Justia Banking Opinion Summaries

The Rudgears, the owners of Wildwood Creek Ranch, LLC, borrowed money, through Wildwood, from the predecessor to BMO Harris Bank to finance construction of a home on a vacant lot. The loan was secured by a deed of trust. The home was never built, and the property remained undeveloped. Wildwood later defaulted on its loan, and BMO foreclosed on the property. A third party successfully bid for the property. BMO subsequently sued Wildwood and the Rudgears for the deficiency. The superior court granted summary judgment in favor of Defendants, concluding that the Rudgears intended to use the property for a single-family residence and therefore qualified for anti-deficiency protection. The Supreme Court reversed, holding that Arizona’s residential anti-deficiency statute does not bar a deficiency judgment against an owner of vacant property. Remanded for entry of partial summary judgment in favor of BMO. View "BMO Harris Bank, N.A. v. Wildwood Creek Ranch, LLC" on Justia Law

Hana Financial and Hana Bank both provide financial services to individuals in the U.S. When Hana Financial sued Hana Bank for trademark infringement, Hana Bank invoked the tacking doctrine, under which lower courts have provided that a trademark user may make certain modifications to its mark over time while, in limited circumstances, retaining its priority position. The district court adopted in substantial part the jury instruction on tacking proposed by Hana Bank. The jury returned a verdict in Hana Bank’s favor. Affirming, the Ninth Circuit explained that the tacking inquiry was an exceptionally limited and highly fact-sensitive matter reserved for juries, not judges. A unanimous Supreme Court affirmed. Whether two trademarks may be tacked for purposes of determining priority is a jury question. Lower courts have held that two marks may be tacked when they are considered to be “legal equivalents,” i.e., they “create the same, continuing commercial impression,” which “must be viewed through the eyes of a consumer.” When the relevant question is how an ordinary person or community would make an assessment, the jury is generally the decision-maker that ought to provide the fact-intensive answer. The “legal equivalents” test may involve a legal standard, but such mixed questions of law and fact have typically been resolved by juries. Any concern that a jury may improperly apply the relevant legal standard can be remedied by crafting careful jury instructions. View "Hana Financial, Inc. v. Hana Bank" on Justia Law

The London InterBank Offered Rate (LIBOR) is a reference point in determining interest rates for financial instruments in the U.S. and globally. The Judicial Panel on Multidistrict Litigation (JPML) established a multidistrict litigation for cases alleging that banks understated their borrowing costs, depressing LIBOR and enabling the banks to pay lower interest rates on financial instruments sold to investors. Over 60 actions were consolidated, including the Gelboim class action, which raised a single claim that banks, acting in concert, had violated federal antitrust law. The district court dismissed all antitrust claims and granted certifications under Rule 54(b), which authorizes parties with multiple-claim complaints to immediately appeal dismissal of discrete claims. The Second Circuit dismissed the Gelboim appeal because the order appealed from did not dispose of all of the claims in the consolidated action. A unanimous Supreme Court reversed. The order dismissing their case in its entirety removed Gelboim from the consolidated proceeding, triggering their right to appeal under 28 U.S.C. 1291, which gives the courts of appeals jurisdiction over appeals from “all final decisions of the district courts.” Because cases consolidated for MDL pretrial proceedings ordinarily retain their separate identities, an order disposing of one of the discrete cases in its entirety qualifies under section 1291 as an appealable final decision. The JPML’s authority to transfer civil actions for consolidated pretrial proceedings, 28 U.S.C. 1407, refers to individual “actions,” not to a monolithic multidistrict “action” and indicates Congress’ anticipation that, during pretrial proceedings, final decisions might be rendered in one or more of the consolidated actions. The Gelboim plaintiffs are no longer participants in the consolidated proceedings. View "Gelboim v. Bank of Am. Corp." on Justia Law

