Justia Banking Opinion Summaries

The Palomars filed for bankruptcy under Chapter 7. The trustee reported that the estate contained nothing that could be sold to obtain money for unsecured creditors. A discharge of dischargeable debts was entered and the bankruptcy case was closed. The day before the trustee issued his report, the Palomars had filed an adversary action against the bank that held a second mortgage on their home. The balance on their first mortgage, but the house was valued at $165,000. The Palomars argued that the second mortgage should be dissolved under 11 U.S.C. 506(a). Deciding that the adversary action was meritless, the judge refused to reopen the bankruptcy proceeding. The district court and Seventh Circuit affirmed, noting that the only debts normally extinguished are those for which a claim was rejected. The bank made no claim; this was a no-asset bankruptcy. Failing to extinguish the lien only deprives the debtors of the chance to make money should the value of their home ever exceed the balance on the first mortgage. View "Palomar v. First Am. Bank" on Justia Law

Plaintiff, FIA Card Services, filed a complaint against Defendant to recover damages for Defendant's unpaid credit card account. The district court subsequently entered summary judgment in favor of Plaintiff. The Supreme Court vacated the summary judgment, holding that Plaintiff, as the moving party and party with the burden of proof at trial, failed to establish that there was no dispute of material fact as to each element of the cause of action where the record did not sufficiently establish either the existence of Defendant's credit card account or that Plaintiff was the owner of that account. Remanded. View "FIA Card Servs., N.A. v. Saintonge" on Justia Law

In each of these consolidated cases, JPMorgan attempted to use the Arkansas Statutory Foreclosure Act (SFA), Ark. Code Ann. 18-50-101 - 18-50-117, to foreclose on the borrower's home. At issue was whether a national banking association chartered by the Office of the Comptroller of the Currency but not registered to do business with the Arkansas Secretary of State or the Arkansas Bank Department could use the non-judicial foreclosure procedure provided by the SFA. The court concluded that an entity could be authorized to do business in Arkansas for SFA purposes pursuant to either state or federal law. In JPMorgan's case, federal law provided such authorization. Therefore, the district court correctly concluded that JPMorgan was authorized to do business in Arkansas and could avail itself of the benefit of the SFA. Accordingly, the court affirmed the judgment. View "JPMorgan Chase Bank v. Johnson, et al." on Justia Law

Defendants executed guaranty contracts in order to secure financing to run their business operations. Bank subsequently commenced foreclosure proceedings on the business. Afterwards, Bank commenced an action against Defendants seeking payment under the guaranty contracts. Defendants, in response, alleged several counterclaims and affirmative defenses. Bank filed a motion for summary judgment, arguing that Defendants' counterclaims and affirmative defenses were derivative of the corporation, and therefore Defendants lacked standing to raise them. Bank also asserted that Defendants' affirmative defenses were barred because they were subject to claim preclusion. The circuit court ultimately granted summary judgment to Bank. The court of appeals affirmed, concluding that Defendants' counterclaims and affirmative defenses were derivative and that they lacked standing to raise them in this action. The Supreme Court affirmed, holding (1) Bank was entitled to summary judgment dismissing all of Defendants' counterclaims, as each of the counterclaims was derivative; (2) Defendants' affirmative defenses did not defeat Bank's demand under the guaranties for payment; and (3) the circuit court correctly granted summary judgment to Bank because Defendants failed to raise any genuine issue of material fact showing payment was not due. View "Park Bank v. Westburg" on Justia Law

Appellant signed a loan agreement with Bank for a line of credit for his business (Business). Appellant later defaulted on the loan, and Bank brought a collection action against Appellant, his wife, their conjugal partnership, and Business. The FDIC subsequently took over the Bank as receiver and obtained summary judgment in its favor on the collection action. The district court also dismissed Appellants' counterclaim for lack of jurisdiction, finding that Appellants had not timely taken the steps necessary to maintain an action against the FDIC. The First Circuit Court of Appeals affirmed, holding (1) summary judgment was properly granted on the collection action because factual disputes did not remain concerning Bank's role in causing Appellants to breach their loan agreement and whether Appellants should be released from their obligations under that agreement; and (2) the district court correctly dismissed Appellants' counterclaims on jurisdictional grounds, as the Bank had insufficient assets to make any distribution on the claims of general unsecured creditors, including Appellants if they prevailed on their counterclaim, and therefore, the claim was not redressable. View "Fed. Deposit Ins. Corp., as receiver for R-G Premier Bank of P.R. v. Estrada-Rivera" on Justia Law

