Justia Banking Opinion Summaries

Various members of the Doty family gave three deeds of trust (DOT) conveying specific tracts of real estate to West Gate Bank, Inc. as security for certain loans. The DOTs also secured future advances given by the Bank. One advance was documented by Promissory Note 257. The Dotys defaulted on Note 257, and therefore, the Bank exercised its power of sale under one DOT and applied the funds generated by the sale to Note 257. The Dotys later brought a declaratory judgment action asking the district court to declare that the Bank was barred by Neb. Rev. Stat. 76-1013 from recovering any amount still owed under Note 257. The district court granted summary judgment in favor of the Dotys, concluding that the Bank was barred by the three-month statute of limitations in section 76-1013 from taking action to collect amounts due on Note 257. The Supreme Court reversed, holding that the district court (1) correctly determined that section 76-1013 precludes the Bank from bringing a personal deficiency action against the Dotys for the balance owed under Note 275; but (2) erred in determining that the three-month statute of limitations set forth in section 76-1013 applies to successive foreclosures on remaining collateral. Remanded. View "Doty v. West Gate Bank, Inc." on Justia Law

Defendants gave a promissory note to Bank and secured a loan with a trust deed on real property. Defendants defaulted on the note, and Bank initiated foreclosure proceedings. The property was sold after a sheriff's sale. Bank subsequently filed a complaint to recover the deficiency. The district court granted Defendants' motion for summary judgment, holding that because Bank filed its complaint ninety-nine days after the sheriff's sale, the action was barred by the three-month statute of limitations in Neb. Rev. Stat. 76-1013. The Supreme Court reversed, holding (1) the special three-month statute of limitations on actions for deficiency set forth in the Nebraska Trust Deeds Act applies where a lender elects to judicially foreclose upon the real estate, but the special limitation applies only where the property has been sold by exercising the power of sale set forth in the trust deed; and (2) because the judicial foreclosure of the trust deed in this case did not result in the sale of property under a trust deed, it did not fall under the statutory language in section 76-1013, and the deficiency action was governed by the general statute of limitations for actions on written contracts. Remanded. View "First Nat'l Bank of Omaha v. Davey" on Justia Law

Lender made loans to Borrower that were secured by deeds of trust describing real estate owned by Borrower. As additional security for the loans to Borrower, Guarantor promised payment of the indebtedness on the promissory notes. Borrower subsequently defaulted, and Lender sought payment of the indebtedness from Guarantor. Guarantor moved to amend his answer to assert he was not liable to Lender because Lender was barred by section 76-1013 of the Nebraska Trust Deeds Act (Act) from pursuing a deficiency action against Borrower. The district court granted summary judgment in favor of Lender. At issue on appeal was whether a guaranty of a promissory note secured by a deed of trust is subject to the Act. The Supreme Court affirmed, holding that Guarantor's guaranty was not subject to the Act, and under the terms of the guaranty, Guarantor was liable for the total amount of Borrower's debt, less the trustee's sale price. View "Mut. of Omaha Bank v. Murante" on Justia Law

In November 2009, Plaintiff filed suit against Bank seeking judgment for principal and interest allegedly due and owing on a $15,000 certificate of deposit (CD) opened by her mother in July 1984. The CD matured in April 1985. The district court granted summary judgment in favor of Bank, finding that Plaintiff's claims were barred by the applicable statute of limitations. The Supreme Court affirmed, holding that Plaintiff had to commence her action either seven years after the maturity date of the CD or one year after July 1, 2008, and therefore, Plaintiff's claims were barred by limitations, and the district court therefore did not err in entering summary judgment for Bank. View "Swift v. Norwest Bank-Omaha West" on Justia Law

Prime Realty, Inc. (Prime) acted as general partner for two limited partnerships (collectively, the Partnerships). Without the Partnerships' limited partners' knowledge, Prime took out two loans from a bank (the Bank) and, by deed of trust, secured the loans with Partnerships' property. The Bank ultimately sold the collateral and applied the proceeds to the loans. The Partnerships sued the Bank for conversion, alleging that the loans were for a nonpartnership purposes and, as such, Prime lacked authority to offer the Partnerships' property as collateral without the limited partners' consent under the Partnership agreements. The district court concluded that the Bank had converted the Partnerships' property and awarded the Partnerships damages and prejudgment interest. The Supreme Court affirmed, holding (1) the Partnerships' complaint was timely; (2) the Bank converted the Partnerships' property; (3) the district court improperly awarded damages in the full amount of the proceeds applied to the loans because a portion of the first loan served a Partnership purpose; and (4) prejudgment interest was proper only in the amount the Bank applied to the second loan. View "Brook Valley Ltd. P'ship v. Mut. of Omaha Bank" on Justia Law

