Justia Banking Opinion Summaries

Appellee Compass Bank and Amy Hovis petitioned the Supreme Court for a writ of mandamus to direct a circuit court to dismiss an action filed in that court filed by Appellant Jerome Sirote based on Alabama's abatement statute. Appellant filed suit against the Bank and several of its employees alleging breach of contract, breach of fiduciary duty, violations of the Real Estate Settlement Procedures Act, fraud, deceit, and violations of the Fair Debt Collection Practices Act. Appellant alleged that the Bank improperly processed transactions in his deposit account and misstated material facts related to that account. The Bank moved to dismiss the complaint. The district court entered an order dismissing Appellant's federal claims with prejudice. The court remanded the case for further proceedings on the state law claims. The Bank moved to dismiss the remaining charges under the Abatement Statute, arguing that Appellant was barred from prosecuting two actions simultaneously in different courts if the claims alleged in each action arose from the same underlying operative facts. Upon review, the Supreme Court granted the Bank's petition and issued the writ to direct the lower court to dismiss Appellant's state claims.

This case was an interlocutory appeal from the trial court's denial of Appellant RBS Citizens, N.A.'s motion for a writ of attachment to Appellee Jan Ouhrabka's property, which Appellee owned jointly with his wife as tenants by entirety.  The trial court held that a creditor like RBS cannot attach property owned jointly by a debtor and a nondebtor when they hold that property as tenants by entirety.  RBS contended on appeal that the estate of tenancy by entirety is an anachronism whose continuing utility should be reconsidered.  In the alternative, RBS argued that Vermont law did not explicitly preclude granting a creditor prejudgment attachment where the property is held jointly by the debtor and a nondebtor in a tenancy by entirety.  Upon review of the applicable legal authority, the Supreme Court disagreed with RBS' argument and affirmed the lower court's decision.

Plaintiff appealed the district court's grant of defendant's motion to dismiss where plaintiff claimed that defendant violated a section of California's Rees-Levering Act (Act), Cal. Civ. Code 2983.2(a), which required a car loan lender to provide certain post-repossession notices to a defaulting borrower prior to selling the repossessed car. At issue was whether the Act's notice requirements were preempted by the National Bank Act (NBA), 12 C.F.R. 7.4008, and its regulations. The court held that because the Act sections at issue were directed toward debt collection and were therefore not preempted by the NBA, the court reversed the judgment of the district court and remanded for further proceedings.

Plaintiffs, on behalf of a putative class, sued defendant under the Missouri Second Mortgage Loan Act (MSMLA), Mo. Rev. Stat. 408.231-408.241, alleging that defendant charged them unauthorized interest and fees in violation of section 408.233.1 of the MSMLA. At issue was whether defendants violated the MSMLA by charging plaintiffs a loan discount, settlement/closing fee, document processing/delivery fee, and prepaid interest. The court held that plaintiffs did suffer a loss of money when defendant charged the loan discount, although plaintiffs received the loan discount amount two days later as part of a loan disbursement. The court also held that it could not decide whether the loan discount and the settlement/closing fee violated the MSMLA and remanded for further proceedings. The court further held that the document processing/delivery fee was not included in section 408.233's exclusive list of authorized charges and violated the MSMLA. The court finally held that because the processing/delivery free violated the MSMLA, the prepaid interest was an additional violation of the statute. Therefore, the court reversed and remanded to the district court for further proceedings.

Defendant-lender reported to credit agencies that two of plaintiff's mortgage payments were received late. Plaintiff, an attorney, filed suit under the Fair Credit Reporting Act, 15 U.S.C. 1681 and alleging defamation, false light invasion of privacy, breach of contract, negligence, negligent supervision, conversion, and fraud. The district court entered summary judgment for the lender. The Third Circuit affirmed. A private litigant seeking to recover against a furnisher of information under the FCRA must first make a complaint to a consumer reporting agency; plaintiff did not comply with the structural framework of the statute.

BAC Home Loans Servicing, LP (formerly known as Countrywide Home Loans Servicing, LP); Countrywide Home Loans of Texas, Incorporated; and Countrywide Home Loans, Incorporated appealed an order for remand where the district court dismissed the lone federal claim under the Truth in Lending Act (TILA), 15 U.S.C. 1601-1667f, and declined to exercise supplemental jurisdiction over the remaining state law claims. Defendants argued that this was an abuse of discretion because Countrywide Home Loans of Texas was improperly joined and thus the district court had diversity jurisdiction over the state law claims. Plaintiffs argued that there was no improper joinder and that defendants waived any right to argue improper joinder or the existence of diversity jurisdiction when they failed to remove the action to federal court within 30 days of service of the original complaint that listed Countrywide Home Loans of Texas. The court held that defendants carried their burden of proving improper joinder; the district court had jurisdiction over the state law claims at the time of remand; and the exercise of that jurisdiction was mandatory. Accordingly, the court reversed the district court's decision to remand the state law claims to Texas state court and remanded for further proceedings.

