Justia Banking Opinion Summaries

Abraham and Betty Jean Morrow filed a request for a modification of their home loan, serviced by Bank of America, through the federal Home Affordable Modification Program. Bank of America denied the modification and scheduled a trustee’s sale of the property. The Morrows subsequently filed a complaint against Bank of America based on the bank’s alleged breach of an oral contract for modification of their loan. The district court granted summary judgment to Bank of America, concluding (1) the Morrows’ claims for breach of contract, fraud, and violation of the Montana Consumer Protection Act (MCPA) were barred by the Statute of Frauds; and (2) the Morrows could not succeed on their claims of negligence, negligent misrepresentation, and tortious breach of the covenant of good faith and fair dealing because Bank of America owed no duty to the Morrows. The Supreme Court reversed as to the negligence, negligent misrepresentation, fraud, and violations of MCPA claims, holding that Bank of America owed a duty to the Morrows, genuine issues of material fact existed as to some claims, and the Statute of Frauds did not preclude the remainder of the Morrows’ claims. View "Morrow v. Bank of Am., N.A." on Justia Law

After conducting a compliance examination of CalCon Mutual Mortgage Corporation (“CalCon”) the Wyoming Department of Audit, Division of Banking (“Division”) determined that CalCon had violated the Wyoming Residential Mortgage Practices Act in six separate brokering transactions by receiving application fees and “yield spread premiums” exceeding those previously disclosed to its customers. The Division requested that CalCon refund the application fees and yield spread premiums to the borrowers. CalCon objected and requested a contesting case hearing before the Office of Administrative Hearings (“OAH”). The OAH determined that CalCon had violated the Act. The State Banking Commissioner subsequently issued a final order directing CalCon to reimburse the fees. The district court affirmed. The Supreme Court affirmed, holding that the Commissioner properly interpreted Wyo. Stat. Ann. 40-23-114 in determining that CalCon was required to provide a written explanation of increased application fees and yield spread premiums in the transactions at issue. View "Calcon Mut. Mortgage Corp. v. State ex rel. Wyo. Dep’t of Audit, Div. of Banking" on Justia Law

PS Business Parks, LP obtained a judgment against Deutsch & Gilden, Inc. for its failure to pay a lease. PS Business, naming Deutsch as debtor, filed a garnishment summons naming SunTrust Bank as garnishee. SunTrust filed two checks with the circuit court. The first check was drawn from an account titled to Deutsch, and the second check was drawn from an account titled to G&D Furniture Holdings, Inc. G&D Filed a motion to quash the garnishment of its account because it was not a party to the underlying action. The account was a master account participating in a “treasury management service” which, in a “zero balance account arrangement,” drew money each day from Deutsch’s account into the master account and moved funds from that master account to Deutsch’s account on an as-needed basis. The circuit court granted G&D’s motion to quash and ordered payment from the Deutsch account. The Supreme Court (1) affirmed the circuit court’s decision to quash garnishment of the G&D master account; and (2) held that the circuit court erred by not considering evidence of funds in Deutsch’s account during the period of time between service on SunTrust of the garnishment summons and its return date.View "PS Bus. Parks, L.P. v. Deutsch & Gilden, Inc." on Justia Law

To purchase her home, Kim King executed a promissory note to Virginia Housing Development Authority (“VHDA”) that was secured by a deed of trust. When King lost her full-time job, she arranged for a special forbearance agreement with VHDA. The VHDA eventually foreclosed on King’s loan, and King’s home was sold. King filed a complaint against VHDA and Evans & Bryant, PLC (“Evans”), as substitute trustee, alleging, among other things, that (1) certain federal regulations prevented VHDA from foreclosing until she was three months in arrears and VHDA had a face-to-face meeting with her, and (2) VHDA breached the deed of trust by foreclosing before it fulfilled these requirements and Evans breached its fiduciary duty by foreclosing when neither of the requirements had been met. The trial court sustained Defendants’ demurrers. The Supreme Court affirmed in part, reversed in part, and remanded, holding that the trial court (1) erred in sustaining the demurrers regarding the failure to hold a face-to-face meeting prior to foreclosure; and (2) did not err in sustaining demurrers against King’s allegation of breach of contract regarding the forbearance agreement and against King's requests for declaratory judgment, rescission, and to quiet title.View "Squire v. Va. Housing Dev. Auth." on Justia Law

