Justia Banking Opinion Summaries

After plaintiff obtained a home equity loan from Countrywide, he filed a pro se complaint alleging five causes of action against Bank of America, the company that acquired Countrywide. The Eighth Circuit affirmed the district court's dismissal of two claims based on Bank of America's failure to honor plaintiff's alleged early payoff right. In this case, plaintiff's claims were barred by the doctrine of res judicata because he had been a member of a global class action settlement that included a broad release of claims by all class members. The court also held that the district court did not abuse its discretion by promptly setting the remaining claims for trial. The court explained that, at minimum, Bank of America failed to establish that the statute of frauds barred these claims as a matter of law on the record. Accordingly, the court affirmed in part, reversed in part, and remanded. View "Calon v. Bank of America Corp." on Justia Law

CMI, a purchaser and reseller of mortgage loans, filed suit against Platinum, an originator and seller of mortgage loans, alleging that Platinum breached a contract by failing to repurchase seven allegedly defective loans after CitiMortgage demanded repurchase by sending multiple notices to Platinum for each loan. The Eighth Circuit reversed and held that CMI adequately and substantially complied with the contract, which neither specified a form of notice nor indicated that the prescription of a time for cure had to be contained within the notice. Accordingly, the court remanded for further proceedings. View "CitiMortgage, Inc. v. Platinum Home Mortgage, Corp." on Justia Law

The receiver filed suit against Associated Bank, which provided banking services to some of the scammers' entities, accusing the bank of aiding and abetting the Ponzi scheme. The Eighth Circuit affirmed the district court's conclusion that there was insufficient evidence to reasonably infer the bank knew about and assisted the scammers' tortious conduct. The court held that a conclusion that the bank aided and abetted the Ponzi scheme could only be reached through considerable conjecture and speculation. In this case, the receiver failed to show that the bank had actual or constructive knowledge of the fraud or that it provided substantial assistance to the tortious conduct. View "Zayed v. Associated Bank, N.A." on Justia Law

Federal law bars “any person who has been convicted of any criminal offense involving dishonesty or a breach of trust” from becoming or continuing as an employee of any institution insured by the Federal Deposit Insurance Corporation (FDIC), 12 U.S.C. 1829(a)(1)(A) (Section 19) without regard to the age of the convictions. Disqualified persons may apply to the FDIC for waivers. Banking institutions may sponsor waiver applications. Wells Fargo, an FDIC-insured bank, requires job applicants to answer whether they had a conviction of a crime involving dishonesty. In 2010, Wells Fargo instituted a fingerprint-based background check for current and potential employees, which returns all criminal convictions. In 2012, Wells Fargo re-screened its entire Home Mortgage division, then terminated employees verified to have Section 19 disqualifications, without informing them of the availability of waivers or offering to sponsor waivers. Wells Fargo terminated at least 136 African Americans, 56 Latinos, and 28 white employees because of Section 19 disqualifications, and withdrew at least 1,350 conditional job offers to African Americans and Latinos and 354 non-minorities. In a suit, alleging race-based employment discrimination under Title VII of the Civil Rights Act, the court granted Wells Fargo summary judgment. The Eighth Circuit affirmed. Even if Wells Fargo’s policy of summarily terminating or not hiring any disqualified individual creates a disparate impact, the bank’s decision to comply with the statute’s command is a business necessity under Title VII. View "Williams v. Wells Fargo Bank, N.A." on Justia Law

Plaintiffs filed suit against their loan servicer, Rushmore, in state court for breach of contract, unjust enrichment, and injunctive relief. After removal to federal court, plaintiffs amended their complaint to add a claim that Rushmore violated the Minnesota statutory requirements for handling foreclosures pursuant to Minn. Stat. 582.043, and added U.S. Bank as a party.The Minnesota Supreme court answered a certified question and held that the lis pendens deadline contained in section 582.043, subd. 7(b) cannot be extended upon a showing of excusable neglect pursuant to Minn. R. Civ. P. 6.02. The Eighth Circuit held that the Minnesota Supreme Court's decision resolved this appeal, because plaintiffs failed to file the lis pendens within their redemption period as required by section 582.043, subd. 7(b). Accordingly, the court affirmed the district court's grant of summary judgment for defendants. View "Litterer v. Rushmore Loan Management Services, LLC" on Justia Law

