Justia Banking Opinion Summaries

In 2007, Scottie and Dawn Pederson (the Pedersons) and Rocky Mountain Bank (the Bank) entered into a construction loan agreement pursuant to which the Bank agreed to lend the Pedersons several thousand dollars. In 2008, the Pedersons and the Bank agreed to finance the construction loan through three short term loans. In 2009, the Pedersons tried to refinance their loans but were unable to do so. Due to alleged failures on the part of the Bank, the Pedersons brought suit against the Bank in 2011, asserting claims for, inter alia, negligence, constructive fraud, and negligent misrepresentation. After it was served with the complaint, the Bank filed a Mont. R. Civ. P. 12(b)(6) motion to dismiss, asserting the statutes of limitations had run on all of the Pedersons' claims. The district court granted the Bank's motion and dismissed the Pedersons' claims. The Supreme Court affirmed, holding (1) the applicable statutes of limitations began to run in 2008 because the Pedersons' claims had accrued and they had discovered the facts constituting the claims; and (2) by filing their complaint more than three years later, the Pedersons failed to commence their action within any of the applicable statutes of limitations. View "Pederson v. Rocky Mountain Bank" on Justia Law

Plaintiffs brought this putative class action against KeyBank, alleging violations of California's Unfair Competition Law (UCL), Cal. Bus. & Prof. Code 17200, in connection with private student loans that KeyBank extended to plaintiffs. The court concluded that (1) the Federal Arbitration Act (FAA) 9 U.S.C. 1 et seq., preempted the Broughton-Cruz rule and (2) the arbitration clause in the parties' contracts must be enforced because it was not unconscionable. Therefore, the court did not reach the question, presented in Appeal No. 10-15934, whether the NBA and the regulations of the OCC preempted plaintiffs' UCL claims. Accordingly, in Interlocutory Appeal No. 09-16703, the court reversed the district court's denial of KeyBank's motion to compel arbitration, vacated the judgment, and remanded to the district court with instructions to enter an order staying the case and compelling arbitration. Because the disposition of that appeal rendered the district court's subsequent dismissal order a nullity, the court dismissed Appeal No. 10-15934 as moot. View "Kilgore, et al. v. Keybank, et al." on Justia Law

In 2009, lender issued plaintiff a four-month trial loan modification, under which it agreed to permanently modify the loan if she qualified under Home Affordable Mortgage Program guidelines, implemented by the Department of the Treasury to help homeowners avoid foreclosure during the decline in the housing market. Plaintiff filed a putative class action, claiming that she did qualify and that lender refused to grant her a permanent modification. She alleged violations of Illinois law under common-law contract and tort theories and under the Illinois Consumer Fraud and Deceptive Business Practices Act. The district court dismissed, finding that HAMP does not confer a private federal right of enforcement action on borrowers. The Seventh Circuit affirmed in part and reversed in part. Plaintiff stated viable claims under Illinois law for breach of contract or promissory estoppel, fraud, and unfair or deceptive business practices. Claims of negligent misrepresentation or concealment were not viable. HAMP and its enabling statute (12 U.S.C. 5219(a)) do not contain a federal right of action, but neither do they preempt otherwise viable state claims. View "Wigod v. Wells Fargo Bank, N.A." on Justia Law

This case came before the Supreme Court on interlocutory appeal from the Circuit Court of Warren County in which the circuit court affirmed in part and reversed in part the county court's grant of summary judgment for Plaintiff James Hobson, Jr. Defendants Chase Home Finance, LLC, and Priority Trustee Services of Mississippi, LLC (collectively, Chase) appealed the circuit court's affirmance of their liability. Plaintiff cross-appealed the circuit court's order that vacated the county court's award and ordered trial on damages. The dispute arose from Plaintiff's purchase of real property at a foreclosure sale. He tendered a cashier's check to Chase's agent, for which Chase gave Plaintiff a receipt. Approximately two weeks later, Chase returned Plaintiff's check and refused to tender a deed to the property, stating that the foreclosure sale had been cancelled due to the original borrower's reinstatement. Plaintiff sued for breach of contract, arguing that Defendants breach was grossly negligent, and requested actual and punitive damages along with attorney's fees. Upon review, the Supreme Court found that the borrower's alleged reinstatement prior to the foreclosure sale created a genuine issue of dispute regarding Chase's liability, and, therefore, the Court held that the circuit court erred in affirming the county court's grant of summary judgment as to liability. Accordingly, the Court reversed the circuit court's judgment and remand to the county court for further proceedings. View "Chase Home Finance, L.L.C. v. Hobson" on Justia Law

In a petition filed in the fall of 2010, Plaintiff-Appellee Deutsche Bank National Trust Company alleged to be the "present holder" of the note and mortgage, and initiated a foreclosure action against Defendant-Appellant Cory Richardson. A review of the note, filed as an exhibit to the Motion for Summary Judgment, revealed an undated blank indorsement. This blank indorsement was filed with the lower court for the first time in the Motion for Summary Judgment. Nowhere in the original petition did Deutsche Bank reference the undated blank indorsement. The Bank purported to have received an "Assignment of Real Estate Mortgage" from the original lender, WMC Mortgage Corporation, which was dated in 2011, claiming to be effective as of December, 2010. A summary judgment was granted in Deustche Bank's favor against Defendant, dated July 1, 2011, signed by the trial judge in September. Defendant appealed the summary judgment, arguing Deutsche Bank failed to demonstrate standing. Upon review, the Supreme Court found there was a question of fact regarding whether the Bank was a "person entitled to enforce" its note prior to the filing of the foreclosure proceeding, and as such, summary judgment was not appropriate. The Court reversed the trial court’s grant of summary judgment in favor of the Bank and remanded the case for further proceedings. View "Deutsche Bank National Trust Co. v. Richardson" on Justia Law

