Justia Banking Opinion Summaries

Articles Posted in Legal Ethics
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Klie purchased property with financing from Coldwell Banker, which assigned its rights to the Federal National Mortgage Corporation (Fannie Mae) but continued to service the loan. The assignment was never recorded. In 2007, servicing rights transferred to JP Morgan. Coldwell Banker assigned its rights in the note and mortgage (none) to JP Morgan, which reassigned to Fannie Mae. Chase, an arm of JP Morgan, serviced the loan until Klie died. With the loan in default, Chase’s law firm, RACJ, prepared an assignment of the note and mortgage that purported to establish Chase’s right to foreclose and filed a foreclosure actionf, naming Glazer, a beneficiary of Klie’s estate. The court entered a decree of foreclosure, but later vacated and demanded that RACJ produce the original note. Chase dismissed the foreclosure without prejudice. Glazer filed suit, alleging that Chase and RACJ violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692, and Ohio law by falsely stating that Chase owned the note and mortgage, improperly scheduling a foreclosure sale, and refusing to verify the debt upon request. Chase and RACJ moved to dismiss. The district court dismissed. The Sixth Circuit reversed, holding that mortgage foreclosure is debt collection under the Act. View "Glazer v. Chase Home Fin. LLC" on Justia Law

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In 2000 Go-Best wired $5 million to an account entitled "Morris M. Goldings client account" at Citizens Bank, based on representations made by Morris M. Goldings, who was then a Massachusetts attorney. Goldings later admitted that the representations were false and that he had used the money to pay other debts. Go-Best filed suit against Citizens Bank, bringing claims of misrepresentation, conversion, aiding and abetting a fraud, aiding and abetting a breach of fiduciary duty, aiding and abetting a conversion, and negligence. Citizens Bank had no knowledge of Goldings's scheme to defraud Go-Best but failed to notify the Board of Bar Overseers of dishonored checks issued on the client account more than six months before Go-Best wired funds into that account. The trial court dismissed, but a divided Appeals Court reversed in part, vacating dismissal of claims of negligence and of aiding and abetting. The Massachusetts Supreme Court reinstated dismissal. Without actual knowledge, the bank's duty to notify the board of dishonored checks from trust accounts arose only from its contractual duty, not from any duty in tort, so the bank could not be liable to Go-Best for any negligence in fulfilling that duty. View "Go-Best Assets Ltd. v. Citizens Bank of MA" on Justia Law

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Petitioners Club Vista Financial Services and others (Club Vista) entered into a real estate development project with real parties in interest Scott Financial Corporation and others (Scott Financial). When a loan guaranteed by some of the Petitioners went into default, Club Vista filed an action against Scott Financial. During discovery, Scott Financial obtained a deposition subpoena for Club Vista's attorney, K. Layne Morrill. An Arizona court granted Morrill's motion to quash the subpoena. The Nevada district court, however, denied Morrill's motion for a protective order and permitted Scott Financial to depose Morrill as to the factual matters supporting the allegations in the complaint. The Supreme Court granted Morrill's petition for writ of mandamus or prohibition in part after adopting the framework espoused by the Eighth Circuit Court of Appeals in Shelton v. American Motors Corp., which states that the party seeking to depose opposing counsel must demonstrate that the information sought cannot be obtained by other means, is relevant and nonprivileged, and is crucial to the preparation of the case. Because the district court did not analyze the Shelton factors, the Court directed the district court to evaluate whether, applying the Shelton factors, Scott Financial may depose Morrill. View "Club Vista Fin. Servs., LLC v. Dist. Court" on Justia Law

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Plaintiff commenced this action in federal court alleging that M&K violated multiple provisions of the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692d-f, by making false statements and misrepresentations in a memorandum filed in the state court action in support of Discover's motion for summary judgment. The complaint also asserted state law claims for malicious prosecution, abuse of process, and the recovery of treble damages for attorney deceit under Minn. Stat. 481.071. Plaintiff subsequently appealed the district court's grant of summary judgment dismissing these claims. The court affirmed the dismissal of the FDCPA claims on the merits where it was not false or misleading to submit a client affidavit and legal memorandum arguing M&K's legal position that plaintiff was liable for the unpaid account balance at issue. The court also affirmed the dismissal of plaintiff's state law claims where plaintiff failed to submit sufficient evidence of intentional fraud and deceit. Accordingly, the court affirmed the judgment. View "Hemmingsen v. Messerli & Kramer, P.A., et al." on Justia Law

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In this suit for an alleged breach of a deposit agreement, the court reviewed the court of appeals' judgment in favor of an estate administrator, as well as the estate administrator's cross-petition concerning attorney's fees. When a party failed to preserve error in the trial court or waived an argument on appeal, an appellate court could not consider the unpreserved or waived issue. Because many of the arguments raised by the parties invoked issues of error preservation or waiver, the court declined to grant either party the relief it sought. View "FDIC v. Lenk" on Justia Law

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This was an appeal by objector, a Nevada attorney, seeking review of the Nevada district court's order denying his motion to quash a subpoena for bank records of his client trust account. The district court concluded that it did not have the authority to consider objector's motion since the subpoena was issued by another district court. The court held that it had jurisdiction over the appeal in the circumstances of this case because the bank had no incentive to disobey the subpoena and force an otherwise appealable contempt order. The court affirmed the district court because it correctly interpreted the provisions of Rule 45 of the Federal Rules of Civil Procedure governing issuance and quashing subpoenas.

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Plaintiffs Carol Metz and others filed a putative class action against fifty-five banks, including Fifth Third. The claims arose out of a Ponzi scheme involving bogus promissory notes. Five months later, attorney Daniel Morris filed a motion to intervene on behalf of his clients. Attached to the motion was a complaint similar to Metz's complaint except it was premised on promissory notes issued by different entities. The district court granted the motion to intervene. After the district court had dismissed Fifth Third with prejudice, Morris filed an intervenors' complaint against Fifth Third. The complaint was virtually identical to the complaint attached to the motion to intervene Morris filed earlier. The district court dismissed the claims with prejudice and granted Fifth Third's request for sanctions. The Sixth Circuit affirmed the imposition of sanctions, holding (1) the district court's imposition of sanctions under the bad faith standard was proper; (2) the record set forth sufficient evidence to support the district court's decision; (3) the district court properly sanctioned Morris under its inherent authority even though Fed. R. Civ. P. 11 also applied; (4) the district court did not deny Morris due process; and (5) the amount of fees awarded was not excessive.