Justia Banking Opinion Summaries

Debtor filed for leave to appeal the bankruptcy court's interlocutory judgment in the district court. While the motion was pending, the bankruptcy court, sua sponte, certified its judgment for direct appeal to this court, pursuant to 28 U.S.C. 158(d)(2)(A)(i) and (iii). The court agreed with the bankruptcy court's ruling on cross-motions for partial summary judgment in favor of FGB that the Multiple Indebtedness Mortgage that FGB recorded was valid and that the property underlying that mortgage, the Deluxe Motel, secured both the loan FGB made to debtor and the loan FGB made to a second entity. Accordingly, the court affirmed the judgment and remanded for further proceedings. View "Hari Aum, L.L.C. v. First Guaranty Bank" on Justia Law

This case arose out of several business transactions entered into by parties involved in the development of condominiums on Hauser Lake. Cherrad, Merritt & Marie, and Max & V (the Hale interests) were limited liability companies owned by Conrad and Cheryl Hale. Craig Kinnaman was sole proprietor of a business called CK Design. Merritt & Marie purchased the Hauser Lake property. Subsequently, the Hales and Kinnaman agreed to develop a portion of the property. Cherrad was the developer, and Mountain West Bank (MWB) made three loans to Cherrad to develop the project. CK Design suffered delays in the project and later left the project. In 2007, Kinnaman committed suicide, and the Estate recorded a $3.3 million construction lien on the condominiums. MWB brought this action 2008 against the Hale interests and the Estate seeking foreclosure on the three secured loans. The Hale interests and the Estate cross-claimed against each other. The district court (1) declared the Estate's construction lien invalid; and (2) determined Cherrad owed the Estate $76,278 for work that CK Design performed on the project. Finding no error, the Supreme Court affirmed. View "Mountain West Bank, N.A. v. Cherrad, LLC" on Justia Law

Mortgage Electronic Registration Systems, as nominee for two lenders (collectively, Plaintiffs), held mortgages on Lot 456. For the property owner's failure to pay his water bill, the Pawtucket Water Supply Board (PWSB) auctioned the lot. PWSB issued a deed conveying the title in the property to Amy Realty. Amy Realty subsequently discovered that the property PWSB had intended to auction had been mistakenly listed as Lot 486 on the tax sale notices and deed. Amy Realty then obtained a corrective deed from the PWSB conveying title to Lot 456. Amy Realty subsequently filed a petition to foreclose on Plaintiffs' rights of redemption in Lot 456. Plaintiffs filed this action seeking to vacate the final decree of disclosure, alleging that the corrective deed changing the lot number from 486 to 456 was invalid and this infirmity rendered the foreclosure decree void. The superior court granted summary judgment for Plaintiffs. The Supreme Court affirmed, holding (1) the corrective deed obtained in this case was null and void because it was not recorded within sixty days of the tax sale; and (2) the final foreclosure decree may be vacated because the tax sale was invalid. View "Mortgage Elec. Registration Sys., Inc. v. DePina" on Justia Law

Plaintiff borrowed $249,900 from Lehman Brothers Bank to finance the purchase of a home, and he signed an adjustable rate note that evidenced the debt. Plaintiff and his wife (Plaintiffs) then executed a mortgage on the property that secured the loan. Even though the note was made payable to the lender, the mortgage was granted to Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for the lender and the lender's subject and assigns. Plaintiffs subsequently defaulted on the note, and MERS initiated foreclosure proceedings. Plaintiffs subsequently commenced an action seeking to prevent MERS from exercising the power of sale contained in the mortgage, arguing that only a mortgagee was permitted to exercise the power of sale and that MERS was merely a nominee-mortgagee without the authority to foreclose. The superior court denied Plaintiffs' request and entered judgment on behalf of Defendants. The Supreme Court affirmed, holding that MERS had both contractual and statutory authority to foreclose and exercise the power of sale. View "Bucci v. Lehman Bros. Bank, FSB" on Justia Law

To help finance her purchase of a condominium (condo) for $395,000, Mary McCulley sought a residential loan from Heritage Bank (Bank) for $300,000. American Land Title Company (ALTC) provided a commitment for title insurance. McCulley signed a promissory note and signed a deed of trust as collateral. Subsequently, ALTC changed the designated use of the condo in the deed from residential to commercial. After closing, McCulley discovered the Bank had issued her an eighteen-month, $300,000 commercial property loan rather than the thirty-year residential property loan for which she applied. When she was unable to obtain long-term refinancing on the property, McCulley signed a warranty deed transferring ownership of the condo to the Central Asia Institute and used the proceeds to pay off the loan. McCulley then sued ALTC and the Bank (collectively, Defendants) for, inter alia, negligence, breach of contract, slander of title, and fraud. The district court granted summary judgment for Defendants. The Supreme Court (1) reversed the district court's order of summary judgment in favor of the Bank on the issue of fraud, as genuine issues of material fact existed relative to McCulley's claim of fraud on the part of the Bank; and (2) otherwise affirmed. View "McCulley v. Am. Land Title Co." on Justia Law

