Justia Banking Opinion Summaries

The Maryland Economic Development Corporation (MEDCO) is a public corporation established by the legislature to aid in promoting the economic development of the State. This litigation arose from MEDCO's involvement in the development of a technology development center. MEDCO sought a loan with Bank to finance the center. MEDCO executed a leasehold deed of trust with Bank requiring MEDCO to pay all recording costs and fees in connection with filing the loan documents. MEDCO subsequently presented the deed of trust for recording in Montgomery County, claiming an exemption from the recordation tax based on Md. Code Ann. Econ. Dev. 10-129(a), which granted MEDCO a tax exemption "from any requirement to pay taxes or assessments on its properties or activities." The county transfer office denied the exemption and required MEDCO to pay recordation tax. The county department of finance denied MEDCO's recordation tax refund claim. The tax court denied MEDCO's petition for appeal. The circuit court reversed, and the court of special appeals reversed the circuit court. The Court of Appeals reversed, holding that, based on the plain language of section 10-129(a), the legislature intended to exempt MEDCO from paying the recordation tax at issue in this case. View "Md. Econ. Dev. Corp. v. Montgomery County" on Justia Law

Conlin refinanced with a loan from Bergin, secured by a mortgage containing a provision that recognized MERS as a nominee for Bergin and Bergin’s successors. Bergin sold the note to the Real Estate Mortgage Investment Conduit, for which U.S. Bank was trustee. The mortgage was held by MERS, and serviced by GMAC. In 2008, MERS assigned the mortgage to “U.S. Bank National Association as trustee.” In 2010 Orlans sent Conlan notice (Mich. Comp. Laws 600.3205a), of default and of his ability to request loan modification, stating that it was sent on behalf of GMAC as “the creditor to whom your mortgage debt is owed or the servicing agent for the creditor.” In 2011, Orlans published notice of foreclosure sale, stating that “the mortgage is now held by U.S. Bank National Association as Trustee by assignment.” The notice was also posted on the property, which was sold at a sheriff’s sale on March 31. On October 28, 2011, Conlin sought damages and to have the foreclosure sale set aside. The district court dismissed. The Sixth Circuit affirmed. Even if the “robo-signed” assignment were invalid, Conlin was not prejudiced. He has not clearly shown fraud in the foreclosure process, as required for a challenge after expiration of the six-month redemption period. View "Conlin v. Mrtg. Elec. Registration Sys., Inc." on Justia Law

Westerfield was a lawyer working for an Illinois title insurance company when she facilitated fraudulent real estate transfers in a scheme that used stolen identities of homeowners to “sell” houses that were not for sale to fake buyers, and then collect the mortgage proceeds from lenders who were unaware of the fraud. Westerfield facilitated five such transfers and was indicted on four counts of wire fraud, 18 U.S.C. 1343. She claimed that she had been unaware of the scheme’s fraudulent nature and argued that she had merely performed the typical work of a title agent. She was convicted on three counts. The Seventh Circuit affirmed, rejecting challenges to the sufficiency of the evidence, to admission of a codefendant’s testimony during trial, and to the sentence of 72 months in prison with three years of supervised release, and payment of $916,300 in restitution. View "United States v. Westerfield" on Justia Law

In 2004, El Camino executed equipment leases with Cyberco, a corporation held out to be a computer sales and consulting business. Cyberco actually operated under several names and was engaged in fraud. Its affiliate, Teleservices, a shell corporation, was represented as an arms-length computer manufacturer. The equipment to be leased by El Camina, which likely never existed, was allegedly manufactured by Teleservices and delivered to Cyberco, which released payment to Teleservices. In 2002, Huntington established a banking relationship with Cyberco. Cyberco used its accounts to deposit funds from El Camino. Huntington investigated a series of overdrafts. Ultimately Cyberco elected to undergo a “gradual migration” from Huntington, and Huntington agreed to credit extensions for Cyberco during the transition. El Camino purchased more than $25 million in computer equipment. El Camino sued Huntington for conversion, aiding and abetting conversion, aiding and abetting fraud, and unjust enrichment. The district court granted summary judgment on the first three claims, concluding that El Camino could not establish the requisite level of knowledge to sustain aiding and abetting and conversion claims. It later dismissed the unjust enrichment claim. The Sixth Circuit affirmed, stating that findings, in a related bankruptcy case, that Huntington did not act in good faith, were irrelevant. View "El Camino Res., LTD. v. Huntington Nat'l Bank" on Justia Law

In November 2009, Plaintiff filed suit against Bank seeking judgment for principal and interest allegedly due and owing on a $15,000 certificate of deposit (CD) opened by her mother in July 1984. The CD matured in April 1985. The district court granted summary judgment in favor of Bank, finding that Plaintiff's claims were barred by the applicable statute of limitations. The Supreme Court affirmed, holding that Plaintiff had to commence her action either seven years after the maturity date of the CD or one year after July 1, 2008, and therefore, Plaintiff's claims were barred by limitations, and the district court therefore did not err in entering summary judgment for Bank. View "Swift v. Norwest Bank-Omaha West" on Justia Law

