Justia Banking Opinion Summaries

Articles Posted in North Dakota Supreme Court

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Jared Larson appealed a district court judgment foreclosing a mortgage in favor of Heartland State Bank. Larson argued the judgment should have been reversed because Heartland’s notice before foreclosure was legally insufficient. The North Dakota Supreme Court found Larson raised an issue of defective notice during the pendency of the action after Heartland moved to amend its complaint. After reviewing the record, the Supreme Court concluded the defect did not impair Larson’s rights and was not fatal to Heartland’s foreclosure action. Rather than impair Larson’s rights, the Court found the defect benefited him: had he paid the amount due under the notice, the mortgage would have been reinstated under N.D.C.C. 32-19-28 and Heartland would have been required to start the process over to foreclose the mortgage. Because the defect did not impair Larson’s right to reinstate the mortgage, the Supreme Court concluded the district court did not err in granting Heartland’s motion to amend the complaint and motion for summary judgment. Judgment was affirmed. View "Heartland State Bank v. Larson, et al." on Justia Law

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JPF Enterprises, LLC, appealed the grant of summary judgment awarding Baker Boyer National Bank $858,135.47 on its breach of contract claim and dismissing JPF’s counterclaim for fraud in the inducement. Baker Boyer loaned money to JPF for the purchase of thirty mobile homes from Jason Sundseth and his company, Vindans LLC, for use as rental housing in western North Dakota. In 2013, Vindans owned the homes and rented them to oil field workers through Greenflex Housing, LLC, and Greenflex’s rental manager, Badlands, LLC. Vindans purchased the homes with financing from Baker Boyer. In the summer of 2013, James Foust, managing owner of JPF, and Sundseth began negotiations for JPF to purchase the homes from Vindans, and JPF sought financing for the purchase from Baker Boyer. According to Foust, Baker Boyer’s loan officer obtained rental information from Greenflex Housing indicating the monthly rental proceeds from the thirty homes was $9,600 and would not service JPF’s anticipated monthly payments of about $15,000 for the loan. Foust also claimed Baker Boyer required JPF to contract with Greenflex Housing to rent the homes to oil field workers and informed him the arrangement would result in a return of $45,000 per month for the thirty homes. According to Foust, Vindans’ loan with Baker Boyer was near foreclosure and Baker Boyer failed to inform him that his purchase of the homes would not be profitable. In November 2015, JPF defaulted on its loan from Baker Boyer, and Baker Boyer sued JPF in North Dakota to enjoin JPF from transferring or disposing of the loan collateral, to take possession of the collateral, for appointment of a receiver, for sale of the collateral and for a money judgment. JPF answered and counterclaimed, admitting payments were not made as agreed and alleging fraud in the inducement. JPF claimed Baker Boyer acted as an intermediary for JPF’s purchase of the homes from Vindans and failed to disclose information to JPF about the physical condition of the homes, the financial condition of Vindans, and the uncertain financial viability of the home rentals. JPF sought an order requiring Baker Boyer to refund more than $600,000 that JPF paid to Baker Boyer in exchange for JPF transferring all right, title and interest in the homes to Baker Boyer. Finding no reversible error in the grant of summary judgment in favor of Baker Boyer, the North Dakota Supreme Court affirmed. View "Baker Boyer National Bank v. JPF Enterprises, LLC" on Justia Law

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Northern Grain Equipment, LLC entered into contracts with Thimjon Farms Partnership and Hagemeister Farms to construct grain-handling systems on their respective properties. Neither Thimjon nor Hagemeister were customers of First International Bank & Trust. Both Thimjon and Hagemeister made down payments to Northern Grain, which were deposited in Northern Grain's account at First International. Northern Grain never constructed the grain-handling systems and discontinued business. Thimjon and Hagemeister brought separate actions against First International, alleging First International's decision to cease loaning money to Northern Grain resulted in Northern Grain breaching its contracts with Thimjon and Hagemeister and that First International intentionally misled Northern Grain to the detriment of Thimjon and Hagemeister. First International moved for summary judgment. While the motion was pending, Thimjon and Hagemeister moved to amend their complaints to add a claim for deceit and to seek exemplary damages. The district court denied the motion to amend, granted First International's motion for summary judgment and entered judgment dismissing Thimjon's and Hagemeister's claims with prejudice. Thimjon and Hagemeister appealed, arguing the district court erred by granting First International's motion and by denying their motion to amend. Finding no error in the district court's judgment, the Supreme Court affirmed. View "Thimjon Farms Partnership v. First International Bank & Trust" on Justia Law