Justia Banking Opinion Summaries

Mark Hilde hired Big Lake Lumber (Big Lake), Wruck Excavating (Wruck), and J. DesMarais Construction (DesMarais) to help him build a "spec home." 21st Century Bank (Bank) recorded a mortgage against the property to finance the purchase of the property and the home construction. After the Bank foreclosed on its mortgage, Big Lake commenced this mechanic's lien foreclosure action. The district court found that the mechanic's liens of Big Lake and DesMarais related back to the date Wruck commenced work on the improvement project, and thus, the mechanic's liens of Big Lake and DesMarais had priority over the mortgage of the Bank. The court of appeals reversed. The Supreme Court reversed, holding (1) the court of appeals erred by adopting and then applying a new "integrated analysis" to find the Bank's mortgage superior to the liens; and (2) the district court did not clearly err when it found that Wruck, Big Lake, and DesMarais contributed to the same project of improvement, and accordingly, under the relation-back doctrine, the mechanic's liens of Big Lake and DesMarais had priority over the Bank's mortgage. View "Big Lake Lumber, Inc. v. Sec. Prop. Invs., Inc." on Justia Law

Defendant executed a promissory note secured by a mortgage deed. Plaintiff subsequently sought to foreclose on the mortgage, claiming it was the holder of the note and mortgage. The trial court rendered a judgment of foreclosure by sale. Defendant filed an objection to the foreclosure, alleging that because he was no longer in default, Plaintiff did not have standing to foreclose the mortgage. Defendant also requested that the court direct Plaintiff to produce the original note to prove Plaintiff had standing to institute the foreclosure action. The court determined Plaintiff had standing and rendered judgment of strict foreclosure. The appellate court reversed, concluding that the trial court erred by failing to conduct an evidentiary hearing to determine whether Plaintiff had standing to bring this action after Defendant challenged Plaintiff's standing. The Supreme Court reversed, holding that, under the circumstances, Defendant failed to demonstrate that he was entitled to a full evidentiary hearing on the issue of Plaintiff's standing where the trial court's determination that Plaintiff had standing to commence this action was not in error. Remanded. View "Equity One, Inc. v. Shivers" on Justia Law

In case no. 1111525, M & F Bank ("M & F") appealed a summary judgment entered in favor of First American Title Insurance Company ("FATIC") on negligence, breach-of-contract, and bad-faith-failure-to-pay claims M&F asserted against FATIC related to a title-insurance policy ("the title policy") FATIC issued M & F in connection with a mortgage loan made by M & F to a developer of property in Auburn. In case no. 1111568, FATIC appealed the grant of summary judgment entered in favor of M & F on FATIC's counterclaims asserting abuse of process, conspiracy, breach of contract, and negligence. Upon review of both cases, the Supreme Court affirmed both judgments. View "M & F Bank v. First American Title Insurance Company " on Justia Law

At the heart of this appeal was a mechanic's lien filed against the Black Rock North Development in Coeur d?Alene, Idaho, and an uncompleted golf course community development. American Bank (the Bank) was the lender to BRN Development, Inc. (BRN). BRN hired Wadsworth Golf Construction Company of the Southwest (Wadsworth) to construct a golf course. BRN failed to pay Wadsworth for a portion of the work it performed, and Wadsworth filed a mechanic's lien against the property. BRN defaulted on the loan, and the Bank initiated foreclosure proceedings. Wadsworth's claim of lien was subordinate to the Bank's mortgage interest in the property. In order to proceed with a foreclosure sale, the Bank posted a lien release bond in order to secure the district court's order releasing Wadsworth's lien. The Bank was the successful bidder at the foreclosure sale. The district court ruled that priority of the parties? claims against the property was irrelevant once the property was replaced by the lien release bond as security for Wadsworth's claim and the Bank (by way of the bond) was responsible for payment of Wadsworth's lien claim. The Bank appeals that decision, arguing that Wadsworth should have been prevented from recovering against the lien release bond because its interest would have been extinguished if it had attempted to foreclose its mechanic's lien and the bond merely served as substitute security in place of the property. Wadsworth cross-appealed, arguing the district court erred in holding that Wadsworth waived its right to file a lien for the unpaid retainage on the contract. Upon review, the Supreme Court reversed the district court allowing Wadsworth to recover against the lien release bond and vacated the district court's judgment in favor of Wadsworth. View "Americn Bank v. Wadsworth Golf" on Justia Law

