Justia Banking Opinion Summaries

In this case, the Supreme Court interpreted a trust instrument to decide whether the death of Betty Plouf triggered the offset provision of the Plouf Family Trust, and thus, instantaneously satisfied the mortgage lien the Trust held on the home of a beneficiary. The trial court held that it did. The Supreme Court affirmed, holding (1) the trial court had inherent authority to revisit an earlier order finding that the Trust had a first-priority lien; (2) the trial court did not err in ruling that the unambiguous terms of the Trust mandated an offset at the time of Betty's death, thus extinguishing the underlying mortgage; and (3) neither party was entitled to appellate attorney fees. View "SBS Fin. Servs., Inc. v. Plouf Family Trust" on Justia Law

Nancy Ramsey filed a complaint against Baxter Title Company and the company's owner, James Lemieux, for breach of fiduciary duty and duty of care and for punitive damages arising from a real estate transaction. The superior court dismissed Ramsey's complaint for failure to state a claim upon which relief can be granted. The Supreme Court affirmed, holding (1) Ramsey's complaint did not allege the kind of close, confidential relationship necessary for a court to find the existence of a fiduciary duty; and (2) Baxter Title and Lemieux did not owe Ramsey a duty of care to explain to her that the loan she secured was more favorable to the lender than to her. View "Ramsey v. Baxter Title Co." on Justia Law

Shannon Barabas had two mortgages on her Madison County home. The second mortgagee foreclosed on the property without notice to the first. The first mortgagee sought to intervene and obtain relief from the foreclosure judgment, but the trial court denied its motion, finding that the first mortgagee was bound by the default judgment because its assignment of the mortgage was never properly recorded. The Supreme Court reversed, holding (1) the first mortgagee had a right to intervene; and (2) the default judgment was void for lack of personal jurisdiction as to the first mortgagee because it had no notice of the foreclosure proceeding. View "Citimortgage, Inc. v. Barabas" on Justia Law

In 2002, Lehman Brothers International Europe (LBIE) created the "Dante Programme" by which certain special purpose entities issued notes of collateralized debt obligations (the Notes). The Notes were purchased by appellants as well as other investors. The same special purpose entities entered into a swap agreement with Lehman Brothers Special Financing Incorporated (LBSF) whereby LBSF agreed to pay amounts due under the Notes in exchange for certain interests in the collateral that secured the Notes. Appellants and LBSF had competing interests in the Collateral. LBSF subsequently commenced an adversary proceeding in the bankruptcy court against the trustees of the Dante Programme and the issuers of the Notes, seeking declaratory relief with respect to priority in the Collateral. The court held that in the circumstances here, the bankruptcy court's denial of appellants' motions to intervene in the adversary proceeding was a final appealable order. Accordingly, the court vacated and remanded. View "In re: Lehman Brothers Holdings Inc." on Justia Law

This case arose when Highland filed suit against Bank of America for breach of contract and promissory estoppel, alleging that the terms sought by Bank of America in a debt-trade agreement did not conform to the parties' oral agreement. Highland appealed the district court's dismissal under Rule 12(b)(6) of its claims for breach of contract and promissory estoppel. Because the court found that the district court was justified in dismissing Highland's promissory estoppel claim, but that it erred in dismissing Highland's breach of contract claim, the court affirmed in part, and reversed and remanded in part. View "Highland Capital Mgmt. LP v. Bank of America" on Justia Law

Debtors appealed from the ruling of the bankruptcy court granting summary judgment to SunTrust and denying summary judgment to debtors, on debtors' adversary complaint that challenged SunTrust's standing to enforce a promissory note and deed of trust on debtors' property, and sought to remove the deed of trust from the chain of title to such property. The court affirmed the bankruptcy court's judgment and held that the promissory note was a negotiable instrument and that SunTrust was entitled to enforce it and the deed of trust. The bankruptcy court properly used evidence from the affidavit of SunTrust's representative and properly applied judicial estoppel. View "Knigge, et al v. SunTrust Mortgage, Inc." on Justia Law

