Justia Banking Opinion Summaries

In this appeal involving a foreclosure action commenced in federal court, the Court of Appeals answered two questions posed by the United States Court of Appeals for the Second Circuit implicating what a lender must do to comply with N.Y. Real Prop. Act. & Proc. Law (RPAPL) 1304 and 1306.The Court of Appeals answered (1) where a presumption of mailing and receipt arises from evidence in the form of a standard office mailing procedure a borrower can rebut a lender's proof of compliance with RPAPL 1304 with proof of a material deviation from the ordinary practice that calls into doubt whether the notice was properly mailed; and (2) with respect to an RPAPL 1306 filing, the statute does not require the inclusion of information about each individual liable on the loan, and information about only one borrower is sufficient. View "CIT Bank N.A. v. Schiffman" on Justia Law

In these appeals stemming from two residential mortgage-back securities (RMBS) transactions the Court of Appeals affirmed the order of the Appellate Division reversing the judgment of Supreme Court and granting Defendants' motions to dismiss the complaints alleging breaches of representations and warranties made in underlying mortgage loans, holding that Plaintiff's causes of action accrued in California, and Plaintiff's actions were untimely pursuant to N.Y. C.P.L.R. 202.Defendants moved to dismiss Plaintiff's actions, contending that pursuant to section 202 Plaintiff's causes of action accrued in California and were therefore untimely. Plaintiff conceded that it was a resident of California but argued that the court should apply a multi-factor analysis to determine where the cause of action accrued. Supreme Court denied Defendants' motions to dismiss, noting that the parties had chosen New York substantive law to govern their rights. The Appellate Division reversed. The Court of Appeals affirmed, holding (1) this Court declines to apply the multi-factor test urged by Plaintiff and instead relies on the general rule that when an economic injury has occurred the place of injury is usually where the plaintiff residents; and (2) where Plaintiff is a resident of California, to satisfy section 202 Plaintiff's actions must be timely under California's statute of limitations. View "Deutsche Bank National Trust Co. v. Barclays Bank PLC" on Justia Law

Plaintiffs were affiliated commercial entities that sought to enforce the auction sale of a syndicated loan against Bank. When Bank accepted Plaintiffs’ bid and then refused to transfer the loan, Plaintiffs brought this action alleging breach of contract and breach of the implied covenant of good faith and fair dealing. In response, Defendant argued that it had no obligation to transfer the loan because the parties never executed a written sales agreement and Plaintiffs failed to submit a timely cash deposit. Supreme Court granted Plaintiffs’ motion for summary judgment on the breach of contract cause of action. The Appellate Division reversed. The Court of Appeals reversed, holding that Plaintiffs established their entitlement to summary judgment because the prerequisites of executing a written sales agreement and submitting a timely cash deposit were not conditions precedent to formation of the parties’ contract and did not render their agreement unenforceable. View "Stonehill Capital Mgt., LLC v. Bank of the West" on Justia Law

Plaintiffs sued Defendants in a New York state court for concealing ill-gotten money from a scheme orchestrated by three of Plaintiff’s employees. Defendants moved to dismiss the complaint for lack of personal jurisdiction. Supreme Court granted the motion to dismiss for lack of jurisdiction. The Appellate Division affirmed, concluding that Defendants did not purposefully avail themselves of the privilege of conducting activities in New York. Plaintiffs appealed, alleging that the defendant-bank’s repeated use of New York correspondent accounts to receive and transfer millions of dollars in illicit funds constituted the transaction of business substantially related to their claims against Defendants sufficient to confer personal jurisdiction. Defendants argued in response that personal jurisdiction cannot depend on third party conduct and requires purposeful availment by Defendants that was lacking in this case. The Court of Appeals reversed, holding that Defendants’ use of the correspondent bank accounts was purposeful, that there was an articulable nexus between the business transaction and the claim asserted, and that the maintenance of suit in New York does not offend traditional notions of fair play and substantial justice. View "Rushaid v. Pictet & Cie" on Justia Law

A condominium board commenced a foreclosure action on a condominium unit to recover unpaid common charges owed by the previous unit owner. Two mortgages were consolidated into a single mortgage lien years before the condominium board filed its common charges lien. Plaintiff, the winning bidder in the foreclosure action, commenced this action seeking a judgment declaring that the second mortgage was subordinate to the subsequently recorded common charges lien and was therefore extinguished by the condominium board’s successful action. Supreme Court declared that the consolidation agreement was the first mortgage of record and that Plaintiff purchased the unit subject to the consolidated mortgage. The Court of Appeals affirmed, holding that the consolidated mortgage qualifies as the first mortgage of record under N.Y. Real Prop. Law 9-B. View "Plotch v. Citibank, N.A." on Justia Law

