Justia Banking Opinion Summaries

At issue in this appeal was Eaton v. Fed. Nat’l Mortgage Ass’n, which held that a foreclosure by power of sale is invalid unless a foreclosing party holds the mortgage and also holds either the underlying mortgage note or acts on behalf of the note holder. In the instant case, Plaintiffs defaulted on their mortgage payments, and Mortgage Electronic Registration Systems (MERS) sought to foreclose on the property. Plaintiffs filed a complaint against MERS claiming that MERS did not have standing to initiate foreclosure proceedings because it was not the holder of the promissory note or an authorized agent of any note holder. The superior court dismissed the complaint. Before Plaintiffs’ appeal was heard, the Supreme Court decided Eaton. The Supreme Court subsequently vacated the dismissal of Plaintiffs’ claim alleging a lack of authority to foreclose, holding (1) Eaton applies to cases, such as the instant case, that preserved the issue presented in Eaton and that were pending on appeal as of June 22, 2012; and (2) therefore, Plaintiffs’ complaint should not have been dismissed for failure to state a claim on the grounds that MERS lacked the authority to foreclose. Remanded.View "Galiastro v. Mortgage Elec. Registration Sys., Inc." on Justia Law

In 2006, Joseph and Mary Romero signed a mortgage contract with the Mortgage Electronic Registration Systems (MERS) as nominee for Equity One, Inc. They pledged their home as collateral for the loan. The Romeros alleged that Equity One urged them to refinance their home for access to the home's equity. The terms of the new loan were not an improvement over their then-current loan: the interest rate was higher and the loan amount due was higher. Despite that, the Romeros would receive a net cash payout they planned to use to pay other debts. The Romeros later became delinquent on their increased loan payments. A third party, Bank of New York (BONY), identified itself as a trustee for Popular Financial Services Mortgage, filed suit to foreclose on the Romeros' home. BONY claimed to hold the Romeros' note and mortgage with the right of enforcement. The Romeros defended by arguing that BONY lacked standing to foreclose because nothing in the complaint established how BONY held their note and mortgage, and that the contracts they signed were with Equity One. The district court found that BONY had established itself as holder of the Romeros' mortgage, and that the bank had standing to foreclose. That decision was appealed. Upon review, the Supreme Court concluded the district court erred in finding BONY's evidence demonstrated that it had standing to foreclose. Accordingly, the Court reversed the district court and remanded the case for further proceedings.View "Bank of New York v. Romero" on Justia Law

Downing, Thorpe & James Design, Inc. (DTJ) was an architectural firm incorporated in Colorado. Thomas Thrope, one of DTJ’s three founding principals, was allowed to practice individually as a foreign architect in Nevada, but DTJ was not allowed to practice as a foreign corporation in Nevada. In 2004, DTJ contracted with a Nevada developer to provide architectural services for a Las Vegas subdivision owned by Prima Condominiums, LLC (Prima). Prima obtained a loan from First Republic Bank in exchange for a promissory note secured by a deed of trust on one of the subdivision’s units. After Prima defaulted on its payments, DTJ recorded a notice of mechanic’s lien against the property for unpaid services. First Republic then foreclosed and purchased the property. DTJ subsequently brought an action against First Republic for lien priority and unjust enrichment. The district court granted summary judgment for First Republic. The Supreme Court affirmed, holding (1) because DTJ had failed to comply with Nevada’s statutory registration and filing provisions, it was barred from maintaining an action in Nevada for compensation for its architectural services; and (2) Thorpe’s individual status had no bearing on whether DTJ could bring or maintain an action for compensation for its services.View "DTJ Design, Inc. v. First Republic Bank" on Justia Law

Bangor Savings Bank filed a foreclosure complaint against Robin Richard. The district court granted summary judgment in favor of the Bank. Richard appealed, arguing, that the district court erred in granting the Bank’s motion for summary judgment for several reasons. The Supreme Court vacated the judgment of the district court, holding that, under strict application of the rules of summary judgment in the context of a residential mortgage foreclosure, the Bank did not set forth a properly supported statement of fact regarding the amount due on the mortgage note, and therefore, there remained a genuine issue of material fact as to the amount owed under the mortgage. Remanded. View "Bangor Savings Bank v. Richard" on Justia Law

Debtors executed a promissory note in favor of First State Bank to purchase a condominium. After Debtors defaulted on their loan, First State subsequently filed a complaint against Debtors, the loan’s guarantor, and the condominium property owners’ association (Metro POA), claiming that it was entitled to collect money owed it from the Debtor and guarantor, and that any interest Metro POA had in the real property related to unpaid assessments was inferior to and subject to State Bank’s mortgage. The circuit court granted First State judgment against Debtors and the guarantor, gave First State the right to foreclose on the property, and ruled that Metro POA’s interest would survive the foreclosure action and become the liability of the purchaser. Thereafter, First State purchased the property at a foreclosure sale. On appeal, First State argued that the circuit court erred in refusing to extinguish Metro POA’s lien for unpaid assessments and in awarding Metro POA attorney’s fees. The Supreme Court affirmed, holding that the circuit court did not err in refusing to extinguish Metro POA’s interest and in awarding attorney’s fees to Metro POA. View "First State Bank v. Metro Dist. Condos. Prop. Owners' Ass’n, Inc." on Justia Law

