Justia Banking Opinion Summaries

Defendants acquired real property by borrowing more than $2 million from Whitefish Credit Union (WCU) and signing a promissory note to WCU, secured by mortgages on the property. Defendants later defaulted on that note, owing a principal balance of $1,951,670. WCU filed this action for foreclosure and collection of the debt. The property was sold at a sheriff’s sale to WCU for $1,100,000. Thereafter, WCU filed a request for entry of a deficiency judgment against Defendants for the amount of $745,365. Defendants opposed the request, arguing that the fair market value of the property exceeded the loan balance. After a hearing, the district court found the property was worth $2,366,667 as of the date of the sheriff’s sale and that no deficiency was owed to WCU. The Supreme Court affirmed in part and reversed in part, holding (1) the district court did not abuse its discretion by proceeding in equity to determine the fair value of the property for purposes of entering a deficiency judgment; but (2) evidentiary errors clearly affected the outcome of the proceeding to the prejudice of WCU. Remanded for further proceedings on the evidentiary issues and the applicable standard. View "Whitefish Credit Union v. Prindiville" on Justia Law

Plaintiff filed suit against BOA and Wells Fargo alleging, among other claims, that BOA had violated Section 51.002(d) of the Texas Property Code and the Texas Debt Collection Act (TDCA), Tex. Fin. Code Ann. 392.301(a)(8), 392.303(a)(2), and 392.304(a)(8). On appeal, plaintiff challenged the district court's grant of summary judgment for BOA. The court concluded that, even if section 51.002(d) authorizes a private cause of action, plaintiff fails to state a claim because she did not allege that BOA attempted to send her a timely notice of sale or to initiate foreclosure. Further, the court concluded that, irrespective of any statutory notice requirements, BOA did not violate section 392.301(a)(8) of the TDCA by threatening to foreclose; plaintiff failed to allege a violation of section 392.303(a)(2); and plaintiff failed to establish any of the elements required by section 392.304(a)(8). Accordingly, the court affirmed the judgment. View "Rucker v. Bank of America" on Justia Law

U.S. Bank National Association ("USB"), successor in interest to Bank of America, N.A., which was the successor by merger to LaSalle Bank, National Association, as trustee for Structured Asset Investment Loan Trust, Mortgage Pass-Through Certificates, Series 2004-4 ("the Trust"), and Bank of America, N.A. ("BOA"), separately appealed a $3.9 million judgment entered against them on trespass and wantonness claims asserted by Chester and Emily Shepherd. USB also appealed the trial court's judgment in favor of the Shepherds on its claims related to an alleged error in a mortgage executed by the Shepherds upon which the Trust had foreclosed. The Alabama Supreme Court reversed. "'Every single one of these cases . . . rejects the availability of negligence and wantonness claims under Alabama law under comparable circumstances to those identified by the [plaintiffs]. Every one of these cases undercuts the legal viability of [the plaintiffs' negligence and wantonness claims], and rejects the very arguments articulated by the [plaintiffs] in opposing dismissal of those causes of action. ... the mortgage servicing obligations at issue here are a creature of contract, not of tort, and stem from the underlying mortgage and promissory note executed by the parties, rather than a duty of reasonable care generally owed to the public. To the extent that the [plaintiffs] seek to hold defendants liable on theories of negligent or wanton servicing of their mortgage, [those negligence and wantonness claims] fail to state claims upon which relief can be granted.'" View "U.S. Bank National Ass'n v. Shepherd" on Justia Law

The FHFA filed a summons with notice in state court asserting breach of contractual obligations to repurchase mortgage loans that violated representations and warranties and then Quicken removed the action to federal court. Plaintiff, as trustee of the subject residential mortgage‐backed securities trust, took control of the litigation and filed the complaint. Quicken moved to dismiss the suit. The court affirmed the district court's conclusion that (1) the statute of limitations ran from the date the representations and warranties were made; (2) the extender provision of the Housing and Economic Recovery Act,12 U.S.C. 4617(b)(12), did not apply to the Trustee’s claim; and (3) the Trustee’s claim for breach of the implied covenant of good faith and fair dealing was duplicative. View "Deutsche Bank Nat'l v. Quicken Loans" on Justia Law

In 2011, Wells Fargo filed a foreclosure complaint against Jeffrey White. In 2014, based on an agreed-to judgment by the parties, the court entered a final judgment of foreclosure. Thereafter, White moved for relief from judgment pursuant to Me. R. Civ. P. 60(b)(1) and (4), alleging that Wells Fargo lacked standing to foreclose and that Wells Fargo’s failure to establish standing deprived the court of jurisdiction, rendering the judgment void. The district court denied White’s motion, finding that White was not entitled to relief. The Supreme Judicial Court affirmed, holding that the district court did not abuse its discretion by denying relief pursuant to either Rule 60(b)(1) or (4), as (1) the parties had not been mistaken about the facts or the law regarding standing when they agreed to the entry of judgment; and (2) Plaintiff had a fair opportunity and a significant incentive to challenge Wells Fargo’s standing but failed to do so. View "Wells Fargo Bank, N.A. v. White" on Justia Law

