Justia Banking Opinion Summaries

Loop 101, LLC (“Loop”) borrowed money from MidFirst Bank to construct an office building. The promissory note was secured by a deed of trust, and four individuals guaranteed payment. The note, deed of trust, and gurantees expressly waived the fair market value provision of Ariz. Rev. Stat. 33-814(A). MidFirst assigned its rights under the loan and deed of trust to CSA 13-101 Loop, LLC (“CSA”). After Loop defaulted on the loan, CSA bought the property at a trustee’s sale for a credit bid of $6.15 million. CSA then sued Loop and the guarantors for a deficiency judgment. Loop and the guarantors counterclaimed and filed a third-party claim against MidFirst for breach of the implied covenant of good faith and fair dealing. MidFirst and CSA moved to dismiss, arguing that Loop and the guarantors had waived their right to a fair market value determination. The superior court ruled that parties may not prospectively waive this provision, determined the fair market value of the property to be $12.5 million, and concluded that no deficiency existed. The Supreme Court affirmed, holding that parties may not prospectively waive the fair market value provision of section 33-814(A). View "CSA 13-101 Loop, LLC v. Loop 101, LLC" on Justia Law

Plaintiff filed suit against defendants in state court, challenging the foreclosure proceedings that ultimately resulted in the sale of his property. Defendants removed to federal court and moved for judgment on the pleadings. The court affirmed the district court's order denying leave to amend plaintiff's complaint to add additional federal claims; vacated the district court's orders relating to the state-law claims against Chase and Shapiro & Burson because the D.C. statutory and common law claims against the bank and its foreclosing agent should have been decided by the local courts; and remanded to the district court with instructions to remand to Superior Court for determination of plaintiff's state-law claims against those parties. View "Araya v. JPMorgan Chase Bank, N.A." on Justia Law

Gordon and Carol Lane took out a loan secured by a piece of commercial real estate. John Serpa executed a personal guaranty upon the loan. The Lanes defaulted on their obligation, and Serpa failed to fulfill his guarantor duties. Before the original lender exercised its right to foreclose, the FDIC was appointed its receiver and assigned the interest in the Lanes’ loan to First Financial Bank, N.A. (FFB). FFB foreclosed and sold the property to itself. FFB then brought a deficiency judgment and breach of guaranty action against the Lanes and Serpa (collectively, Respondents). The district court entered judgment in Respondents’ favor under Nev. Rev. Stat. 40.451 because the fair market value of the property exceeded the consideration the FFB paid the FDIC to acquire a lien on the property. The Supreme Court reversed, holding that the definition of “indebtedness” found in section 40.451 does not limit the amount a successor lienholder can recover in an action for a deficiency judgment to the amount of consideration such a lienholder paid to obtain its interest in the note and deed of trust. Remanded. View "First Fin. Bank v. Lane" on Justia Law

Plaintiffs, pension funds, filed suit, seeking to hold BNYM responsible for the losses allegedly caused by Countrywide's breach of its representations and warranties in connection with 530 residential mortgage-backed securities (RMBS) created between 2004 and 2008 for which BNYM acts as trustee. The court affirmed the portion of the district court's order dismissing plaintiffs' claims related to the trusts in which they did not invest for lack of standing because plaintiffs' claims do not implicate the "same set of concerns" as those of absent class members who purchased certificates issued by trusts in which no named plaintiff invested; reversed the portion of that order denying BNYM's motion to dismiss plaintiffs' Trust Indenture Act (TIA), 15 U.S.C. 77aaa-77aaaa, claims related to the PSA-governed (pooling and servicing agreements) New York trusts where the New York certificates at issue are exempt from section 304(a)(2) of the TIA; and the court remanded in part for further proceedings. View "Retirement Board v. Bank of New York Mellon" on Justia Law

CET owns the asserted patents, which share substantially the same specification. The four patents contain a total of 242 claims. The claims generally recite a method of extracting data from hard copy documents using an automated digitizing unit such as a scanner, recognizing specific information from the extracted data, and storing that information in a memory. This method can be performed by software on an automated teller machine (ATM) that recognizes information written on a scanned check, such as the check’s amount, and populates certain data fields with that information in a computer’s memory. CET asserted infringement by banking entities. Diebold, the manufacturer of ATMs used by the banking entities, sought a declaratory judgment that its ATMs did not infringe CET’s asserted patents and that CET’s patents were invalid and sought injunctive and monetary relief for tortious interference and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO) arising from CET’s act of filing allegedly baseless infringement suits against its customers. The district court dismissed CET’s infringement action, holding that the claims of the asserted patents are invalid as patent-ineligible under 35 U.S.C. 101 and dismissed Diebold’s claims. The Federal Circuit affirmed. View "Content Extraction & Transmission, LLC v. Wells Fargo Bank" on Justia Law

