Justia Banking Opinion Summaries

In 2010, Plaintiffs purchased real estate from Charter West National Bank. Plaintiffs later filed suit, alleging that Charter West represented that the property would be free and clear of all liens but manipulated the language of the deed to reflect that the conveyance was subject to liens of record. Charter West moved to compel arbitration pursuant to the real estate purchase agreement, which contained an arbitration clause. Plaintiffs filed an objection asserting that the arbitration clause was void because it failed to comply with Nebraska’s Uniform Arbitration Act, and the Federal Arbitration Act (FAA) was inapplicable because the transaction did not involve interstate commerce. The district court denied the motion to compel arbitration without prejudice based on a lack of evidence that the transaction affected interstate commerce as to trigger the provisions of the FAA. Charter West appealed. The Supreme Court dismissed the appeal on the grounds that there was no final, appealable order entered by the district court capable of appellate review. View "Wilczewski v. Charter West Nat'l Bank" on Justia Law

After Plaintiff defaulted on a mortgage loan secured by her property, a complaint was filed in the Massachusetts land court as a preliminary step to foreclose on Plaintiff’s house. Plaintiff subsequently filed this case in federal district court against Defendants, asserting multiple claims arising from the purportedly invalid transfer and assignment of the mortgage on her home. The district court granted summary judgment in favor of Defendants. While this appeal was pending, the parties reached an agreement, which resulted in the mortgage loan becoming current and Plaintiff no longer being subject to any actual or threatened foreclosure proceedings. The First Circuit dismissed this appeal as moot, holding that the circumstances evolved in such a way that there was no longer a live case or controversy. View "Matt v. HSBC Bank USA, N.A." on Justia Law

At issue in this case was a 2006 amendment to the “obsolete mortgage” statute, under which a mortgage becomes unenforceable after a certain number of years. A mortgage in which the term or maturity date is stated becomes unenforceable five years after the expiration of the term, and a mortgage in which the term or maturity date is not stated becomes unenforceable thirty-five years after recording. Here, Defendant conducted a foreclosure auction purporting to sell certain property that secured two mortgages held by Defendant. At the time, both mortgages would be unenforceable under the amended obsolete mortgage statute if the five-year statute of limitations was applicable. Plaintiff sought a declaration that the mortgages were discharged under the obsolete mortgage statute and that the foreclosure auction was null and void. A land court judge granted partial summary judgment for Plaintiff, concluding that a reference in the mortgages to the term of the underlying debt was sufficient to state the “term or maturity date of the mortgage.” The Supreme Judicial Court affirmed, holding (1) the two mortgages were subject to the five-year period and thus were discharged under the obsolete mortgage statute; and (2) the application of the statute in this case did not violate due process and contracts clause protections. View "Deutsche Bank Nat’l Trust Co. v. Fitchburg Capital, LLC" on Justia Law

In 2014, the Eighth Circuit held that the Petersons’ claim for rescission under the Truth in Lending Act, 15 U.S.C. 1601, was time-barred by 15 U.S.C. 1635(f) because of their failure to file a lawsuit within three years of their transaction with Bank of America. In 2015, the Supreme Court held that another court had erred in holding that a borrower’s failure to file a suit for rescission within three years of the transaction’s consummation extinguishes the right to rescind and bars relief. Following remand by the Court, the Eighth Circuit vacated it earlier judgment and remanded. View "Bank of America v. Peterson" on Justia Law

After Defendants fell behind on their mortgage payments, their lender (“the Bank”) commenced a non-judicial foreclosure sale of the property, acquired the property at auction, and filed an ejectment action. The circuit court granted summary judgment for the Bank, judgment for possession, and a writ of possession (“the April 12th orders”). Defendants filed a motion to reconsider. Defendant later filed an amended Haw. R. Civ. P. 60(b) motion for relief from judgment. The circuit court denied Defendants’ motion to reconsider but did not dispose of the amended Rule 60(b) motion. Defendants appealed. The intermediate court of appeals (ICA) determined that the appeal from the April 12th orders and motion to reconsider was untimely and ruled that the appeal was premature with respect to the amended Rule 60(b) motion. The Supreme Court (1) vacated the portion of the ICA dismissal order concluding that it lacked appellate jurisdiction over the appeal of the April 12th orders and the motion to reconsider, holding that the ICA had appellate jurisdiction over this portion of the appeal; and (2) affirmed the portion of the ICA dismissal order dismissing any appeal of the amended Rule 60(b) motion, holding that the ICA lacked jurisdiction over this portion of the appeal. View "Deutsche Bank Nat’l Trust Co. v. Amasol" on Justia Law

