Justia Banking Opinion Summaries

Plaintiff sued defendant asserting causes of action for breach of fiduciary duty, gross negligence, and breach of contract where the gravamen of the complaint was that defendant mismanaged the portfolio of an entity whose obligations plaintiff guaranteed. At issue was whether the Martin Act, General Business Law art 23-A, preempted plaintiff's common-law causes of action for breach of fiduciary duty and gross negligence. The court agreed with plaintiff that the Martin Act did not preclude a private litigant from bringing a nonfraud common-law cause of action where the Martin Act did not expressly mention or otherwise contemplate the elimination of common-law claims.

Plaintiff sued individual defendants and a bank alleging violations of Wisconsin Statute section 134.01, which prohibits conspiracies to willfully or maliciously injure the reputation, trade, business or profession of another. Defendants had caused appointment of a receiver for plaintiff's business and had sued, claiming that plaintiff "looted" the business. A jury verdict against plaintiff was reversed. The receivership is still on appeal. The district court dismissed plaintiff's subsequent suit for failure to state a claim. The Seventh Circuit affirmed. While plaintiff did plead malice adequately to support a claim, the claim was barred by issue preclusion. Plaintiff was attempting to relitigate whether the imposition and ends of the receivership were proper.

The Wyoming Division of Banking performed a Wyoming Uniform Consumer Credit Code compliance examination of Onyx Acceptance Corporation and determined it was improperly charging its Wyoming customers fees for making payments by telephone or internet. The Division ordered Onyx to stop charging the fees and refund the fees collected. The Office of Administrative Hearings issued a recommended order granting summary judgment for the Division. Consistent with the recommended decision, the administrator of the Code issued an order finding that Onyx violated the Code when it charged the fees. The district court reversed, concluding that the fees were not covered by the Code and, therefore, Onyx did not violate the Code by charging them to customers who opted to pay by phone or internet. The Supreme Court affirmed, holding that Onyx did not violate the Code and summary judgment in its favor was appropriate. Remanded.

Plaintiff appealed the district court's grant of summary judgment for appellees (GNOFCU and Cumis). The district court found that GNOFCU did not violate either the Federal Credit Union Act, 12 U.S.C. 1790b, or La. Rev. State. Ann. 23:967(A), by terminating plaintiff's employment after she complained of possible fraud in the company's lending practices. Because the court found that the district court minimized key evidence in finding no causal link between plaintiff's termination, demotion, and pay decrease, and her National Credit Union Administration (NCUA) complaints, and because section 23:967 seemed to offer broader protections than its federal counterpart, the court found that the district court's grant of summary judgment was improper. Accordingly, the judgment was vacated and the case remanded for further proceedings.

Plaintiff appealed from the dismissal of its complaint for lack of subject matter jurisdiction and from the district court's order denying its motion for reconsideration. Plaintiff asserted, inter alia, claims against defendants under the First and Fourth Amendments and under the Right to Financial Privacy Act, 12 U.S.C. 3401-3422, as well as under state constitutions and various anti-wiretapping, consumer protection, and deceptive trade practices laws. On appeal, plaintiff argued that the district court erred by holding that it lacked standing, by denying jurisdictional discovery, and by denying it leave to amend its complaint. The court held that the district court correctly determined that plaintiff did not have Article III standing to assert its claims. Consequently, the district court did not abuse its discretion in denying plaintiff's request for jurisdictional discovery and for leave to amend its complaint. Accordingly, the court affirmed the judgment and order of the district court.

Plaintiff commenced an action under the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq., seeking a declaratory judgment that he was entitled to rescind a financing transaction and an award of statutory damages. At issue was whether a lender violated TILA in providing a notice to a borrower who was refinancing his mortgage of the right to rescind the transaction, using a form of notice substantially similar to Model Form H-8 in the Appendix to Regulation Z, 12 C.F.R. pt. 226, rather than using Model Form H-9, which was designed for refinancing transactions. The court agreed with the district court and affirmed the dismissal of the complaint for failure to state a claim where Model Form H-8 included all of the information required by TILA and Regulation Z to advise borrowers of the right to rescind a consumer credit transaction, including a financing transaction.

