Justia Banking Opinion Summaries

The Fleets applied to have their Bank of America (BofA) home loan modified in 2009 under the Making Homes Affordable Act. The result of multiple telephone calls and letters to various BofA-related personnel, the Fleets were either (a) assured the Fleets that everything was proceeding smoothly or (b) told BofA had no knowledge of any loan modification application. Finally, in November 2011, BofA informed the Fleets they had been approved for a trial period plan under a Fannie Mae modification program. All they had to do, was to make three monthly payments starting on December 1, 2011. If they made the payments, then they would move to the next step (verification of financial hardship); if they passed that test, their loan would be permanently modified. The Fleets made the first two payments, for December 2011 and January 2012, which BofA acknowledged receiving, and therefore foreclosure proceedings had been suspended. Toward the end of January 2012, their house was sold at a trustee’s sale. Two days after the sale, a representative of the buyer showed up at the house with a notice to quit. The Fleets informed him that the house had significant structural problems, and he said he was going to rescind the sale. The Fleets continued to try to communicate with BofA regarding the property. A BofA representative left voice mail messages to the effect that BofA wanted to discuss a solution to the dispute, but otherwise it appeared that productive conversation between the Fleets and BofA and between the Fleets and the buyer had ceased. In light of this silence (which they interpreted to mean the buyer was trying to rescind the sale), the Fleets spent $15,000 to repair a broken sewer main, which was leaking sewage onto the front lawn. They were evicted in August 2012. In June 2012, the Fleets sued BofA, the trustee under their deed of trust, BofA officers and some of the employees who had been involved in handling their loan modification, and the buyer of the property and its representative. BofA’s demurrer to the first amended complaint was sustained without leave to amend as to the remaining causes of action promissory estoppel, breach of contract, fraud, and accounting. All of the BofA defendants were dismissed. The Court of Appeal reversed: "Although the Fleets’ amended complaint spreads the fraud allegations over three causes of action and contains a great deal of extraneous information, it also alleges the requisite elements of promissory fraud. [. . .] This cause of action may or may not be provable; what it definitely is not is demurrable." The Court sustained the demurrer to the Fleets' action for promissory estoppel, and affirmed the trial court in all other respects. The case was remanded for further proceedings. View "Fleet v. Bank of America" on Justia Law

Plaintiffs, manufacturers of well-known luxury items, filed suit claiming that defendants were selling counterfeit versions of plaintiffs' products on the Internet. In the instant appeal, Bank of China, a nonparty appellant, challenged an August 2011 order granting plaintiffs' motion to compel the Bank to comply with a document subpoena and an asset freeze injunction and denying the Bank's cross-motion to modify the court's orders; a May 2012 order denying the Bank's motion to reconsider; and a November 2012 order holding the Bank in civil contempt and imposing monetary penalties. The court concluded that the Bank's claim that the district court was without authority to issue orders restraining defendants' assets pending adjudication was without merit; the court vacated the August 2011 and May 2012 orders so that the district court may consider on remand whether it may exercise specific personal jurisdiction over the Bank to compel compliance with its orders and if so whether it should exercise such jurisdiction, properly applying principles of comity; and the court reversed the November 2012 order holding the Bank in civil contempt and imposing civil monetary penalties. View "Gucci v. Bank of China" on Justia Law

After the Republic of Argentina defaulted on its external debt, NML, one of its bondholders, prevailed in 11 debt-collection actions filed against Argentina in New York. To execute its judgments, NML sought discovery of Argentina’s property, serving subpoenas on nonparty banks for records relating to global financial transactions. The district court granted motions to compel compliance. The Second Circuit affirmed, rejecting Argentina’s argument that the order transgressed the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C. 1330, 1602. The Supreme Court affirmed; the FSIA does not immunize a foreign-sovereign judgment debtor from post-judgment discovery of information concerning its extraterritorial assets. The FSIA replaced factor-intensive loosely-common-law-based immunity with “a comprehensive framework for resolving any claim of sovereign immunity” so that any sort of immunity defense made by a foreign sovereign in a U.S. court must stand or fall on its text. The FSIA established jurisdictional immunity, section 1604, which was waived here. FSIA execution immunity under sections 1609, 1610, 1611, generally shields “property in the United States of a foreign state” from attachment, arrest, and execution. Nothing forbids or limits discovery in aid of execution of a foreign-sovereign judgment debtor’s assets. Even if Argentina is correct that section 1609 execution immunity implies coextensive discovery-¬in-aid-of-execution immunity, there would be no protection from discovery a foreign sovereign’s extraterritorial assets. Section 1609 immunizes only foreign-state property “in the United States.” The prospect that NML’s general request for information about Argentina’s worldwide assets may turn up information about property that Argentina regards as immune does not mean that NML cannot pursue its discovery.View "Republic of Argentina v. NML Capital, Ltd." on Justia Law

After the Republic of Argentina defaulted on its external debt, NML, one of its bondholders, prevailed in 11 debt-collection actions filed against Argentina in New York. To execute its judgments, NML sought discovery of Argentina’s property, serving subpoenas on nonparty banks for records relating to global financial transactions. The district court granted motions to compel compliance. The Second Circuit affirmed, rejecting Argentina’s argument that the order transgressed the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C. 1330, 1602. The Supreme Court affirmed; the FSIA does not immunize a foreign-sovereign judgment debtor from post-judgment discovery of information concerning its extraterritorial assets. The FSIA replaced factor-intensive loosely-common-law-based immunity with “a comprehensive framework for resolving any claim of sovereign immunity” so that any sort of immunity defense made by a foreign sovereign in a U.S. court must stand or fall on its text. The FSIA established jurisdictional immunity, section 1604, which was waived here. FSIA execution immunity under sections 1609, 1610, 1611, generally shields “property in the United States of a foreign state” from attachment, arrest, and execution. Nothing forbids or limits discovery in aid of execution of a foreign-sovereign judgment debtor’s assets. Even if Argentina is correct that section 1609 execution immunity implies coextensive discovery-¬in-aid-of-execution immunity, there would be no protection from discovery a foreign sovereign’s extraterritorial assets. Section 1609 immunizes only foreign-state property “in the United States.” The prospect that NML’s general request for information about Argentina’s worldwide assets may turn up information about property that Argentina regards as immune does not mean that NML cannot pursue its discovery. View "Republic of Argentina v. NML Capital, Ltd." on Justia Law

Plaintiffs filed suit against Wells Fargo, raising multiple causes of action under state and federal law pertaining to plaintiffs' home loan and deed of trust. At issue was whether, under 28 U.S.C. 1348, a national bank is a citizen of both the state in which its principal place of business is located as designated in the banks' articles of association. The court concluded that, under section 1348, a national bank is a citizen only of the state in which its main office is located. Therefore, the district court had diversity jurisdiction because there was complete diversity between plaintiffs, citizens of California, and Wells Fargo, a citizen of South Dakota. Accordingly, the court reversed the district court's judgment to the contrary and remanded for further proceedings. View "Rouse, et al. v. Wachovia Mortgage" on Justia Law