Justia Banking Opinion Summaries

Hastings State Bank sought to enforce a commercial guaranty against Miriam Misle in her capacity as trustee of the Julius Misle Revocable Trust. The bank claimed that Julius had signed a guaranty in favor of the Bank, which guaranteed debt owed by a limited liability company. The district court determined that Julius' trust was liable for up to $500,000 in principal on the commercial guaranty and granted partial summary judgment in favor of the bank. After a trial, the district court found in favor of the bank and entered judgment in the amount of $500,000. On appeal, the Supreme Court affirmed, holding (1) the district court did not err when it granted partial summary judgment in the bank's favor and denied Miriam's motion for summary judgment; and (2) the district court's factual determination that the trust was liable for the full amount of the guaranty, $500,000, was supported by the evidence and was not clearly wrong.

Petitioners appealed from a Memorandum and Order and Final Order of Forfeiture entered by the district court dismissing their petition for an ancillary hearing and rejecting their claim as beneficiaries of a putative constructive trust in defendant's forfeiture assets. At issue was whether the remission provision of 21 U.S.C. 853(i) precluded the imposition of a constructive trust in petitioners' favor and whether imposing a constructive trust would be consistent with a forfeiture statutory scheme provided by section 853. Because the court concluded that section 853(i) did not preclude, as a matter of law, recognizing a constructive trust and because a constructive trust was not inconsistent with the forfeiture statute, the court vacated the Final Order of Forfeiture and remanded the case to the district court to consider whether, pursuant to Vermont law, a constructive trust should be recognized in favor of petitioners.

Appellee First Community Bank loaned $175,000 to Catherine Warbington and two Warbington family trusts, listing the property in the trusts as security. After Catherine died, the bank later filed a foreclosure complaint, asserting that payments were not being made on the loan and naming as defendants the unknown heirs of Catherine, the trusts, the trustee of the trusts, and others. Later, a foreclosure judgment was entered finding that the parties before the court had consented to the judgment and were indebted to the bank for the principal amount. The heirs and trusts then filed a motion to vacate the foreclosure, asserting (1) that the judgment was void by operation of law because Bert Warbington had not been personally served as trustee, and (2) Bert was not named individually in the complaint though he was a known heir and as such Ark. R. Civ. P 4 and due process required the bank name him as a party. The circuit court denied the motion. On appeal, the Supreme Court found (1) the circuit court did not clearly err in finding from the evidence that there was personal service and (2) that the circuit court did not err in finding that Bert was an unknown heir. Affirmed.