Plaintiffs filed suit against Wells Fargo under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p, and the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691-1691f. The court affirmed the district court's dismissal of plaintiffs' FDCPA claim because the complaint did not plausibly allege that Wells Fargo was a debt collector under section 1692a(6). The court reversed, however, the district court's dismissal of the ECOA claim where the complaint's allegations that Wells Fargo took an adverse action without complying with ECOA's notice requirements were enough for the ECOA claim to survive a motion to dismiss because the parties agreed that Wells Fargo did not send plaintiffs an adverse action notice. View "Schlegel v. Wells Fargo Bank" on Justia Law

This case arose when the FDIC filed a complaint against appellants for sums due under various promissory notes. Appellants then entered into a Stipulated Judgment in favor of FDIC and against appellants. CadleRock moved ex parte to re-open the case to allow it to file the necessary pleadings to revive the Stipulated Judgment and the district court granted the motion. CadleRock then filed an ex parte motion to revive the Stipulated Judgment (Revived Judgment) as it pertained to appellants and the district court granted the motion. Five years later, CadleRock commenced collection and served appellants with pleadings and appellants moved to vacate and annul. At issue on appeal was the district court's order denying appellants' Federal Rule of Civil Procedure 60(b)(4) motion to vacate. The court concluded that the Revived Judgment was not void under Rule 60(b)(4); appellants' due process challenges failed; and, given that appellants have not shown an actual conflict between federal and state law, their preemption claim failed. Accordingly, the court affirmed the district court's judgment. View "FDIC v. SLE, Inc., et al." on Justia Law

Petitioners executed a promissory note secured on a mortgage on their residence from a California corporation. The mortgage stated that Respondent, Mortgage Electronic Registration Systems, listed as mortgagee and nominee, held legal title to the interests granted by Petitioners in the mortgage. After Petitioners failed to make payments pursuant to the terms of the note, Respondent, acting as nominee, filed a complaint against Petitioners seeking foreclosure of the mortgage and sale of the property. The circuit court granted Respondent's motion for summary judgment and entered a foreclosure judgment. Petitioners' property was then sold to Respondent. The circuit court confirmed the sale despite Petitioners' assertion that Respondent lacked standing to bring the foreclosure action. The intermediate court of appeals affirmed. The Supreme Court affirmed, holding that Petitioners were precluded from raising the issue of Respondent's standing where (1) a standing objection is not unique to a confirmation of sale proceeding from which Petitioners appealed; and (2) Petitioners' failure to appeal the foreclosure judgment barred challenges to Respondent's standing under the doctrine of res judicata. View "Mortgage Elec. Registration Sys., Inc. v. Wise" on Justia Law

Appellant Alstep, Inc. obtained a multimillion dollar loan from Appellee State Bank and Trust Company (SB&T) for the purchase of a sandwich shop, gas station and liquor store. Alstep fell behind on loan payments, and the Bank conducted a non-judicial foreclosure. SB&T was the highest bidder at the sale, and applied the proceeds of that sale to Alstep's loan balance. There was still a deficit. The Bank demanded immediate possession of the property, but Alstep refused. Despite receiving notice of a temporary restraining order, Alstep continued to operate the gas station and otherwise make use of the property. SB&T filed and served Alstep with an emergency motion for appointment of a receiver. SB&T cited three grounds in support of its motion: (1) that Alstep converted rent from the property's tenant (the sandwich shop) that should have gone to SB&T; (2) that Alstep was depleting the property that served as collateral for its debt; and (3) that SB&T needed to take control of the property to guard against its potential liability under state and federal environmental regulations as the owner of the gas station. Appellant never filed a response to the motion, but ultimately challenged the trial court's appointment of a receiver. The Supreme Court held that the trial court had broad discretion in deciding whether to appoint a receiver, and found no abuse of that discretion. View "Alstep, Inc. v. State Bank & Trust Co." on Justia Law

Plaintiffs, who stopped paying their mortgage in April 2010, filed this try title action challenging the authority of Defendant U.S. National Bank Association to foreclose on their home pursuant to a March 2011 assignment of the mortgage loan on Plaintiffs' home. U.S. Bank moved to dismiss the complaint for failure to state a claim under the Massachusetts try title statute. The federal district court granted the motion, holding (1) a petitioner must allege that an adverse claim clouds his record title to state a claim under the try title statute; and (2) U.S. Bank's efforts to foreclose on Plaintiffs' home did not amount to an adverse claim under Massachusetts law. The First Circuit Court of Appeals affirmed, holding (1) Petitioners were required to allege an adverse claim to withstand U.S. Bank's motion to dismiss; and (2) the allegations in the petition did not satisfy the Fed. R. Civ. P. 12(b)(6) standard. View "Lemelson v. U.S. Bank Nat'l Ass'n" on Justia Law