In 2004, Plaintiffs refinanced their home by means of a loan from Downey Savings and Loan Association (Downey), a federal insured financial institution. In 2008, Plaintiffs' monthly loan payment doubled. Later that year, Downey was closed and the FDIC was appointed as its receiver. U.S. Bank subsequently assumed all of Downey's loans and mortgages. After Plaintiffs defaulted on their mortgage loan, U.S. Bank conducted a foreclosure sale and recorded a foreclosure deed. Plaintiffs, in turn, sued U.S. Bank, claiming that the loan made by Downey violated various state consumer protection laws and that the foreclosure was unlawful. U.S. Bank removed the case to federal district court, which granted summary judgment to U.S. Bank. The First Circuit Court of Appeals affirmed, holding (1) the Financial Institutions Reform, Recovery, and Enforcement Act's exhaustion requirement applied to Plaintiffs' consumer protection claims, and therefore, Plaintiffs' failure to file those claims with the FDIC divested the district court of subject-matter jurisdiction; and (2) the transfer of a mortgage, authorized by federal law, obviates the need for a specific written assignment of the mortgage that state law would otherwise require, and thus, the foreclosure sale in this case was lawful. View "Demelo v. U.S. Bank Nat'l Ass'n" on Justia Law

Plaintiffs each filed suit against Darby Bank and various real estate developers and contractors (collectively, the Drayprop Defendants) in state court alleging negligent misrepresentation, fraud, beach of contract, and breach of warranty. Subsequently, the FDIC was appointed receiver of Darby Bank. In consolidated appeals, plaintiffs challenged the denial of their motions for remand to state court after the FDIC removed to federal court, the district court's grant of summary judgment to the FDIC on federal claims, and the district court's refusal to exercise supplemental jurisdiction over remaining state law claims against other defendants. The court concluded that the district court properly granted summary judgment to the FDIC on plaintiffs' claims against Darby Bank. The court concluded, however, that the district court improperly dismissed the remaining claims against the non-FDIC defendants because 12 U.S.C. 1819(b)(2)(A) operated to create original jurisdiction over those claims. Therefore, the court affirmed in part, reversed in part, and remanded for further proceedings. View "Lindley v. FDIC, et al." on Justia Law

Dorothy Urban's estate (Estate) filed suit against Robert Street, asking the circuit court to declare null and void a deed executed by Urban to Street for a residential property on the grounds that the execution of the deed was procured through fraud. Street subsequently executed a deed of trust for a loan that was secured by the property. The majority of the loan was used to pay off a mortgage on the property placed by Urban. Later, the circuit court directed that the property be conveyed in Street's name to the Estate. The court created a constructive trust on the property without expressly declaring the Urban-to-Street deed void ab initio. Street subsequently defaulted on the deed of trust and Petitioners filed a foreclosure action on the property. The Estate filed a motion to dismiss the foreclosure proceedings, which the circuit court denied. The court of special appeals reversed. The Court of Appeals reversed, holding that although Petitioners were not bona fide purchasers of the property, under the doctrine of equitable subrogation, Petitioners were entitled to priority for the amount loaned to Street used to pay off the balance owed on the preexisting Urban mortgage. View "Fishman v. Murphy" on Justia Law

Plaintiffs filed a class-action lawsuit in state court, alleging that the defendants had conducted non-judicial foreclosure sales that did not comply with Utah law. After removal, the district court dismissed the complaint for failure to state a claim, concluding that whether federal law “incorporates Utah or Texas law, Recon[Trust] had not operated beyond the law by acting as a foreclosure trustee in Utah.” On the limited record presented on appeal, the Tenth Circuit concluded that the district court erred in determining it had jurisdiction to hear this case. View "Dutcher, et al v. Matheson, et al" on Justia Law

This case involved the foreclosure sale of certain property owned by plaintiffs. Plaintiffs appealed the district court's dismissal with prejudice of their claims against BAC and NDE under the Texas Debt Collection Act (TDCA), Tex. Fin. Code 392.304(a), the Texas Deceptive Trade Practices Act (DTPA), Tex. Bus. & Com. Code 17.41 et seq., and Texas common law. The court concluded that plaintiffs have alleged sufficient facts to state a claim against BAC for misrepresenting the status or nature of the services that it rendered. Accordingly, the court reversed the district court's dismissal of the TDCA claims under section 392.304(a)(14) as to that basis, remanding for further proceedings. Consequently, the court also reversed the district court's dismissal of plaintiffs' request for an accounting from NDE. The court affirmed in all other respects. View "Miller, et al. v. BAC Home Loans Servicing, L.P., et al." on Justia Law

Rosen, as owner of Kully Construction, submitted a development plan to the city of East St. Louis for a $5,624,050 affordable housing project to be constructed with a combination of private and public funds: $800,000 in federal grant funds, $1,124,810 in Tax Increment Financing (TIF), and $3,699,240 from Rosen and Kully. Rosen constructed elaborate lies about his credentials and history. After obtaining a contract for 32 units, Rosen learned that the project was under-funded by about $2.7 million dollars. To conceal the problem, Rosen misrepresented to the city that he could build 56 units without increasing construction costs, then substituted less-expensive prefab modular housing units in place of the promised new construction; he nonetheless submitted an itemized list of materials and expenses related to construction. He also submitted falsified tax returns to obtain financing and falsified statements that he had obtained financing. After the scheme was discovered, Rosen pleaded guilty to seven counts of wire fraud, and based on the court’s calculation of the loss amount and determination that Rosen was an organizer or leader of criminal activity, was sentenced to 48 months in prison. The Seventh Circuit affirmed. View "United States v. Rosen" on Justia Law