Justia Banking Opinion Summaries

Plaintiffs filed suit against defendant to recover on a promissory note. On appeal, plaintiffs challenged the district court's grant of summary judgment in favor of defendant. The court concluded that, construing the evidence most favorably to plaintiffs, a genuine issue of material fact existed as to whether the primary purpose of the loan was consumer or non-consumer in nature. The district court correctly declined to create a de minimus exception to the no notice rule. The court reversed and remanded. View "Crozier, et al. v. Wint" on Justia Law

Cadlerocks Centennial Drive, LLC entered into a loan secured by a mortgage on its property. Daniel Cadle executed a personal guaranty on the loan. The original lender subsequently assigned the mortgage and related documents to Wells Fargo Bank as trustee for registered holders ("Trust"). ORIX Capital Markets, LLC was the special servicer of the Trust and began servicing the loan. Cadlerocks later defaulted on its loan, after which the Trust commenced foreclosure proceedings. ORIX then filed this lawsuit against Cadlerocks and Cadle, alleging breaches of the various agreements related to the loan. Among those documents was an indemnity agreement, under which Cadle and Cadlerocks agreed to indemnify the original lender and its assignees for liabilities "sought from or asserted against" the indemnitees connected with the presence of hazardous material on or around the property. ORIX conducted environmental tests on the property, and the district court held that ORIX was entitled to recover the majority of the costs associated with the environmental testing under the indemnity agreement. The First Circuit Court of Appeals reversed the part of the district court's order awarding costs associated with environmental testing, holding that the cost of the tests that ORIX conducted fell outside the scope of the indemnity agreement. Remanded. View "ORIX Capital Markets, LLC v. Cadlerocks Centennial Drive, LLC" on Justia Law

Plaintiff sued the servicer of his loan (Bank) in a putative class action, asserting that the Bank's requirement that he maintain flood insurance coverage in an amount sufficient to cover the replacement value of his home breached the terms of his mortgage contract. The mortgage was insured by the Federal Housing Administration (FHA). Specifically, Defendant contended that the Bank, under a covenant of the mortgage contract, could not require more than the federally mandated minimum flood insurance. The covenant was a standard uniform covenant prescribed by the FHA pursuant to federal law. The district court dismissed the complaint for failure to state a claim. The judgment of dismissal was affirmed by an equally divided en banc First Circuit Court of Appeals, holding that Plaintiff failed to state a claim for breach of contract, as (1) the Bank's reading of the contract was correct and Plaintiff's was incorrect; (2) Plaintiff could not avoid dismissal on the grounds that his specific understanding or the actions of the parties created an ambiguity; and (3) the United States' position articulated in its amicus brief, which stated that Plaintiff's interpretation of the contract was incorrect, reinforced the Court's conclusion. View "Kolbe v. BAC Home Loans Servicing, LP" on Justia Law

Deutsche Bank filed a complaint for foreclosure against Wilk, 14 M.R.S. 6321, attaching documents, including a 2005 mortgage ($459,375) from Wilk in favor of the original lender’s nominee, MERS; a 2008 assignment from MERS to IndyMac; and a 2010 assignment by the FDIC, as the receiver for IndyMac, to Deutsche Bank. Trial evidence included a 2011 assignment from OneWest Bank to Deutsche Bank, executed approximately two weeks prior to the FDIC conveyance to OneWest Bank, purporting to grant “all interest” OneWest Bank then held in the mortgage to Deutsche Bank. On cross-examination, Deutsche Bank’s only witness confirmed that the assignment from OneWest Bank to Deutsche Bank was prior in time to the assignment from the FDIC to OneWest Bank. Deutsche Bank did not introduce the 2010 mortgage assignment, which it had attached to the complaint and which purported to transfer the mortgage from the FDIC to Deutsche Bank. The court entered a judgment of foreclosure. The Maine Supreme Court vacated, holding that Deutsche Bank failed to prove that it is the assignee of the mortgage. View "Deutsche Bank Nat'l Trust Co. v. Wilk " on Justia Law

The FDIC, as receiver for the Bank, challenged the judgment of the lower courts that the tax sharing agreement between NetBank, the parent company, and its subsidiary, Bank, established a debtor-creditor relationship between the parties and awarding the tax refund to the bankruptcy estate of NetBank. The court reversed and remanded with instructions to enter judgment in favor of the FDIC, concluding that the parties to the tax sharing agreement in this case intended to create an agency relationship rather than a debtor-creditor relationship with respect to IRS refunds attributable to the Bank. View "FDIC v. Zucker" on Justia Law

