Justia Banking Opinion Summaries

Defendants executed guaranty contracts in order to secure financing to run their business operations. Bank subsequently commenced foreclosure proceedings on the business. Afterwards, Bank commenced an action against Defendants seeking payment under the guaranty contracts. Defendants, in response, alleged several counterclaims and affirmative defenses. Bank filed a motion for summary judgment, arguing that Defendants' counterclaims and affirmative defenses were derivative of the corporation, and therefore Defendants lacked standing to raise them. Bank also asserted that Defendants' affirmative defenses were barred because they were subject to claim preclusion. The circuit court ultimately granted summary judgment to Bank. The court of appeals affirmed, concluding that Defendants' counterclaims and affirmative defenses were derivative and that they lacked standing to raise them in this action. The Supreme Court affirmed, holding (1) Bank was entitled to summary judgment dismissing all of Defendants' counterclaims, as each of the counterclaims was derivative; (2) Defendants' affirmative defenses did not defeat Bank's demand under the guaranties for payment; and (3) the circuit court correctly granted summary judgment to Bank because Defendants failed to raise any genuine issue of material fact showing payment was not due. View "Park Bank v. Westburg" on Justia Law

Appellant signed a loan agreement with Bank for a line of credit for his business (Business). Appellant later defaulted on the loan, and Bank brought a collection action against Appellant, his wife, their conjugal partnership, and Business. The FDIC subsequently took over the Bank as receiver and obtained summary judgment in its favor on the collection action. The district court also dismissed Appellants' counterclaim for lack of jurisdiction, finding that Appellants had not timely taken the steps necessary to maintain an action against the FDIC. The First Circuit Court of Appeals affirmed, holding (1) summary judgment was properly granted on the collection action because factual disputes did not remain concerning Bank's role in causing Appellants to breach their loan agreement and whether Appellants should be released from their obligations under that agreement; and (2) the district court correctly dismissed Appellants' counterclaims on jurisdictional grounds, as the Bank had insufficient assets to make any distribution on the claims of general unsecured creditors, including Appellants if they prevailed on their counterclaim, and therefore, the claim was not redressable. View "Fed. Deposit Ins. Corp., as receiver for R-G Premier Bank of P.R. v. Estrada-Rivera" on Justia Law

Plaintiffs filed suit against Wells Fargo under the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692-1692p, and the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691-1691f. The court affirmed the district court's dismissal of plaintiffs' FDCPA claim because the complaint did not plausibly allege that Wells Fargo was a debt collector under section 1692a(6). The court reversed, however, the district court's dismissal of the ECOA claim where the complaint's allegations that Wells Fargo took an adverse action without complying with ECOA's notice requirements were enough for the ECOA claim to survive a motion to dismiss because the parties agreed that Wells Fargo did not send plaintiffs an adverse action notice. View "Schlegel v. Wells Fargo Bank" on Justia Law

This case arose when the FDIC filed a complaint against appellants for sums due under various promissory notes. Appellants then entered into a Stipulated Judgment in favor of FDIC and against appellants. CadleRock moved ex parte to re-open the case to allow it to file the necessary pleadings to revive the Stipulated Judgment and the district court granted the motion. CadleRock then filed an ex parte motion to revive the Stipulated Judgment (Revived Judgment) as it pertained to appellants and the district court granted the motion. Five years later, CadleRock commenced collection and served appellants with pleadings and appellants moved to vacate and annul. At issue on appeal was the district court's order denying appellants' Federal Rule of Civil Procedure 60(b)(4) motion to vacate. The court concluded that the Revived Judgment was not void under Rule 60(b)(4); appellants' due process challenges failed; and, given that appellants have not shown an actual conflict between federal and state law, their preemption claim failed. Accordingly, the court affirmed the district court's judgment. View "FDIC v. SLE, Inc., et al." on Justia Law

Petitioners executed a promissory note secured on a mortgage on their residence from a California corporation. The mortgage stated that Respondent, Mortgage Electronic Registration Systems, listed as mortgagee and nominee, held legal title to the interests granted by Petitioners in the mortgage. After Petitioners failed to make payments pursuant to the terms of the note, Respondent, acting as nominee, filed a complaint against Petitioners seeking foreclosure of the mortgage and sale of the property. The circuit court granted Respondent's motion for summary judgment and entered a foreclosure judgment. Petitioners' property was then sold to Respondent. The circuit court confirmed the sale despite Petitioners' assertion that Respondent lacked standing to bring the foreclosure action. The intermediate court of appeals affirmed. The Supreme Court affirmed, holding that Petitioners were precluded from raising the issue of Respondent's standing where (1) a standing objection is not unique to a confirmation of sale proceeding from which Petitioners appealed; and (2) Petitioners' failure to appeal the foreclosure judgment barred challenges to Respondent's standing under the doctrine of res judicata. View "Mortgage Elec. Registration Sys., Inc. v. Wise" on Justia Law

