Justia Banking Opinion Summaries

Property Owner owned two adjacent lots, a house lot and a vacant lot. Property Owner mortgaged certain real property to Option One Mortgage Corporation. Property Owner then conveyed its house lot to an individual who, in turn, granted a mortgage to Mortgage Electronic Registration Systems (MERS). Aurora Loan Services, LLC was the servicer for MERS. Aurora later informed Option One that it intended to foreclose on the house lot. Option One filed a complaint seeking a declaration that Option One had a valid first lien encumbrance on the house lot that was superior to the Aurora mortgage. The hearing justice granted summary judgment for Option One. The Supreme Court affirmed, holding that the Option One mortgage was a valid first lien on the house lot where (1) there was no dispute the Option One mortgage was properly recorded in the town records so any subsequent purchaser or mortgagee, including Aurora, was charged with constructive notice of the Option One mortgage; and (2) a prior deed reference in the Option One mortgage description was sufficient to put a subsequent purchaser or mortgagee on notice that the Option One mortgage was intended to encumber both the house lot and the vacant lot.View "Option One Mortgage Corp. v. Aurora Loan Servs., LLC" on Justia Law

Anne Sullivan-Thorne (Defendant) executed a mortgage on her house in favor of IndyMac Bank, FSB. Cambridge Mutual Fire Insurance Company filed an action against Defendant relating to damage done to the home. As part of the litigation, Defendant filed an action against IndyMac seeking to have all insurance proceeds payable to her alone. IndyMac counterclaimed against Defendant, alleging that Defendant had breached the note and mortgage and that Defendant had caused IndyMac not to receive payment of insurance proceeds in an amount sufficient to repair the property. The superior court dismissed IndyMac's counterclaim and entered a final judgment in which the court ordered that Cambridge re-issue the insurance proceeds and make them payable to Defendant alone. IndyMac later assigned the mortgage to Wilmington Trust Company (Plaintiff), who filed this action seeking a judgment of foreclosure against Defendant. The district court entered summary judgment for Defendant, finding that the action was barred by the doctrine of res judicata. The Supreme Court vacated the judgment of the district court, holding that because Wilmington's foreclosure claim did not present matters that "were, or might have been, litigated" in the earlier action, the court erred in entering summary judgment for Defendant on claim preclusion grounds.View "Wilmington Trust Co. v. Sullivan-Thorne" on Justia Law

This appeal involved two separate actions that were consolidated. In the first action, a married couple raised allegations of fraud and other claims against Residential Finance Corporation (RFC), which had brokered two refinancings of the couple's residential mortgage. The first action was consolidated with a foreclosure case filed later against the couple. Appellant and RFC were named as third-party defendants in the foreclosure case. After consolidation, the case was bifurcated on the basis of subject matter for trial purposes and was scheduled to go to trial only on the refinancing issues. Judge Robert Nichols denominated Appellant as a codefendant in that trial. Appellant field an action for a writ of prohibition to prevent Nichols from requiring him to be a defendant in the trial. The court of appeals denied the writ. The Supreme Court affirmed, holding that Appellant could not establish the elements for a writ of prohibition, as Appellant had an adequate remedy at law and Nichols did not patently and unambiguously lack jurisdiction over Appellant.View "State ex rel. Shumaker v. Nichols" on Justia Law

Wells Fargo Bank filed a complaint for foreclosure against Kenneth and Shelley Burek, alleging that the Bureks had defaulted on a promissory note held by Wells Fargo, thus breaching a condition of a corresponding mortgage held by the bank. During trial, the superior court admitted into evidence the promissory note, mortgage, and loan modification agreement between the Bureks and Wells Fargo proffered by Wells Fargo in addition to other documents. The trial court entered a judgment of foreclosure for Wells Fargo, concluding that the bank failed to prove it was a holder of the note but that it was entitled to enforce the note as a nonholder in possession with the rights of a holder. The Supreme Court affirmed, holding that competent evidence supported the superior court's conclusion that Wells Fargo certified its proof of ownership of the mortgage note for purposes of Me. Rev. Stat. 14, 6321 by demonstrating that it was a nonholder in possession with the rights of a holder pursuant to Me. Rev. Stat. 11, 3-1301.View "Wells Fargo Bank, N.A. v. Burek" on Justia Law

Bank and Lumber Company had business and financial relationships with Sawmill. A few years into its operation, Sawmill began experiencing serious financial difficulties. Sawmill defaulted on approximately $1.4 million in loan obligations to Bank and owed Lumber Company approximately $900,000. Proceedings were initiated in bankruptcy court and district court. While the cases were pending, Sawmill was destroyed by fire. Bank recovered approximately $980,000 from Sawmill's insurance proceeds. In a subsequent case between Bank and Lumber Company, the jury determined that neither Bank nor Lumber Company was entitled to recover damages from the other. The Supreme Court affirmed, holding that the district court did not abuse its discretion in refusing to admit into evidence a particular letter written by the Bank president. View "H.E. Simpson Lumber Co. v. Three Rivers Bank of Mont." on Justia Law