Debtors borrowed $157,291.77, secured by their home and took a second loan for $15,870, using their truck as security. They filed Chapter 7 bankruptcy protection and signed a reaffirmation agreement committing to pay those two debts. They stopped making payments; the truck had been stolen. The bank filed an unsecured claim. The trustee sought to avoid the mortgage as not properly perfected; the matter was resolved by agreement. The bank bought the property at auction, re-sold it at a profit of $33,400 and filed an unsecured claim for the full balance of the mortgage. The bankruptcy court allowed the claim; the bank received a total of about $37,000 in payments as an unsecured creditor on the two loans. The bank then sued the debtors in Kentucky state court, seeking about $89,000 on the real property loan and about $11,500 on the truck loan. The bankruptcy court reopened the case and voided the reaffirmation agreement on the ground of mutual mistake because the parties signed the agreement based on the false assumption that the bank held secured interests in the real property and the truck, which would have allowed debtors (rather than the bankruptcy estate) to retain ownership. The district court and Sixth Circuit affirmed.

In 1999 Debtor borrowed $75,558.93 secured by a recorded mortgage lien, encumbering real property and all improvements and fixtures. The property contains a manufactured home, with a plate indicating compliance with federal manufactured home standards. The lender's notes indicated that in 1997, the mobile home was gutted and rebuilt as a house. Debtor did not acquire a separate title to the manufactured home; it is unclear whether such a certificate ever issued. In 2009, Debtor filed a petition for chapter 13 relief. He sought to avoid the lien pursuant to 11 U.S.C. 544 because the Bank failed to perfect its lien on the manufactured home pursuant to Kentucky law. The bankruptcy court granted summary judgment to Debtor. The Sixth Circuit affirmed, first holding that Debtor had derivative standing to seek to avoid the lien. Regardless of the issuance of a certificate of title, Debtor has an interest in the home that is part of the bankruptcy estate. Under Kentucky law, a mobile home is personal property; perfection of a lien requires notation on the certificate of title. The mobile home had not been converted to real property and the lender did not perfect a lien on personal property.

Roxco, Ltd. was hired as the general contractor for several public-construction projects for the State of Mississippi, including four building projects at the University of Mississippi, Jackson State University, and Alcorn State University. Pursuant to Section 31-5-15, in order to access the retainage on its state-construction projects, Roxco substituted securities valued at $1,055,000. These securities were deposited in a safekeeping account at Trustmark National Bank. Upon being notified of Roxco’s default, the State instructed Trustmark to transfer the funds from the treasury bills into the state treasury account. By letter, Roxco directed Trustmark not to transfer the funds from the treasury bills to the State’s account. Notwithstanding Roxco’s letter, Trustmark deposited the funds into the State’s account. Roxco filed suit against Trustmark for breach of contract and conversion. Trustmark argued that Section 31-5-15 permitted the release of the funds in the safekeeping account. A jury found in favor of Roxco and awarded $3,720,000 in damages. Aggrieved, Trustmark filed this appeal. Finding that the trial court should have granted Trustmark's motion for judgment notwithstanding the verdict, the Supreme Court reversed and remanded the case for further proceedings.

This case arose when respondents commenced an action to foreclose a mortgage against petitioner. At issue was whether Florida Rule of Appellate Procedure 9.350 required the court to dismiss a case after the court had accepted jurisdiction based on a question certified to be one of great public importance and after the petitioner had filed his initial brief on the merits. This issue arose after the parties filed a joint Stipulated Dismissal, which advised that they had settled this matter and stipulated to the dismissal of the review proceeding pending before the court. The court held that well-established precedent authorized it to exercise its discretion to deny the requested dismissal of a review proceeding, even where both parties to the action agreed to the dismissal in light of an agreed-upon settlement. The question certified to the court transcended the individual parties to this action because it had the potential to impact the mortgage foreclosure crisis throughout the state and was one which Florida's trial courts and litigants needed guidance. The legal issue also had implications beyond mortgage foreclosure actions. Because the court agreed with the Fourth District that this issue was one of great public importance and in need of resolution, the court denied the parties' request to dismiss.