Justia Banking Opinion Summaries

The Bank filed suit against the Hanna Parties for breach of contract after the Hanna Parties failed to pay the balance due on a loan when it matured. The Hanna Parties counterclaimed, alleging fraud, breach of fiduciary duty, negligence, deceptive trade practices, and breach of contract by the Bank, and demanding reformation or rescission. The district court granted summary judgment in favor of the Bank as to the counterclaims. A jury concluded that the Hanna Parties did not breach the contract and the district court denied the Bank's post-verdict motions for judgment as a matter of law and for a new trial. Both parties appealed. The court concluded that the case was properly submitted to a jury, and the Bank is precluded from seeking a judgment as a matter of law, but that the jury's verdict was against the great weight of the evidence, so the court reversed and remanded for a new trial on the Bank's breach-of-contract claims. The court agreed with the district court that the Hanna Parties' counterclaims failed as a matter of law and affirmed the district court's grant of summary judgment for the Bank as to those claims. View "Bank of America v. JB Hanna, et al." on Justia Law

First National Bank of Clarksdale (FNB) secured a loan of more than $800,000 with a deed of trust on real property in Oxford with the understanding that the bank would become the primary lien holder on the realty. FNB acquired title insurance from Mississippi Valley Title Insurance Company against the risk of an undiscovered superior lien holder. No formal title search on the property was performed, although Mississippi Valley’s agent did discover the existence of another deed of trust on the property held by Community Trust Bank (CTB). The agent never relayed this information to FNB or to Mississippi Valley and issued the policy without regard to this prior recorded lien. Years later, CTB’s loan went into default and CTB initiated foreclosure proceedings, which alerted FNB to the existence of CTB’s deed of trust on the property. FNB brought suit in Chancery Court to be subrogated to the primary lien holder position on the property in the amount that it had paid to satisfy the original primary deed of trust. After a bench trial, the chancellor found that the doctrine of equitable subrogation applied and granted primary status to FNB. CTB appealed. Upon review, the Supreme Court reversed: based upon the facts presented, subrogation was not equitable. View "Community Trust Bank of Mississippi v. First National Bank of Clarksdale" on Justia Law

At issue in this case was whether Ohio Rev. Code 5721.25 permits a mortgage holder to redeem the mortgaged property when it is the subject of a tax foreclosure proceeding. Here, Vanderbilt Mortgage and Finance, Inc. (Vanderbilt) was the holder of both a promissory note and mortgage on certain property. Due to the mortgagors’ failure to pay taxes on the property, the county treasurer initiated a tax foreclosure proceeding for delinquent taxes. The question before the trial court was whether Vanderbilt had the right to redeem. The trial court concluded that Vanderbilt was a “person entitled to redeem” under section 5721.25, granted Vanderbilt’s motion to stay the confirmation of sale and to vacate and set aside the sheriff’s sale. The court of appeals reversed, determining that Vanderbilt was not entitled to redeem the property. The Supreme Court reversed the court of appeals, holding (1) “any person entitled to redeem the land” under section 5721.25 includes “any owner or lienholder of, or other person with an interest in” the property as set forth in section 5721.181; and (2) therefore, Vanderbilt, as a lienholder, was entitled to redeem the land. Remanded. View "In re Foreclosure of Liens for Delinquent Land Taxes v. Parcels of Land Encumbered with Delinquent Tax Liens" on Justia Law

On April 12, 2010, U.S. Bank National Association initiated a summary process action against Defendant, seeking to evict him from property he owned following the property’s sale to the Bank at a foreclosure auction. On May 25, 2012, a judge entered judgment in favor of the Bank for possession. Defendant appealed, arguing that the foreclosure sale was void because the notice of his right to cure a default did not satisfy the provisions of Mass. Gen. Laws ch. 244, 35A, which gives a mortgagor of residential real property a ninety-day right to cure a payment of default before foreclosure proceedings may be commenced. The Supreme Judicial Court affirmed, holding (1) section 35A is not one of the statutes relating to the foreclosure of mortgages by the exercise of a power of sale, and (2) that being the case, and given the deficiencies in the steps Defendant took to obtain relief, Defendant was precluded from challenging the Bank’s compliance with section 35A in this summary process action.View "U.S. Bank Nat’l Ass’n v. Schumacher" on Justia Law

Defendant pleaded guilty to two counts of conspiracy to engage in prohibited monetary transactions in property for his part in the purchase of two parcels of real property with fraudulently obtained loans. The district court ordered Defendant to pay $615,935 in restitution to JP Morgan Chase, a loan purchaser, and $329,767 in restitution to CitiGroup, a loan originator. Defendant appealed the restitution order. The Ninth Circuit (1) affirmed the district court’s determination that the requirements of the Mandatory Victim Restitution Act were met in this case; (2) affirmed the calculation of restitution owed to CitiGroup; and (3) vacated and remanded for the district court to recalculate the amount owed to Chase because the court applied a formula for a loan originator, although Chase had purchased the loans. View "United States v. Luis" on Justia Law