This case involved multiple litigations among three parties - Insurer, insured Mortgagee, and Homeowner - arising out of a defect in the title to Homeowner's home. Insurer brought suit in the land court on behalf of Mortgagee seeking to reform the deed to the property or to equitably subrogate Homeowner's interest in the property behind Mortgagee's mortgage. Homeowner initiated suit in the superior court against Mortgagee. Eventually, all claims in both actions became part of a federal court case, which settled. Thereafter, Mortgagee filed a complaint against Insurer in the U.S. district court seeking to recover from Insurer for the costs Mortgagee incurred in defending against Homeowner's claims. The judge determined Insurer had no obligation under its title insurance policy to pay Mortgagee's defense costs but certified two questions to the Massachusetts Supreme Court. The Court answered by holding that, under Massachusetts law (1) a title insurer does not have a duty to defend the insured in the entire lawsuit where one claim is within the scope of the title insurance coverage and other claims are not; and (2) a title insurer that initiates litigation similarly does not have a duty to defend the insured against all reasonably foreseeable counterclaims. View "GMAC Mortgage, LLC v. First Am. Title Ins. Co." on Justia Law

From 1997 through 2009 Sachdeva, the vice president for accounting at Koss, instructed Park Bank, where Koss had an account, to prepare more than 570 cashier’s checks, payable to Sachdeva’s creditors and used to satisfy personal debts. She embezzled about $17.4 million, pleaded guilty to federal crimes, and was sentenced to 11 years’ imprisonment. The SEC sued Sachdeva and an accomplice because their scheme caused Koss to misstate its financial position. Koss and Park Bank are litigating which bears the loss in Wisconsin. In this suit, Park Bank argued that Federal Insurance must defend and indemnify it under a financial-institution bond (fidelity bond) provision that promises indemnity for “Loss of Property resulting directly from . . . false pretenses, or common law or statutory larceny, committed by a natural person while on the premises of” the Bank. Sachdeva did not enter the Bank’s premises. She gave instructions by phone, then sent employees to fetch the checks. The district court entered judgment in the insurer’s favor. The Seventh Circuit affirmed; every court that has considered the subject has held that a fraud orchestrated from outside a financial institution’s premises is not covered under the provision, which is standard in the industry. View "Bankmanagers Corp. v. Fed. Ins. Co." on Justia Law

The Sponsors formed West Run to construct and manage West Virginia University off-campus housing and retained CBRE to secure financing. CBRE provided prospective lenders with confidential information. Huntington’s predecessor loaned $39.975 million and construction began. A competing project (Copper Beach) was built across the street. West Run learned that Huntington had loaned $20 million for that project; West Run alleged that Huntington divulged to Copper Beach proprietary West Run information provided by CBRE. West Run‘s occupancy dropped from 95 percent to 64 percent. West Run sued, alleging that Huntington had breached its duty of good faith and fair dealing by financing Copper Beech. Two similar projects, involving the Sponsors, alleged breach of contract based on Huntington‘s failure to provide funds under their construction loan agreements. Huntington claimed that they had sold insufficient units to require Huntington to disburse additional funds under the agreements. The district court dismissed. The Third Circuit affirmed in part, holding that the complaint contained no corroborating facts that confidential information was disclosed and that no contract terms prohibited Huntington from lending to competitors. The court vacated with respect to the other projects for a chance to provide evidence showing that the pre-sale numbers in the original complaint were incorrect. View "W. Run Student Hous. v. Huntington Nat'l Bank" on Justia Law

Former employees (Plaintiffs) of a failed bank taken into receivership by the Federal Deposit Insurance Corporation (FDIC) sued Banco Popular de Puerto Rico (BPPR), a bank that subsequently acquired the failed bank's deposits and certain assets on claims for severance pay. The FDIC intervened, asserting that the district court lacked jurisdiction over the claims because Plaintiffs either failed to file administrative claims with the FDIC or failed to challenge in federal court the FDIC's disallowance of their administrative claims. BPPR moved for summary judgment, arguing that it was not liable for any severance claims for at least three different merits-based reasons. The district court granted summary judgment for BPPR and did not address the question of whether it had jurisdiction. The First Circuit Court of Appeals vacated entry of summary judgment for Defendants and remanded with instructions to dismiss for lack of subject-matter jurisdiction, holding that Plaintiffs' failures to comply with the Financial Institutions Reform, Recovery, and Enforcement Act administrative claims process triggered the statutory bar, and Plaintiffs could not avoid the jurisdictional bar by failing to name the FDIC as a defendant. View "Acosta-Ramirez v. Banco Popular de Puerto Rico" on Justia Law

The plaintiffs in this case appealed the grant of summary judgment upholding the validity of a bank's mortgage in real property that the plaintiffs had sold to a mortgagor in exchange for an interest in an investment account that turned out to be a Ponzi scheme. Plaintiffs filed an action against other parties to their transaction including the Bank of Commerce arguing, among other things, that they were entitled to rescind the sale of a portion of their property for lack or failure of consideration and mutual mistake ("They argue[d] that they did not receive any consideration because the . . . interest in their investment account with the Trigon Group turned out to be worthless. Mr. Harris testified that he 'assumed that was real money, which it later proved out not to be.'"). Finding no error in the district court's judgment, the Supreme Court affirmed the lower court. View "Harris v. Bank of Commerce" on Justia Law