Justia Banking Opinion Summaries

In a contract dispute related to the funding of the development of the Fountainebleau Resort in Las Vegas (the Project), Term Lenders appealed the district court's grant of summary judgment in favor of the Bank. The court concluded that under the Disbursement Agreement the Bank was permitted to rely on the Borrowers' certifications that the conditions precedent were satisfied unless it had actual knowledge to the contrary. The court also concluded that there remained genuine issues of material fact about whether the Bank had such knowledge and whether its actions amounted to gross negligence. The court affirmed the district court's denial of the Term Lenders' Motion for Partial Summary Judgment and the district court's interpretation of the Bank's obligations under the Disbursement Agreement. The court reversed, however, the district court's grant of summary judgment in favor of the Bank and the court remanded the case for further proceedings. View "Avenue CLO Fund, Ltd., et al. v. Bank of America, NA" on Justia Law

An Illinois judgment creditor may, without court action, require a third party to freeze property of a judgment debtor until a court determines whether the creditor has a valid claim, by serving the third party with a citation to discover assets. If the third party releases the property without court order, the third party may be liable to the creditor for property that was released. Mendez was awarded $387,931 in damages for unlawful abuse suffered at the hands of her employer. She served more than 50 citations to discover assets on the employer and banks where she believed the defendants had deposited assets. She successfully fought the employer’s fraudulent attempt to declare bankruptcy. She has recovered only $99,519.97. Mendez served Republic Bank a citation, requiring the bank to freeze accounts held under the names of 22 entities that Mendez believed contained assets belonging to her former employers. Republic Bank froze all of the listed accounts. Interveners, who owned only a subset of the accounts frozen, obtained a court order that the bank claims unambiguously required it to unfreeze all accounts, except two that were specifically mentioned as remaining frozen. The Seventh Circuit held that Republic Bank is not liable because the most reasonable reading of the order unfroze the accounts in question. View "Mendez v. Republic Bank" on Justia Law

This case concerned the withdrawal liability for a pro rata share of unfunded vested benefits to a multiemployer pension fund of Scott Brass, Inc. (SBI), a bankrupt company. SBI had withdrawal pension obligations to the multiemployer pension fund (TPF), which sought to impose the obligations on two private equity funds (Plaintiffs). Plaintiffs asserted they were passive investors that indirectly controlled SBI and sought a declaratory judgment against the TPF. The TPF counterclaimed and sought payment of the withdrawal liability at issue. The district court entered summary judgment for Plaintiffs. The First Circuit Court of Appeals affirmed in part, reversed in part, and vacated in part, holding (1) at least one of the private equity funds that operated SBI sufficiently operated and was advantaged by its relationship with SBI, and further factual development was necessary as to the other equity fund; (2) the district court erred in entering summary judgment for Plaintiffs under the "trades or businesses" aspect of a two-part "control group" test under 29 U.S.C. 1301(b)(1); and (3) the district court correctly entered summary judgment for Plaintiffs on TPF's claim of liability on the ground that the funds had engaged in a transaction to evade or avoid withdrawal liability. Remanded. View "Sun Capital Partners III, LP v. New England Teamsters & Trucking Indus. Pension Fund" on Justia Law

Plaintiff, a recipient of Supplemental Security Income (SSI) benefits, appealed from the district court's judgment sua sponte dismissing his amended complaint under 28 U.S.C. 1915(e)(2)(B). Plaintiff sought an Order to Show Cause, a temporary restraining order, and a preliminary injunction enjoining defendants from levying against his SSI benefits to enforce a child support order. At issue was whether 42 U.S.C. 659(a) authorized levy against SSI benefits provided under the Social Security Act, 42 U.S.C. 301 et seq., to satisfy the benefits recipient's child support obligations. The court concluded that SSI benefits were not based upon remuneration for employment within the meaning of section 659(a); section 659(a) did not preclude plaintiff's claims; and the Rooker-Feldman doctrine and the exception to federal jurisdiction for divorce matters did not preclude the district court from exercising jurisdiction over the matter. Accordingly, the court vacated the judgment to the extent the district court dismissed plaintiff's claims against the agency defendants and remanded for further proceedings. However, the court affirmed the portion of the judgment dismissing plaintiff's claims against Bank of America because his complaint had not alleged facts establishing that the bank was a state actor for purposes of 42 U.S.C. 1983. View "Sykes v. Bank of America" on Justia Law

Federal National Mortgage Association (FNMA) initiated an unlawful detainer action against Appellant, claiming ownership of Appellant's home pursuant to a trustee's deed it obtained from ReconTrust, a national bank that conducted a nonjudicial foreclosure sale in its capacity as trustee of the trust deed that Appellant had executed to secure her mortgage. After an immediate occupancy hearing, the district court entered an order of restitution requiring that Appellant vacate her home. At issue on appeal was whether ReconTrust had authority to conduct the foreclosure sale and convey Appellant's home to the FNMA where Utah Code 57-1-21 and 57-1-23 limits the power of sale to trustees who are either members of the Utah State Bar or title insurance companies with an office in Utah. The district court concluded that ReconTrust, as a national bank, was authorized to conduct the sale under federal law and that federal law preempted Utah law. The Supreme Court vacated the district court's order of restitution, holding that the relevant Utah statutes were not preempted by federal law, and therefore, a national bank seeking to foreclose real property in Utah must comply with Utah law. Remanded. View "Fed. Nat'l Mortgage Ass'n v. Sundquist" on Justia Law