In 2009, Scott Schulte and Marisel Del Valle (together, Appellants) executed a promissory note and, as security for the note, a mortgage on real property. The note and mortgage were later assigned to BAC Home Loans Servicing. In 2010, BAC filed a foreclosure petition alleging Appellants were in default, and the district court entered a decree of foreclosure. In 2012, Bank of America, as successor by merger to BAC, filed a notice of rescission of foreclosure and, contemporaneously, filed a motion to set aside decree. Appellants opposed the motion to set aside decree, arguing that neither the motion nor the notices of rescission were timely filed within one year of the entry of judgment as required by Iowa R. Civ. P. 1.1012 and 1.1013 and were therefore time barred. The district court found the rescission notices timely filed, concluding that a two-year limitations period applied under Iowa Code 654.17, and accordingly, granted Bank of America’s motion to set aside the decree. The Supreme Court affirmed, holding that the district court did not err when it confirmed that the rescission action was timely filed and granted the motion to set aside decree. View "Bank of Am., N.A. v. Schulte" on Justia Law

Defendants executed a promissory note in favor of FirstMerit Bank secured by a mortgage on several parcels of real estate. After Defendants defaulted on the promissory note, FirstBank initiated foreclosure proceedings. The common pleas court entered a decree in foreclosure, and the properties were sold at auction. Because the sale of the properties resulted in a deficiency, FirstMerit obtained a cognovit judgment against Defendants. Defendants moved for relief from judgment pursuant to Ohio R. Civ. P. 60(B), asserting as a defense that they had reached an oral settlement agreement with FirstMerit under which FirstMerit had agreed to cease legal proceedings and release Defendants from their obligations. The trial court denied the motion, concluding that the statute of frauds barred their defense. The appellate court reversed, determining that Ohio Rev. Code 1335.05 did not prohibit Defendants from raising as a defense that the parties orally agreed to modify the terms of their agreement. The Supreme Court reversed, holding that the oral agreement in this case fell within the statute of frauds, and therefore, Defendants were precluded from raising the agreement as a defense in a motion for relief from judgment.View "FirstMerit Bank, N.A. v. Inks" on Justia Law

Developer obtained a loan from Bank to construct a commercial and condominium project. Bank secured its loan with two deeds of trust, the first of which attached before construction began on the project. Developer failed to pay the general contractor (Contractor) several million dollars for the project, and after Developer had sold many of the units, Contractor recorded a mechanics’ lien against the project. Contractor then sought to foreclose on its lien against Developer, the unit owners, and their lenders. The Owners and Lenders contested the foreclosure, arguing that they were equitably subrogated to Bank’s first deed of trust and thus had priority over Contractor’s mechanics’ lien. The trial court concluded that Contractor’s lien had priority. The Supreme Court reversed, holding (1) Ariz. Rev. Stat. 33-992(A), which gives mechanics’ liens priority over liens recorded after construction begins on real property, does not preclude assignment by equitable subrogation of lien that attached before construction began on the project; and (2) when a single mortgage burdens multiple parcels, a third party may be entitled to equitable subrogation when that party has paid a pro rata amount of the obligation and obtained a full release of the parcel at issue from the mortgage. Remanded. View "Weitz Co., LLC v. Heth" on Justia Law

The Debtors were account holders at Wells Fargo. When Wells Fargo discovered that the Debtors had filed a voluntary Chapter 7 bankruptcy petition, it placed a “temporary administrative pledge” on their accounts and requested instructions from the Chapter 7 trustee regarding the distribution of account funds, a portion of which the Debtors claimed as exempt under Nevada Revised Statutes 21.090(1)(g). The Debtors brought an adversary proceeding, which the bankruptcy court dismissed. The district court affirmed, holding that they did not state a claim for a willful violation of 11 U.S.C. 362(a)(3), which prohibits “any act to obtain possession of property of the estate or of property from the estate or to exercise control over property of the estate.” Before the account funds revested in the Debtors, they remained estate property, and the Debtors had no right to possess or control them. The administrative pledge could cause the Debtors no injury before the account funds revested. After the account funds revested in the Debtors, they lost their status as estate property and thus were no longer subject to section 362(a)(3). View "In re: Mwangi" on Justia Law

To secure a loan, Plaintiff executed a promissory note naming ABN AMRO Mortgage Group (ABN) as the note holder. ABN later merged with CitiMortgage, Inc., which became the holder of Plaintiff’s note. CitiMortgage notified Plaintiff that her balloon payment was due and that she could either make the payment or exercise her “reset option.” Plaintiff did not notify CitiMortgage of her intent to exercise the reset option and did not make the payment. The property was foreclosed. CitiMortgage purchased the property and conveyed it to Federal National Mortgage Association (FNMA). Plaintiff filed a complaint against FNMA and CitiMortgage (Defendants). Plaintiff then moved for partial summary judgment, asserting that no evidence of the transfer of the note from ABN to CitiMortgage had been produced during discovery. Defendants subsequently produced a copy of the certificate of merger between ABN and CitiMortgage. The district court granted summary judgment for Defendants, concluding that the untimely disclosure was harmless. The Supreme Court affirmed, holding (1) the district court did not abuse its discretion by declining to impose sanctions against Defendants for discovery violations; and (2) the clause requiring Plaintiff to give written notice of her intent to exercise the reset option was not an unenforceable contract of adhesion or a violation of the Montana Consumer Protection Act.View "Doherty v. Fed. Nat’l Mortgage Ass’n" on Justia Law