Plaintiff borrowed money from Countrywide Financial and secured the loan with a mortgage on real property. The recorded mortgage was assigned to the Bank of New York Mellon (BONY), which also held the note on Plaintiff's property. When Plaintiff was unable to make payments on the mortgage, BONY instituted judicial foreclosure proceedings. Plaintiff filed suit to enjoin the foreclosure, arguing that (1) the description of his property in the mortgage did not satisfy New Hampshire's statute of frauds, and (2) Countrywide's unilateral addition of a more precise description of the property to the copy of the mortgage was an act of fraud that should bar BONY from foreclosing. The district court rejected both of Plaintiff's arguments. The First Circuit Court of Appeals affirmed, holding (1) the description of the property, in light of the surrounding circumstances, was not so imprecise as to be unenforceable under the New Hampshire statute of frauds; and (2) because the description of the property attached to the mortgage was correct, Countrywide's unilateral addition of a more precise description of the property was not fraudulent. View "French v. Bank of New York Mellon" on Justia Law

Appellants, owners and/or managers of Big Drive Cattle, LLC, appealed the district court's dismissal of their counterclaims against Farm Credit. Big Drive executed various promissory notes and loan agreements with Farm Credit. Farm Credit subsequently filed suit against appellants to enforce appellants' guarantees. Appellants filed counterclaims against Farm Credit for negligence, negligent misrepresentations, and breach of the duty of good faith and fair dealing. The court concluded that appellants could not rely on the loan agreements, the notes, the guarantees, or any other contracts for the source of the legal duty of accurate reporting they alleged Farm Credit owed to them; appellants' allegations that Farm Credit ignored an "express directive" to remove a particular employee from Big Drive's line of credit was not relevant to their amended counterclaims; and appellants failed to state a claim for negligence where appellants have not plead any plausible duty requiring Farm Credit to provide appellants with accurate reports on the loan collateral, negligent misrepresentation where appellants did not plead the element of intent, and breach of the duty of good faith and fair dealing where appellants failed to plead sufficient specific facts to establish damages arising from Farm Credit's breach. Accordingly, the court affirmed the judgment of the district court. View "Page, et al. v. Farm Credit Services, etc., et al." on Justia Law

In case no. 1111525, M & F Bank ("M & F") appealed a summary judgment entered in favor of First American Title Insurance Company ("FATIC") on negligence, breach-of-contract, and bad-faith-failure-to-pay claims M&F asserted against FATIC related to a title-insurance policy ("the title policy") FATIC issued M & F in connection with a mortgage loan made by M & F to a developer of property in Auburn. In case no. 1111568, FATIC appealed the grant of summary judgment entered in favor of M & F on FATIC's counterclaims asserting abuse of process, conspiracy, breach of contract, and negligence. Upon review of both cases, the Supreme Court affirmed both judgments. View "M & F Bank v. First American Title Insurance Company " on Justia Law

Dorothy Urban's estate (Estate) filed suit against Robert Street, asking the circuit court to declare null and void a deed executed by Urban to Street for a residential property on the grounds that the execution of the deed was procured through fraud. Street subsequently executed a deed of trust for a loan that was secured by the property. The majority of the loan was used to pay off a mortgage on the property placed by Urban. Later, the circuit court directed that the property be conveyed in Street's name to the Estate. The court created a constructive trust on the property without expressly declaring the Urban-to-Street deed void ab initio. Street subsequently defaulted on the deed of trust and Petitioners filed a foreclosure action on the property. The Estate filed a motion to dismiss the foreclosure proceedings, which the circuit court denied. The court of special appeals reversed. The Court of Appeals reversed, holding that although Petitioners were not bona fide purchasers of the property, under the doctrine of equitable subrogation, Petitioners were entitled to priority for the amount loaned to Street used to pay off the balance owed on the preexisting Urban mortgage. View "Fishman v. Murphy" on Justia Law

BNY, as Trustee of an investment portfolio of collateralized loan obligations, initiated an interpleader action to resolve a contract dispute between certain shareholders and the manager of that portfolio, Franklin. At issue were the terms of the indenture and, specifically, terms governing distribution of a Contingent Collateral Management Fee, which was payable to Franklin only if distributions reached a twelve percent internal rate of return (IRR). The court granted the partial summary judgment to Franklin and the denial of summary judgment to the Shareholders, as well as the award of attorneys fees and costs. The court vacated, however, the award of statutory prejudgment interest with instruction to award prejudgment interest actually accrued on the fee owed to Franklin, to be paid from the court's account. View "Franklin Advisers, Inc. v. CDO Plus Master Fund, Ltd." on Justia Law