Justia Banking Opinion Summaries

In this case, Eli Global, LLC, and Greg Lindberg appealed a summary judgment entered against them by the Mobile Circuit Court in Alabama. The dispute involved Eli Global's alleged failure to fulfill its obligations on a promissory note and Lindberg's alleged failure to fulfill his obligations on a guaranty of that promissory note. The promissory note and guaranty were part of an agreement to purchase a healthcare company. Eli Global and Lindberg also challenged the circuit court's award of attorney fees and expenses to the plaintiffs.The Supreme Court of Alabama affirmed the lower court's judgment finding Eli Global and Lindberg liable based on the promissory note and the guaranty, and its award of the principal amount plus interest due based on that liability. The court found that the promissory note was not a negotiable instrument under New York law, and even if it was, the plaintiffs were not required to prove who possessed the promissory note because Eli Global and Lindberg waived that argument in the lower court. In addition, the court found that one of the plaintiffs did not release his claims against Lindberg that were based on the guaranty.However, the court remanded the case back to the lower court to provide a more detailed explanation for the award of attorney fees and expenses. The court found that the lower court's order did not provide sufficient explanation on how it determined the award of attorney fees and expenses. The lower court was instructed to return its explanation to the Supreme Court within 42 days. View "Eli Global, LLC v. Cieutat" on Justia Law

Philip and Jennie Bowling purchased their house via a promissory note in 1986. The loan was secured by a mortgage, which was eventually assigned to U.S. Bank National Association ("U.S. Bank"). A little over a decade later, the Bowlings began missing loan payments. Litton Loan Servicing, LP ("Litton"), the original servicer for the loan, sent the Bowlings several notices of default between July 1999 and June 2011, before eventually transferring service of the loan to another entity, Ocwen Loan Servicing, LLC ("Ocwen"). In September 2011, Ocwen allegedly notified the Bowlings that they were in default. Ocwen then scheduled a foreclosure sale, which took place in October 2012. A company called WGB, LLC ("WGB"), purchased the Bowlings' house at the foreclosure sale, but the Bowlings refused to vacate the property. A few weeks later, WGB filed an ejectment action against them. The Bowlings answered by asserting that they had not defaulted on the loan and that the foreclosure sale was invalid. The Bowlings also named as third-party defendants U.S. Bank, Ocwen, and Litton (collectively, "the banks"), alleging that the banks had mishandled the loan, the foreclosure sale, and related matters. In total, the Bowlings asserted 15 third-party claims against the banks. Rule 54(b) of the Alabama Rules of Civil Procedure gives a trial court discretion to certify a partial judgment as final, and thus immediately appealable, even though some piece of the case remains pending in the trial court. This appeal stemmed from a Rule 54(b) certification. After review, the Alabama Supreme Court concluded the Jefferson Circuit Court exceeded its discretion in certifying its partial judgment as immediately appealable. Because an improper Rule 54(b) certification cannot support an appeal on the merits of the underlying judgment, the Supreme Court dismissed this appeal for lack of jurisdiction. View "Bowling v. U.S. Bank National Association, et al." on Justia Law

Brett Deslonde appealed the grant of summary judgment entered in favor of Nationstar Mortgage, LLC, doing business as Mr. Cooper ("Nationstar"), and The Bank of New York Mellon, as trustee for Nationstar Home Equity Loan Trust 2007-C ("BNYM"), on Deslonde's claim seeking reformation of a loan-modification agreement on the ground of mutual mistake. In December 2006, Deslonde purchased real property in Fairhope, Alabama with a loan from Nationstar. Deslonde subsequently defaulted on his mortgage payments and applied for a loan modification through Nationstar's loss-mitigation program. By letter dated February 2014, Nationstar notified Deslonde that he had been approved for a "trial period plan" under the federal Home Affordable Modification Program ("the federal program"). Under the federal program, Deslonde was required to make three monthly trial payments in the amount of $1,767.38 and to submit all required documentation for participation in the program, including an executed loan-modification agreement. In July 2014, Nationstar informed Deslonde that his request for a loan modification under the federal program had been denied because he had not returned an executed loan-modification agreement or made the trial payments. That letter informed Deslonde that there were other possible alternatives that might be available to him if he was unable to make his regular loan payments. Deslonde submitted a second application package for loss mitigation in October 2014. Under the executed modification agreement from the second application, Deslonde made monthly payments sufficient to cover only interest and escrow charges on the loan. The loan-modification period, however, expired in November 2016, at which time the monthly payments reverted to the premodification amount so as to include principal on the loan. After the loan-modification period expired, Deslonde made three additional monthly payments, but he then ceased making payments altogether. In an attempt to avoid foreclosure, Deslonde filed a complaint against Nationstar and BNYM in the Baldwin Circuit Court ("the trial court"), requesting a temporary restraining order enjoining foreclosure of the mortgage, a judgment declaring the parties' rights under the executed modification agreement, and reformation of the executed modification agreement on the ground of mutual mistake. Finding that the trial court did not err in granting summary judgment in favor of Nationstar and BNYM, the Alabama Supreme Court affirmed. View "Deslonde v. Nationstar Mortgage, LLC, d/b/a Mr. Cooper et al." on Justia Law