Gary Hopkins and Randal Burnett formed a LLC and financed the project with a small business administration (SBA) loan. Bank 1 loaned the remainder of the total project costs. Hopkins secured the SBA portion of the loan with third mortgages on his rental properties. Bank 2 subsequently acquired Bank 1. After Burnett bought Hopkins' membership in the LLC, Bank 2 released Hopkins from his loan. However, an agreement entered into by the parties did not mention the third mortgages on the property held by SBA. Burnett subsequently defaulted on his loan obligations, and Bank foreclosed on the mortgage covering the business property. Because Hopkins' third mortgages on his rental properties were not released by SBA, Hopkins was forced to continue to make the payments on the SBA loan. Hopkins and his wife (Plaintiffs) sued Bank 2, Burnett, and the LLC, arguing that, pursuant to the agreement, Bank 2 was supposed to remove Hopkins' liability and the mortgages held on his property. The district court granted summary judgment for Bank 2. The Supreme Court affirmed, holding that the terms of the contract between the parties were unambiguous, extrinsic evidence was not required to discern the parties' intent, and Bank 2 had abided by the terms of the contract.View "Hopkins v. Bank of the West" on Justia Law

In a foreclosure action, the trial court granted partial summary judgment to bankruptcy trustee J. Coleman Tidwell against National City Mortgage Company. Addressing its jurisdiction sua sponte, the Court of Appeals dismissed the appeal on the grounds that PNC Bank, N.A. was not a party to the foreclosure and therefore lacked standing to appeal the order entered against National City. The Supreme Court granted certiorari to consider whether the Court of Appeals correctly held that PNC Bank lacked standing to appeal on behalf of its predecessor National City Mortgage Company. Because the Court of Appeals erred in concluding that the appeal must be dismissed due to the trial court's failure to substitute or join PNC Bank as a party under OCGA 9-11-25 (c), the Court reversed and remanded the case for the Court of Appeals to address issues raised in this appeal.View "National City Mortgage Co. v. Tidwell " on Justia Law

Judgment creditor PAL I, LLC levied and executed upon collateral in which KeyBank had a perfected security interest. PAL argued that because KeyBank did not file a third-party claim to the collateral in accordance with I.C. 11-203, it waived its interest in the collateral. The district court held that a perfected security interest survives a creditor's failure to comply with the statute, that KeyBank's security interest extended to the proceeds PAL realized from the sheriff's sale of the collateral, and that KeyBank was entitled to judgment against PAL in that amount. PAL appealed to the Supreme Court. Finding no error, the Supreme Court affirmed. View "Keybank Nat'l Assoc v. Pal I, LLC" on Justia Law

The bank fraud statute, 18 U.S.C. 1344(2), makes it a crime to “knowingly execut[e] a scheme ... to obtain” property owned by, or under the custody of, a bank “by means of false or fraudulent pretenses.” Loughrin was charged with bank fraud after he was caught forging stolen checks, using them to buy goods at a Target store, and then returning the goods for cash. The district court declined to give Loughrin’s proposed jury instruction that section 1344(2) required proof of “intent to defraud a financial institution.” A jury convicted Loughrin. The Tenth Circuit and Supreme Court affirmed. Section 1344(2) does not require proof that a defendant intended to defraud a financial institution, but requires only that a defendant intended to obtain bank property and that this was accomplished “by means of” a false statement. Imposing Loughrin’s proposed requirement would prevent the law from applying to cases falling within the statute’s clear terms, such as frauds directed against a third-party custodian of bank-owned property. The Court rejected Loughrin’s argument that without an element of intent to defraud a bank, section 1344(2) would apply to every minor fraud in which the victim happens to pay by check, stating that the statutory language limits application to cases in which the misrepresentation has some real connection to a federally insured bank, and thus to the pertinent federal interest. View "Loughrin v. United States" on Justia Law

After the Republic of Argentina defaulted on its external debt, NML, one of its bondholders, prevailed in 11 debt-collection actions filed against Argentina in New York. To execute its judgments, NML sought discovery of Argentina’s property, serving subpoenas on nonparty banks for records relating to global financial transactions. The district court granted motions to compel compliance. The Second Circuit affirmed, rejecting Argentina’s argument that the order transgressed the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C. 1330, 1602. The Supreme Court affirmed; the FSIA does not immunize a foreign-sovereign judgment debtor from post-judgment discovery of information concerning its extraterritorial assets. The FSIA replaced factor-intensive loosely-common-law-based immunity with “a comprehensive framework for resolving any claim of sovereign immunity” so that any sort of immunity defense made by a foreign sovereign in a U.S. court must stand or fall on its text. The FSIA established jurisdictional immunity, section 1604, which was waived here. FSIA execution immunity under sections 1609, 1610, 1611, generally shields “property in the United States of a foreign state” from attachment, arrest, and execution. Nothing forbids or limits discovery in aid of execution of a foreign-sovereign judgment debtor’s assets. Even if Argentina is correct that section 1609 execution immunity implies coextensive discovery-¬in-aid-of-execution immunity, there would be no protection from discovery a foreign sovereign’s extraterritorial assets. Section 1609 immunizes only foreign-state property “in the United States.” The prospect that NML’s general request for information about Argentina’s worldwide assets may turn up information about property that Argentina regards as immune does not mean that NML cannot pursue its discovery.View "Republic of Argentina v. NML Capital, Ltd." on Justia Law