Justia Banking Opinion Summaries

The case revolves around a dispute over the ownership of funds in a joint checking account following the death of one of the parties named on the account. Karon “Kelly” Kelso was originally a joint owner of a checking account with his wife, Sandra Kelso. After Sandra's death, Linda Applington, a friend of Kelly’s, began helping Kelly process his monthly bills. Kelly later added Linda on his checking account as a joint owner with the right of survivorship. After Kelly's death, his son, Greg Kelso, became the personal representative and sole heir of Kelly’s estate. Greg sought to have the funds transferred to Kelly’s estate, but Linda claimed ownership of the account under the right of survivorship and declined to transfer the funds.The district court granted summary judgment in favor of Linda, finding clear and convincing evidence that Kelly intended Linda to have the funds in his account upon his death. Greg appealed to the Supreme Court of the State of Idaho.The Supreme Court of the State of Idaho reversed the district court’s grant of summary judgment and remanded for a jury trial. The court found that there were inconsistencies in the testimonies of Linda and Janet Overman, an employee of the bank, which raised questions about their credibility. The court held that summary judgment was not proper when the record raises any question as to the credibility of witnesses. The court also vacated the award of attorney fees to Linda, stating that the prevailing party has not been determined and fees may be considered at the conclusion of the case. View "Kelso v. Applington" on Justia Law

In this case, UMB Bank, N.A. (UMB) filed a complaint against Jessie Benton and her children, alleging that they violated the Racketeer Influenced and Corrupt Organizations Act (RICO) by committing acts of mail, wire, and bank fraud. The dispute arose from the management of a family trust, which included works of art, real estate, and personal effects. The beneficiaries of the trust accused UMB of mismanagement and sued UMB in a separate Missouri state court case. UMB then filed this federal case, arguing that the beneficiaries and their attorney engaged in fraudulent activities to force UMB to increase trust distributions or resign as trustee.The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision to dismiss UMB's complaint for failure to state a civil RICO claim. The court agreed that UMB failed to sufficiently allege a pattern of racketeering activity. Although UMB might be able to prove that three communications to media outlets qualify as predicate acts of mail, wire, or bank fraud, these acts did not show a pattern of racketeering activity because they occurred within a few days and targeted a single victim (UMB). The court also affirmed the district court's denial of UMB's post-judgment motions for leave to amend the complaint, as the proposed amendment was both untimely and futile. View "UMB Bank v. Guerin" on Justia Law

The Supreme Judicial Court vacated the judgment of the district court dismissing Key Bank National Association's complaint for foreclosure because the debtor or the debtor's estate was a necessary party and was not participating in the action, holding that neither the debtor nor the debtor's estate was a necessary party to the action.The debtor borrowed money from KeyBank and executed a promissory note for the loan. After the debtor died intestate the property at issue passed by operation of law to the debtor's wife as a surviving joint tenant. After the note went into default the wife conveyed the property to a third party. Thereafter, embank filed a complaint for foreclosure of the property against the debtor's wife and estate, as well as third party. The trial court dismissed the action without prejudice, holding that either the debtor or his estate must be named as a necessary party to the foreclosure action. The Supreme Judicial Court vacated the dismissal, holding that because a foreclosure does not include a claim for a deficiency judgment and is therefore solely in rem in nature any mortgagor or successor in interest is a necessary party but a deceased debtor is not. View "KeyBank National Ass'n v. Keniston" on Justia Law

In its prior decision, the Ninth Circuit rejected Optional’s contention that DAS should be held in contempt for allegedly failing to comply with the May 2013 final judgment that was entered in these forfeiture proceedings. Optional filed a Fed. R. Civ. P. 60(a) motion to amend the May 2013 judgment to provide that (1) the $12.6 million that DAS had received “is impressed with a constructive trust in favor of Optional” and that (2) “DAS is directed to return that $12,602,824.09, with interest, to Optional’s counsel.” Optional argued that the May 2013 judgment’s failure to specifically award the $12.6 million to Optional was a “scrivener’s error” that should be corrected under Rule 60(a). The district court denied Optional’s Rule 60(a) motion.   The Ninth Circuit granted DAS Corporation’s motion to summarily affirm the district court’s decision. First, the panel denied Optional’s motion to strike DAS’s papers, which alleged that DAS was not a proper party in this matter. The panel held that this contention was frivolous. The panel held that DAS had standing to object to the proposed entry of a subsequent final judgment that, in its view, did not correctly reflect the court’s earlier rulings that finally disposed of the matter as to DAS. The panel granted DAS’s motion for summary affirmance. Finally, the panel held that despite being warned in the prior decision that its prior litigation maneuvers had gone too far, Optional filed this utterly meritless appeal and filed a frivolous motion contesting DAS’s right even to be heard in this appeal. View "OPTIONAL CAPITAL, INC. V. DAS CORPORATION, ET AL" on Justia Law

