Justia Banking Opinion Summaries

Plaintiffs appealed from the district court's denial of their motion to remand and its dismissal on the merits of their claims against Wells Fargo and Kozeny. The court concluded that, because plaintiffs did not allege that Kozeny owed a tort duty enumerated in the deed of trust, no reasonable basis in fact and law supported plaintiffs' negligence claim against Kozeny; because there was no reasonable basis in fact and law for either of plaintiffs' negligence and breach of fiduciary claims, it follows that Kozeny was fraudulently joined and that the district court properly denied plaintiffs' motion to remand; the court modified the district court's dismissal of the claims against Kozeny to be without prejudice for lack of subject matter jurisdiction; and because Kozeny - the only nondiverse defendant - was dismissed, the district court properly retained federal diversity jurisdiction over plaintiffs' remaining claims against Wells Fargo. Because plaintiffs failed to state a claim of wrongful foreclosure, fraudulent misrepresentation, violation of the Missouri Merchandising Practices Act, Mo. Rev. Stat. 407.020.1, negligence, or negligent misrepresentation, the district court properly granted Wells Fargo's motion to dismiss. View "Wivell, et al v. Wells Fargo Bank, N.A., et al." on Justia Law

Plaintiffs appealed from the district court's denial of their motion to remand and its dismissal on the merits of their claims against Wells Fargo and Kozeny. The court concluded that, because plaintiffs did not allege that Kozeny owed a tort duty enumerated in the deed of trust, no reasonable basis in fact and law supported plaintiffs' negligence claim against Kozeny; because there was no reasonable basis in fact and law for either of plaintiffs' negligence and breach of fiduciary claims, it follows that Kozeny was fraudulently joined and that the district court properly denied plaintiffs' motion to remand; the court modified the district court's dismissal of the claims against Kozeny to be without prejudice for lack of subject matter jurisdiction; and because Kozeny - the only nondiverse defendant - was dismissed, the district court properly retained federal diversity jurisdiction over plaintiffs' remaining claims against Wells Fargo. Because plaintiffs failed to state a claim of wrongful foreclosure, fraudulent misrepresentation, violation of the Missouri Merchandising Practices Act, Mo. Rev. Stat. 407.020.1, negligence, or negligent misrepresentation, the district court properly granted Wells Fargo's motion to dismiss. View "Wivell, et al v. Wells Fargo Bank, N.A., et al." on Justia Law

In 2009, David and Debra Sawyer defaulted on a mortgage held by U.S. Bank N.A. In 2012, the Bank filed a complaint for foreclosure. At the time the complaint was filed, J.P. Morgan Chase Bank N.A. had taken over as loan servicer. Four court-ordered mediations subsequently took place, during which time the Sawyers attempted to negotiate a modification with Chase. The mediations were unsuccessful, largely due to Chase’s repeated delays and requests to submit documentation that the Sawyers had already submitted. At a show cause hearing, the superior court subsequently dismissed the Bank’s complaint with prejudice, concluding that the Bank was not prepared to proceed at the hearing. The Supreme Court affirmed, holding (1) the sanction was not excessive under the circumstances, and (2) there was evidence that the Sawyers were prejudiced by the Bank’s failure to participate in the mediation process in good faith.View "U.S. Bank, N.A. v. Sawyer" on Justia Law

Plaintiff filed suit alleging that CitiMortgage's responses to requests for information about her mortgage violated the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601-2617; the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p; and N.Y. General Business Law (GBL) section 349. The district court dismissed the complaint for failure to state a claim under Rule 12(b)(6). The court concluded that plaintiff failed to allege that CitiMortgage did not properly designate a qualified written address (QWR) or that any or her lawyer's letters were sent to the designated address. Because plaintiff's lawyer's letters are not QWRs, CitiMortgage's RESPA duties were not triggered, and therefore the district court properly dismissed the RESPA claims. The district court did not err in dismissing the FDCPA claims where the amended complaint failed to alleged that CitiMortgage qualified as a debt collector under the FDCPA. The district court did not err in dismissing the section 349 claim where CitiMortgage's QWR address notice was not inadequate. Finally, the court affirmed the judgment of the district court and denied her request for leave to amend.View "Roth v. CitiMortgage Inc." on Justia Law

