2005, fell behind on her homeowners’ association dues. In 2008, the Association obtained a default judgment of $2,436. As additional dues went unpaid, the Association sued again in 2010 and obtained another default judgment, worth $3,599.08. A writ of execution and attachment issued. A sheriff’s sale of Makowka’s property was scheduled for September 2011. Days before the sale, Makowka filed a Chapter 13 petition. In her proposed bankruptcy plan, Makowka moved to avoid the Association’s claims under 11 U.S.C. 522(f), which releases a debtor from obligations imposed by judicial liens and non-possessory, non-purchase money security interests. Although Makowka acknowledged that the Uniform Planned Community Act granted the Association a self-executing statutory lien on her residence for unpaid dues, she claimed that part of that lien had been extinguished because the Association failed to foreclose within the statutory period of three years. To the extent the claims represented fees due before September 2008, Makowka contended, it had obtained dischargeable money judgments. The Bankruptcy Court denied Makowka’s motion. The district court affirmed. The Third Circuit vacated, concluding that the district court relied on the wrong state precedent and that the Association did not enforce its statutory lien on Makowka’s residence when it pursued actions in debt.View "In re: Makowka" on Justia Law

Plaintiffs filed suit against Sam's club, alleging that Sam's Club willfully violated a provision of the Fair and Accurate Credit Transactions Act (FACTA), 15 U.S.C. 1681c(g)(1), which prohibits accepting credit or debit cards for a consumer transaction from printing more than the last five digits of the card number upon any receipt provided to the cardholder. The court concluded that plaintiffs have standing under Article III; the court agreed with the district court that Sam's Club violated FACTA but that the violation was not willful; and the district court acted properly in denying plaintiffs' motion to recuse. Accordingly, the court affirmed the district court's grant of summary judgment to Sam's Club.View "Hammer, et al. v. Sam's East, Inc., et al." on Justia Law

Plaintiff executed a promissory note in favor of EquiFirst, secured by a mortgage on real estate. The mortgage designated EquiFirst as the Lender and named Mortgage Electronic Registration Systems (MERS) as the mortgagee and the Lender’s nominee. MERS, as EquiFirst’s nominee, assigned the mortgage to Sutton Funding, which assigned the mortgage to Bank of New York Mellon Trust Company (Bank of New York). Bank of New York subsequently initiated a foreclosure sale, at which it prevailed as the highest bidder. Plaintiff filed suit in the superior court challenging the validity of the two mortgage assignments. The hearing justice dismissed Plaintiff’s complaint under Sup. Ct. R. Civ. P. 12(b)(6), concluding that the assignments were valid, and additionally dismissed Plaintiff’s complaint under Rule 12(b)(7) for failing to join an indispensible party, Bank of New York. The Supreme Court affirmed the dismissal on the basis of Rule 12(b)(7), holding that hearing justice’s dismissal on Rule 12(b)(7) grounds was appropriate where Plaintiff failed to join Bank of New York to the action. View "Rosano v. Mortgage Elec. Registration Sys., Inc." on Justia Law

Merchants Bank appealed a Circuit Court judgment in favor of Elizabeth Head on Merchants Bank's claim against her alleging breach of a promissory note. After the 2008 promissory note at issue was executed, Merchants Bank wired the $400,000 to Elizabeth's husband, David Head's, personal account. David testified that he then wrote a check distributing the funds to his real-estate-development company, Head Companies, LLC. The Heads renewed the 2008 promissory note in March 2009 and again in March 2010, in August 2010, in February 2011, and, finally, in July 2011. With the exception of the July 2011 renewal, each renewal was signed on page three by both David and Elizabeth. A box on page two was left blank. On the initial version of the July 2011 renewal of the note, however, Elizabeth signed in both the box on page two, indicating that she intended to "give [Merchants Bank] a security interest" in the Heads' personal residence, and at the end of the document on page three. signature on page two of the initial July 2011 note was "a mistake in the nature of a scrivener's error and [Merchants] Bank subsequently had the Heads execute a corrected note, which they did knowingly and voluntarily." Elizabeth presented no evidence to the contrary. The "corrected note" bore the same date as the initial July 2011 note and, like all the previous renewals, was signed by both David and Elizabeth on page three of the document only. The box on page two of the corrected July 2011 note was left blank. The Heads defaulted on the promissory note in April 2012. In September 2012, Merchants Bank sued the Heads, alleging breach of the promissory note and attaching to the complaint the initial July 2011 note as evidence of the debt. David did not answer the complaint, and Merchants Bank obtained a default judgment against him in the amount of $415,142.57 plus interest on the judgment. Elizabeth did answer the complaint, arguing that the note was unenforceable against her because she had signed the initial July 2011 note only to give a security interest in her and David's residence not "for the purpose of agreeing to pay the debt evidenced thereby" and because she had not received consideration for her signature on the note. Merchants Bank moved for a summary judgment against Elizabeth. That motion was denied. After a bench trial in March 2013, the circuit court entered a final judgment in favor of Elizabeth. Upon review, the Supreme Court held that Elizabeth renewed her obligations under the 2008 promissory note in the capacity of a maker in July 2011, and that her obligations under the 2008 promissory note were supported by valid consideration. It was undisputed that she and David defaulted on their obligations under the corrected July 2011 note. Thus, Elizabeth was liable to Merchants Bank on its claim of breach of promissory note, and the circuit court erred in entering a judgment in her favor.View "Merchants Bank v. Head " on Justia Law

