Justia Banking Opinion Summaries

Affordable appealed the district court's grant of Fannie Mae's motion to dismiss, concluding that EFA had not acted as Fannie Mae's agent in originating the loan for a senior living complex that Affordable purchased and that the loan documents unambiguously authorized a prepayment penalty. The court affirmed the dismissal of Affordable's claims for negligent misrepresentation, breach of the covenant of good faith and fair dealing, and unjust enrichment. However, the court reversed the dismissal of Affordable's breach of contract claim where the agreement was ambiguous as to whether "condemnation award" included a sale in lieu of condemnation and remanded for further proceedings. View "Affordable Communities of MO v. Federal Nat'l. Mortgage Assoc." on Justia Law

Debtor borrowed money to finance a real estate purchase. Debtor signed a promissory note and secured the loan with a mortgage. Bank of America (BANA) became the owner of the note. After the mortgage was recorded, an assignment of the mortgage to Mortgage Electronic Registration Systems (MERS) was recorded. MERS subsequently assigned the mortgage to BAC Home Loans Servicing (BAC), which was servicing the loan on behalf of BANA. After Debtor defaulted on her home loan, she and her husband filed a Chapter 7 bankruptcy petition. The bankruptcy trustee subsequently initiated an adversary proceeding against BAC, seeking to avoid the mortgage for its failure to comply with the requirements of Wyo. Stat. Ann. 34-2-122 and -123 (the statutes), notice statutes intended to protect third parties from conflicting claims of a principal and agent. The U.S. bankruptcy court filed a certification order to the Wyoming Supreme Court requesting the Court to answer with the mortgage must comply with the requirements of the statutes. The Supreme Court held that the statutes did not apply in this case because there were no conflicting claims by a principal and an agent from which a third party needed protection. View "Barney v. BAC Home Loans Servicing, L.P." on Justia Law

Appellant purchased nonrecourse notes (Notes) in the amount of two million dollars, issued by the Puerto Rico Conservation Trust Fund (PRCTF). The Notes were not registered under the Securities Act based on an exemption from registration. The Notes later went into default, and Appellant sued Banco Popular de Puerto Rico (BPPR), trustee of the Notes, and Wilmington Trust Company (WTC), indenture trustee of the securities that the PRCTF purchased with Note proceeds. Appellant brought suit in federal district court, premising his assertion of subject matter jurisdiction on the Edge Act and the Trust Indenture Act of 1939 (TIA). The district court dismissed the amended complaint for want of subject matter jurisdiction. The First Circuit Court of Appeals affirmed, holding (1) Appellant's suit did not arise under federal law; and (2) the district court did not abuse its discretion in refusing to permit Appellant to file a delayed amended complaint asserting a new theory of liability because Appellant proffered no good reason for the delay. View "Nikitine v. Wilmington Trust Co." on Justia Law

Defendants gave a promissory note to Bank and secured a loan with a trust deed on real property. Defendants defaulted on the note, and Bank initiated foreclosure proceedings. The property was sold after a sheriff's sale. Bank subsequently filed a complaint to recover the deficiency. The district court granted Defendants' motion for summary judgment, holding that because Bank filed its complaint ninety-nine days after the sheriff's sale, the action was barred by the three-month statute of limitations in Neb. Rev. Stat. 76-1013. The Supreme Court reversed, holding (1) the special three-month statute of limitations on actions for deficiency set forth in the Nebraska Trust Deeds Act applies where a lender elects to judicially foreclose upon the real estate, but the special limitation applies only where the property has been sold by exercising the power of sale set forth in the trust deed; and (2) because the judicial foreclosure of the trust deed in this case did not result in the sale of property under a trust deed, it did not fall under the statutory language in section 76-1013, and the deficiency action was governed by the general statute of limitations for actions on written contracts. Remanded. View "First Nat'l Bank of Omaha v. Davey" on Justia Law

Plaintiffs commenced this putative class action alleging that defendants participated in a global Internet conspiracy to sell illegal prescription drugs, in violation of the laws of the United States and Virginia. At issue on appeal was whether the district court erred in dismissing the complaint against four foreign banks for lack of personal jurisdiction. The court concluded that Rule 4(k)(2) did not justify the exercise of personal jurisdiction over the banks because exercising jurisdiction over them would not, in the circumstances here, be consistent with the United States Constitution and laws. Subjecting the banks to the coercive power of the court in the United States, in the absence of minimum contacts, would constitute a violation of the Due Process Clause. Accordingly, the court affirmed the district court's orders dismissing the complaint against the banks. View "Unspam Technologies v. Chernuk" on Justia Law