Plaintiffs executed a mortgage identifying Domestic Bank as the lender and Mortgage Electronic Registration Systems, Inc. as a corporation “acting solely as nominee” for the lender and the lender’s assigns. Later, MERS purported to assign the mortgage to Aurora Loan Services, LLC (Aurora). Aurora “or the successful bidder” allegedly took a foreclosure deed at a subsequent foreclosure sale. Plaintiffs filed a complaint against MERS seeking a declaration that the assignment and foreclosure sale were void and that Plaintiffs owned a fee simple interest in the property. The superior court dismissed the complaint, concluding (1) Plaintiffs did not have standing to seek relief based on the assignment because they were neither an assignor nor an assignee of the assignment; and (2) even if Plaintiffs had standing, their allegations were insufficient to survive a motion to dismiss. The Supreme Court vacated the judgment of the superior court, holding (1) Plaintiffs had standing to prosecute their claim; and (2) Defendants’ Rule 12(b)(6) motion was improperly granted because Plaintiffs’ complaint stated a plausible claim upon which relief could be granted.View "Chhun v. Mortgage Elec. Registration Sys., Inc." on Justia Law

Plaintiff executed a promissory note secured by a mortgage on his property. After Plaintiff defaulted on the loan, foreclosure proceedings commenced. Plaintiff subsequently filed a Chapter 7 bankruptcy petition. Then then-holder of the mortgage sought relief from the automatic stay imposed by bankruptcy law. Relief from the stay was given in two bankruptcy cases filed by Plaintiff, the second of which was initiated after a foreclosure sale had been completed. Plaintiff then filed an action seeking a declaration that the foreclosure deed was void and that he owned the property in fee simple absolute. The superior court granted summary judgment against Plaintiff based on the doctrine of res judicata. The Supreme Court affirmed, holding that Plaintiff was precluded from raising issues regarding the foreclosure again in the superior court after the propriety of the foreclosure was examined by the bankruptcy court and the foreclosure sale was declared valid.View "Reynolds v. First NLC Fin. Servs., LLC" on Justia Law

Ruby Valley National Bank (RVNB) obtained and recorded a deed of trust (DOT) on certain real property subsequent to a previously recorded DOT. Wells Fargo Delaware Trust Co. (Wells Fargo) claimed to be the beneficiary of the first DOT. RVNB filed for judicial foreclosure of its interest in the property. The district court granted summary judgment for RVNB, holding that RVNB’s DOT was entitled to priority over the earlier DOT held by Wells Fargo because Wells Fargo had not proven the elements necessary for judicial foreclosure and was unable to do so because its trial witness and exhibit list had been stricken. The Supreme Court reversed, holding (1) Wells Fargo was not required to file a counterclaim for foreclosure to protect its interest in the property; and (2) because the undisputed facts established that Wells Fargo was the current beneficiary of the first DOT, the undisputed facts established that Wells Fargo was entitled to judgment as a matter of law that its indenture held priority over RVNB’s indenture. View "Ruby Valley Nat’l Bank v. Wells Fargo Del. Trust Co., N.A." on Justia Law

Appellant Lebanon Valley Farmers Bank (LVFB) is a Pennsylvania chartered bank, and a subsidiary of Fulton Financial Corporation, which merged with Keystone Heritage Group, Inc. The merger made Fulton the parent company of Lebanon Valley National Bank, which merged with Farmers Bank as part of the transaction, thereby forming LVFB. Prior to the merger, both Farmers Bank and National Bank were "institutions" subject to the Shares Tax. For the 2002 tax year, LVFB filed a Bank Shares Tax return, which included National Bank's pre-merger value in its calculation of its six-year average share value, as required by the combination provision. However, in 2005, LVFB filed a petition with the Board of Appeals, seeking a refund of the portion of its 2002 tax payment attributable to National Bank’s pre-merger share value. It claimed disparate treatment because the combination provision was inapplicable when mergers involved out-of-state banks or banks less than six years old. The Commonwealth Court has held, under the plain language of the statute, the combination provision applied only to combinations of "institutions" (i.e., banks with Pennsylvania locations). The trial court held LVFB, as the survivor of the merger of two Pennsylvania banks, should have reported a taxable share value which averaged the combined share value of each constituent institution over the past six years and was, therefore, not entitled to a refund. However, the court ordered the Commonwealth "to provide meaningful retrospective relief" to cure LVFB’s non-uniform treatment. The Commonwealth Court affirmed the Board of Finance and Revenue's classification of the merged LVFB and the 2002 tax assessment. After careful review, the Supreme Court disagreed with the Commonwealth Court's decision and reversed for further proceedings. View "Lebanon Valley Farmers Bank v. Pennsylvania" on Justia Law

John and Oretha Meeks appealed the grant of partial summary judgment in favor of Roderick Morrow and Merchants & Farmers Bank. Because it appeared that the judgment from which the Meekses purported to appeal was not a final judgment, the Supreme Court's clerk’s office remanded the cause to the trial court, which then certified its order as final pursuant to Rule 54(b), Ala. R. Civ. P. After review of the case, the Supreme Court concluded that the trial court’s certification was not proper and the judgment was not made final. Therefore, the Court dismissed the appeal. View "Meeks v. Morrow " on Justia Law