Justia Banking Opinion Summaries

Plaintiff challenged the constitutionality of the Indiana Unclaimed Property Act, Ind. Code 32‐34‐1‐1, as authorizing confiscation of private property without compensation. The Act states that property is presumed abandoned if the apparent owner has not communicated in writing with the holder or otherwise indicated interest in the property within a specified period. When the presumption applied, the holder (here, a bank) is required to try to notify the owner and to submit, within 60-120 days after that, a report including the owner’s last known address to the state attorney general, and to simultaneously transfer the property to the attorney general. The following year, the attorney general must attempt notice by publication. Notice is also posted on an official website. The owner can reclaim the property from the state for 25 years after its delivery before it escheats to the state. An owner who files a valid claim is entitled only to principal, and not to any interest earned on it. Plaintiff’s ward had an interest‐bearing account. The presumption of abandonment applied in 2006, three years after the last communication. Because the statute does not require individualized notice if the value of the account is less than $50, plaintiff (guardian) did not learn about the account until 2011. The district court dismissed her challenge to the “taking” of interest on the account. The Seventh Circuit reversed. View "Cerajeski v. Zoeller" on Justia Law

Med‐1 buys delinquent debts and purchased Suesz’s debt from Community Hospital. In 2012 it filed a collection suit in small claims court and received a judgment against Suesz for $1,280. Suesz lives one county over from Marion. Though he incurred the debt in Marion County, he did so in Lawrence Township, where Community is located, and not in Pike Township, the location of the small claims court. Suesz says that it is Med‐1’s practice to file claims in Pike Township regardless of the origins of the dispute and filed a purported class action under the Fair Debt Collection Practices Act venue provision requiring debt collectors to bring suit in the “judicial district” where the contract was signed or where the consumer resides, 15 U.S.C. 1692i(a)(2). The district court dismissed after finding Marion County Small Claims Courts were not judicial districts for the purposes of the FDCPA. The Seventh Circuit affirmed.View "Suesz v. Med-1 Solutions, LLC" on Justia Law

Appellant was a bondholder who acquired German Agra Bonds issued in 1928. Under a 1953 treaty, the courts of the United States could be used for enforcement of Agra Bonds only under certain conditions, requiring prior use of enumerated validation procedures pursuant to several post-World War II international treaties. Appellant filed suit in federal court against several German banks seeking payment on the bonds. However, the bonds were not validated. The federal court dismissed the suit for failure to meet the conditions. The First Circuit Court of Appeals affirmed, holding (1) under the 1953 treaty, the Agra Bonds are enforceable in U.S. courts only if they have been validated; and (2) because Appellant's bonds were not validated, they were unenforceable in U.S. courts. View "Fulwood v. Fed. Republic of Germany" on Justia Law

Wells Fargo and Hindman were creditors of Clark, whose president and CEO was Hindman’s son. Wells Fargo agreed to extend credit to the companies if Hindman agreed to become a subordinated creditor. Hindman executed subordination agreements. In 2010 Hindman authorized a wire transfer of $750,000 from his personal investment account at Wells Fargo to Clark at the request of his son. By that time, however, his son purportedly had been stripped of authority to make business decisions by Clark. When authorized decision makers learned about the purported loan, they ordered Hindman’s son to reject the funds. Hindman’s son promptly instructed a Wells Fargo Bank vice‐president to stop the transaction, but $750,000 arrived in Clark’s accounts and was automatically used to pay down its Wells Fargo line of credit. Days later, the same Wells Fargo vice‐president transferred $750,000 from Clark’s account to Hindman’s account at a Florida bank at Hindman’s request. Wells Fargo claimed that Hindman’s receipt of the $750,000 violated subordination agreements because Clark repaid a debt to Hindman while it had outstanding obligations to Wells Fargo. Hindman maintained that a valid loan was never consummated because his son could not bind the company and authorized decision makers rejected the proposed loan. The Seventh Circuit vacated summary judgment, reasoning that the district court failed to explain its rejection of Hindman’s plausible arguments. View "Wells Fargo Bus. Credit v. Hindman" on Justia Law

Plaintiff filed suit against the Bank, alleging that the Bank violated the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691, by requiring her to serve as her husband's guarantor. Plaintiff sought equitable and injunctive relief, asserting a claim for unjust enrichment and seeking a declaratory judgment. The district court dismissed the complaint with prejudice because plaintiff failed to state a claim upon which relief could be granted and, in any event, waiver and limitation barred her claims. The court concluded that the Bank may have violated ECOA by requiring plaintiff to sign as an unlimited guarantor. However, the court concluded that plaintiff's claim failed where, in exchange for the Bank's restructuring of the loan at issue, she executed waivers to all claims against the Bank on four separate occasions over a period of more than two years. Accordingly, the court affirmed the district court's dismissal. View "Ballard v. Bank of America, NA" on Justia Law