Plaintiff sought a thirty-year residential financing loan from the predecessor to U.S. Bank in the amount of $300,000. Three years later, Plaintiff filed suit against U.S. Bank alleging that the Bank committed fraud by issuing, without notice, an eighteen-month, $300,000 commercial loan, rather than the thirty-year residential property loan for which she applied. A jury ultimately found in favor of Plaintiff and awarded her $1,000,000 in compensatory damages and $5,000,000 in punitive damages. The district court confirmed the punitive damages award and ordered that post-judgment interest would accrue from the of its decision. The Bank appealed, and Plaintiff cross-appealed. The Supreme court affirmed the direct appeal and reversed the cross-appeal, holding that the district court (1) did not abuse its discretion by excluding law witness testimony and Plaintiff’s medical records; (2) correctly concluded that the Bank committed actual fraud; (3) did not err in holding U.S. Bank liable for punitive damages arising out of Heritage Bank’s pre-merger conduct; (4) did not err in upholding the jury’s award of punitive damages; but (5) erred by ordering accrual of post-judgment interest from the date of its decision. View "McCulley v. U.S. Bank of Montana" on Justia Law

At issue in this case was the effect of a subordination agreement between fewer than all of the creditors who hold an interest in the same collateral. Appellant VCS, Inc. provided labor and materials to improve real property located in a planned unit development. The developer, Acord Meadows, secured funding for the project from America West Bank and Utah Funding Commercial. The loans were secured with trust deeds to the development properties, and the lenders entered into subordination agreements among themselves that altered the priority arrangement of their trust deeds. Because VCS was never paid for its work, it filed a mechanic’s lien covering several lots of the development, four of which were sold through a foreclosure sale after Acord defaulted on its loans from Utah Funding. VCS claimed it was entitled to payment of its mechanic’s lien because its lien had priority over Utah Funding’s liens. The district court ruled that VCS’s mechanic’s lien was extinguished by the foreclosure of Utah Funding’s liens. The Supreme Court affirmed after adopting the partial subordination approach to the issue in this case, holding that under the partial subordination approach, VCS’s mechanic’s lien was extinguished once Utah Funding’s lien was foreclosed upon. View "VCS Inc. v. Countrywide Home Loans, Inc." on Justia Law

This case was the companion interlocutory appeal with facts that mirrored Iowa Dep’t of Human Servs. v. DeWitt Bank and Trust Co., decided on the day of this opinion. As in DeWitt Bank, the Iowa Department of Human Services filed an application for relief against defendant healthcare providers under Iowa Code 249A.44. The district court appointed a receiver. Bank Iowa, a lender that held perfected security interests in Defendants’ property, intervened and challenged the receiver’s applications for fees and expenses. The district court concluded that receivership expenses should be paid out of property in which the Bank had prior lien interests. The Supreme Court reversed based on the reasoning set forth in DeWitt Bank, holding that Iowa follows the common law rule that a receiver may be charged against a third party’s security interest only to the extent the secured creditor has received a benefit from the receivership or the secured creditor has consented to the receivership. Remanded. View "Iowa Dep’t of Human Servs. v. Morse Healthcare Servs., Inc." on Justia Law

DeWitt Bank & Trust Company (Bank) held perfected security interests on real and personal property of Community Care, Inc. (CCI). When the Iowa Department of Human Services (DHS) determined that CCI had committed Medicaid fraud, DHS filed an application for injunctive relief under Iowa Code 249A.44. The district court enjoined CCI from transferring property or taking action inconsistent with DHS’s right to recover overpayments of medical assistance from CCI. CCI subsequently ceased operations, and the district court appointed a receiver for CCI. The Bank sought clarification that the receiver’s fees and expenses would not be paid out of CCI assets in which the Bank had a prior perfected security lien. The district court denied substantive relief, concluding that Iowa law requires the expenses of the receiver to be paid before secured creditors. The Supreme Court reversed, holding (1) Iowa law does not authorize a receiver to be paid out of assets that are subject to a prior perfected line; and (2) rather, Iowa follows the common law rule that the costs of a receiver may be charged against a third party’s security interest only to the extent the secured creditor has received a benefit from the receivership or the secured creditor has consented to the receivership. View "Iowa Dep’t of Human Servs. v. Cmty. Care, Inc." on Justia Law

Respondents obtained a home-equity loan from Wells Fargo Bank. After Respondents stopped making loan payments, Wells Fargo filed an application in the district court for an expedited court order authorizing foreclosure. Respondents filed a separate and original declaratory judgment action that invoked the automatic stay and dismissal provisions of Tex. R. Civ. P. 736.11. Wells Fargo filed an amended answer asserting a counterclaim for declaratory judgment and requesting attorney’s fees pursuant to the Uniform Declaratory Judgments Act. The trial court granted Wells Fargo’s motion for summary judgment and awarded attorney’s fees, concluding that Respondents had defaulted on their home-equity loan. The court of appeals affirmed the trial court’s summary judgment but reversed the attorney’s fee award, concluding that neither party had pleaded a cognizable claim for declaratory relief, and the non-recourse status of the home-equity loan prohibited a personal judgment for attorney’s fees against Respondents. The Supreme Court reversed in part, holding (1) because Respondents failed to preserve any challenge to the characterization of their own claim for declaratory relief, the trial court was authorized to enter a judgment awarding Wells Fargo its attorney’s fees; and (2) neither the parties’ loan agreement nor the Texas Constitution prohibited a personal judgment against Respondents for attorney’s fees. View "Wells Fargo Bank, N.A. v. Murphy" on Justia Law