Freed and Weiss were the sole managing members of a legal practice, CLG. Freed claims to have provided CLG’s operating capital through loans of $12 million. Under the partnership agreement between the two, Freed was entitled to repayment before CLG could make distributions to other members. According to Freed, shortly after he received partial repayment from CLG in 2011, Weiss began taking steps to terminate Freed’s control of CLG and to create a new limited liability company without him, by moving CLG funds held by Chase into other accounts, to which Freed lacked access. Freed demanded that Chase freeze CLG accounts. Freed contends that Chase employees informed Weiss, who then removed all funds from Chase. Freed sued Weiss in state court, alleging improprieties primarily regarding access to records and funds, breach of fiduciary duties and of the partnership agreement, and seeking a declaration of voluntary termination of CLG. Weiss counterclaimed, seeking to expel Freed from CLG. Freed sued Chase claiming that Chase facilitated Weiss’s unauthorized transfer, tortious interference with contractual rights, and aiding Weiss’s breaches of fiduciary duties. The suit was removed to federal court and Chase brought third-party claims for indemnity or contribution. Freed filed suit in federal court against Weiss, his father, and CLG, asking the court to force CLG to purchase Freed’s distributional interest. The district court found that abstention in the federal court cases was proper and stayed both pending the outcome of the state court proceedings. The Seventh Circuit agreed.View "Freed v. Weiss" on Justia Law

Petitioners obtained a loan from a Lender by taking out a second mortgage on their residence secured by a deed of trust on that property. The Lender sold the loan to another entity, to whom it assigned the loan instruments. That entity, in turn, sold the loan and assigned the loan instruments. After Petitioners had paid off the note and Respondent had released the deed of trust, Petitioners sued the Lender and Respondent, alleging that Lender had violated the Maryland Secondary Mortgage Loan Law (SMLL) at the time of the original transaction. The circuit court granted summary judgment for Respondent. The court of special appeals affirmed, holding (1) Petitioners’ sole recourse against an assignee such as Respondent for the Lender’s violations of the SMLL would be by way of recoupment, but (2) because Petitioners filed suit only after they had paid off the loan, that remedy was not available to them. The Court of Appeals affirmed, holding (1) Respondent was not liable for violations of the SMLL committed by the Lender when the loan was originated, and (2) Respondent was not derivatively liable under statute or the common law for a violation of the SMLL committed by the Lender. View "Thompkins v. Mountaineer Invs., LLC" on Justia Law

A Law Firm had an escrow account with a Bank and authorized an employee to sign checks on the account by herself. The employee began embezzling money from the Firm’s various escrow accounts by engaging in a scheme called “check-kiting,” which involved the employee writing and depositing checks between the Bank account and the Law Firm’s account at another bank. More than three years after the last activity on the Bank account the Law Firm sued the Bank, raising four claims, including violations of the Uniform Commercial Code and common-law causes of action. The court of appeals concluded that the claims were barred by the one-year repose period of Ky. Rev. Stat. 355.4-406. The Supreme Court affirmed on other grounds, holding that the claims were barred by the three-year statute of limitations under Ky. Rev. Stat. 355.4-111.View "Mark D. Dean, P.S.C. v. Commonwealth Bank & Trust Co." on Justia Law

Asset Acceptance, LLC filed a complaint against Amy Newby, alleging that Newby had received a credit card from Asset and that her account was past due and remained unpaid. Newby asserted counterclaims against Asset. Asset subsequently filed a motion to compel arbitration, claiming that the credit card was issued to Newby by Chase Bank and was subject to a cardholder agreement that contained an arbitration provision. The circuit court denied the motion, concluding that Asset had waived its right to arbitration by filing its complaint in the circuit court. The Supreme Court affirmed, holding that the circuit court did not err in (1) denying Asset’s motion to compel arbitration, and (2) denying sanctions against Asset pursuant to Ark. R. Civ. P. 11. View "Asset Acceptance LLC v. Newby" on Justia Law

Appellant entered into a mortgage contract with Pawtucket Credit Union (PCU) for the purchase of real property in Rhode Island. The mortgage agreement included a private contractual remedy, authorized by R. I. Gen. Laws 34-11-22, that allowed PCU, in the event Appellant defaulted on her loan payments, to accelerate its loan and invoke its statutory power of sale. PCU later declared Appellant in default, invoked its statutory power of sale, and began the foreclosure process. Appellant filed suit against PCU in federal district court, alleging that foreclosure pursuant to section 34-11-22 violated her federal and state due process rights. The district court dismissed the case for lack of subject matter jurisdiction. The First Circuit Court of Appeals affirmed, holding that none of the statutory bases cited in Appellant’s complaint conferred federal jurisdiction.View "Grapentine v. Pawtucket Credit Union" on Justia Law

The Rhode Island Joint Reinsurance Association brought an interpleader action against multiple defendants for the purpose of determining the proper disposition of insurance proceeds. Bank of America, N.A. (BANA), one of the defendants, moved for summary judgment on the interpleader claim and against defendant Genoveva Santana-Sosa’s cross-claim. The superior court granted summary judgment for BANA, concluding that BANA was entitled to the entire amount of the insurance proceeds and that Santana-Sosa was entitled to none of the disputed funds. The Supreme Court affirmed, holding that BANA was entitled to judgment as a matter of law.View "R.I. Joint Reinsurance Ass’n v. Santana-Sosa" on Justia Law