Justia Banking Opinion Summaries

In 2006, Thompson signed a $354,800 mortgage note with AME as the lender. Several sections of the note and deed of trust noted AME’s intent to transfer the note. Its signature page contains a signed, undated stamp memorializing AME’s transfer to Countrywide and another signed, undated endorsement from Countrywide to blank. BOA purchased Countrywide and has the note. In 2012, BOA offered to short-sell her house in lieu of foreclosure. Thompson requested modification of her repayment terms under the HAMP program (Emergency Economic Stabilization Act, 12 U.S.C. 5201), that gives lenders incentives to offer modifications to borrowers with a payment-to-income ratio over 31%. Thompson claims that she complied with numerous document requests. BOA never granted her application. She sued BOA, Mortgage Electronic Registration Systems, and unidentified persons she believes to be the note’s true owners, claiming: that BOA falsely induced her to sign the mortgage by pretending it was an actual lender; that her title is clouded by the note’s transfer; and that BOA fraudulently induced her to seek modification, knowing it lacked authority to modify her terms or intending to drive her into foreclosure. The district court dismissed for failure to comply with pleading standards. The Sixth Circuit affirmed. View "Thompson v. Bank of Am., N.A." on Justia Law

AIDG Properties, LLC, a real-estate holding company managed by Anjan Dutta-Gupta, purchased property. AIDG obtained loans from BankNewport (Defendant) to finance the purchase and to perform improvements. Dutta-Gupta personally guaranteed the loans. Emond Plumbing & Heating, Inc. and Tecta America New England, LLC (collectively, Plaintiffs) served as subcontractors on the project. Plaintiffs substantially completed the renovations, and BankNewport deposited the loan proceeds into AIDG’s account. After Dutta-Gupta was arrested, Defendant declared Dutta-Gupta to be in default and accelerated the loans. Defendant then set off the deposit it made previously by reversing it. As a result, AIDG was unable to pay Plaintiffs for the work they had performed. Defendant, who was granted possession of the property, later foreclosed. Plaintiffs filed a complaint seeking to recover compensation for their work under the theory of unjust enrichment. The superior court granted summary judgment for Defendant. The Supreme Court affirmed, holding that due to the absence of a relationship between Plaintiffs and Defendant and the lack of any allegation that Defendant engaged in any type of misconduct or fraud, Defendant’s retention of the property, including the improvements, was not inequitable under the Court’s jurisprudence on unjust enrichment. View "Emond Plumbing & Heating, Inc. v. BankNewport" on Justia Law

Tender Care Veterinary Hospital, Inc. ("TCVH"), appealed the grant of summary judgment entered in favor of First Tuskegee Bank on breach-of-fiduciary-duty and fraud claims stemming from a construction loan TCVH received from First Tuskegee in September 2004. The gravamen of those claims was that TCVH was injured by First Tuskegee's alleged insistence that TCVH use PJ Construction as the general contractor on the project although PJ Construction was not licensed as a general contractor in Alabama, that PJ Construction's work product was below what one would expect from a properly licensed general contractor, and that using PJ Construction resulted in delays, cost overruns, and, TCVH argued, the ultimate failure of its business. However, because TCVH's claims accrued in approximately July 2005 and TCVH did not formally assert them until after it initiated this action in April 2009, those claims were barred by the two-year statute of limitations that governed them. Accordingly, the summary judgment entered by the trial court in favor of First Tuskegee was affirmed. View "Tender Care Veterinary Hospital, Inc. v. First Tuskegee Bank " on Justia Law