Cadence Bank, N.A. ("Cadence"), sued Steven Dodd Robertson and Mary Garling-Robertson, seeking to recover a debt the Robertsons allegedly owed Cadence. The circuit court ruled that Cadence's claim was barred by the statute of limitations and, thus, granted the Robertsons' motion for a summary judgment. The Alabama Supreme Court reversed, finding the Robertsons' summary-judgment motion did not establish that Cadence sought to recover only pursuant to an open-account theory subject to a three-year limitations period. The Robertsons did not assert any basis in support of their summary-judgment motion other than the statute of limitations. The matter was remanded for further proceedings. View "Cadence Bank, N.A. v. Robertson" on Justia Law

SE Property Holdings, LLC ("SEPH"), the successor by merger to Vision Bank, and FNB Bank ("FNB") separately appealed a circuit court's judgments on their breach-of-contract claims against Bama Bayou, LLC, formerly known as Riverwalk, LLC ("Bama Bayou"), and Marine Park, LLC ("Marine Park"), and the individuals and entities guaranteeing Bama Bayou's and Marine Park's contract obligations, challenging the trial court's damages awards. Bama Bayou and Marine Park were the developers of a planned mixed-use development in Orange Beach consisting of a marine park, residential condominiums, retail shops, hotels, and commercial entertainment venues. Marine Park specifically intended to develop a special-use facility for the exhibition of marine animals. Vision Bank made four loans to Bama Bayou and Marine Park related to the development project. The Marine Park loan was fully funded by FNB pursuant to a participation agreement with Vision Bank. The participation agreement provided that the Marine Park parcel would be owned by FNB in the event it was acquired by foreclosure. Bama Bayou and Marine Park were having financial problems with regard to the project by August 2007. Vision Bank demanded payment at that time, and Bama Bayou, Marine Park, and the guarantors failed and/or refused to pay the indebtedness owed on the loans. In 2009, Vision Bank conducted a public auction to separately foreclose the mortgages. No bids were submitted; Vision Bank purchased the properties. Neither Bama Bayou, nor Marine Park, nor the guarantors exercised their rights to redeem the properties. Vision Bank sued Bama Bayou and its guarantors, and Marine Park and its guarantors for amounts owed under those loans, including all principal, accrued interest, late charges, attorney's fees and collection costs. After review, the Alabama Supreme Court reversed the trial court's judgments in these consolidated cases and remanded for a determination of the appropriate awards on the breach-of-contract claims. "Such awards should account for all accrued interest, late charges, attorney's fees, collection costs, and property- preservation expenses owed." View "FNB Bank v. Marine Park, LLC, et al." on Justia Law

TD Bank, National Association and TD Bank US Holding Company (collectively, "TD Bank") petitioned the Alabama Supreme Court for a writ of mandamus to direct the circuit court to dismiss claims filed against them by Bolaji Kukoyi and Dynamic Civil Solutions, Inc., on the basis of a lack of personal jurisdiction. In January 2017, Kukoyi retained Jessyca McKnight, a real-estate agent and broker employed with A Prime Location, Inc., d/b/a A Prime Real Estate Location ("Prime"), to assist him in purchasing a house. Kukoyi made an offer on a house, the offer was accepted, and the closing was scheduled to take place at attorney David Condon's office in Birmingham. Before the closing date, McKnight and Prime received an e-mail purportedly from Condon's paralegal instructing Kukoyi to wire funds for the closing costs one week before the closing date to an account at a TD Bank location in Florida. According to Kukoyi, he questioned the instructions but was assured by McKnight and Prime that wiring the funds was necessary for the closing to go forward. Kukoyi initiated a wire transfer in the amount of $125,652.74 from an account he owned jointly with Dynamic Civil Solutions with ServisFirst Bank ("ServisFirst") to the account at TD Bank as instructed in the e-mail McKnight and Prime had forwarded to Kukoyi. Unbeknownst to plaintiffs, the account to which Kukoyi wired the funds had been opened by a company known as Ozoria Global, Inc. ServisFirst discovered that the wire transfer was fraudulent and had not been completely processed. Kukoyi requested that ServisFirst put a stop-payment on the wire transfer, and ServisFirst advised TD Bank that the transfer had been fraudulent and requested that TD Bank reverse the transfer. In late 2017, plaintiffs sued, asserting various causes of action against TD Bank and other defendants in relation to the wire transfer. By March 2019, TD Bank filed a motion to dismiss the claims against it based on a lack of personal jurisdiction. The Alabama Supreme Court determined TD Bank demonstrated that it had a clear legal right to mandamus relief, and granted the writ. The trial court was directed to grant TD Bank's motion to dismiss. View "Ex parte TD Bank US Holding Company" on Justia Law