In 2003, Appellants entered into a mortgage with Countrywide Home Loans that secured a promissory note in the amount of $165,750 and encumbered certain property. Plaintiffs later refinanced the loan by executing a promissory note in favor of Countrywide in the amount of $236,900 and executed a mortgage in the property in favor of BAC Home Loans Servicing, LP. In 2009, Appellants defaulted under the terms of the subject note and mortgage. In 2011, BAC filed an amended complaint to foreclose the mortgage. The circuit court granted BAC’s motion for summary judgment. The court also awarded attorney fees to BAC and reformed the mortgage by changing the legal description. The property was subsequently sold to BAC at a sheriff’s sale. The Supreme Court affirmed, holding (1) the circuit court did not err in granting BAC summary judgment to foreclose the mortgage; (2) the circuit court did not err in awarding BAC attorney fees and costs; and (3) the circuit court’s revision of the mortgage reflected the true intention of the parties and therefore, was not error. View "BAC Homes Loans Servicing, LP v. Trancynger" on Justia Law

Members of Healy Lake Village Tribe who claimed to constitute the newly elected tribal council brought suit in superior court against Mt. McKinley Bank after the Bank refused to change the signatory authority on the Tribe’s accounts to reflect the alleged leadership change. A second group of tribal members, who also claimed to represent the Tribe based on a competing election, was granted intervention in order to contest the superior court’s jurisdiction. The superior court determined that the fundamental issue in the case was the determination of the legitimate governing body of the Tribe, which was an internal self-governance matter within the Tribe’s retained inherent sovereignty. The superior court dismissed the case for lack of subject matter jurisdiction, and the group that brought the initial action appealed to the Alaska Supreme Court. Because determining the real party in interest would have required the superior court to decide matters solely within the Tribe’s retained inherent sovereignty, the Supreme Court affirmed the superior court’s dismissal of the case for lack of subject matter jurisdiction. View "Healy Lake Village v. Mt. McKinley Bank" on Justia Law

The residence of Brent and Amy Hubbard secured a note and deed of trust held by Trustmark National Bank. Additionally, the Hubbards obtained a second loan, which was secured by a note and second deed of trust held by BancorpSouth on the same residence. Trustmark foreclosed on the first deed of trust and sold the property. More than a year later, BancorpSouth sued the Hubbards for money due under the second note. The Hubbards admitted they were in default, but asserted as an affirmative defense that BancorpSouth’s claim was time barred under the one-year statute of limitations prescribed in Mississippi Code Section 15-1-23. After a hearing on the motion, the circuit court found Section 15-1-23 inapplicable and ruled instead that Mississippi Code Section 15-1-49 provides the proper limitations period (three years). The circuit court entered judgment in favor of BancorpSouth. On appeal, the Hubbards argued that the circuit court erred in granting BancorpSouth’s judgment on the pleadings because the action was barred by the one-year statute of limitations prescribed by Section 15-1-23. The Supreme Court affirmed the circuit court’s grant of judgment on the pleadings. However, the three-year statute of limitations provided under Section 15-1-49 was inapplicable in this case; the proper limitations period for suits on promissory notes for nonforeclosing lenders is Mississippi Code Section 75-3-118, which provided a six-year statute of limitations, rather than the three-year statute of limitations set forth in Section 15-1-49.View "Hubbard v. BancorpSouth Bank " on Justia Law