In 2009, Plaintiff-Appellee Deutsche Bank National Trust Company, as Trustee for J.P. Morgan Mortgage Acquisition Trust 2007-CH3 (Deutsche Bank) filed a foreclosure action against Defendant-Appellant Theron Matthews. Deutsche Bank claimed at that time to hold the note and mortgage, and that the note and mortgage were indorsed in blank. However from the face of the note attached to the Petition, no such indorsement was found. The Bank then filed a document entitled "Assignment of Real Estate Mortgage" with the County Clerk of Creek County six months after the filing of the foreclosure proceeding. A trial court granted partial summary judgment in Deutsche Bank's favor against Defendant a month later. Defendant appealed the grant of summary judgment arguing Deutsche Bank failed to demonstrate standing. Finding that the Bank did not have the proper supporting documentation in hand when it filed suit, the Supreme Court reversed the trial court's grant of partial summary judgment in its favor. The Court remanded the case for further proceedings. View "Deutsche Bank National Trust Co. v. Matthews" on Justia Law

Defendants Maryse and Emilio Guillaume failed to make their mortgage payment in April 2008, and made no payments since. In May 2008, the mortgage servicer "ASC" delivered a Notice of Intention to Foreclose informing them that the lender intended to file a foreclosure action and that they should seek the advice of an attorney. The notice of intention identified ASC, with a telephone number, as the entity to contact if they wished to dispute the calculation of the payment due or that a default had occurred. The name and address of the lender, Plaintiff U.S. Bank, did not appear anywhere on the notice. One month later, the Bank filed a foreclosure action. The complaint warned that judgment could be entered if Defendants failed to file an answer to the complaint within thirty-five days and that exercising their rights to dispute the debt did not excuse them from this requirement. For several months thereafter, the Guillaumes corresponded with ASC about the possibility of a loan modification to reduce their payment and to restore the loan to active status. However, the Guillaumes did not file an answer in the foreclosure action. The court entered a final judgment of foreclosure. The Guillaumes attempted to vacate the default judgment against them, arguing that the failure to provide the lender's name on the May 2008 notice of intent to foreclose was in violation of the Fair Foreclosure Act. The trial court denied the motion to vacate. On appeal, the Supreme Court held that because the trial court ordered the Bank to reissue a notice of intention and because the Guillaumes' other arguments did not warrant relief, the Court affirmed the denial of their motion to vacate the default judgment. View "US Bank National Association v. Guillaume" on Justia Law

Plaintiffs are personal investment holding corporations owned by two related Panamanian shareholders. Defendants, of who there are two distinct groups, are (1) a related group of banking corporations operating under the umbrella of Banco Santander, which provide banking, investment, and other financial management services; and (2) certain individual officers/employees of Santander. This dispute arose from plaintiff's investment of an undisclosed sum of money with defendants. At issue was whether a district court, having found a valid contract containing an arbitration clause existed, was also required to consider a further challenge to that contract's place within a broader, unexecuted agreement. Having considered those circumstances in light of Granite Rock Co. v. International Brotherhood of Teamsters and other relevant precedent, the court found that the district court properly construed the law regarding arbitrability in dismissing plaintiff's suit. Accordingly, the court affirmed the judgment. View "Solymar Investments, Ltd., et al. v. Banco Santander S.A., et al." on Justia Law

Defendant sells brokerage and investment products and services, typically to registered broker-dealers and investment advisers that trade securities for clients. One of its services, NetExchange Pro, an interface for research and managing brokerage accounts via the Internet, can be used for remote access to market dynamics and customer accounts. A firm may make its clients' personal information, including social security numbers and taxpayer identification numbers, accessible to end-users in NetExchange Pro. Some of defendant's employees also have access to this information. Plaintiff, a brokerage customer with NPC, which made its customer account information accessible in NetExchange Pro, received notice of the company's policy and filed a putative class action, alleging breach of contract, breach of implied contract, negligent breach of contractual duties, and violations of Massachusetts consumer protection laws. The district court dismissed. The First Circuit affirmed. Despite "dire forebodings" about access to personal information, plaintiff failed to state any contractual claim for relief and lacks constitutional standing to assert a violation of any arguably applicable consumer protection law.

A Chapter 7 debtor instituted an adversary proceeding against Sallie Mae, Inc. (11 U.S.C. 523(a)(8)) to determine the dischargeability of a student loan (about $25,000). The bankruptcy court entered a default judgment against Sallie Mae and later denied a motion to set aside the judgment. The Sixth Circuit affirmed, holding that the district court acted within its discretion in rejecting an argument of excusable neglect. It is unclear whether Sallie Mae had no reasonable policy in place to see that mail was delivered to appropriate personnel or simply failed to apprise the court of that policy.Sallie Mae was not entitled to notice of a hearing on the motion for default judgment. Service was proper; it was an internal decision to have Sallie Mae's chief operating officer work at a location other than its listed principal address.