In 2004, Paint Rock Turn, LLC purchased a sod farm and related farm equipment. To partially finance the purchase, Paint Rock borrowed $1,706,250 from First Jackson Bank. The loan was secured by a mortgage on the sod farm and a security interest in the equipment used on the farm. By February 2009, reflecting in part a drop in demand for sod caused by the collapsing market for new homes, Paint Rock had defaulted on the loan. In early 2009, Paint Rock filed a Chapter 11 bankruptcy petition. The filing of the petition operated as an automatic stay and precluded First Jackson from foreclosing on the sod farm or retaking the equipment. The bankruptcy petition was dismissed later that year, and a few months later, First Jackson moved forward with its intent to foreclose by publishing the first of three notices of a foreclosure sale on the Paint Rock property. On the morning of the scheduled sale, Paint Rock filed a second bankruptcy petition, which stayed the sale. This second petition was dismissed a month later for failure to file the proper schedules and statements. First Jackson published another notice that the foreclosure sale was rescheduled for December 30, 2009. December 26, Paint Rock filed a third bankruptcy petition. Four days later, the bankruptcy court lifted the automatic stay, expressly finding that Paint Rock misused the bankruptcy process to "hinder and delay First Jackson's efforts to foreclose its mortgage and security agreement." First Jackson was the high bidder at the sale, purchased the property, and sent Paint Rock a letter demanding possession of the sod farm. In early 2010, First Jackson filed an ejectment action. The same day, Paint Rock demanded access to the farm to recover "emblements in the form of sod which is being grown on the real property recently foreclosed upon ...." Paint Rock also requested the return of its equipment. First Jackson denied Paint Rock's request. Paint Rock, relying on a section of the Alabama Code that permits a tenant at will to harvest its crop, counterclaimed for damages for harm suffered as the result of being unable to harvest the sod. Paint Rock also sought damages for conversion of "plats of sod" contained on the sod farm. First Jackson sold the sod farm to Mrs. Goodson, subject to any claim Paint Rock may have to the emblements growing on the property. Paint Rock filed a joint third-party complaint against First Jackson and Mr. and Mrs. Goodson, alleging conversion and detinue, as well as the emblements claim. After the trial court denied motions for a summary judgment filed by First Jackson and the Goodsons, the case proceeded to trial. At the close of Paint Rock and Jones's case, the trial court granted a motion for a JML filed by First Jackson and the Goodsons on Paint Rock's counterclaim for emblements on the ground that Paint Rock was not an at-will tenant. After Paint Rock withdrew its detinue claims and the trial court granted a JML on the wantonness claims, leaving only the conversion and negligence claims. The jury awarded Paint Rock damages against First Jackson for conversion of a sod cutter and cut sod that had been loaded on a tractor-trailer when First Jackson took possession of the property. The jury also awarded Paint Rock damages against the Goodsons for conversion of business property and equipment. Paint Rock appealed the JML in favor of the defendants on the emblements claim; First Jackson cross-appealed the judgment awarding Paint Rock damages for conversion of the cut sod. The Supreme Court affirmed with regard to Paint Rock's emblements claim, but reversed on the conversion of the cut sod claim. View "Paint Rock Turf, LLC v. First Jackson Bank et al. " on Justia Law

Plaintiff and his wife purchased a home in Massachusetts that was encumbered by a mortgage. The mortgage was eventually assigned to Defendant CitiMortgage, Inc. Defendant ultimately invoked its statutory power of sale and sent a notice of foreclosure sale to Plaintiff’s home address. Plaintiff sued, alleging breach of contract, unjust enrichment, and breach of the covenant of good faith and fair dealing. A federal district court granted summary judgment for Defendant on all counts and denied Plaintiff’s motion for reconsideration. The First Circuit affirmed the district court’s denial of Plaintiff’s motion for reconsideration, holding that none of the grounds advanced by Plaintiff for reversal of the district court’s denial of reconsideration warranted relief. View "Biltcliffe v. CitiMortgage, Inc." on Justia Law

Plaintiffs executed a promissory note in order to purchase certain real property. To secure payment obligations under the note, Plaintiffs executed a mortgage on the property. Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for the original lender, assigned its interest in the mortgage to OneWest Bank, FSB (OneWest), which was then authorized to service the note for Federal National Mortgage Association (Fannie Mae). When Plaintiffs failed to make timely payments, OneWest initiated foreclosure proceedings. Plaintiffs filed an action against MERS and OneWest seeking a declaration that the assignment from MERS to OneWest was invalid and to quiet title to the property. OneWest eventually held a sale, and the property was sold to Fannie Mae. The hearing justice granted summary judgment for Defendants, concluding (1) MERS validly assigned its interest in the mortgage to OneWest, and therefore, OneWest had the statutory power of sale; (2) Plaintiffs defaulted under the terms of the note; and (3) Fannie Mae, as the buyer at the foreclosure sale, held the record title to the property. The Supreme Court affirmed, holding that the hearing justice did not err in determining that no genuine issue of material fact existed such that granting summary judgment in favor of Defendants was appropriate. View "Breggia v. Mortgage Elec. Registration Sys., Inc." on Justia Law

