Justia Banking Opinion Summaries

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

Plaintiffs, former customers of West Bank, filed a multiple-count proposed consumer class action lawsuit against the Bank challenging one-time nonsufficient funds fees the Bank charged when Plaintiffs used their debit cards to create overdrafts in their checking account. Plaintiffs alleged usury claims and sequencing claims. The district court denied the Bank’s motions for summary judgment on the usury and sequencing claims but granted summary judgment on the Bank’s motion for summary judgment on Plaintiffs’ usury claim arising under the Iowa Ongoing Criminal Conduct Act. In a companion case issued today, the Supreme Court concluded that the district court erred in denying the Bank’s motions for summary judgment except as to the good-faith claim involving the sequencing of overdrafts. Likewise, the Court here found that the district court also erred in certifying the class action on all claims except for Plaintiffs' good-faith sequencing claim. View "Legg v. West Bank" on Justia Law

Plaintiffs, former customers of West Bank, filed a multiple-count proposed consumer class action lawsuit against the Bank challenging one-time nonsufficient funds fees the Bank charged when Plaintiffs used their debit cards to create overdrafts in their checking account. Plaintiffs alleged usury claims and sequencing claims. the Bank filed three motions for summary judgment asking the district court to dismiss all of Plaintiffs’ usury and sequencing claims. The district court denied the Bank’s motions for summary judgment on the usury and sequencing claims but granted summary judgment on the Bank’s motion for summary judgment on Plaintiffs’ usury claim arising under the Iowa Ongoing Criminal Conduct Act. The Bank filed this interlocutory appeal on the district court’s denial of its motions for summary judgment. The Supreme Court affirmed in part and reversed in part, holding that the district court erred in denying the Bank’s motions for summary judgment except as to Plaintiffs’ claim based on a potential breach of the express duty of good faith in the sequencing of postings of bank card transactions. Remanded. View "Legg v. West Bank" on Justia Law

Plaintiff filed suit against Wells Fargo, alleging that his mortgage agreement, providing him with a loan far in excess of his home’s actual value, was an “unconscionable contract” under the West Virginia Consumer Credit and Protection Act, W. Va. Code 46A–1–101 et seq. The court agreed with the district court that the amount of a mortgage loan, by itself, cannot show substantive unconscionability under West Virginia law, and that plaintiff has not otherwise made that showing. The court concluded, however, that the Act allows for claims of “unconscionable inducement” even when the substantive terms of a contract are not themselves unfair. Accordingly, the court remanded so that the district court may consider this issue in the first instance. View "McFarland v. Wells Fargo Bank" on Justia Law

In 2004, the Baumans purchased Ohio property with a loan from Taylor, secured by a mortgage that listed Mortgage Electronic Registration Systems as nominee on behalf of Taylor. In previous litigation involving the parties, the court found the loan was sold to Hudson in 2004. BAC became the loan servicer in 2008. In 2010, BAC brought a foreclosure action in state court. Under Ohio law, a party who seeks to foreclose on a mortgage must prove that “it is the current holder of the note and mortgage.” At the time, Hudson was the note holder, but BAC falsely represented that it had standing. BAC later voluntarily dismissed the case. The Baumans sued BAC’s successor, Bank of America, and Hudson alleging violations of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692e. The district court rejected the suit, finding that the defendants were not a “debt collector” under FDCPA because they acquired their interests in the debt prior to the Baumans's default. The Baumans filed a new complaint requesting a declaration barring a future foreclosure action and to quiet title. The Sixth Circuit affirmed dismissal, holding that defendants were not required to bring a foreclosure action as a compulsory counterclaim to the FDCPA action. View "Bauman v. Bank of America, N.A." on Justia Law

Plaintiffs appealed the district court's grant of summary judgment for Wells Fargo in a suit stemming from plaintiffs' default on a home mortgage. Plaintiff asserted claims for common-law fraud and fraudulent inducement. The court concluded that plaintiffs' claimed damages are either categorically not damages, too speculative, or unsubstantiated assertions. Because plaintiffs failed to give proof to support an element of their fraud claims, the district court committed no error in granting summary judgment. The district court did not commit error, let alone plain error, in denying a continuance where plaintiffs filed only a one-line request for a continuance without any supporting evidence regarding the need for additional discovery or why existing discovery had been incomplete. Accordingly, the court affirmed the judgment. View "Lawrence v. FHLMC" on Justia Law

Plaintiffs filed a putative class action against Wells Fargo and U.S. Bank, alleging federal and state law claims arising out of the modification of the deed of trust for plaintiffs' home. At issue is the retroactivity of 15 U.S.C.1641(g), a 2009 amendment to the 1968 Truth in Lending Act (TILA). Section 1641(g) requires a creditor who obtains a mortgage loan by sale or transfer to notify the borrower of the transfer in writing. The court held that section 1641(g) does not apply retroactively because Congress did not express a clear intent to do so. The court noted that its holding is consistent with numerous district court decisions. Accordingly, the court affirmed the judgment. View "Talaie v. Wells Fargo Bank" on Justia Law