Justia Banking Opinion SummariesArticles Posted in US Court of Appeals for the Eleventh Circuit
Landcastle Acquisition Corp. v. Renasant Bank
The case arises out of the insolvency of the Crescent Bank and Trust Company (“Crescent”) and the conduct of its customer lawyer, a manager of his law firm, Morris Hardwick Schneider, LLC (“Hardwick law firm”). In 2009, Crescent, a Georgia bank, made the lawyer a loan for $631,276.71. The lawyer, as his law firm’s manager, signed a security agreement that pledged, as collateral, his law firm’s certificate of time deposit (“CD”) for $631,276.71. When Crescent failed, the Federal Deposit Insurance Corporation (“FDIC”), as receiver, took over and sold the lawyer’s loan and CD collateral to Renasant Bank. The lawyer then made loan payments to Renasant, and Renasant held the CD collateral. Landcastle sued Renasant (as successor to the FDIC and Crescent), claiming Renasant was liable for $631,276.71, the CD amount. Landcastle’s lawsuit seeks to invalidate the Hardwick law firm’s security agreement. The Eleventh Circuit reversed the district court’s ruling. The court explained that Landcastle’s lack-of-authority claims are barred under D’Oench because they rely on evidence that was outside Crescent’s records when the FDIC took over and sold the lawyer’s loan and CD collateral to Renasant. The court concluded that the lawyer’s acting outside the scope of his authority did not render the security agreement void but, at most, only voidable. A voidable interest is sufficient to pass the CD security agreement to the FDIC and to trigger the D’Oench shield View "Landcastle Acquisition Corp. v. Renasant Bank" on Justia Law
Jesus Alonso Alvarez Rodriguez, et al v. Branch Banking & Trust Company, et al
Appellants lost over $850,000 when an alleged BB&T employee and a co-conspirator impersonated them, changed their passwords, and transferred the money out of their BB&T bank accounts. Appellants sued BB&T under contract and tort theories. The district court dismissed the tort claims as duplicative of the contract claim, concluding that Appellants’ demand was time-barred because BB&T’s standard bank account contract limited the time to assert a demand from the statutory one-year period to just 30 days. In the alternative, the district court entered summary judgment for BB&T because it concluded the bank had and had followed commercially reasonable security procedures.The Eleventh Circuit vacated (1) the district court’s order dismissing the complaint and (2) the district court’s order entering summary judgment for BB&T on the remaining counts in the Fourth Amended Complaint, finding, as a matter of law, that Appellants’ claim for statutory repayment is not time-barred. View "Jesus Alonso Alvarez Rodriguez, et al v. Branch Banking & Trust Company, et al" on Justia Law
Federal Deposit Insurance Corporation v. Certain Underwriters at Lloyd’s of London
A federal district court decision in a declaratory judgment action that an insurance policy issued by Certain Underwriters at Lloyd’s, London (“Underwriters”) covered certain negligent actions undertaken by the former directors and officers of Omni National Bank (“Omni”) during the 2008 banking crisis. The Federal Deposit Insurance Corporation (“FDIC”), acting in Omni’s name as Omni’s receiver, demanded payment and prejudgment interest from Underwriters under the insurance policy for a stipulated judgment previously entered against three of Omni’s former directors and officers for $10 million, the limit of Underwriters’ insurance policy. Underwriters paid the $10 million once the Supreme Court denied certiorari for its appeal from the declaratory judgment but refused to pay prejudgment interest, causing the FDIC to institute this action. On appeal, the FDIC argues that demands for prejudgment interest are timely under Georgia law so long as they are made before the entry of a coercive final judgment, which declaratory judgments are not. The Eleventh Circuit agreed, concluding that the district court erred by granting summary judgment for Underwriters. Accordingly, the court remanded for the determination of when prejudgment interest began to run. The court explained that Underwriters’ argument that it lacked a full and fair opportunity to litigate the issue of prejudgment interest, as Section 9–11–54(c)(1) requires, is false on its face. This entire lawsuit has been dedicated to extensively litigating prejudgment interest. Further, the court held that FDIC’s claim is not barred. View "Federal Deposit Insurance Corporation v. Certain Underwriters at Lloyd's of London" on Justia Law
Jonathan E. Perlman v. PNC Bank, N.A.
Plaintiff, a court-appointed receiver, appealed the district court’s dismissal of his aiding and abetting claims on behalf of the companies in receivership (the Receivership Entities) against PNC Bank. The district court granted PNC’s Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction because it found that Plaintiff lacked standing to bring those claims. The district court relied on our decision in Isaiah v. JPMorgan Chase Bank, 960 F.3d 1296, 1308 (11th Cir. 2020). On appeal, Plaintiff argued that he has standing because he was appointed pursuant to Section 501.207(3) of the Florida Deceptive and Unfair Trade Practices Act (FDUTPA). The Eleventh Circuit affirmed the district court’s orders granting PNC’s Rule 12(b)(1) motion for lack of subject matter jurisdiction and denying Plaintiff’s motions for reconsideration and leave to amend. The court held that even assuming that Section 501.207(3) applies, it does not rectify the standing issue in Isaiah because it does not expressly address the imputation of wrongful acts between the Receivership Entities themselves and their insiders. View "Jonathan E. Perlman v. PNC Bank, N.A." on Justia Law
Constance Daniels v. Select Portfolio Servicing, Inc.