A Bank filed a residential foreclosure complaint against Appellant, alleging that Appellant executed a promissory note and a mortgage securing the note on certain property and that Appellant defaulted on the note. The Bank claimed that, through a series of endorsements and assignments, the Bank had acquired rights in the mortgage and authority to enforce the note. The trial court entered a judgment in Appellant’s favor, concluding that the Bank failed to provide Appellant with a statutorily-complaint notice of the default and of his right to cure. The court then prospectively reserved to the Bank the right to relitigate a second foreclosure action. The Supreme Court vacated the portion of the judgment reserving to the parties the right to relitigate all issues in a future foreclosure action, as the trial court entered a final judgments on the merits in favor of Appellant, and there was no special reason identified for affirmatively reserving the parties’ rights to relitigate. The Court affirmed the judgment in all other respects. View "U.S. Bank, N.A. v. Tannenbaum" on Justia Law

This appeal stemmed from a superior court decision to grant summary judgment in favor of defendant Caroline Marini on plaintiff EverBank’s complaint for foreclosure on a mortgage that Caroline signed in 2009 together with her co-defendant and then-husband Gary Marini. In ruling on cross-motions for summary judgment, following a hearing, the trial court concluded that Caroline was entitled to judgment as a matter of law on EverBank’s foreclosure complaint because the undisputed material facts established that Caroline signed the mortgage under the threat of physical violence from Gary and thus the mortgage was void as to her. The trial court also concluded that regardless of whether the mortgage was void as to Caroline, EverBank was not a bona fide purchaser. EverBank subsequently moved to alter or amend the judgment on the ground that the grant of summary judgment as to Caroline unjustly enriched her. The trial court denied the motion, explaining that EverBank had not raised the issue of unjust enrichment in response to Caroline’s cross-motion for summary judgment. EverBank appealed both decisions. After review, the Supreme Court reversed the decision granting summary judgment in favor of Caroline on the issue of whether the mortgage was void, and directed the trial court to enter judgment for EverBank on that issue. The Court remanded for trial the issues of whether the mortgage was voidable and, if so, whether it was enforceable because it was ratified by Caroline, but affirmed the trial court’s decision that the bona fide purchaser doctrine was not available to EverBank. View "Everbank v. Marini" on Justia Law

Earnest Magee sued Covington County Bank (CCB) for conversion after it seized collateral for a promissory note and later sold the property at auction. CCB moved under Mississippi Rule of Civil Procedure 12(b)(6) to dismiss, arguing: (1) that the statute of limitations had expired; (2) that it had a contractual right to the property; and (3) that Magee’s claim was barred by issue preclusion. The circuit judge denied CCB’s motion and finding no reversible error, the Supreme Court affirmed. View "Covington County Bank v. Magee" on Justia Law

Whitney and Pamela Smith entered into a residential mortgage contract with Saxon Mortgage Services (“Saxon”), which was secured with a promissory note on the Smiths’ home in Grant Parish. The Smiths later failed to make their installment payments beginning June 1, 2004. Two months later, Mr. Smith died in an automobile accident. On November 4, 2004, J.P. Morgan Chase Bank (“Chase”), as trustee for Saxon, filed suit for executory process against the Smiths, seeking to deliver a notice of seizure to Ms. Smith. Ms. Smith, fearing that she would be evicted from her home over the holidays, moved her children out of the house and sought an injunction to stop the seizure by executory process. In support, she argued the foreclosure documents were not in authentic form pursuant to the requirements set forth in La. Code Civ. P. art. 2635(A)(2) because they were executed in front of only one witness. Ms. Smith also filed a reconventional and third party demands against Chase, alleging wrongful seizure, conversion, and federal due process violations pursuant to 42 U.S.C. 1983. Ultimately, the Banks were found to have improperly seized the Smith home. The Supreme Court granted certiorari to determine whether private attorneys for the lender were entitled to judgment as a matter of law on the ground their actions did not violate 42 U.S.C. 1983. The Supreme Court found that the district court properly granted summary judgment, and the court of appeal erred in reversing that judgment. View "Bank of New York Mellon v. Smith" on Justia Law

At issue in this case was whether a lender who takes possession of property but does not become the fee simple record owner of the property through foreclosure or a deed in lieu of foreclosure is liable for homeowners’ association assessments. The resolution of the question was not addressed on appeal, however. Petitioner, a homeowners association, filed a complaint against Respondent, a bank, alleging that Respondent had failed to pay homeowners’ association dues since taking possession of property. The district court granted Respondent’s motion to dismiss. The circuit court affirmed. The Supreme Court dismissed Petitioner’s appeal for lack of jurisdiction because Petitioner’s appeal from the district court to a circuit court was untimely. View "Brownstones at Park Potomac Homeowners Ass’n v. JP Morgan Chase Bank, N.A." on Justia Law