After the U.S. Department of Veterans Affairs determined Evans was no longer competent to manage his veterans’ benefits, it appointed his daughter as the federal fiduciary. The VA later terminated her appointment and appointed the Greenfield Banking Company. Evans’s wife and daughter filed suit asserting breach of fiduciary duty and conversion by the Bank and sought creation of a constructive trust. The complaint alleges that the Bank complied with the terms of its obligations to the VA as federal fiduciary but that doing so meant it breached its fiduciary duty to Evans. The complaint did not claim misuse of funds, mismanagement depriving him of the use of any funds, embezzlement, or the like. The daughter was apparently not fully reimbursed for expenditures she made on behalf of Evans while pursuing a guardianship in state court. Evans died in 2012. The district court dismissed. The Seventh Circuit affirmed, stating that the complaint is really a challenge to a federal fiduciary appointment and to veteran benefits distribution and, as such, not within the court’s jurisdiction. View "Stump v. Greenfield Banking Co," on Justia Law

In 2011, in response to an increased number of foreclosures, the City of Springfield enacted two ordinances addressing properties left vacant during or after the foreclosure process. The mediation ordinance established a program requiring mandatory mediation between mortgagors and mortgagees. The foreclosure ordinance required owners of buildings that are vacant or undergoing foreclosure to register with the City. Six banks holding mortgage notes on properties in the City (Plaintiffs) filed suit seeking declaratory and injunctive relief from the enforcement of the ordinances. The federal district court allowed the City’s motion for summary judgment. Plaintiffs appealed, and the First Circuit certified two questions to the Supreme Judicial Court. The Court answered (1) the foreclosure statute preempts the mediation ordinance in whole but does not preempt the foreclosure ordinance; (2) the foreclosure ordinance is preempted by the Massachusetts Oil and Hazardous Material Release Prevention Act and the state sanitary code; and (3) the foreclosure ordinance does not impose an unlawful tax in violation of the Constitution of the Commonwealth of Massachusetts. View "Easthampton Savings Bank v. City of Springfield" on Justia Law

The Mortgage Electronic Registration System (MERS) is a national electronic registry that does not originate, assign, or service mortgages, but charges a fee when members record or transfer a mortgage on the registry. Initially, mortgages are recorded with the county recorder and MERS becomes the mortgagee of record. With subsequent transfers, MERS remains the mortgagee of record in county property records, but tracks the transfers for priority purposes on its registry. Transfers of mortgages are not recorded in the county where the property is located. Counties brought a class action, alleging that Lenders violated Minnesota law by allowing mortgagees to circumvent recordation in the counties. The district court dismissed, finding no duty to record a mortgage assignment under Minnesota law. The Eighth Circuit affirmed that the recording statute is not mandatory and declined to certify the question to the Minnesota Supreme Court. View "Ramsey Cnty. v. MERSCORP Holdings, Inc." on Justia Law

Plaintiff-respondent Sharon McGill sued defendant-appellant Citibank, N.A. for unfair competition and false advertising in offering a credit insurance plan she purchased to protect her Citibank credit card account. She brought claims under California’s unfair competition law (UCL), false advertising law (FAL), and Consumer Legal Remedies Act (CLRA), seeking monetary damages, restitution, and injunctive relief to prevent Citibank from engaging in its allegedly unlawful and deceptive business practices. Citibank petitioned to compel McGill to arbitrate her claims based on an arbitration provision in her account agreement. The trial court granted the petition on McGill’s claims for monetary damages and restitution, but denied the petition on the injunctive relief claims. Citibank appealed. The Court of Appeal reversed and remanded the case for the trial court to order all of McGill’s claims to arbitration. View "McGill v. Citibank" on Justia Law

This appeal stemmed from plaintiff's suit against Wells Fargo after Wells Fargo closed her bank accounts and refused to return the money in her accounts. The court concluded that plaintiff defaulted on Wells Fargo’s counterclaim when she failed to file a timely answer. So her request for leave to file an out-of-time answer to Wells Fargo’s counterclaim should have been analyzed as a motion to set aside an entry of default under the more forgiving Rule 55(c) standard as opposed to the more exacting Rule 6(b)(1)(B) standard. Because plaintiff’s failure to respond to Wells Fargo’s counterclaim meant that the pleadings had not yet closed, the district court’s evaluation of Wells Fargo’s motion for judgment on the pleadings was premature. Therefore, the court reversed the district court's order granting Wells Fargo's motion for judgment on the pleadings and remanded for the district court to consider plaintiff's motion under Rule 55(c). Even if Wells Fargo's motion could have been properly considered as a motion for judgment on the pleadings, it should have been denied. Because the construction of a contract is a question of law for the court, the contents of the Agreement must be evaluated in determining whether Wells Fargo was entitled to judgment as a matter of law on its motion for judgment on the pleadings. The court also reversed the district court's order denying plaintiff's motion to file an amended complaint and remanded for further proceedings because the district court was required to review the actual contract at issue in evaluating whether amendment of the complaint would necessarily be futile. Because the court reversed the order granting judgment on the pleadings for Wells Fargo, on which the award of attorney's fees was based, the court remanded the attorney's fee issue. View "Perez v. Wells Fargo" on Justia Law