Justia Banking Opinion Summaries

Plaintiffs in this consolidated interlocutory appeal were defaulted mortgagors of Rhode Island real estate. Defendants were the corresponding mortgagees, Plaintiffs' agents or assignees, who allegedly held Rhode Island mortgagees' legal titles and asserted the right to foreclosure for default on mortgage terms. Plaintiffs brought this action alleging that the ostensible assignments of their mortgagees' legal titles were invalid, leaving the assignees without the right to foreclose. The district court imposed a stay in the nature of a preliminary injunction against foreclosure and possessory proceedings and appointed a special master to mediate the claims. Defendants appealed and filed a mandamus petition, claiming that the district court erred in failing to provide notice and hearing before issuing the stay and in failing to set limits of time and cost when referring the mortgagors' cases to the special master. The First Circuit Court of Appeals remanded with instructions to hold a prompt hearing with reasonable notice on the question of whether the injunction should be continued and to establish specific limits of time and expense if the reference for mediation was to remain in effect. View "In re Mortgage Foreclosure Cases" on Justia Law

Gaia and State Street were bound by a mezzanine loan agreement with Lehman Brothers to help finance the construction of a residential building in Manhattan. At issue on appeal was whether equitable estoppel, principles of good faith and fair dealing, or general principles of equity prevented State Street from keeping the Accrued Interest. The court concluded that Gaia could not rely on equitable estoppel to recover the Accrued Interest because Gaia did not demonstrate an omission or misrepresentation by State Street on which Gaia reasonably relied to its substantial detriment; State Street was entitled to act in its own self-interest and require payment of the Accrued Interest, even if such action lessened Gaia's anticipated profits, because State Street acted consistently with the contract and did not violate a presumed obligation or Gaia's reasonable expectations; State Street's actions were not taken in bad faith; State Street did not unlawfully demand payment of the Accrued Interest and it was not liable for the Doral damages; and the Professional Fee provision applied in this action and State Street was entitled to Professional Fees incurred as a result of this litigation. Accordingly, the court reversed and remanded. View "Gaia House Mezz LLC v. State St. Bank & Trust Co." on Justia Law

This mortgage foreclosure action arose from a failed redevelopment of a hotel complex. The complex consisted of several interconnected properties, including the hotel property, a tower building, and another building. The lender for the redevelopment and numerous mechanic's lienors dispute the priority of their respective claims to the proceeds from the foreclosure sale of the tower building. At issue before the Court of Appeals was N.Y. Lien Law 22, which subordinates a building loan mortgage made pursuant to an unfiled building loan contract to subsequently filed mechanic's liens. The Court of Appeals affirmed as modified, holding (1) the loan agreement made with the lender was a building loan contract, but the lender's mortgage was not entitled to first priority because the lender never filed the loan agreement; and (2) the lender was entitled to priority with respect to the loan proceeds used to refinance the existing mortgage, as the subordination penalty did not apply in this circumstance. View "Altshuler Shaham Provident Funds, Ltd. v. GML Tower, LLC" on Justia Law

Hrivnak filed a purported class action under the Fair Debt Collection Practices Act, 15 U.S.C. 1692–1692p, and Ohio consumer-protection law, Ohio Rev. Code §§ 1345.01–.99, 4165.01–04, seeking statutory, compensatory, and punitive damages exceeding $25,000, and injunctive and declaratory relief. The suit was based on the conduct of debt management companies and a law firm in dunning hi on credit card debts. The defendants made an offer of judgment of $7,000 plus costs and attorney’s fees, under Civil Rule 68. Hrivnak rejected the offer. The district court rejected the defendants’ claim that the offer rendered the suit moot. The Sixth Circuit affirmed, characterizing defendants’ argument as asserting that claims with little to no chance of success should be dismissed as moot whenever they are mixed in with promising claims that a defendant offers to compensate in full. View "Hrivnak v. NCO Portfolio Mgmt., Inc." on Justia Law

The debtor worked Saylor’s nightclub and for another entity owned by Saylor, scouting for commercial properties. Debtor obtained loans ($1,018,350) to purchase four Michigan car washes. The loan closings were conducted by another company controlled by Saylor, acting as agent for the title company, which never released loan proceeds to complete the purchases. After the debtor defaulted, Bayview, assignee of the notes, discovered that he did not hold title to the properties securing the notes. Bayview filed claims under the title commitments. The title company claimed that the loan applications contained false statements and denied the claim for failure to exercise due diligence in approving the loans. Bayview sued and the parties settled; Bayview assigned an interest in the notes to the title company, which obtained a default judgment of $10,172,840 against Saylor. The debtor filed a Chapter 7 bankruptcy petition. The title company filed an adversary complaint claiming that the Bayview notes were undischargeable under 11 U.S.C. 523(a)(2)(B). The bankruptcy court rejected the argument, holding that under Michigan law, claims for fraud cannot be assigned and that the title company had the right to pursue Saylor, but not the debtor. The district court reversed. The Sixth Circuit affirmed, holding that the title company can seek nondischargeability under section 523(a)(2) View "Pazdzierz v. First Am. Title Ins. Co." on Justia Law