Plaintiff sued Select Portfolio Servicing ("Portfolio"), a mortgage servicer, under the Fair Debt Collections Practices Act ("FDCPA") and the Florida Consumer Collection Practices Act ("FCCPA"). Plaintiff claimed that several mortgage statements sent by Portfolio misstated a number of items, including the principal due, and that by sending these incorrect statements, Portfolio violated the FDCPA and FCCPA. The district court dismissed Plaintiff's complaint, finding the mortgage statements were not "communications" under either statute.The Eleventh Circuit reversed, holding that monthly mortgage statements may constitute "communications" under the FDCPA and FCCPA if they "contain debt-collection language that is not required by the TILA or its regulations" and the context suggests that the statements are an attempt to collect or induce payment on a debt. View "Constance Daniels v. Select Portfolio Servicing, Inc." on Justia Law
1944 Beach Boulevard, LLC v. Live Oak Banking Co.
Beach, a debtor in possession, sought to avoid Live Oak’s blanket lien on all of its assets. In Florida, a creditor’s financing statement that does not list the debtor’s correct name is “seriously misleading” and ineffective to perfect the creditor’s security interest. Fla. Stat. 679.5061(2). Live Oak asserted that abbreviating “Boulevard” to “Blvd.” did not render the financing statements defective or seriously misleading. Florida Statute 679.5061(3), establishes a safe harbor for defective financing statements. The bankruptcy court granted Live Oak summary judgment.Noting that lower courts, applying Florida law, have reached different conclusions regarding the application of the statutory safe harbor, the Eleventh Circuit certified to the Florida Supreme Court the questions: (1) Is the “search of the records of the filing office under the debtor’s correct name, using the filing office’s standard search logic,” as provided for by Florida Statute 679.5061(3), limited to or otherwise satisfied by the initial page of twenty names displayed to the user of the Registry’s search function? (2) If not, does that search consist of all names in the filing office’s database, which the user can browse to using the command tabs displayed on the initial page? (3) If the search consists of all names in the filing office’s database, are there any limitations on a user’s obligation to review the names and, if so, what factors should courts consider when determining whether a user has satisfied those obligations? View "1944 Beach Boulevard, LLC v. Live Oak Banking Co." on Justia Law
Fisher v. PNC Bank, N.A.
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
R&R International Consulting LLC v. Banco Do Brasil, S.A.
After R&R filed suit seeking to redeem bonds issued by Banco do Brasil, the district court dismissed for lack of subject-matter jurisdiction and decided, in the alternative, that the bonds were no longer redeemable under Brazilian law.The Eleventh Circuit concluded that the district court had subject-matter jurisdiction under the commercial-activity exception to the Foreign Sovereign Immunities Act (FSIA), because the issuance of the colonization bonds was a commercial activity and the Bank's refusal to honor those bonds caused a direct effect in the United States. However, the court concluded that the complaint is barred by the statute of limitations under Brazilian law. In this case, the statute of limitations ran in 1997, 20 years after maturity, and thus when R&R tried to redeem the colonization bonds in 2018, they were no longer enforceable. Accordingly, the court vacated in part and affirmed in part. View "R&R International Consulting LLC v. Banco Do Brasil, S.A." on Justia Law
BBX Capital v. Federal Deposit Insurance Corp.
BBX filed suit challenging the FDIC's determination that the severance payments BBX sought to make to five former executives of the Bank were golden parachute payments and that it would approve payments of only twelve months of salary to each executive. The FDIC also concluded that BBT was required to seek and receive approval before making the reimbursement payments to BBX. The FRB subsequently approved the same payment amounts but took no action with respect to approving any payments over 12 months of salary because the FDIC had already prohibited any additional payments.The Fifth Circuit affirmed the district court's dismissal of BBX's action against FRB for lack of standing because BBX has not shown any injury it has sustained is fairly traceable to an FRB action or inaction. The court also held that the FDIC's decision to classify the proposed payments as golden parachute payments was not arbitrary or capricious, because the golden parachute statute, 12 U.S.C. 1828(k), covers the stock purchase agreement (SPA) and the proposed payments included therein. Furthermore, earlier agreements, such as severance contracts, are irrelevant because the proposed payments are being made under the SPA. The court held that the FDIC's denial of any payments in excess of 12 months' salary for each executive was not arbitrary and capricious where the explanations the FDIC offered for denying additional payments were reasonable and did not run counter to the evidence. Finally, the court rejected BBX's argument that the FDIC's requirement that BBT seek approval before reimbursing BBX was arbitrary and capricious. View "BBX Capital v. Federal Deposit Insurance Corp." on Justia Law
Estate of David Bass v. Regions Bank, Inc.
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