Brad Dupree sued PeoplesSouth Bank ("PeoplesSouth"), alleging that PeoplesSouth wrongfully gave the proceeds of a $100,000 certificate of deposit to his father, not him. Jimmy Dupree was Brad's father. In 1993, Jimmy opened the CD at issue here; it was issued in both Brad's and Jimmie's names. Handwritten edits on the CD later reversed the order of the names to "Jimmy Dupree and Brad Dupree" and also replaced Brad's taxpayer ID number with Jimmy's taxpayer ID number. A handwritten note, dated December 1993 on the back of the CD stated "changed order of names to report interest under Jimmy's SS#." No evidence was offered as to who made the handwritten changes, and they were not initialed by either Jimmy or Brad. Brad was a minor at the time the CD was issued and did not contribute any money to the purchase of the CD. In November 2010, before filing this case, Brad, his mother, and his stepbrother sued Jimmy alleging Jimmy had wrongfully converted certain personal property, including the CD. In 2012, while the 2010 action was pending, Jimmy cashed the CD without notifying Brad. PeoplesSouth issued a cashier's check payable to the order of "Jimmy Dupree or Brad Dupree" for the amount of the CD less amounts set off by PeoplesSouth related to Jimmy's business loan. Jimmy cashed the check and then spent the funds. Brad learned during mediation of the 2010 action that Jimmy had cashed in the CD and was advised by the mediator to sue PeoplesSouth. The circuit court entered judgment in favor of the bank. Brad appealed, arguing he should have won on his breach-of-contract claim and awarded $100,000 in damages. The Alabama Supreme Court determined that without any rights in the CD by virtue of an inter vivos gift, Brad could not show he was damaged by PeoplesSouth's alleged nonperformance, and he was therefore unable to prevail on his breach-of-contract claim. Judgment in favor of the bank was affirmed. View "Brad Dupree v. PeoplesSouth Bank" on Justia Law

Pentagon Federal Credit Union ("PenFed") appealed a circuit court judgment entered in favor of Susan McMahan. McMahan and her husband purchased property in Loxley, Alabama in 2005. The purchase mortgage was provided by Wells Fargo bank, and a second mortgage was granted in favor of PenFed. In pertinent part, the PenFed mortgage stated "At no time shall this mortgage, not including sums advanced to protect the security of this mortgage, exceed $55,000.00. ... [PenFed] shall be subrogated to the rights of the holder of any previous lien, security interest, or encumbrance discharged with funds advanced by [PenFed] regardless of whether these liens, security interests or other encumbrances have been released of record." In 2014, the McMahans filed for Chapter 13 bankruptcy protection, listing both the Wells Fargo and PenFed mortgages. Both Wells Fargo and PenFed ultimately foreclosed on the mortgages. The McMahans' bankruptcy case was dismissed in late 2015. The Wells Fargo debt/lien and the PenFed debt were not discharged in the bankruptcy proceedings. PenFed filed suit against Wells Fargo to quiet title as the first lien holder to the McMahan property by virtue of the PenFed mortgage, the foreclosure deed, and the erroneous legal description in the Wells Fargo mortgage. PenFed did not notify or make McMahan a party to that lawsuit. That lawsuit was never tried to conclusion but was settled, and PenFed paid Wells Fargo $91,256.54 to satisfy the [Wells Fargo] note and in exchange for a cancellation and release of the Wells Fargo mortgage. PenFed did not acquire the right to enforce the Wells Fargo note and/or mortgage. Within one year of the foreclosure, PenFed sold the property, leaving the McMahans with a deficiency balance of $14,433.41. PenFed's calculation of the post-foreclosure-sale surplus proceeds excluded the $91,256.54 that PenFed paid to Wells Fargo to satisfy the Wells Fargo note and cancel the Wells Fargo mortgage. In 2018, McMahan sued PenFed, alleging PenFed's sale of the property to third-party purchasers created excess proceeds greater than what PenFed was entitled to received under the original note. The circuit court concluded PenFed could not exclude the surplus proceeds it paid to Wells Fargo to settle the Wells Fargo mortgage. The Alabama Supreme Court concluded the circuit court erred in characterizing the doctrine of unjust enrichment as an affirmative defense. Accordingly, PenFed did not waive the defense of unjust enrichment by failing to plead it in its responsive pleadings. Instead, PenFed raised the argument to the circuit court at trial and in its trial brief; the argument was properly before the circuit court. Judgment was reversed for further consideration of the merits of PenFed's unjust-enrichment argument. View "Pentagon Federal Credit Union v. McMahan" on Justia Law

Deutsche Bank National Trust Company sought to appeal a circuit court order in a foreclosure action it brought against Dortha and Randy Karr. The Alabama Supreme Court determined the order appealed from was not a final judgment, thus it dismissed the Bank's appeal. View "Deutsche Bank National Trust Company v. Karr" on Justia Law

Patricia Devine sued to invalidate a foreclosure sale that divested her interest in a property located in Elberta, Alabama. The trial court explained that the foreclosure was lawful and that Devine's lawsuit was, in any event, barred by the statute of limitations and precluded by the doctrine of res judicata. Devine insisted on appeal that the foreclosure was illegal and therefore void, but the Alabama Supreme Court found she failed to address the trial court's application of the statute of limitations and the doctrine of res judicata. The trial court was therefore affirmed. View "Devine v. Bank of New York Mellon Company" on Justia Law