The Supreme Court affirmed in part and reversed in part the judgment of the circuit court granting summary judgment concluding that Plains Commerce Bank could not foreclose on certain trust real estate, that the trustee's mortgage on trust real estate was void and unenforceable, and that Plaintiff was entitled to attorney fees, holding that the attorney fee award was an abuse of discretion.Garry and Betty Beck treated an irrevocable spendthrift trust naming their three children as secondary beneficiaries. Their child Matthew Beck took out a substantial personal loan with Plains Commerce and granted a mortgage to the bank on trust real estate as partial collateral. When Matthew defaulted on the loan, Plains Commerce brought a foreclosure action against Matthew in his capacity as trustee. Jamie Moeckly intervened on behalf of the trust. The circuit court granted summary judgment for Jamie and further granted her motion for attorney fees. The Supreme Court reversed in part, holding (1) the circuit court erred in awarding attorney fees to Jamie as intervenor for the trust; and (2) because there was no mortgage foreclosure the statutory provision in S.D. Codified Laws 15-17-38 authorizing attorney fees "on foreclosure" did not apply. View "Plains Commerce Bank, Inc. v. Beck" on Justia Law

The Supreme Court reversed the opinion of the circuit court affirming the district court's order liquidating a trust's assets, holding that the order was arbitrary, unreasonable, unfair, and unsupported by sound legal principles.J.P. Morgan Chase Bank, N.A., obtained a Jefferson District Court Court order that improperly directed the Bank to liquidate certain trust assets and pay them into the Jefferson Registry of Court. The circuit court affirmed the district court's action. The Supreme Court reversed, holding (1) the Bank violated its statutory and fiduciary duties by liquidating the trust's assets when the legislature has provided an adequate mechanism and remedy for the settlement and distribution of trust assets; and (2) as a remedy, the district court is to order an accounting and appropriate damages. View "Estate of Worrall v. J.P. Morgan Bank, N.A." on Justia Law

Plaintiff filed suit against PNC Bank and PNC Investments for mishandling an investment account that belonged to plaintiff and her deceased mother. The district court sua sponte ordered briefing on the probate exception to federal diversity jurisdiction, concluded that plaintiff was "attempting to circumvent the normal probate process by bringing an individual claim against PNC Bank," and dismissed the case. The district court also held that plaintiff had no standing to sue.The Eleventh Circuit reversed, concluding that neither the probate exception nor standing doctrine divests the district court of jurisdiction over this lawsuit. The court concluded that the district court erred in dismissing the case under the probate exception because it can adjudicate her claims for damages against PNC without probating her mother's will, administering the estate, or disposing of the estate's property. The court also concluded that plaintiff is the real party in interest and has standing to bring her claims. The court remanded for further proceedings. View "Fisher v. PNC Bank, N.A." on Justia Law

Six Delaware statutory Trusts acquired student loans, issued notes for the acquisitions, and pledged the student loans as collateral for the notes. This “securitization” works well when the students do not default. The Trusts initially did not provide for servicing delinquent loans; under a subsequent “Special Servicing Agreement,” U.S. Bank became the Indenture Trustee and the “Special Servicer” but allegedly failed to collect hundreds of millions of dollars in delinquent loans. The holders of the Trusts’ equity ownership interests hired an additional loan servicer, Odyssey, and submitted invoices from Odyssey for payment from the trust estate.The district court held that the Trust documents were not violated by hiring Odyssey and Odyssey’s invoices were payable. The Third Circuit reversed in part. Several provisions of the Odyssey Agreement violate the Trust documents by impermissibly transferring to the Owners of the Trusts rights reserved for the Indenture Trustee. The Odyssey Agreement supplements and modifies several provisions of the Trust documents, requiring consent not obtained from the Indenture Trustee. The court remanded for a determination of whether the Odyssey invoices are nonetheless payable, which may include reconsideration os a self-dealing issue. View "In re: National Collegiate Student Loan Trusts" on Justia Law

The administrator brought separate actions against Regions and Fidelity, alleging claims arising from the decedent's transfer of his entire retirement savings account to his sister before his death.The Eleventh Circuit held that the district court properly granted Fidelity's Rule 12(b)(6) motion regarding the Count III breach of contract and Count IV breach of fiduciary duty claims; vacated the district court's Rule 12(b)(1) dismissals of the Count II Georgia UCC claims in both complaints because those rulings were incapable of meaningful review; and affirmed the district court's dismissal of the Count I common law conversion and Count II common law negligence claims because they were preempted by Georgia Code 11-3-420. View "Estate of David Bass v. Regions Bank, Inc." on Justia Law

Winget created the Trust, retaining the right to revoke the Trust at any time and to receive income generated by the trust property during his lifetime. He also served as the trustee with broad powers. Venture (a company owned by Winget) sought a loan from Chase. Winget guaranteed the loan both in his individual capacity and as a representative of the Trust. Venture defaulted on the loan, Chase sued. During one of six previous appeals, the Sixth Circuit held that the guarantee agreement limited Winget’s personal liability to $50 million but did not limit the Trust’s liability. Winget paid Chase $50 million; the Trust has not satisfied its obligation and now owes $750 million. The Sixth Circuit affirmed that Chase could recover that money from the Trust property. Under Michigan law trusts can enter into contracts and satisfy their contractual obligations through the trust property. Creditors can sue to recover from the trust property, just like with any other contract. Under Michigan law and the trust agreement, Winget had the power to enter into contracts on behalf of the Trust. The court rejected Winget’s argument that he “owns” the trust property because he can revoke the Trust and pays taxes on the trust property and that Chase cannot take the property to satisfy the Trust’s obligation. The trust property would not be used to satisfy Winget’s personal liability but would be used to satisfy the Trust’s liability. View "JPMorgan Chase Bank, N.A. v. Winget" on Justia Law