The CEO and sole shareholder of Zee decided to expand his chemical sales business into the water treatment industry and hired employees who were currently working or had previously worked in the industry. Four employees came from GE and were bound by non-compete agreements. GE sued Zee and its former employees in North Carolina state court for breach of contract, tortious interference with contract, and unfair trade practices. The state court found the agreements enforceable and held Zee and the employees jointly and severally liable for $288,297.00 in compensatory damages as a result of unfair and deceptive trade practices and for $5,769,903.10 in attorney fees, $864,891.00 in punitive damages, and $257,931.44 in costs. GE discovered that Zee had tied up virtually all of its assets in a credit facility agreement with BMO Harris Bank before entry of judgment; registered the judgment in Illinois, Harris’s principal place of business; and served Harris with a citation to discover Zee’s assets. GE objected to removal to federal court, but the district court dismissed GE’s case entirely. The Seventh Circuit vacated, finding that GE raised a timely and sound objection to removal under the forum-defendant rule, and the district court should have remanded the case. View "GE Betz, Inc. v. Zee Co., Inc." on Justia Law

In 2008, Regents Bank issued two loans to Appellant. After Appellant failed to repay either loan, Regents filed a complaint in district court for breach of contract and judicial foreclosure. The district court stayed the proceedings and compelled arbitration as provided in the loan documents. The arbitrator ultimately ruled in Regents' favor. The district court confirmed the arbitration award and later entered an amended judgment and order of sale. Appellant appealed, arguing (1) Regents employed undue means in procuring the award, and (2) the arbitrator manifestly disregarded the law in refusing to void one of the loans. The Supreme Court affirmed the district court's order confirming the arbitration award, holding (1) Appellant failed to satisfy his burden of proving by clear and convincing evidence that the award was procured through intentionally misleading conduct; and (2) the arbitrator's refusal to void one of the loans was not a manifest disregard of the law. View "Sylver v. Regents Bank, N.A." on Justia Law

Homeowner attended a first Foreclosure Mediation Program (FMP) mediation with Citimortgage, after which Defendant was denied a loan modification. The district court subsequently ordered a second mediation. PennyMac Corp. later obtained beneficial interest in the deed of trust and promissory note and attended the second mediation. The mediator determined that PennyMac failed to bring the promissory note, deed of trust, and other documents to the mediation and that PennyMac's representative lacked authority to negotiate. Homeowner filed a petition for judicial review, requesting sanctions, attorney fees, and a judicially imposed loan modification. The district court imposed sanctions against PennyMac but declined to impose a loan modification or monetary sanctions beyond the amount of attorney fees. The Supreme Court affirmed, holding (1) Homeowner had standing to challenge the district court's order on appeal; and (2) the district court acted within its discretion in denying an FMP certificate and in determining sanctions. View " Jacinto v. PennyMac Corp." on Justia Law

Plaintiff, seeking damages and declaratory relief, brought a diversity action against two national banking associations, alleging violations of Louisiana consumer protection law in connection with a mortgage foreclosure proceeding. The district court dismissed the action in part pursuant to the Rooker-Feldman doctrine and in part for failure to state a claim of a statutory exemption under Louisiana law. The court concluded that the district court had jurisdiction to hear plaintiff's claims, which were "independent claims" for Rooker-Feldman purposes. However, plaintiff's complaint must be dismissed nonetheless for failure to state a claim where the Louisiana consumer protection law did not provide plaintiff with an avenue of relief because both banks were exempt and where plaintiff had not disputed that her declaratory judgment could be dismissed under Louisiana's preclusion principles. Accordingly, the court affirmed the judgment. View "Truong v. Bank of America, N.A., et al" on Justia Law

The Commonwealth of the Northern Marina Islands obtained two tax judgments in the U.S. district court against the Millars for unpaid taxes. The Millards, who previously resided in the Commonwealth, relocated before the Commonwealth was able to obtain the judgments. The Commonwealth commenced proceedings as a judgment creditor asseking a turnover order against garnishees holding assets of the Millars. The Commonwealth named a Canadian bank (Bank) headquartered in Toronto, with a branch in New York, as a garnishee under the theory that the Millards maintained accounts in a foreign subsidiary of Bank. The district court denied the Commonwealth's motion for a turnover order against Bank. The Court of Appeals accepted certification to answer questions of law, holding (1) for a court to issue a post-judgment turnover order pursuant to N.Y. C.P.L.R. 5225(b) against a banking entity, the entity itself must have actual, not merely constructive, possession or custody of the assets sought; and (2) therefore, it is not enough that the banking entity's subsidiary might have possession or custody of a judgment debtor's assets. View "Commonwealth of N. Mariana Islands v. Canadian Imperial Bank of Commerce" on Justia Law