Plaintiff obtained a mortgage loan from Equity One, Inc. As security for the note, Plaintiff executed a mortgage on the property in favor of Mortgage Electronic Registration Systems (MERS). The note was twice transferred, eventually landing in the possession of Deutsche Bank, National Trust Company. Litton Loan Servicing, L.P. was retained to service the loan. Meanwhile, MERS, as nominee for Equity One, assigned its interest in the mortgage to Deutsche Bank. After Litton and Deutsche Bank initiated foreclosure proceedings, Plaintiff filed an action alleging that the assignment from MERS to Deutsche Bank was invalid for lack of authority. When Plaintiff sought to depose a MERS designee, MERS filed a motion for a protective order, arguing that Plaintiff lacked standing to challenge the assignment. The superior court denied the motion. MERS filed a petition for a writ of certiorari. Litton and Deutsche Bank then moved for summary judgment, which the hearing justice granted. The Supreme Court (1) quashed the order denying MERS’ motion for a protective order, holding that Plaintiff lacked standing to challenge the assignment in question; and (2) affirmed the grant of summary judgment for Litton and Deutsche Bank, holding that MERS had the authority to assign the mortgage. View "Genao v. Litton Loan Servicing, L.P." on Justia Law

Imperial Capital Bank granted a loan to Main and West, LLC in the sum of $607,500. Main and West signed a promissory note as security for the loan, and two individuals personally guaranteed the loan. City National Bank (Plaintiff) acquired the loan after Imperial dissolved. When Main and West defaulted on the note, Plaintiff filed suit seeking full payment of the obligations of Defendants - Main and West and the guarantors. The trial justice granted summary judgment for Plaintiff. Defendants appealed, arguing that the trial justice erred in granting summary judgment because he considered an exhibit that was viewed in camera without having afforded defense counsel an opportunity to review it. The Supreme Court vacated the summary judgment and remanded, holding that the trial justice inappropriately reviewed and relied on a document not shown to defense counsel in granting summary judgment. View "City Nat’l Bank v. Main & West, LLC" on Justia Law

Plaintiff executed a promissory note that was secured by a mortgage on her real estate. The mortgage deed named Mortgage Electronic Registration Systems, Inc. (MERS) as the mortgagee. The note was transferred to USA Residential Properties, LLC, and Rushmore Loan Management Services, LLC became the servicer for the loan. MERS then assigned its interest in the mortgage to ACT Properties, LLC, which assigned its interest in the mortgage to USA Residential. When Rushmore initiated foreclosure proceedings, Plaintiff filed a complaint alleging that the assignment from MERS to ACT Properties was invalid because the signer was unauthorized. When Plaintiff filed a notice to depose a MERS designee as to the authority of the official who executed the assignment from MERS to ACT Properties, MERS moved for a protective order seeking to restrict discovery, arguing that Plaintiff had no standing to challenge the validity of the assignment. The hearing justice denied the motion. The Supreme Court quashed the hearing justice’s decision, holding that because Plaintiff merely alleged that the assignment was voidable, as opposed to void, and because she was not a party to the assignment, she lacked standing to challenge it and was not entitled to engage in discovery pertaining to the authority issue. View "Cruz v. Mortgage Elec. Registration Sys., Inc." on Justia Law

In order to finance her purchase of a home, Plaintiff executed a note payable to New Century Mortgage Corporation. The note was secured by a mortgage on the property naming Mortgage Electronic Registration Systems, Inc. (MERS) as mortgagee. New Century, the lender, subsequently filed for bankruptcy and filed a notice of rejection of executory contract regarding its membership agreement with MERS and its status as a MERS member. MERS then assigned the mortgage to UBS Real Estate Securities, and UBS assigned the mortgage to USA Residential Properties. Thereafter, USA Residential and its loan servicer, Rushmore Loan Management Services, LLC, commenced foreclosure proceedings against Plaintiff. Plaintiff filed this complaint against MERS, UBS, USA Residential, and Rushmore, declaring that the mortgage assignments were void and the foreclosure sale was invalid. The superior court dismissed the action for failure to state a claim, concluding that Plaintiff lacked standing to challenge the assignments of the mortgage and, alternatively, that the assignments were valid and the foreclosure proper. The Supreme Court vacated the judgment of the superior court, holding that Plaintiff had standing to challenge the assignment of the mortgage on her home and adequately stated a claim upon which relief may be granted. View "DiLibero v. Mortgage Elec. Registration Sys., Inc." on Justia Law