In 2011, Sterling Bank sued Christopher Sanspree for nonpayment on a promissory note. Sanspree answered, raised counterclaims of fraudulent misrepresentation, fraudulent concealment, negligence and negligent supervision. The bank moved for summary judgment on the nonpayment issue only. Sanspree responded to the motion arguing the bank's claim should not be adjudicated separately from his counterclaims. The trial court entered summary judgment in favor of the bank on its claim without mention of Sanspree's counterclaims. Sanspree then moved the trial court to certify the summary judgment as final. Once the court certified the motion, Sanspree appealed to the Supreme Court. The high court found the trial court erred in certifying the summary judgment motion as final and dismissed the appeal. View "Sanspree v. Sterling Bank " on Justia Law

A corporation entered into an agreement with Wells Fargo for a business line of credit. The owners of the corporation signed the document as officers of the corporation. The corporation later defaulted on the line of credit. Velocity Investments, the alleged successor in interest to Wells Fargo, subsequently filed suit against the corporation and the owners as personal guarantors of the debt. The trial court granted summary judgment for Velocity after the owners, acting pro se, failed to respond to Velocity's statement of material facts and requests for admissions. The Supreme Court reversed, holding that the trial court (1) abused its discretion in denying the owners' motion for leave to answer requests for admissions, as (i) allowing the owners to answer the requests for admissions would serve the presentation of the merits of this case, and (ii) Velocity failed to demonstrate that it would be prejudiced if the owners were allowed to answer; and (2) because the trial court granted summary judgment based solely upon the owners' failure to respond to the request for admissions, genuine issues of material fact still existed, and the motion for summary judgment should have been denied. View "Velocity Invs., LLC v. Dybvig Installations, Inc." on Justia Law

Appellant obtained a home loan from Countywide Home Loans. The promissory note was secured by a deed of trust naming Countrywide as the lender and Mortgage Electronic Registration Systems (MERS) as beneficiary of the deed of trust. MERS assigned its interest in the deed of trust to HSBC Bank. Bank of America later acquired Countrywide and its assets, including Appellant's promissory note. After Appellant defaulted on the loan, Appellant participated in Nevada's Foreclosure Mediation Program (FMP). BAC Home Loans Servicing, as a representative of Bank of America, appeared at the mediation. After the mediation, Appellant filed a petition for judicial review, which the district court denied. Appellant appealed, arguing that Bank of America lacked authority to negotiate a loan modification at the mediation because the note and deed of trust were assigned to two separate entities. The Supreme Court reversed the district court's denial of Appellant's petition for judicial review and refusal to impose sanctions, holding that because Bank of America was not the deed of trust beneficiary at the time of the FMP mediation, Bank of America failed to satisfy Nev. Rev. Stat. 107.086(4)'s attendance and participation requirement. Remanded. View " Bergenfield v. Bank of Am." on Justia Law

These two consolidated cases involved a bond for which Hartford Fire Insurance Company (Hartford) was the surety. Each bond principal was sued, and both cases resulted in the entry of default judgments. Hartford was not given notice of either lawsuit against its principals or notice that default judgments were being sought. Hartford learned of the default judgments only after the plaintiffs in those cases sought payment on the bonds. In each case, Hartford ultimately was found liable on the bond. Hartford appealed, asserting that the circuit courts erred in finding the bonds to be judgment bonds and in holding Hartford liable on the bonds under the circumstances. The Supreme Court affirmed, holding that the two bonds at issue were judgment bonds, and therefore, the circuit courts correctly found that default judgments entered against the bond principals were conclusive and binding against Hartford. View "Hartford Fire Ins. Co. v. Curtis" on Justia Law

A trust (Trust) purchased lots in an RV park. The purchase agreement for the lots granted Trust an easement for access to a lake over and across lakefront property. At the time of the purchase, the lake property was encumbered by a deed of trust issued by Bank. After the owners of the lake property became delinquent on their loan obligations, Bank attempted to foreclose on the lake property by way of a trustee's sale, at which it purchased the property. Because Bank failed to provide Trust with notice of the sale, Bank subsequently noticed a second trustee's sale of the lake property, this time providing notice to Trust. Trust filed a complaint against Bank, claiming the Bank was precluded from holding the second sale and that it therefore could not extinguish its easement via the second sale. Bank subsequently purchased the property at the second trustees sale. The district court concluded (1) the first trustee's sale was invalid, but the second trustee's sale was valid; and (2) Trust's easement claims were therefore subordinate to Bank's interests in the lake property. The Supreme Court affirmed, holding that the district court correctly concluded that Bank effectively foreclosed on Trust's easement through the second trustee's sale. View "Terry L. Bell Generations Trust v. Flathead Bank of Bigfork" on Justia Law