Justia Banking Opinion Summaries

In this appeal the Supreme Court considered whether the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA), an act that governs the disposition of failed financial institutions' assets, divests a court of jurisdiction to consider any defense or affirmative defense not first adjudicated through FIRREA's claims process. The Supreme Court concluded that while FIRREA's jurisdictional bar divests a district court of jurisdiction to consider claims and counterclaims asserted against a successor in interest to the Federal Deposit Insurance Corporation (FDIC) not first adjudicated through FIRREA's claims process, it does not apply to defenses or affirmative defenses raised by a debtor in response to the successor in interest's complaint for collection. In this case, the Court reversed the district court's grant of summary judgment to Successor in Interest on its breach of contract and breach of personal guaranty claims against Debtor, as Debtor's affirmative defenses were not barred by FIRREA. Remanded. View "Schettler v. RalRon Capital Corp." on Justia Law

A group of investors (Borrowers) bought a golf course by contributing part of the purchase amount in cash and financing the remaining balance through a nonrecourse loan with Community Bank of Nevada (CBN). To facilitate the sale, William Walters entered into a separate guaranty with CBN where he personally guaranteed the loan. Prior to the Borrowers' default and the eventual foreclosure of the golf course, Walters filed a complaint against CBN, asserting causes of action for declaratory relief and breach of the implied covenant of good faith and fair dealing. CBN counterclaimed, asserting breach of guaranty against Walters. The district court granted summary judgment in part to CBN, concluding that no genuine issues of material fact existed as to Walters' guaranty liability to CBN. Walters filed a petition for a writ compelling the district court to vacate its partial summary judgment in favor of CBN and to preclude CBN from recovering any amount from Walters under his guaranty. The Supreme Court denied the writ, holding (1) CBN complied with the deficiency application requirements of Nev. Rev. Stat. 40, and (2) CBN was not attempting double recovery because double recovery was not an issue in this case.