In a consolidated appeal, the plaintiffs from four separate actions (collectively, Appellants) ask the Supreme Court to reverse the trial court's order granting a motion to dismiss in favor of respondents Branch Banking & Trust Company (BB&T) and BB&T employee James Edahl. Skywaves I Corporation (Skywaves) was a South Carolina corporation that develops technology for the wireless telecommunications industry. In 2005, Skywaves entered into a factoring agreement with BB&T. From 2005 to 2007, Skywaves and BB&T occasionally amended the agreement via written modifications so that BB&T could fund Skywaves's working capital needs as those needs developed and expanded. In early 2007, Skywaves won several lucrative government contracts, and its Board of Directors determined that the company required more capital than BB&T provided at that time in order to meet the increased demand for their products. Skywaves therefore solicited funding proposals from various entities, including Wachovia, Hunt Capital, and BB&T. In July 2007, Edahl made a presentation to Appellants, each of whom was a director, officer, or shareholder in Skywaves, in addition to a current or potential investor in Skywaves. During the presentation, Edahl told Appellants that BB&T believed that Skywaves would continue to develop and expand into new markets, that BB&T "was fully committed to providing all of Skywaves['s] short-term and long-term financial needs for growth," and that BB&T would honor the new factoring agreement between itself and Skywaves. Appellants alleged that they each relied on these statements and were induced to "invest[] in the growth" of Skywaves via purchasing equity positions and making loans to Skywaves. BB&T funded Skywaves in accordance with the new factoring agreement from March 2007 until January 2008. In January 2008, BB&T asserted that Skywaves had defaulted under the terms of the factoring agreement, and BB&T refused to honor any further financial commitments in accordance with the contract. In the absence of funding, Skywaves filed for bankruptcy. As a result of the bankruptcy proceedings, Appellants lost their equity investments in Skywaves. Skywaves and Appellants therefore filed separate lawsuits against Respondents—Skywaves on its own behalf, and Appellants in their capacity as investors and employees of Skywaves. The trial court granted the motions to dismiss, finding all of Appellants' claims were barred for various reasons. The Supreme Court concluded that while Skywaves might be able to show that, as a BB&T customer, the bank owed the corporation a duty, Appellants were not BB&T's customers and therefore were not owed a similar duty. Accordingly, the Court affirmed the trial court's ruling that Respondents were entitled to judgment as a matter of law as to all of Appellants' claims. View "Kerr v. BB&T" on Justia Law

Troy Bank sued Citizens Bank seeking to recover damages Troy Bank claimed to have suffered as a result of a check encoding error made by Citizens Bank. Troy Bank alleged that it was entitled to recover damages under Alabama's check-encoding warranty, 7-4-209, Ala. Code 1975. Citizens Bank filed a motion for a summary judgment arguing that it was not strictly liable for its encoding error, but that Troy Bank "had an obligation to mitigate its damages and attempt to avoid loss altogether. [Troy Bank] failed to do this when it sent no written notice of dishonor or nonpayment before its midnight deadline and it allowed final payment to be made from [the accountholder]...." In this case, the encoding warranty, which is applied to determine liability as between banks, operated to shift the liability to Citizens Bank. "To hold that Citizens Bank is not liable for the damage it caused Troy Bank based on Citizens Bank's encoding error would render the encoding warranty useless and strip Troy Bank of a legislatively enacted protection." The Supreme Court concluded that the circuit court erred in its application of the law to the facts of this case. View "Troy Bank & Trust Company v. Citizens Bank " on Justia Law

This case arose out of a transaction between a bank located in United Arab Emirates and a partnership which had its headquarters in Saudi Arabia. The bank sued the partnership to collect an alleged debt and chose to do so in New York Supreme Court. The partnership filed a third-party complaint against a citizen of Saudi Arabia (“citizen”) and a bank headquartered in the Kingdom of Bahrain. The citizen moved to dismiss the third-party complaint on the ground of forum non conveniens. After the issue was briefed and argued at Supreme Court, the court dismissed both the complaint and the third-party complaint on forum non conveniens grounds. The Appellate Division reversed, concluding that VSL Corp. v. Dunes Hotels & Casinos, Inc. prohibited the dismissal of the main action on forum non conveniens grounds in the absence of a motion seeking that relief and that the dismissal of the third-party complaint was an abuse of discretion. The Court of Appeals reversed, holding (1) VSL did not bar Supreme Court from dismissing the complaint under the circumstances of this case; and (2) Supreme Court was correct as a matter of law in dismissing both the complaint and the third-party complaint.View "Mashreqbank PSC v. Ahmed Hamad A1 Gosaibi & Bros. Co." on Justia Law