Miller and his pastor Wellons wanted to buy investment land for $790,000. Miller formed Fellowship, with eight investment units valued at $112,500 each, to purchase the land and recruited investors. Miller and Wellons did not purchase units, but Miller obtained a 19.5% interest as Fellowship’s manager and Wellons obtained a 4.5% interest as secretary. Miller secured $675,000 in investments before closing and obtained a loan from First Bank, representing that DEMCO, one of Miller’s development companies, needed a $337,500 loan that would be paid within six months. Because DEMCO pledged Fellowship’s property, First Bank required a written resolution. The resolution contained false statements that all Fellowship members were present at a meeting, and that, at this nonexistent meeting, they unanimously voted to pledge the property as collateral. Fellowship’s members, other than Miller and Wellons, believed that the property was being purchased free of encumbrances. After the closing, $146,956.75 remained in Fellowship’s account. Miller then exchanged his ownership in Fellowship for satisfactions of debts. Despite having no ownership interest, Miller modified and renewed the loan. Later Miller told Fellowship members the truth. Miller was convicted of two counts of making false statements to a bank, 18 U.S.C. 1014, and two counts of aggravated identity theft, 18 U.S.C. 1028A. The Sixth Circuit affirmed conviction on one count of false statements, but vacated and remanded the other convictions. View "United States v. Miller" on Justia Law

In 2009, Tyler had accumulated $1,041 of debt on his Chase credit card. DHC, assignee of the debt, filed suit in Kentucky, seeking collection of the debt, plus 21% interest, and attorney’s fees. The complaint had not been served when Tyler filed for Chapter 7 bankruptcy, three months after the suit was filed. Tyler did not list this suit as debt or his potential Fair Debt Collection Practices Act counterclaims as assets on the bankruptcy schedules. Tyler did list a debt owed on a Chase credit card, of “Unknown” amount. Chase did not participate and Tyler was granted a discharge. Eight days later, DHC served process on Tyler. DHC filed a voluntary Notice of Dismissal without prejudice after it learned of Tyler’s bankruptcy, but Tyler filed a purported federal class action, alleging violations of the FDCPA and Kentucky’s usury laws. The district court dismissed, finding that Tyler “elected to forego filing compulsory counterclaims” and that Tyler’s claims were “rooted in the allegations in DHC’s state court complaint” and thus part of the bankruptcy estate. The Sixth Circuit affirmed. While the claim was not barred under res judicata principles, the claim was based on a pre-petition violation and, thus, property of the bankruptcy estate.View "Tyler v. DH Capital Mgmt., Inc." on Justia Law

Buffets filed suit against U.S. Bank and BMO Harris Bank alleging, among other things, violations of the Uniform Fiduciaries Act (UFA), Minn. Stat. 520.01 et seq. The district court asserted jurisdiction on the ground that the action was related to a Title 11 bankruptcy proceeding, 28 U.S.C. 1334(b), and that abstention in favor of state-court litigation was not required under 28 U.S.C. 1334(c)(2). The court concluded that, although the question of "related to bankruptcy" jurisdiction was difficult and close, the answer ultimately did not affect the court's jurisdiction. Even if the district court lacked "related to" bankruptcy jurisdiction - because the banks could not pursue indemnification claims against LGI - the court had jurisdiction over the appeal under the rationale of Caterpillar Inc. v. Lewis. On the merits, the court concluded that Buffets has not established a genuine dispute as to whether either bank was indifferent to LGI's suspicious activity, such that its actions amounted to bad faith. Accordingly, the court affirmed the the district court's grant of summary judgment to the banks. View "Buffets, Inc., et al. v. BMO Harris Bank, et al." on Justia Law

Plaintiff faced foreclosure on her home mortgage after having fallen behind on her payments. The notice of foreclosure that Plaintiff received did not come from her lending institution but from a bank that had purchased her mortgage through a series of assignments facilitated by the Mortgage Electronic Recording System (MERS). Plaintiff brought this complaint against the receiving institution that sought foreclosure, (1) contending that MERS could not validly assign her mortgage, and therefore asserting that the receiving institution had no legal interest upon which to foreclose; and (2) bringing state law claims for fraud and unfair business practices. The district court dismissed Plaintiff's complaint. The First Circuit Court of Appeals affirmed, holding that Plaintiff's claims did not present legally cognizable claims for relief. View "Woods v. Wells Fargo Bank, N.A." on Justia Law

Serna defaulted on a loan he obtained through the Internet that was subsequently purchased by Samara. Attorney Onwuteaka, who owns Samara, obtained a default judgment and attempted to collect. Serna then filed suit in federal court, alleging that because he neither resided nor entered the loan agreement in Harris County where the judgment entered, the suit violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692, venue requirement. A magistrate found Serna’s suit was untimely under the FDCPA’s one-year limitations period because he filed his complaint more than one year after Onwuteaka filed his petition in the underlying debt-collection action. The Fifth Circuit reversed, that the alleged FDCPA violation arose only after Serna received notice of the underlying debt collection action. The FDCPA provides that a debtor may bring an action “within one year from the date on which the violation occurs.” A violation of does not occur until the debt-collection suit is filed and the alleged debtor is notified of the suit.View "Serna v. Law Office of Joseph Onwuteaka" on Justia Law