Justia Banking Opinion Summaries

The Bank filed a judicial foreclosure action to collect a loan secured by two parcels of real estate which had been made to a husband and wife. After the husband died, the loan went into default. The Bank and wife agreed to a private sale of one of the parcels that was her separate property and Bank filed the foreclosure action on the remaining parcel to obtain a deficiency judgment. The trial court granted the Bank's motion for summary adjudication of its judicial foreclosure cause of action and determined that the Bank was entitled to obtain a deficiency judgment against the representatives of the husband's estate (appellants). The court concluded that, because the Bank failed to show the requirements of Code of Civil Procedure 726 for creditors seeking deficiency judgments by disposing of the property at issue outside of judicial foreclosure and without appellants' consent or waiver, the Bank has waived any right to a deficiency against them. Accordingly, the court reversed the judgment of the trial court. View "First CA Bank v. McDonald" on Justia Law

Plaintiffs, family members or trustees of the estates of victims of state-sponsored terrorism, seek to enforce their 2009 Florida state court judgment obtained against Cuba by attaching the blocked assets of that state under section 201 of the Terrorism Risk Insurance Act of 2002 (TRIA), 28 U.S.C. 1610 note. Plaintiffs seek to satisfy the underlying judgment from electronic fund transfers (EFTs) blocked under the Cuban Assets Control Regulations, 31 C.F.R. Part 515. The court concluded that the EFTs are not attachable under section 201 because no terrorist party or agency or instrumentality thereof has a property interest in the EFTs. In this case, it is undisputed that no Cuban entity transmitted any of the blocked EFTs directly to the blocking bank. Accordingly, the court reversed the district court's grant of summary judgment for plaintiffs and remanded for further proceedings. View "Hausler et al., v. JPMorgan Chase Bank, N.A., et al." on Justia Law

The respondents in this case were fourteen non-residents who were named in a petition filed by the New Hampshire Bank Commissioner, as liquidator for Noble Trust Company (Noble) and Aegean Scotia Holdings, LLC (Aegean Scotia). They appealed a superior court order denying their motions to dismiss for lack of personal jurisdiction. Each respondent had signed an individual account application with Noble Trust Company, which had a New Hampshire address. Respondents' accounts were funded with either a check deposit (mailed to New Hampshire) or wired electronically. As respondents tried to check on their accounts, withdraw from or close their accounts, they encountered problems. Respondents' petition alleged Noble was involved in a Ponzi scheme, in which the Bank was using their money to cover losses of other investors. They sought to set aside transfers of money from Noble to the respondents, impose constructive trusts, and recover for unjust enrichment and conversion. The respondents moved to dismiss the suit for lack of personal jurisdiction. The trial court denied the motion, finding that the court could exercise personal jurisdiction over the respondents on the basis that: (1) respondents Carlson and the Schweitzers filed proofs of claim in the liquidation proceeding against Noble in New Hampshire; and (2) the remaining respondents had sufficient minimum contacts with New Hampshire. The Supreme Court found no reversible error with the superior court's decision, and remanded the case for further proceedings. View "New Hampshire Bank Commissioner v. Sweeney" on Justia Law

Plaintiff, the named Defendant in this action, and others formed a limited liability company (the LLC) to purchase and redevelop certain property. After the LLC acquired the property, Plaintiff guaranteed the payment of two loans from a Bank. In the meantime, Plaintiff, Defendant, and others entered into backstop guarantee agreements that provided protection to Plaintiff in the event he was required to honor his personal guarantees to the Bank. The Bank later commenced foreclosure proceedings against the LLC and Plaintiff as guarantor. The court rendered a judgment of strict foreclosure, and the Bank sought a deficiency judgment against the Plaintiff. The Bank and Plaintiff entered into a settlement agreement. Thereafter, Plaintiff commenced the present action against Defendants to enforce the backstop guarantee agreements. The trial court concluded that the backstop guarantee agreements were unenforceable. The Appellate Court reversed. Defendant appealed, claiming that Plaintiff’s tax treatment of the debt that Defendant guaranteed effectively divested Plaintiff of his interest in the debt, and therefore, Plaintiff had no standing to enforce the backstop guarantee agreement. The Supreme Court affirmed, holding that Plaintiff had standing to enforce the agreement. View "One Country, LLC v. Johnson" on Justia Law