Plaintiff US Bank National Association appealed a trial court order that granted summary judgment to Defendant Homeowner Christine Kimball and dismissed with prejudice US Bank’s foreclosure complaint for lack of standing.  On appeal, US Bank argued that it had standing to prosecute the foreclosure claim and that the court’s dismissal with prejudice was in error.  Homeowner cross-appealed, arguing that the court erred in not addressing her claim for attorney’s fees. Homeowner purchased the property in question in June 2005.  To finance the purchase, she executed an adjustable rate promissory note in favor of Accredited Home Lenders, Inc. (Accredited).  The note was secured by a mortgage deed to Mortgage Electronic Registration Systems, Inc. (MERS) as nominee for Accredited. In 2009, US Bank filed a foreclosure complaint for Homeowner’s failure to make required payments.  The complaint alleged that the mortgage and note were assigned to US Bank by MERS, as nominee for Accredited.  Attached to the complaint was a copy of the instrument signed by a "Duly Authorized Agent" of MERS.  The promissory note was also attached to the complaint and appended to it was an undated allonge signed by a corporate officer of Accredited, endorsing the note in blank. Homeowner moved for summary judgment claiming, among other things, that US Bank failed to present sufficient evidence that it held homeowner’s note and corresponding mortgage. Because neither note submitted by US Bank was dated, the court concluded that there was no evidence that the note was endorsed to US Bank before the complaint was filed.  Therefore, the court held that US Bank lacked standing to bring the foreclosure action.  Following a hearing, the court denied the motions for reconsideration and to amend the complaint.  The court concluded that US Bank had submitted a defective complaint and the deficiencies were not mere technicalities, but essential items, without which the case could not proceed.  The court held that US Bank lacked standing when the complaint was filed, and dismissed the complaint “with prejudice.”  Upon review of the trial record and briefs submitted by the parties, the Supreme Court affirmed the trial court's decision in all respects but for the 'with prejudice': "this may be but an ephemeral victory for homeowner.  Absent adjudication on the underlying indebtedness, the dismissal cannot cancel her obligation arising from an authenticated note, or insulate her from foreclosure proceedings based on proven delinquency." The Court dismissed the foreclosure complaint and remanded the case for consideration of the parties' fees dispute.

This case arose when elderly widow Dorothy Chase Stewart filed for bankruptcy in 2007 and Wells Fargo Bank filed a proof of claim with the bankruptcy court reciting debts owed from an outstanding mortgage on Ms. Stewart's house. The bankruptcy court subsequently found that Wells Fargo's mortgage claims exhibited systematic errors arising from its highly automated, computerized loan-administration program and issued an injunction requiring Wells Fargo to audit every proof of claim it had filed on or filed after April 13, 2007; to provide a complete loan history on every account and file that history with the appropriate court; and "to amend...proofs of claim already on file to comply with the principles established in this case and [In re] Jones." Wells Fargo appealed, challenging the claim amount and the injunction. The court vacated the injunction as exceeding the reach of the bankruptcy court. Because neither the injunction nor the calculation of Ms. Stewart's debt was properly before the court, the court dismissed as moot Wells Fargo's appeal of legal rulings underlying the bankruptcy court's interpretation of the mortgage.

After Beneficial Maine filed a complaint for foreclosure against Timothy and Kathleen Carter in district court, Beneficial moved for summary judgment. To support its motion, Beneficial relied on an affidvait of an employee of a separate business identified as Beneficial's servicer. Beneficial cited to the affidavit as the sole evidentiary support for its allegations of its ownership of the promissory note and mortgage, the Carters' obligation on the note, the Carters' default, and the amount that the Carters owed. The district court entered summary judgment in the bank's favor on its foreclosure complaint. The Carters appealed, challenging the foundation presented by Beneficial to support the admissibility of its mortgage records pursuant to the business records exception to the hearsay rule. The Supreme Court vacated the summary judgment entered in favor of Beneficial, concluding that because the employee did not establish that she was a custodian or other qualified witness who could provide trustworthy and reliable information about the records, the affidavit could not establish the foundation for the records' admissibility. Therefore, the district court could not properly consider those records on summary judgment. Remanded.

This appeal arose from a motion for class certification filed in the trial court by petitioner where petitioner claimed that respondent violated sections 627.840(3)(b) and 627.835, Florida Statutes, by knowingly overcharging him an additional service charge of $20 twice in a twelve month period in two premium finance agreements which he entered into with respondent. At issue was whether the putative class members satisfied the requirements of commonality and predominance needed for class certification under Florida Rule of Civil Procedure 1.220. The court held that the Third District's decision was incorrect because it afforded no deference to the trial court's actual factual findings and conducted a de novo review which constituted error where the proper appellate standard of review for a grant of class certification was abuse of discretion. The court also held that the Third District incorrectly addressed whether petition satisfied section 627.835's "knowingly" requirement and incorrectly held that petitioner and the putative class members failed to satisfy rule 1.220's commonality and predominance requirements. Therefore, the court held that the Third District created conflict with Olen Properties Corp. v. Moss and Smith v. Glen Cove Apartments Condominiums Master Ass'n. Accordingly, the court quashed the Third District's judgment.