Selma Development, LLC (Selma) obtained a loan from TierOne Bank (TierOne) that was guaranteed with six individual guaranty agreements. Selma later defaulted on the note. The property was sold at a trustee's sale, but the sale price was insufficient to cover the debt. TierOne brought an action seeking payment from the guarantors (Defendants). After a hearing, the trial court concluded that the fair market value of the property greatly exceeded the amount received from the trustee's sale. The court then granted TierOne's motion for summary judgment and entered judgment against Selma for $306,230 and against Defendants for $586,229. The Supreme Court vacated the trial court's judgment remanded, holding (1) once the trial court determined that the fair market value of the property was greater than the amount received at the trustee's sale, it had to determine whether the Nebraska Trust Deeds Act applied to the guarantors, and accordingly, its order determining fair market value was not a final order; and (2) Defendants offered evidence which created a genuine issue of material fact regarding their defenses, precluding summary judgment. View "Selma Dev., LLC v. Great W. Bank" on Justia Law

Bank sued five guarantors (Guarantors) following defaults on the underlying notes. During discovery, Bank tendered requests for admissions to each of Guarantors, including a request to admit the specific amount due on the note for principal, accrued interest, and a prepayment fee. Ultimately, the district court (1) entered judgment in favor of the Bank with respect to the principal and accrued interest due from Guarantors, but (2) based in part on Guarantors' answers to the requests for admissions, determined Bank was not entitled to prepayment fees. The Supreme Court reversed the rulings in each case on the prepayment fee issue, holding that the district court erred when it treated the Guarantors' answers to Bank's requests for admissions as denials rather than admissions that Guarantors owed prepayment fees. Remanded. View "U.S. Bank Nat'l Ass'n v. Peterson" on Justia Law

Shirley Krzycki was the sole settlor, trustee, and beneficiary of the Shirley Krzycki Trust established to hold annual payments from an insurance settlement. Upon Shirley's death, Shirley's son Greg was named successor trustee of the Trust. Greg filed suit, claiming that sums on deposit in a bank account, formerly owned by Shirley as "primary joint owner," were property of the Trust. Shirley's daughter Robin was originally named "secondary joint owner" on this account, and Robin refused to give to the Trust the sums on deposit in this account. After a bench trial, the district court held that the balance of the Wells Fargo account belonged to the Trust. The Supreme Court affirmed, but for reasons different from those of the district court, holding (1) the remaining sums on deposit in the bank account for the benefit of the Trust were trust funds belonging to the Trust; and (2) Robin converted the funds in the account for her own use by refusing to turn them over to the Trust. View "Krzycki v. Krzycki" on Justia Law

Westin Hills West Three Townhome Owners Association (the Association) appealed an order of the district court, which entered summary judgment in favor of the owner of the property, Federal National Mortgage Association, doing business as Fannie Mae (FNMA). In this foreclosure of lien case, the Association claimed that the recording of its declaration of covenants before the deed of trust gave the assessment lien recorded after the deed of trust first priority. The district court rejected this claim. The Supreme Court affirmed, holding that the court did not err in granting FNMA's motion for summary judgment, as the deed of trust was superior to any assessment lien mentioned in the declaration of the Association. View "Westin Hills Townhome Owners Ass'n v. Fed. Nat'l Mortgage Ass'n" on Justia Law

Mutual of Omaha Bank filed a petition seeking declaratory judgment against Patrick and April Kassebaum, who owed the Bank payments due under several promissory notes. In particular, the Bank sought to have the district court declare the rights of the parties with respect to an assignment of unliquidated proceeds or personal injury litigation executed by the Kassebaums. The Kassebaums filed a motion to dismiss or, in the alternative, a motion for summary judgment, alleging that the assignment was ineffective. The district court denied the motion, and the matter proceeded to trial. A jury entered a verdict in favor of the Bank in the amount of $126,376. The Supreme Court affirmed, holding that the Kassebaums' assignment was valid and enforceable under Nebraska law. View "Mut. of Omaha Bank v. Kassebaum " on Justia Law