Exactly three years after borrowing money to refinance their home mortgage, the Jesinoskis sent the lender a letter purporting to rescind the transaction. The lender replied, refusing to acknowledge the rescission’s validity. One year and one day later, the Jesinoskis filed suit, seeking a declaration of rescission and damages. The district court entered judgment on the pleadings, concluding that a borrower can exercise the Truth in Lending Act’s right to rescind, 15 U. S. C.1635(a), (f), only by filing a lawsuit within three years of the date the loan was consummated. The Eighth Circuit affirmed. The unanimous Supreme Court reversed. A borrower exercising his right to rescind under the Act need only provide written notice to his lender within the 3-year period, not file suit within that period. Section 1635(a)’s language: a borrower “shall have the right to rescind . . . by notifying the creditor . . . of his intention to do so,” indicates that rescission is effected when the borrower notifies the creditor of his intention. The statute says nothing about how that right is exercised and does not state that rescission is necessarily a consequence of judicial action. View "Jesinoski v. Countrywide Home Loans, Inc." on Justia Law

Oliver was manager and part-owner of PSC. Oliver and PSC sought to refinance property on Lake Superior. Meecorp required additional collateral. Oliver identified 14 other income-producing properties and his interest in each. The sum of the “Oliver values” was more than $1 million. Gandolf, owned by Oliver and PSC, supplied: cash-flow projections, the value of Oliver’s interests, member-control agreements, certificates of good standing, and Schedule K-1s for Gandolf-owned LLCs associated with each property. Gandolf did not supply the deeds of ownership. Meecorp concluded that Oliver, individually, could not pledge adequate collateral for a loan of $1.32 million, having no direct interest in the properties. Meecorp requested that Gandolf, as owner of the remaining governance rights and the 100% owner of the financial rights, pledge its interests in the LLCs. Oliver, as Gandolf’s representative, signed the pledge. Meecorp delivered the funds. Oliver and PSC defaulted. Meecorp learned that neither Oliver nor Gandolf’s LLCs owned the pledged properties; Gandolf’s LLCs were general partners in undisclosed limited partnerships that owned each property. Undisclosed limited partners owned up to 99.99% of the equity in the properties; limited-partnership organizational documents prohibited the general partners (LLCs) from pledging their interests without consent. Meecorp sued. The district court granted Meecorp summary judgment on its breach-of-the-note claim against PSC and its breach-of-guaranty claim against Oliver, awarding $2,366,191.88, and entered judgment against Gandolf for breach-of-the-guaranty and against Gandolf, Oliver, and PSC for fraud. The Eighth Circuit affirmed. View "Meecorp Capital Mkts., LLC v. Oliver" on Justia Law

The Bank of Maine filed a complaint seeking foreclosure of Defendant’s primary residence. Defendant failed to file a timely answer, and the superior court later entered Defendant’s default. Defendant responded to the complaint and requested mediation on the date default was entered. The court granted summary judgment to the Bank and entered judgments of foreclosure that included legal fees. Defendant appealed, arguing that the time limit established by Me. R. Civ. P. 93 improperly limits a defendant’s substantive right to mediation. The Supreme Court affirmed, holding (1) Rule 93 is not an improper limitation of the substantive rights of litigants; and (2) because Defendant did not request mediation pursuant to Rule 93 in a timely manner, the court did abuse its discretion in denying Defendant’s request for mediation. View "Bank of Maine v. Peterson" on Justia Law