In this appeal, which arose out of Nevada's Foreclosure Mediation Program (FMP), the Supreme Court examined the note-holder and beneficial-interest status of a party seeking to foreclose. The Court concluded (1) to participate in the FMP and ultimately obtain an FMP certificate to proceed with the nonjudicial foreclosure of an owner-occupied residence, the party seeking to foreclose must demonstrate that it is both the beneficiary of the deed of trust and the current holder of the promissory note; (2) when the Mortgage Electronic Registration System, Inc. (MERS) is the named beneficiary of the deed of trust and a different entity holds the promissory note, the note and deed of trust are split, making nonjudicial foreclosure by either improper, but any split is cured when the promissory note and deed of trust are reunified; and (3) because the foreclosing bank in this case became both the holder of the promissory note and the beneficiary of the deed of trust, it had standing to proceed through the FMP. View "Edelstein v. Bank of New York Mellon" on Justia Law

Petitioners were beneficiaries of a testamentary trust who sued the trustee, Respondent PNC Bank. Petitioners alleged that PNC improperly demanded that each beneficiary execute a broad release agreement prior to distribution and misapplied the provisions of the Maryland Code, Tax-General Article in calculating the amount of inheritance tax owed on the trust's assets and the amount of commission to which PNC was entitled as trustee. The circuit court granted summary judgment in PNC's favor, finding no legal impropriety in PNC's distribution plan or its calculation of the tax and commission. The court of special appeals affirmed. The Court of Appeals affirmed, holding that PNC's actions were in accord with Maryland law. View "Hastings v. PNC Bank, NA" on Justia Law

Boggio and wife, Sarah, resided in Texas. Boggio served military tours, and assigned Sarah power of attorney. They separated; Boggio left the state. Six months later Sarah purchased a car with financing through USAA. Sarah allegedly signed Boggio’s name, unbeknownst to him, on the check issued to the car dealership. The car was later listed on Boggio’s car insurance. The divorce decree confirmed that the car was acquired during the marriage, identified the associated loan as a marital debt, and stated that Sarah alone would be responsible for payment. Later, Boggio, residing in Cincinnati, experienced credit problems due to missed payments. Boggio wrote to consumer reporting agencies and USAA disputing his status as co-obligor. USAA attempted to mail Boggio (but not his counsel) a copy of the allegedly forged check, but the letter was sent to an incorrect Texas address. Because Boggio would not go to Texas to file a police report, USAA declared the dispute a civil matter between the Boggios. In Boggio’s suit under the Fair Credit Reporting Act, the district court granted summary judgment to USAA. The Sixth Circuit reversed. A reasonable jury could find that USAA’s investigation and notices were unreasonable.View "Boggio v. USAA Fed.l Sav. Bank" on Justia Law

Cleveland sued financial institutions, alleging that by securitizing subprime mortgages and foreclosing on houses, defendants allegedly contributed to declines in property values, shrinking tax base, and increased criminal activity, causing a public nuisance. The district court dismissed, finding preemption by state law and failure to demonstrate that defendants unreasonably interfered with a public right or were the proximate cause of alleged harm. The Sixth Circuit affirmed. Cleveland filed another suit in state court against non-diverse institutions, alleging public-nuisance, violation of the Ohio Corrupt Activities Act, (RICO analogue), by inaccurately claiming title to mortgages and notes in foreclosures in violation of Ohio Rev. Code 2923.32. Cleveland also sought to recover (Ohio Revised Code 715.261) costs incurred maintaining or demolishing foreclosed houses. While the case was pending, banks sought a declaratory judgment that Cleveland’s public-nuisance claim was preempted by the National Bank Act and an injunction against the suits. The district court suggested that it lacked subject-matter jurisdiction and dismissed. Subsequently, the state court dismissed Cleveland’s public-nuisance and OCAA claims; appeal is pending. The U.S. Supreme Court denied certiorari in the first case, so that declaratory relief is now moot. The Sixth Circuit reversed with respect to the second suit; the district court had jurisdiction.View "Chase Bank USA, N.A. v. City of Cleveland" on Justia Law