Justia Banking Opinion Summaries

Plaintiff filed suit for damages in connection with a $66,500 loan secured by a deed of trust on her house. Plaintiff alleged that, in the administration of and collection efforts on the loan, defendants violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692 et seq.; the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq.; and the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601 et seq. The district court dismissed plaintiff's FDCPA and TILA claims and, following discovery, granted Wells Fargo’s motion for summary judgment on her RESPA claim. The court concluded that plaintiff adequately alleged that the White Firm and the Substitute Trustees were “debt collectors,” as that term is used in the FDCPA. Therefore, the court reversed the order of dismissal of her FDCPA claims against them and remanded for further proceedings, without suggesting whether or not those defendants violated the FDCPA. The court affirmed as to the TILA claims. View "McCray v. Federal Home Loan Mortgage Corp." on Justia Law

A mandatory arbitration clause is contained in each deposit agreement for customers of appellee SunTrust Bank. The clause permits an individual depositor to reject the agreement’s mandatory arbitration clause by giving written notice by a certain deadline. SunTrust claimed it drafted the arbitration clause in such a way that only an individual depositor may exercise this right to reject arbitration on his or her own behalf, thereby permitting that individual to file only an individual lawsuit against the bank. But SunTrust asserted that even if, as it has been determined here, the filing of a lawsuit prior to the expiration of the rejection of arbitration deadline operated to give notice of the individual plaintiff’s rejection of arbitration, the complaint could not be brought as a class action because the filing of a class action could not serve to reject the arbitration clause on behalf of class members who have not individually given notice. Jeff Bickerstaff, Jr., who was a SunTrust Bank depositor, filed a complaint against SunTrust on behalf of himself and all others similarly situated alleging the bank’s overdraft fee constitutes the charging of usurious interest. At the time Bickerstaff opened his account (thereby agreeing to the terms of SunTrust’s deposit agreement), that agreement included a mandatory arbitration provision. In response to the ruling of a federal court in an unrelated action finding the arbitration clause in SunTrust’s deposit agreement was unconscionable at Georgia law, and after Bickerstaff’s complaint had been filed, SunTrust amended the arbitration clause to permit a window of time in which a depositor could reject arbitration by sending SunTrust written notification that complied with certain requirements. SunTrust had not notified Bickerstaff or its other customers of this change in the arbitration clause of the deposit agreement at the time Bickerstaff filed his complaint, but the complaint, as well as the first amendment to the complaint, was filed prior to the amendment’s deadline for giving SunTrust written notice of an election to reject arbitration. It was only after Bickerstaff’s complaint was filed that SunTrust notified Bickerstaff and its other existing depositors, by language printed in monthly account statements distributed on August 24, 2010, that an updated version of the deposit agreement had been adopted, that a copy of the new agreement could be obtained at any branch office or on-line, and that all future transactions would be governed by the updated agreement. SunTrust appealed the order denying its motion to compel Bickerstaff to arbitrate his claim, and the Court of Appeals affirmed the trial court, finding that the information contained in the complaint filed by Bickerstaff’s attorney substantially satisfied the notice required to reject arbitration. Bickerstaff appealed the order denying his motion for class certification, and in the same opinion the Court of Appeals affirmed that decision, holding in essence, that the contractual language in this case requiring individual notification of the decision to reject arbitration did not permit Bickerstaff to reject the deposit agreement’s arbitration clause on behalf of other putative class members by virtue of the filing of his class action complaint. The Georgia Supreme Court reversed that decision, holding that the terms of the arbitration rejection provision of SunTrust’s deposit agreement did not prevent Bickerstaff’s class action complaint from tolling the contractual limitation for rejecting that provision on behalf of all putative class members until such time as the class may be certified and each member makes the election to opt out or remain in the class. Accordingly, the numerosity requirement of OCGA 9-11-23 (a) (1) for pursuing a class complaint was not defeated on this ground. View "Bickerstaff v. SunTrust Bank" on Justia Law