The Maryland Economic Development Corporation (MEDCO) is a public corporation established by the legislature to aid in promoting the economic development of the State. This litigation arose from MEDCO's involvement in the development of a technology development center. MEDCO sought a loan with Bank to finance the center. MEDCO executed a leasehold deed of trust with Bank requiring MEDCO to pay all recording costs and fees in connection with filing the loan documents. MEDCO subsequently presented the deed of trust for recording in Montgomery County, claiming an exemption from the recordation tax based on Md. Code Ann. Econ. Dev. 10-129(a), which granted MEDCO a tax exemption "from any requirement to pay taxes or assessments on its properties or activities." The county transfer office denied the exemption and required MEDCO to pay recordation tax. The county department of finance denied MEDCO's recordation tax refund claim. The tax court denied MEDCO's petition for appeal. The circuit court reversed, and the court of special appeals reversed the circuit court. The Court of Appeals reversed, holding that, based on the plain language of section 10-129(a), the legislature intended to exempt MEDCO from paying the recordation tax at issue in this case. View "Md. Econ. Dev. Corp. v. Montgomery County" on Justia Law

Conlin refinanced with a loan from Bergin, secured by a mortgage containing a provision that recognized MERS as a nominee for Bergin and Bergin’s successors. Bergin sold the note to the Real Estate Mortgage Investment Conduit, for which U.S. Bank was trustee. The mortgage was held by MERS, and serviced by GMAC. In 2008, MERS assigned the mortgage to “U.S. Bank National Association as trustee.” In 2010 Orlans sent Conlan notice (Mich. Comp. Laws 600.3205a), of default and of his ability to request loan modification, stating that it was sent on behalf of GMAC as “the creditor to whom your mortgage debt is owed or the servicing agent for the creditor.” In 2011, Orlans published notice of foreclosure sale, stating that “the mortgage is now held by U.S. Bank National Association as Trustee by assignment.” The notice was also posted on the property, which was sold at a sheriff’s sale on March 31. On October 28, 2011, Conlin sought damages and to have the foreclosure sale set aside. The district court dismissed. The Sixth Circuit affirmed. Even if the “robo-signed” assignment were invalid, Conlin was not prejudiced. He has not clearly shown fraud in the foreclosure process, as required for a challenge after expiration of the six-month redemption period. View "Conlin v. Mrtg. Elec. Registration Sys., Inc." on Justia Law

Westerfield was a lawyer working for an Illinois title insurance company when she facilitated fraudulent real estate transfers in a scheme that used stolen identities of homeowners to “sell” houses that were not for sale to fake buyers, and then collect the mortgage proceeds from lenders who were unaware of the fraud. Westerfield facilitated five such transfers and was indicted on four counts of wire fraud, 18 U.S.C. 1343. She claimed that she had been unaware of the scheme’s fraudulent nature and argued that she had merely performed the typical work of a title agent. She was convicted on three counts. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence, to admission of a codefendant’s testimony during trial, and to the sentence of 72 months in prison with three years of supervised release, and payment of $916,300 in restitution. View "United States v. Westerfield" on Justia Law

In 2004, El Camino executed equipment leases with Cyberco, a corporation held out to be a computer sales and consulting business. Cyberco actually operated under several names and was engaged in fraud. Its affiliate, Teleservices, a shell corporation, was represented as an arms-length computer manufacturer. The equipment to be leased by El Camina, which likely never existed, was allegedly manufactured by Teleservices and delivered to Cyberco, which released payment to Teleservices. In 2002, Huntington established a banking relationship with Cyberco. Cyberco used its accounts to deposit funds from El Camino. Huntington investigated a series of overdrafts. Ultimately Cyberco elected to undergo a “gradual migration” from Huntington, and Huntington agreed to credit extensions for Cyberco during the transition. El Camino purchased more than $25 million in computer equipment. El Camino sued Huntington for conversion, aiding and abetting conversion, aiding and abetting fraud, and unjust enrichment. The district court granted summary judgment on the first three claims, concluding that El Camino could not establish the requisite level of knowledge to sustain aiding and abetting and conversion claims. It later dismissed the unjust enrichment claim. The Sixth Circuit affirmed, stating that findings, in a related bankruptcy case, that Huntington did not act in good faith, were irrelevant. View "El Camino Res., LTD. v. Huntington Nat'l Bank" on Justia Law

In November 2009, Plaintiff filed suit against Bank seeking judgment for principal and interest allegedly due and owing on a $15,000 certificate of deposit (CD) opened by her mother in July 1984. The CD matured in April 1985. The district court granted summary judgment in favor of Bank, finding that Plaintiff's claims were barred by the applicable statute of limitations. The Supreme Court affirmed, holding that Plaintiff had to commence her action either seven years after the maturity date of the CD or one year after July 1, 2008, and therefore, Plaintiff's claims were barred by limitations, and the district court therefore did not err in entering summary judgment for Bank. View "Swift v. Norwest Bank-Omaha West" on Justia Law