Appellant Alstep, Inc. obtained a multimillion dollar loan from Appellee State Bank and Trust Company (SB&T) for the purchase of a sandwich shop, gas station and liquor store. Alstep fell behind on loan payments, and the Bank conducted a non-judicial foreclosure. SB&T was the highest bidder at the sale, and applied the proceeds of that sale to Alstep's loan balance. There was still a deficit. The Bank demanded immediate possession of the property, but Alstep refused. Despite receiving notice of a temporary restraining order, Alstep continued to operate the gas station and otherwise make use of the property. SB&T filed and served Alstep with an emergency motion for appointment of a receiver. SB&T cited three grounds in support of its motion: (1) that Alstep converted rent from the property's tenant (the sandwich shop) that should have gone to SB&T; (2) that Alstep was depleting the property that served as collateral for its debt; and (3) that SB&T needed to take control of the property to guard against its potential liability under state and federal environmental regulations as the owner of the gas station. Appellant never filed a response to the motion, but ultimately challenged the trial court's appointment of a receiver. The Supreme Court held that the trial court had broad discretion in deciding whether to appoint a receiver, and found no abuse of that discretion. View "Alstep, Inc. v. State Bank & Trust Co." on Justia Law

Plaintiffs, who stopped paying their mortgage in April 2010, filed this try title action challenging the authority of Defendant U.S. National Bank Association to foreclose on their home pursuant to a March 2011 assignment of the mortgage loan on Plaintiffs' home. U.S. Bank moved to dismiss the complaint for failure to state a claim under the Massachusetts try title statute. The federal district court granted the motion, holding (1) a petitioner must allege that an adverse claim clouds his record title to state a claim under the try title statute; and (2) U.S. Bank's efforts to foreclose on Plaintiffs' home did not amount to an adverse claim under Massachusetts law. The First Circuit Court of Appeals affirmed, holding (1) Petitioners were required to allege an adverse claim to withstand U.S. Bank's motion to dismiss; and (2) the allegations in the petition did not satisfy the Fed. R. Civ. P. 12(b)(6) standard. View "Lemelson v. U.S. Bank Nat'l Ass'n" on Justia Law

Specialized Loan Servicing, LLC sued Assurant Specialty Property, American Security Insurance Company, Donyelle January and Capital One Bank over a mortgage agreement. Specialized was the servicer of the note and mortgage executed by January. Specialized was the primary insured on a policy covering the property issued by Assurant and a subsidiary underwriter, American Security. After a fire, American Security cut a check made out to January and Specialized. The check was sent to Assurant who then forwarded it to January with instructions on how to endorse the check and then to return the check to Specialized. January negotiated the check to Capital One; Capital One cashed the check in favor of January with no endorsement from Specialized. Specialized contacted Assurant for an explanation, and Assurant claimed someone altered the check. Capital One rejected Specialized's fraud claim. Capital One filed a peremptory exception of prescription, contending that Louisiana law set a one-year prescription period: the check was negotiated in 2009, and suit was filed in 2010. The ultimate issue before the Supreme Court in this case was whether the doctrine of contra non valetem was applicable to suspend the prescription of a conversion claim against a payor. Upon review of the applicable statutes and the trial court record, the Court agreed with the Court of Appeal that the doctrine could not suspend the one-year prescriptive period. View "Specialized Loan Servicing, LLC v. January" on Justia Law

Plaintiffs appealed the district court's dismissal of their first amended complaint and the district court's denial of leave to further amend their complaint. Plaintiffs claimed that defendants improperly initiated non-judicial foreclosure proceedings after plaintiffs failed to comply with the mortgage obligations financing their residence. Because the provisions of the deed of trust foreclosed the pleading of a plausible "show me the note" claim by plaintiffs, the district court appropriately dismissed this claim; the district court properly dismissed plaintiffs' claims premised on the unauthorized appointment of a successor trustee and/or the lack of proof of ownership of the note where these claims lacked legal and factual plausibility; because Arizona law countenances the trustee sale as conducted, plaintiffs failed to allege any plausible claims premised on the PEB Report or the UCC; plaintiffs' constitutional challenges of A.R.S. 33-811(b) were rejected by the court; plaintiffs' fraud and misrepresentation claims were barred by A.R.S. 12-543(3); and denial of leave to amend was within the district court's discretion. Accordingly, the court affirmed the judgment. View "Zadrozny, et al. v. Bank of New York Mellon, et al." on Justia Law

Plaintiff filed suit against Wells Fargo, alleging that Wells Fargo violated Minn. Stat. 580.032, subd. 3 by failing to record a notice of pendency of foreclosure before publishing the foreclosure notice. The court affirmed the district court's grant of Wells Fargo's motion to dismiss, concluding that the statute did not provide plaintiff with relief in this case because there was no dispute that Wells Fargo properly served plaintiff with notice in compliance with Minn. Stat. 580.03 and, since she received personal service of the foreclosure notice, she could not have been among those for whose benefit the separate notice requirement of Minn. Stat. 580.032, subd. 3 was enacted. View "Badrawi v. Wells Fargo Home Mortgage" on Justia Law