This mortgage foreclosure action arose from a failed redevelopment of a hotel complex. The complex consisted of several interconnected properties, including the hotel property, a tower building, and another building. The lender for the redevelopment and numerous mechanic's lienors dispute the priority of their respective claims to the proceeds from the foreclosure sale of the tower building. At issue before the Court of Appeals was N.Y. Lien Law 22, which subordinates a building loan mortgage made pursuant to an unfiled building loan contract to subsequently filed mechanic's liens. The Court of Appeals affirmed as modified, holding (1) the loan agreement made with the lender was a building loan contract, but the lender's mortgage was not entitled to first priority because the lender never filed the loan agreement; and (2) the lender was entitled to priority with respect to the loan proceeds used to refinance the existing mortgage, as the subordination penalty did not apply in this circumstance. View "Altshuler Shaham Provident Funds, Ltd. v. GML Tower, LLC" on Justia Law

The Commonwealth of the Northern Marina Islands obtained two tax judgments in the U.S. district court against the Millars for unpaid taxes. The Millards, who previously resided in the Commonwealth, relocated before the Commonwealth was able to obtain the judgments. The Commonwealth commenced proceedings as a judgment creditor asseking a turnover order against garnishees holding assets of the Millars. The Commonwealth named a Canadian bank (Bank) headquartered in Toronto, with a branch in New York, as a garnishee under the theory that the Millards maintained accounts in a foreign subsidiary of Bank. The district court denied the Commonwealth's motion for a turnover order against Bank. The Court of Appeals accepted certification to answer questions of law, holding (1) for a court to issue a post-judgment turnover order pursuant to N.Y. C.P.L.R. 5225(b) against a banking entity, the entity itself must have actual, not merely constructive, possession or custody of the assets sought; and (2) therefore, it is not enough that the banking entity's subsidiary might have possession or custody of a judgment debtor's assets. View "Commonwealth of N. Mariana Islands v. Canadian Imperial Bank of Commerce" on Justia Law

M&T Real Estate Trust foreclosed on commercial mortgages executed by Defendant. After a public auction, the referee sold M&T the property. M&T's attorney twice declined to accept or retain physical possession of the referee's deed dated May 11, 2010. As a result, the referee took back the deed and other closing documents and ultimately executed a deed on August 9, 2010 when M&T's attorney accepted it on behalf of MAT Properties, Inc. The deed was recorded on August 17, 2010. M&T subsequently filed a motion seeking to confirm the referee's report of sale and enter a deficiency judgment. Defendants argued that M&T's request for a deficiency judgment was untimely. The county court granted M&T's motion, determining that it was timely under the relevant ninety-day period because the consummation of the sale occurred on August 9, 2010 and was recorded on August 17, 2010. The appellate division reversed, concluding that the ninety-day period commenced in May 2010 upon the delivery of the referee's deed. The Court of Appeals reversed, holding that M&T's motion was timely because it was brought within ninety days after the date of the consummation of the sale by the delivery of the deed to the purchaser on August 9, 2010. View "M&T Real Estate Trust v. Doyle" on Justia Law

Following the collapse of two investment vehicles known as SIV-Lites, Oddo Asset Management (Plaintiff) commenced this action against Barclays Bank PLC, Barclays Capital Inc. (collectively, Barclays), and The McGraw-Hill Companies, Inc., claiming aiding and abetting breach of fiduciary duty and tortious interference with contract. Supreme Court dismissed the complaint. The appellate division affirmed, concluding (1) the collateral managers of the SIV-Lites did not have a contract or relationship with Plaintiff such as would give rise to an underlying fiduciary duty, and (2) Plaintiff's tortious interference claim failed because Plaintiff did not allege an actual breach of the underlying contract. The Court of Appeals affirmed, holding (1) the collateral managers appointed to oversee the assets of the SIV-Lites did not owe a fiduciary duty to Plaintiff, and (2) Plaintiff failed to state a cognizable claim for tortious interference with contract. View "Oddo Asset Mgmt. v. Barclays Bank PLC" on Justia Law

Plaintiff sued defendant asserting causes of action for breach of fiduciary duty, gross negligence, and breach of contract where the gravamen of the complaint was that defendant mismanaged the portfolio of an entity whose obligations plaintiff guaranteed. At issue was whether the Martin Act, General Business Law art 23-A, preempted plaintiff's common-law causes of action for breach of fiduciary duty and gross negligence. The court agreed with plaintiff that the Martin Act did not preclude a private litigant from bringing a nonfraud common-law cause of action where the Martin Act did not expressly mention or otherwise contemplate the elimination of common-law claims.