ROK Builders LLC (ROK) constructed a hotel for Moultonborough and had a mechanic's lien on the property. 2010-1 SFG Venture LLC (SFG) was the assignee of the construction lender and had a mortgage on the hotel. After Moultonborough filed for bankruptcy, SFG initiated an adversary proceeding against ROK in bankruptcy court, seeking a declaration that its mortgage was senior to ROK's lien to the extent the construction lender had disbursed loan funds to ROK. ROK, in turn, asserted that its lien was senior to SFG's mortgage. The New Hampshire bankruptcy court and district court entered judgment in favor of SFG. The First Circuit Court of Appeals affirmed, holding that the bankruptcy court did not err in concluding that N.H. Rev. Stat. Ann. 447:12-a established the seniority of SFG's mortgage over ROK's mechanic's lien to the extent of the amount of money the construction lender disbursed to ROK. View "ROK Builders, LLC v. 2010-1 SFG Venture, LLC" on Justia Law

Trish Carcopa purchased a unit in Parkway Towers, a condominium, and later executed a quit claim deed conveying the unit to herself and Nicole Carcopa. Nicole subsequently executed an adjustable rate note that was a refinancing of the original purchase-money lien. The note was secured by a deed of trust that was held by Appellant at the time of this dispute. Parkway Towers brought a petition to judicially foreclose on its lien, alleging that Trish and Nicole failed to pay their assessments and dues and asserting it had a first and prior lien on the unit. The trial court found Parkway Towers' lien was superior to Appellant's deed of trust and ordered Parkway Towers' lien to be judicially foreclosed. Appellant appealed, claiming Mo. Rev. Stat. 448.3-116 was unconstitutionally vague and ambiguous with respect to its application to determine priority between a refinancing deed of trust and a delinquent condominium association assessment. The Supreme Court affirmed, holding that the statute was not vague and ambiguous and that Appellant's lien did not receive priority. View "Bd. of Managers of Parkway Towers Condo. Ass'n v. Carcopa" on Justia Law

In 1968 French founded a successful manufacturing firm that he sold, in 1996, for about $200 million. French executed interlocking irrevocable trusts to benefit his four children upon his death. In 2004 he moved the trust accounts to Wachovia Bank. The trusts held two whole life insurance policies. Wachovia replaced the policies with new ones, providing the same benefit for a significantly lower premium, after months of evaluation and consultation with French and his lawyers. Wachovia received a hefty but industry-standard commission for its insurance-brokerage affiliate. French’s adult children sued Wachovia for breach of fiduciary duty by self-dealing. The district court rejected the claim, based on the trust document’s express conflict-of-interest waiver, and held that the transaction was neither imprudent nor undertaken in bad faith. The court ordered the Frenches to pay the bank’s costs and attorney’s fees. The Seventh Circuit affirmed. The trust documents gave Wachovia broad discretion to invest trust property without regard to risk, conflicts of interest, lack of diversification, or unproductivity. The trust instrument overrides the common-law prohibition against self-dealing and displaces the prudent-investor rule. While there is always a duty to administer the trust in good faith, there was no evidence that the bank acted in bad faith. View "French v. Wachovia Bank, N.A." on Justia Law

Plaintiff sought injunctive relief and damages against the Bank after it filed an unlawful detainer action against her in state court without giving 90 days notice to vacate the foreclosed property. At issue on appeal was whether the Protecting Tenants at Foreclosure Act of 2009 (PTFA), Pub. L. No. 111-22, 701-04, 123 Stat. 1632, 1660-62, provided a private right of action. The court concluded that dismissal of the state unlawful detainer proceedings did not moot plaintiff's claim; the court agreed with the Third Circuit that the regulation of eviction proceedings "does not implicate an important state interest" under Younger v. Harris; but plaintiff had no cognizable interest under the PTFA. Accordingly, the court affirmed the district court's dismissal of the complaint. View "Logan v. U.S. Bank" on Justia Law

Plaintiffs refinanced their home through Lender. The monthly payment on the loan was $600 greater than Plaintiffs' total monthly income. After the mortgage was funded, it was sold and assigned to Bank. Servicer serviced the loan. After Plaintiffs defaulted on the loan, Bank foreclosed on the mortgage. Plaintiffs subsequently brought this action asserting violations of the Consumer Protection Act, the Predatory Home Loan Practices Act, and the Borrower's Interest Act, and asserting that the loan was unenforceable because it was unconscionable. A superior court judge granted summary judgment to Defendants, Bank and Servicer, on all claims based on the ground that Defendants, as assignees, had no liability for the acts of Lender. The Supreme Court (1) reversed summary judgment in favor of Bank, holding that Bank was not shielded from liability as a matter of law by virtue of its status as an assignee and that Bank failed to establish the absence of material issues of disputed fact entitling it to judgment on any individual claim; and (2) affirmed summary judgment in favor of Servicer because Servicer was not shown to be an assignee and Plaintiffs offered no alternative basis on which Servicer might be held liable. Remanded. View "Drakopoulos v. U.S. Bank Nat'l Ass'n" on Justia Law