After seeking a mortgage modification under the Home Affordable Modification Program Plaintiff filed a complaint against Wells Fargo Bank, N.A. and Homeward Residential Inc., claiming breach of contract, unfair debt collection under Mass. Gen. Laws ch. 93A, and derivative equitable relief. A federal district court dismissed Plaintiff’s action in its entirety. The First Circuit vacated and remanded, holding that Plaintiff’s complaint sufficiently alleged that Defendants failed to offer her a mortgage modification in a timely manner and that Plaintiff had sufficiently pled damages for her Chapter 93A claim. On remand, the district court granted summary judgment in favor of Defendants. The First Circuit affirmed, holding that Plaintiff’s breach of contract and Chapter 93A claims failed, and therefore, her derivative claim for equitable relief failed as well. View "Young v. Wells Fargo Bank, N.A." on Justia Law

This appeal arose out of a $17 million verdict rendered in favor of Francis Maybank for claims sounding in contract, tort, and the South Carolina Unfair Trade Practices Act (UTPA). Maybank brought this action alleging he received faulty investment advice from Branch Banking and Trust (BB&T - the Bank) through BB&T Wealth Management (Wealth Management) and BB&T Asset Management (Asset Management), all operating under the corporate umbrella of BB&T Corporation (collectively, Appellants). Appellants appealed on numerous grounds, and Maybank appealed the trial court's denial of prejudgment interest. After review, the Supreme Court reversed as to an award of punitive damages based on a limitation of liability clause. The Court affirmed on all other grounds. View "Maybank v. BB&T" on Justia Law

In 2004, the Woods obtained a $76,000 home-equity loan secured by their homestead. Nearly eight years later, the Woods notified the note holder, HSBC, and loan servicer, Ocwen that the loan did not comply with the Texas Constitution because the closing fees exceeded 3% of the loan amount. Neither of the lenders attempted to cure the alleged defects. In 2012, the Woods sued, seeking to quiet title and asserting claims for constitutional violations, breach of contract, fraud, and a declaratory judgment that the lien securing the home-equity loan is void, that all principal and interest paid must be forfeited, and that the Woods have no further obligation to pay. The trial court granted the lenders summary judgment and the court of appeals affirmed, citing the statute of limitations. The Texas Supreme Court reversed in part.“No . . . lien on the homestead shall ever be valid unless it secures a debt described by this section[.]” TEX. CONST. art. XVI, § 50(c). This language is clear, unequivocal, and binding. Liens securing constitutionally noncompliant home-equity loans are invalid until cured and thus not subject to any statute of limitations. The Woods do not, however, have a cognizable claim for forfeiture. View "Wood v. HSBC Bank USA, N.A." on Justia Law

Goldenstein, obtained a $1,000 online loan from a company owned by Chippewa Indians, incorporated under Chippewa tribal law, and authorized to issue loans secured by vehicles at interest rates greater than permitted under Pennsylvania law. Goldenstein pledged his car and was charged 250 percent interest. The company, after deducting a $50 transfer fee and wiring $950 to Goldenstein, withdrew installments of $207.90 from Goldenstein’s bank account in June and July. Goldenstein removed funds from the account because he did not recognize the activity on his bank statements. When the company attempted to collect the August installment, it was rejected for insufficient funds. Repossessors took Goldenstein’s car. Goldenstein was told that his payment would not be accepted, nor his car returned unless he signed releases. Goldenstein paid $2,393 ($2,143 for the loan and $250 in repossession fees), signed the releases, then filed suit, claiming violations of the Fair Debt Collection Practices Act, 15 U.S.C. 1692–1692p; Pennsylvania’s Fair Credit Extension Uniformity Act and Uniform Commercial Code; and the Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1962(c). The Third Circuit vacated summary judgment in favor of the defendants on the RICO and state law claims, but affirmed as to the FDCPA claim. Forfeiture of collateral can amount to “collection of unlawful debt” under RICO, but defendants had a right to possession and did not violate the FDCPA by repossessing the car. View "Goldenstein v. Repossessors Inc." on Justia Law