At issue in this case was whether the “separate entity” rule continues to be valid law and serves to prevent a judgment creditor from ordering a garnishee bank operating branches in New York to restrain a judgment debtor’s assets held in foreign branches of the bank. The United States Court of Appeals for the Second Circuit certified this question of law to the New York Court of Appeals. Plaintiff, the judgment creditor in this case, asked the Court of Appeals to disavow the separate entity doctrine as outmoded and unnecessary. Defendant, the garnishee bank, urged that the rule remains vital in the context of international banking. The Court of Appeals answered the certified question in the affirmative, holding that the separate entity remains valid, and thus, a judgment creditor’s service of a restraining notice on a garnishee bank’s New York branch is ineffective under the separate entity rule to freeze assets held in the bank’s foreign branches. View "Motorola Credit Corp. v Standard Chartered Bank" on Justia Law

At issue in this case was whether a borrower may rescind a loan that has not been consummated pursuant to the federal Truth in Lending Act (TILA). Prior to closing on a home refinancing loan, Respondent submitted to the lender a notice of rescission of the loan. Thereafter, Respondent signed a note and deed of trust consistent with the negotiated terms of the loan. The loan proceeds were distributed as previously agreed to by the parties, and Respondent made payments on the note for approximately two years. Respondent subsequently defaulted on the loan, and the home was sold at a foreclosure public auction. Respondent filed exceptions to the foreclosure sale, arguing that he had rescinded the loan. The circuit court overruled the exceptions and ratified the sale. The court of special appeals reversed, holding that the rescission notice was timely because there was no language in 15 U.S.C. 1635 or TILA’s implementing regulation prohibiting a borrower from rescinding a loan prior to consummation of the transaction, and therefore, such an action was supported by statute. The Court of Appeals reversed, holding that, under TILA, a loan may not be rescinded before it is consummated. View "Burson v. Capps" on Justia Law

Plaintiffs sought damages under the doctrine of promissory estoppel after losing their home in a foreclosure sale which they understood from a phone conversation with the bank would be postponed to a date 10 days after the actual sale date. The trial court dismissed. The court of appeal affirmed, holding that the plaintiffs failed to establish a triable issue of material fact regarding detrimental reliance or injury under the doctrine of promissory estoppel. They did not relinquish any legal right to stay the bank’s foreclosure View "Jones v. Wachovia Bank" on Justia Law

Defendant borrowed $143,065 in two separate loans from a Corporation. The Corporation assigned its interest in the notes to a Bank, which assigned the second loan (loan two) to Plaintiff, a municipality. Defendant had fully paid off the first loan (loan one), but determining that Defendant had defaulted on his payment obligations as to loan two, Plaintiff brought an action against Defendant to foreclose on the property. Defendant counterclaimed, arguing, among other things, that he made an overpayment on loan two. The trial court concluded that Plaintiff was liable to Defendant for the total amount Defendant claimed to have overpaid on loan two to Plaintiff and all other prior holders of the note. The Appellate Court reversed, concluding that, in the absence of an express contract provision, “an assignee generally does not assume the original responsibilities of the assignor." The Supreme Court affirmed, holding that the Appellate Court properly determined that Plaintiff, “as the most recent assignee and current holder of Defendant’s note, could not be held liable to repay Defendant for sums that were overpaid on the note before it was assigned to Plaintiff.” View "Hartford v. McKeever" on Justia Law

In 2003, the Supreme Court held that Seattle Savings Bank had the right to foreclose on certain property that Defendant inherited from his mother. In 2007, the Bank executed a quitclaim deed conveying the property to the Federal National Mortgage Association (Fannie Mae). Because Defendant refused to vacate the property, Fannie Mae filed a trespass and ejectment complaint. Defendant, in turn, argued that Fannie Mae was not entitled to possession of the property. The trial court awarded Fannie Mae possession of the property. The Supreme Court affirmed, holding that the superior court correctly found that Fannie Mae had the right to possess the property. View "Fed. Nat’l Mortgage Ass’n v. Malinou" on Justia Law

A mortgage deed designated Desmond Leone as the mortgagor of his home and Mortgage Electronic Registration Systems (MERS) as the mortgagee, acting as nominee for the lender, Equity One, Inc. MERS later assigned its interest in the mortgage to Assets Recovery Center Investments, LLC (ARC). When Leone failed to make timely payments to the lender, ARC, which Equity One had authorized to act on its behalf, initiated foreclosure proceedings. Leone subsequently filed a complaint seeking a declaration that the assignment from MERS to ARC was invalid and also sought to quiet title to the property. A hearing justice granted summary judgment in favor of Defendants - MERS, Equity One, and ARC. The Supreme Court affirmed, holding that the hearing justice properly found that no genuine issues of material fact existed and that the matter was ripe for summary judgment in favor of Defendants. View "Leone v. Mortgage Elec. Registration Sys." on Justia Law