The Eighth Circuit affirmed the district court's judgment for Wells Fargo in a third lawsuit arising between the parties involving the foreclosure of plaintiff's property. Plaintiff alleged that the bank violated Minn. Stat. 582.043 when it continued with foreclosure proceedings after he had submitted an application for a loan modification, and Wells Fargo brought a counterclaim against him for breach of a prior settlement agreement. The court held that plaintiff's claim was barred by res judicata because he could have brought the claim during the 2013 foreclosure litigation and he had an opportunity to litigate the claim fairly and fully if he had timely raised it. The court also held that the district court did not err in granting judgment on the pleadings for Wells Fargo on the bank's counterclaim where plaintiff was not discharged from his obligation to perform under the settlement agreement. Finally, the district court did not abuse its discretion by denying leave to amend on futility grounds. View "Lansing v. Wells Fargo Bank, N.A." on Justia Law

The Eighth Circuit reversed the district court's grant of summary judgment against Specialized Loan Servicing, in an action alleging violations of the Real Estate Settlement Procedures Act (RESPA) and the Minnesota Mortgage Originator and Servicer Licensing Act. The court held that plaintiff failed to prove actual damages under RESPA and therefore he failed to establish an essential element of his federal claim. In this case, the bank records that plaintiff obtained for 2012 and 2013 were irrelevant to the dispute whether his loan payments were past due before June 2011. In the alternative, plaintiff did not produce evidence to support a finding of "pattern or practice" here, and there was no evidence that Specialized failed to investigate and respond reasonably to qualified written requests from other borrowers. Consequently, the court reversed as to the state law claim as well. The court remanded with directions to enter summary judgment for Specialized on the RESPA claim and for further proceedings on the claim under the Minnesota Act. View "Wirtz v. Specialized Loan Servicing, LLC" on Justia Law

The Eighth Circuit reversed the district court's grant of summary judgment against Specialized Loan Servicing, in an action alleging violations of the Real Estate Settlement Procedures Act (RESPA) and the Minnesota Mortgage Originator and Servicer Licensing Act. The court held that plaintiff failed to prove actual damages under RESPA and therefore he failed to establish an essential element of his federal claim. In this case, the bank records that plaintiff obtained for 2012 and 2013 were irrelevant to the dispute whether his loan payments were past due before June 2011. In the alternative, plaintiff did not produce evidence to support a finding of "pattern or practice" here, and there was no evidence that Specialized failed to investigate and respond reasonably to qualified written requests from other borrowers. Consequently, the court reversed as to the state law claim as well. The court remanded with directions to enter summary judgment for Specialized on the RESPA claim and for further proceedings on the claim under the Minnesota Act. View "Wirtz v. Specialized Loan Servicing, LLC" on Justia Law

The Eighth Circuit affirmed the district court's grant of summary judgment on remand in favor of defendants in an action filed by mortgage loan borrowers alleging violation of the Truth in Lending Act (TILA). Specifically, borrowers alleged that the lender did not provide the required number of copies of the required notice and material disclosures, and thus borrowers could rescind their loan on a date just shy of the three-year anniversary of loan execution. The court held that the district court did not err in determining that the signed acknowledgement borrowers had executed created a rebuttable presumption that they received the required number of copies and that borrowers' evidence was insufficient to overcome that rebuttable presumption. View "Jesinoski v. Countrywide Home Loans, Inc." on Justia Law

Bank of America filed suit against the Hanna Parties for breach of contract after they failed to pay a loan. The jury found that the Hanna Parties did not breach the contract and the district court entered judgment for them. On remand, the Hanna Parties advanced defenses of fraudulent inducement and fraudulent failure to disclose. The Eighth Circuit affirmed the district court's grant of the Bank's motion for summary judgment on those defenses because JB Hanna could not have reasonably relied on the Bank's allegedly fraudulent representations. In this case, the district court correctly rejected the defenses of fraudulent inducement and fraudulent failure to disclose as a matter of law. Furthermore, because there was insufficient evidence to support the fraud defenses, the setoff defense also failed. View "Bank of America v. JB Hanna, LLC" on Justia Law