Plaintiff filed suit against defendants, alleging common-law fraud and violations of the Truth in Lending Act (TILA), 15 U.S.C. 1601 et seq. Plaintiff alleged that she never agreed to the mortgage loan at issue. The court concluded that the district court acted within its discretion in admitting an attorney's testimony under FRE 406 regarding the fact that he had met with plaintiff and had not asked her to sign blank sheets of paper; the district court did not abuse its discretion in admitting the loan documents at issue under FRE 901(a) for authenticated records and the court rejected plaintiff's argument that admission of the photocopies violated the best evidence rule where the original documents had been lost; plaintiff's FRCP 50 argument fails where the evidence was more than adequate to warrant the jury in finding for defendants' on the case's central issue; and the district court did not abuse its discretion in denying plaintiff's FRCP 59 motion for a new trial where nothing in the record warranted upsetting the verdict. Accordingly, the court found no error and affirmed the judgment. View "Crawford v. Franklin Credit Mgmt. Corp." on Justia Law

Facing more than $40,000 in unsecured debt that she owed to Discover Bank and other banks, Susan Ossello enrolled in a debt reduction program and signed a contract with Global Client Solutions. Ossello subsequently stopped making payments on her credit card debt, and Discover Bank brought a collection action against her. Ossello filed a third-party complaint against Global, alleging that Global used deceptive and fraudulent representations to solicit her participation in an illegal debt settlement plan. Global filed a motion to compel arbitration and to dismiss the third-party complaint for lack of jurisdiction. The district court concluded that the arbitration clause in Global’s contract was unconscionable and not unenforceable and therefore denied Global’s motion to dismiss and to compel arbitration. The Supreme Court affirmed, holding that the district court did not err in (1) reserving to itself the determination of arbitrability, and (2) declaring that the arbitration provision was unconscionable and therefore not enforceable against Ossello. View "Discover Bank v. Ossello" on Justia Law

Plaintiff filed suit against the assignee of his mortgage after his servicer failed to provide a payoff balance. The Truth in Lending Act (TILA), 15 U.S.C. 1641(e)(1)(A), creates a cause of action against an assignee for a violation that is “apparent on the face of the disclosure statement provided in connection with [a mortgage] transaction pursuant to this subchapter.” The court affirmed the dismissal of plaintiff's amended complaint because the failure to provide a payoff balance is not a violation apparent on the face of the disclosure statement. View "Evanto v. Federal National Mortgage Ass'n" on Justia Law

Plaintiff filed suit for breach of contract, negligence, wrongful foreclosure, and violations of the Texas Deceptive Trade Practices Act (DTPA), Tex. Bus. & Com. Code 17.50(a)(1)). On appeal, plaintiff challenged the district court's dismissal of her claims, as well as her motion to join a non-diverse defendant. The court concluded that the district court's dismissal of plaintiff's breach-of-contract claim was proper because she failed to allege any facts showing her own performance and did not refute the facts in documents referred to in her complaint, central to her claims, and attached to the motion to dismiss; the dismissal of the negligence claim was proper where any damages stemming from an alleged violation of those solely contractual duties are not redressable in tort; the wrongful-foreclosure claim was properly dismissed where plaintiff never alleged that Wells Fargo disposed of the house at a “grossly inadequate selling price,” nor does she allege that Wells Fargo fraudulently chilled the bidding at the foreclosure sale; and, where plaintiff bases her DTPA claims on Wells Fargo’s failure to make automatic withdrawals to pay the loan, such services cannot form the basis of a DTPA claim because they are incidental to the loan and would serve no purpose apart from facilitating the mortgage loan. Finally, in regard to the motion to join a non-diverse defendant, the district court applied the correct legal standard and its finding of fact were not clearly erroneous. Accordingly, the court affirmed the judgment. View "Villarreal v. Wells Fargo Bank, N.A." on Justia Law