Justia Banking Opinion Summaries

Respondent is a former employee who won a judgment in Argentina's National Court of Labor Appeals against Citibank, N.A. Petitioner, the Argentinian branch of Citibank, N.A., filed a demand for arbitration with the American Arbitration Association and brought the proceedings below. The district court compelled arbitration, preliminarily enjoined the employee from enforcing the Argentinian judgment against Petitioner, and held Respondent in contempt of court. It also denied his motion to dismiss.   The Second Circuit reversed and remanded. The court held that the district court lacked subject matter jurisdiction over the Petition. Therefore, the district court was without authority to issue its orders in this case. The court reversed the district court's orders -- including its order to compel arbitration, the preliminary injunction it entered against Respondent, its order finding Respondent in contempt, and its order requiring Respondent to pay the Branch's attorneys' fees and costs. The court concluded that because the Branch has not shown it enjoys independent legal existence and Citibank has not sought to substitute itself or join this action as the real party in interest, there has been no party adverse to Respondent. Without adverse parties, there can be no subject matter jurisdiction under Article III. View "The branch of Citibank, N.A., established in the Republic of Argentina v." on Justia Law

The Board of Governors of the Federal Reserve System brought an enforcement action against Petitioners Frank Smith and Mark Kiolbasa, who were employees at Farmers State Bank at the time, after finding they committed misconduct at Central Bank & Trust where they had previously worked. This resulted in their removal as officers and directors of Farmers Bank and the imposition of restrictions on their abilities to serve as officers, directors, or employees of other banks in the future. Petitioners sought review from the Tenth Circuit Court of Appeals, arguing that the Board did not have authority to bring this enforcement action against them because the Board was not the “appropriate Federal banking agency,” as defined by 12 U.S.C. § 1813(q)(3), with authority over the bank where the misconduct took place. After review, the Tenth Circuit concluded that, because the Board had authority over Petitioners at the time the action commenced, the Board was an appropriate federal banking agency and had authority to initiate the proceeding. The appellate court also declined to review Petitioners’ Appointments Clause challenge because they did not raise it at trial. View "Smith, et al. v. FRS" on Justia Law

Frazier obtained a home mortgage loan for which Dovenmuehle served as sub-servicer. Beginning in October 2015, Frazier failed to make her monthly payments. Frazier successfully negotiated and settled her debt through a short sale of her home, which closed in January 2016. Frazier was later denied a new mortgage loan because her Equifax credit report reflected late payments on her previous mortgage in months following the short sale. She disputed the information to several credit reporting agencies. To confirm the accuracy of its records, Equifax sent Dovenmuehle four Automated Consumer Dispute Verification forms in 2019-2020. Frazier contends the amended codes Dovenmuehle gave Equifax for Pay Rate and Account History were inaccurate, pointing to how Equifax interpreted and reported the amended data in her credit reports.Frazier sued under the Fair Credit Reporting Act, 15 U.S.C. 1681, claiming that Dovenmuehle failed to conduct a reasonable investigation of disputed data and provided false and misleading information to credit reporting agencies. She relied on evidence about persisting inaccuracies in Equifax’s credit reports produced using the amended data. The district court granted Dovenmuehle summary judgment. The Seventh Circuit affirmed. Given the full record, no reasonable jury could find that Dovenmuehle provided patently incorrect or materially misleading information. View "Frazier v. Dovenmuehle Mortgage, Inc." on Justia Law

Goodman dealt with Martinek of Southern Risk to obtain crop insurance and later discovered that portions of his property could not be farmed. Southern denied his claim. Goodman accused Martinek and Southern of failing to obtain proper coverage. Based on a perceived moral obligation, Martinek provided Goodman with checks drawn from Southern’s Commercial Bank account–for $100,000 and $200,000. Southern’s account had insufficient funds to cover the draws. Goodman gave Martinek nothing in consideration for the checks; they never discussed a lawsuit. Goodman twice unsuccessfully attempted to cash the checks. Months later, after exchanging text messages with Martinek, Goodman was heading to Commercial Bank when Martinek sent an “everything stopped” message. Goodman asked for cashier’s checks in exchange for the Southern checks, without mentioning his past attempts to negotiate the checks. The teller did not check the balance in Southern’s account but printed “teller’s checks” payable to Goodman for $100,000 and $200,000. When the teller realized the account lacked sufficient funds, the Bank issued a stop payment order.Goodman sued to enforce the checks. The Bank counterclaimed for restitution. Under Tennessee’s Commercial Code, if Commercial Bank paid the checks by “mistake” and Goodman had taken those checks in “good faith” and “for value,” the Bank was not entitled to restitution. The district court held that Commercial Bank paid the checks by mistake and that Goodman did not give value. The Sixth Circuit affirmed summary judgment for Commercial Bank. View "Goodman v. Commercial Bank & Trust Co." on Justia Law