At issue in this case was whether New Hampshire law requires a foreclosing entity to hold both mortgage and note before it can exercise a power of sale under N.H. Rev. Stat. Ann. 479:25, which authorizes a mortgagee to conduct a non-judicial foreclosure where, as in this case, the mortgage document contains a clause allowing them. Plaintiff executed a promissory note and a mortgage. The note and mortgage document and the note were subsequently assigned to different entities. After Plaintiff failed to make mortgage payments, Defendant, the mortgagee, moved to foreclose. Defendant removed the case from New Hampshire state court to federal court. The district court allowed Defendant’s motion to dismiss, concluding that the parties’ intent to separate the mortgage and note at the beginning of the transaction trumped any common law rule requiring unity, and thus, Defendant could proceed with the foreclosure under section 479:25. Plaintiff appealed. Because controlling state precedent did not provide definitive guidance on how to resolve the questions of whether the common law or state statute mandates the unity of a mortgage and note, and if so, whether parties can override that rule by agreement, the First Circuit certified the questions to the New Hampshire Supreme Court. View "Castagnaro v. Bank of New York Mellon" on Justia Law

With the threat of foreclosure looming on his home, Plaintiff sued Bank for failing to consider him for a mortgage loan modification, which a California class action settlement agreement required Bank to do before attempting to foreclose on Plaintiff’s home. The complaint alleged breach of contract, violation of Mass. Gen. Laws ch. 244, 35A and 35B, violation of Mass. Gen. Laws ch. 93A, and breach of the implied covenant of good faith and fair dealing. The district court dismissed the complaint in its entirety. The First Circuit vacated in part and remanded Plaintiff’s claims for breach of contract and breach of the implied covenant of good faith and fair dealing, holding (1) Plaintiff’s statutory causes of action fell short of stating a cognizable claim; but (2) the district court improperly converted Bank’s motion to dismiss Plaintiff’s contract-based claims into a motion for summary judgment, warranting a remand of those claims. View "Foley v. Wells Fargo Bank, N.A." on Justia Law

In 2012, St. Louis County adopted an ordinance that implemented a foreclosure mediation program requiring lenders to provide residential borrowers an opportunity to mediate prior to foreclosure. Two bankers filed suit against the County seeking a declaratory judgment establishing that the ordinance was invalid. The circuit court sustained the County’s motion for summary judgment, concluding that the County possessed the charter authority to enact the ordinance, the ordinance was a valid exercise of the County’s police power, the ordinance was not preempted by state law, and the fees associated with the ordinance did not violate the Hancock Amendment. The Supreme Court reversed, holding that the ordinance was void and unenforceable ab initio because the County exceeded its charter authority in enacting the ordinance. View "Mo. Bankers Ass’n, Inc. v. St. Louis County, Mo." on Justia Law

Property Owners filed a lawsuit against a Mortgage Company, claiming that, by preparing deeds of trust and promissory notes for the Property Owners, the Mortgage Company (1) violated Mo. Rev. Stat. 484.010.2 and 484.020 by engaging in the "law business"; (2) committed an unlawful practice in violation of the Missouri Merchandising Practices Act; and (3) was unjustly enriched because it charged for services it did not perform or did not perform lawfully. The trial court granted summary judgment for the Mortgage Company. The Supreme Court affirmed, holding that because the Property Owners did not dispute that the Mortgage Company did not charge a separate fee or vary its customary charges for preparation of legal documents, there were no disputed material facts, entitling the Mortgage Company to summary judgment as a matter of law. View "Binkley v. Am. Equity Mortgage, Inc." on Justia Law