Plaintiffs filed suit against Regions alleging that Regions settled a check presented by them at less than par in violation of Florida Statute 655.85 (Counts I and II). Plaintiffs also claimed that Regions was unjustly enriched when it settled their check at less than par (Counts III and IV). Under section 655.85, a financial institution may not settle any check drawn on it otherwise than at par. The court concluded that, because federal law preempted section 655.85 with respect to national banks, by operation of 12 U.S.C. 1831(a)(j)(1), so too does it preempt section 655.85 with respect to Regions, an out-of-state bank. And because plaintiffs have premised their unjust enrichment claims on the same facts as they lay out in Counts I and II, Counts III and IV are similarly preempted.View "Pereira, et al. v. Regions Bank" on Justia Law

Corporation obtained a loan from Lenders to help pay for real property that was secured by a deed of trust on the property. Appellant, the principal and sole owner of Corporation, signed a personal guaranty of the loan, which included a waiver of his right to receive notice of any default on the loan. Corporation defaulted on the loan, and Lender purchased the property at a trustee’s sale. Lender then filed a complaint seeking a deficiency judgment from Appellant as guarantor. The district court awarded a deficiency judgment in favor of Lender, concluding (1) Appellant’s waiver of his right to receive a notice of default was invalid pursuant to Nev. Rev. Stat. 40.453; but (2) Lender substantially complied with Nev. Rev. Stat. 107.095’s notice requirement. The Supreme Court affirmed, holding (1) the Legislature intended for section 40.453 to invalidate a guarantor’s purported waiver of the right to be mailed a notice of default; and (2) substantial compliance can satisfy section 107.095’s notice requirements.View "Schleining v. Cap One, Inc." on Justia Law

Petitioner personally guaranteed a commercial real estate loan that Bank purchased. The borrowers defaulted on the loan, and Bank sought recovery of the loan’s balance from Petitioner. While the case against Petitioner was pending, Bank foreclosed and took ownership of the property securing the underlying loan at a trustee’s sale. Bank subsequently moved for summary judgment regarding Petitioner’s liability for his breach of the loan guaranty. Petitioner also moved for summary judgment, arguing that Nev. Rev. Stat. 40.455 precluded Bank from obtaining a judgment for the deficiency on the loan balance after the trustee’s sale. The district court granted summary judgment for Bank. The Supreme Court subsequently issued a writ of mandamus compelling the district court to dismiss the guaranty action against Petitioner, concluding that Bank was barred from recovery under the guaranty because it failed to apply for a deficiency judgment under section 40.455 within six months after the property’s sale. The Supreme Court denied Bank's petition for rehearing because it considered and resolved Bank’s arguments in its order granting mandamus relief and did not misread or misapply the pertinent law.View "Lavi v. Eighth Judicial Dist. Court" on Justia Law

In 2006 Iroanyah obtained first and second mortgage loans of $192,000 and $36,000. The Disclosure Statement for each displayed the repayment schedule, including the number of payments, the amount due for each, and the due dates for the first and last payments. Neither disclosure included the dates on which each payment was due, nor did they include the frequency with which payment should be made. The Iroanyahs admitted that they understood that payments were to be made monthly. They stopped making payments in 2008. In response to foreclosure proceedings in state court, the Iroanyahs sent a rescission notice for the first loan, citing deficient disclosure statements in violation of the Truth in Lending Act. The lender denied violation, but agreed to rescind the loan upon payment of $169,015.30. The Iroanyahs sent rescission notices for the second loan, to which there was no response They filed suit. The court agreed that the disclosures violated TILA, which extended the right of rescission to three years; statutory damages were denied under a one year limitation period. The court held that failure to respond to the rescission notices violated TILA, triggering an award of statutory damages for failure to respond and actual damages for attorneys’ fees. The Iroanyahs sought awards of $38,812 and $33,849. The district court awarded fees and costs in the amount of $16,433 against one lender and $13,433 against the other. The Seventh Circuit affirmed.View "Iroanyah v. Bank of America, N.A." on Justia Law