Congress assigned implementation of the PPP to the Small Business Administration (SBA). Potential borrowers must have answered “No” to whether “any individual owning 20% or more of the equity of the Applicant [was] subject to an indictment, criminal information, arraignment, or other means by which formal criminal charges are brought in any jurisdiction, or presently incarcerated, or on probation or parole.” When completing a PPP loan application on behalf of law firm Ramey & Schwaller, L.L.P., owner William Ramey answered “No” to that question. Zions Bancorporation, NA, doing business as Amegy Bank, approved the law firm’s application and disbursed a $249,300 loan. Later, the bank learned that Ramey had actually been subject to a criminal complaint accusing him of attempted sexual assault in Harris County, Texas. So the bank held the law firm in default and froze the firm’s accounts as an offset to the loan balance. The law firm then filed this action against the bank, seeking a declaratory judgment that Ramey did not answer the application question falsely. The bank alleged a counterclaim for breach of contract. The district court granted summary judgment to the bank and dismissed the law firm’s claims.   The Fifth Circuit affirmed. The court explained that because Ramey was, at least, subject to “means by which formal criminal charges are brought” at the time he completed the Application, he answered Question 5 falsely on behalf of Ramey & Schwaller. Accordingly, the law firm was in default under the PPP loan documents, and the district court correctly entered summary judgment in favor of Amegy Bank. View "Ramey & Schwaller v. Zions Bancorp" on Justia Law

Plaintiffs-Appellants are American victims and the relatives and estates of victims of terrorist attacks in Israel between 2001 and 2003. Plaintiffs alleged that Palestine Investment Bank ("PIB") facilitated the attacks, in violation of the Anti-Terrorism Act, 18 U.S.C. 2213-39D. The district court dismissed the case on the ground that it lacked personal jurisdiction over PIB.Federal Rule of Civil Procedure 4(k)(1)(A) permits a federal court to exercise personal jurisdiction over a defendant to the extent allowed by the law of the state in which it sits. New York's long-arm statute, C.P.L.R. 302(a)(1) authorizes personal jurisdiction over a foreign defendant for causes of action that arise out of “transact[ing] any business within the state,” whether in person or through an agent. in this context, transacting business means “purposeful activity—some act by which the defendant purposefully avails itself of the privilege of conducting activities within the forum State," invoking the benefits of the state's laws.Here, the PIB's actions indicated that it availed itself of the benefits of New York's financial system and that Plaintiff's claim arose from these activities. View "Spetner v. PIB" on Justia Law

The Supreme Court affirmed the order of the circuit court determining that Bank breached its contract with Respondent by refusing to tender payment upon Respondent's presentation of an an original unendorsed money market certificate of deposit (CD), holding that Bank was not entitled to relief on its allegations of error.Respondent presented to Bank and demanded payment of the CD issued in 1980 by Bank and payable either to Respondent or her father. Bank denied payment, determining that there was no existing account associated with the CD. Respondent brought this action alleging breach of contract. The jury found for Respondent and awarded her damages. The Supreme Court affirmed, holding (1) the circuit court did not err in denying Bank's motion for judgment as a matter of law; (2) the circuit court did not err in refusing two proffered jury instructions; and (3) the filing of this matter was not barred by the applicable statute of limitations. View "Wesbanco Bank, Inc. v. Ellifritz" on Justia Law

The Supreme Court affirmed the order of the circuit court overruling Appellants' motion to vacate the court's order appointing a receiver for Appellants, holding that the petition filed by Patriots Bank seeking the appointment of a receiver pursuant to the Missouri Commercial Receivership Act (MCRA), Mo. Rev. Stat. 515.500-515.665, did not violate due process.Bank entered into lending relationships with Appellants, all of which defaulted. Bank filed a petition seeking the appointment of a receiver for Appellants. The circuit court entered the receiver order. The Supreme Court affirmed, holding (1) the Bank complied with the plain language of the MCRA's notice requirement; (2) the application of the MCRA to Appellants' case did not violate the due process protections under either the state or federal constitutions; (3) the circuit court did not abuse its discretion in overruling Appellants' motion to vacate the receiver order; and (4) the receiver order did not violate the MCRA. View "Black River Motel, LLC v. Patriots Bank" on Justia Law

The Supreme Court vacated the judgment of Supreme Court in favor of Plaintiff Wilmington Savings Fund Society, FSB in this case involving a dispute over payments due under a promissory note relating to Defendants' mortgage, holding that summary judgment was improperly granted under the terms of this case.Plaintiff's predecessor filed a complaint against Defendants alleging breach of contract. The hearing justice granted summary judgment in favor of Plaintiff. Defendants appealed, arguing that the issue of whether Plaintiff complied with the note's notice provisions was a question of material fact precluding summary judgment. The Supreme Court vacated the judgment below, holding that Plaintiff's failure to send the notice of default to the property address referred to in the note was not in accordance with the terms of the note, and therefore, summary judgment should not have been granted. View "Wilmington Savings Fund Society, FSB v. Cavalloro" on Justia Law

The Supreme Court affirmed the judgment of the trial court declining to pierce Sebastian Holdings, Inc.'s (SHI) corporate veil and to hold Alexander Vik, SHI's sole shareholder and director, jointly and severally liable with SHI for an approximately $243 million foreign judgment against Vik, holding that the trial court did not err.After SHI failed to pay the English judgment Deutsche Bank commenced this action against Defendants alleging that Vik caused SHI to breach its contractual obligations to Deutsche Bank and to fraudulently convey funds to third parties in order to defraud Deutsche Bank out of money owed. Count two sought a declaratory judgment piercing SHI's corporate veil and holding Vik jointly and severally liable for the English judgment. The trial court rendered judgment for Defendants. The Supreme Court affirmed, holding that Deutsche Bank could not prevail on its claim that the results of the trial would have been different if the court had applied Connecticut law or if it had correctly applied the laws of Turks and Caicos Islands, a British territory. View "Deutsche Bank AG v. Sebastian Holdings, Inc." on Justia Law