Justia Banking Opinion Summaries

Dorothy Halstein suffered from dementia. She owned a home worth between $235,000 and $320,000. While suffering demential, she owed approximately $75,000 to Washington Mutual Bank (WaMu), secured by a deed of trust on her home. Because of the cost of her care, her guardian did not have the funds to pay her mortgage. Quality Loan Services, acting as trustee of the deed of trust, foreclosed on her home. Quality sold the home for $83,087.67, one dollar more than Ms. Halstein owed. A notary falsely notarized the notice of sale by predating the notary acknowledgement. The falsification permitted the sale to take place earlier than it could have had the notice of sale been dated when it was actually signed. Before the foreclosure sale, Halstein's court-appointed guardian secured a buyer for her house willing to pay $235,000. There was not enough time before the scheduled foreclosure to close the sale with the buyer. Despite numerous requests, WaMu did not postpone the sale. A jury found that the trustee was negligent, and that the trustee's acts violated the Consumer Protection Act (CPA), and that the trustee breached its contractual obligations. The Court of Appeals reversed all but the negligence claim. Upon review, the Supreme Court reversed the Court of Appeals in part, and restored the award based on the CPA. View "Klem v. Wash. Mut. Bank" on Justia Law

Wells Fargo appealed from a district court decision affirming confirmation of a Chapter 11 cramdown plan. Debtors had obtained a loan from Morgan Stanley to renovate hotel properties and Wells Fargo eventually acquired the loan from Morgan Stanley. As a preliminary matter, the court held that the appeal was not equitably moot. On the merits, the court held that the bankruptcy court's 5% cramdown rate calculation on the basis of a straightforward application of the prime-plus approach was not erroneous. Accordingly, the court affirmed the judgment. View "Wells Fargo Bank National Assn v. TX Grand Prairie Hotel Realty, et al" on Justia Law

In 2006 a coal-mining company borrowed $7 million from Caterpillar secured by mining equipment. The company was also indebted to Peabody, for an earlier loan, and at Peabody’s request, transferred title to the same equipment, subject to Caterpillar’s security interest, to a Peabody affiliate. In 2008, Peoples Bank lent the mining company $1.8 million secured by the same equipment and filed a financing statement. Wanting priority, the bank negotiated a subordination agreement with Peabody. After the mining company defaulted, the bank obtained possession of the assets and told Caterpillar it would try to sell them for $2.5 million. Caterpillar did not object, but claimed that its security interest was senior. The bank sold the equipment for $2.5 million but retained $1.4 million and sent a check for $1.1 million to Caterpillar. Caterpillar neither cashed nor returned the check. The district court awarded Caterpillar $2.4 million plus prejudgment interest. The Seventh Circuit affirmed. The bank’s claim of priority derives from its dealings with Peabody. The bank did not obtain a copy of a security agreement for Peabody’s loan; a security interest is not enforceable unless the debtor has authenticated a security agreement that provides a description of the collateral. View "Caterpillar Fin. Servs. v. Peoples Nat'l Bank" on Justia Law

Fire Eagle appealed the district court's decision affirming a bankruptcy court's grants of summary judgment in two consolidated matters. The court held that the bankruptcy court's jurisdiction extended to the underlying adversary actions and declined to reverse the district court's holding to that effect. The bankruptcy court's entering an order in the two adversary proceedings without reference to the district court was within its statutory authority. There was no constitutional bar to the bankruptcy court's exercise of its jurisdiction over the two adversary actions. Venue was proper in the Western District of Texas. The transfer of venue of the Bischoff Adversary to the Western District of Texas was proper. Finally, the court affirmed the bankruptcy court's grant of summary judgment. View "Fire Eagle, L.L.C. v. Bischoff, et al" on Justia Law

Jack Bays, Inc. did site work on the construction of a new church (New Life). Jack Bays contracted with several subcontractors, eleven of which were parties to this action. New Life obtained additional funds for the project through three lenders. The Lenders were listed on the deed of trust for the new financing. After New Life stopped making to Jack Bays due to lack of funding, Jack Bays recorded its memorandum of mechanics' lien against New Life and terminated the construction contract. All Contractors timely filed complaints against the Lenders. The circuit court ordered that the property be sold at public auction with the proceeds to be applied in satisfaction of the mechanics' liens in the following order of priority: Subcontractors, Jack Bays, and Lenders. The Lenders appealed. The Supreme Court affirmed in part and reversed in part, holding that the circuit court (1) did not err in finding that Jack Bays' lien was valid; (2) was not plainly wrong in determining that the Contractors' liens had priority over the Lenders' deed of trust; but (3) erred in approving the sale of the entire parcel of land to satisfy the Contractors' liens, where no evidence was introduced to support this decision. Remanded. View "Glasser & Glasser, PLC v. Jack Bays, Inc." on Justia Law

Appellant Crafton, Tull, Sparks & Associates (CTSA) appealed an order of the circuit court finding that CTSA's lien was second in priority to Appellee Metropolitan National Bank's lien on certain property. The circuit court filed an order titled "Final Judgment and Rule 65(b) certificate" stating that certain parties and actions remained unresolved. CTSA then brought this appeal. Although neither party raised the issue, the Supreme Court sua sponte raised the question of whether the order was final and subject to appeal. The Court dismissed the appeal without prejudice, holding that there was no final order or a sufficient Ark. R. Civ. P. 54(b) certificate, and therefore, the Court lacked jurisdiction to hear the appeal. View "Crafton Tull Sparks & Assocs. v. Ruskin Heights, LLC" on Justia Law

Plaintiffs, Massachusetts residents, bought a three-dwelling in Massachusetts, financing the entire purchase price with two mortgage loans from Plaza Home Mortgage (Plaza). After the collapse of the housing market, Plaintiffs sued Plaza, alleging state common law and statutory violations in making the loans. The district court dismissed for failure to state a claim. The First Circuit Court of Appeals affirmed, holding (1) the district court correctly dismissed Plaintiffs' claim based on Plaza's alleged violation of the Massachusetts covenant of good faith and fair dealing; and (2) Plaintiffs' claim based on a violation of the Massachusetts consumer protection was correctly dismissed as time-barred. View "Latson v. Plaza Home Mortgage, Inc." on Justia Law

Plaintiff Mark Case appealed a superior court order that granted summary judgment to defendant St. Mary's Bank and denied his cross-motion for summary judgment on his claims that the bank engaged in trespass and violated state law and the New Hampshire Consumer Protection Act (CPA). The matter arose from the bank's foreclosure on property Plaintiff leased from his landlord, Jean Marcelin. Months before the foreclosure sale, pipes burst in an apartment above plaintiff's, causing a flood. The City of Manchester turned off water and electricity to the building. Plaintiff spoke about the problem to Marcelin, who denied that he still owned the property. Plaintiff then spoke about the problem to a Bank representative; the representative asked plaintiff to allow her, a plumber, and an electrician into the building. The plaintiff complied with this request. The City placed a legal notice on the property’s front door, stating that it was unsafe and prohibiting occupancy. Plaintiff had not resided at the property since the flood, though most of his possessions remained at the property. When the Bank allowed him access to the apartment to remove his possessions, plaintiff observed that his apartment door was "wide open" and subsequently alleged that many of his possessions were missing. Finding no error with the superior court order, the Supreme Court affirmed the decision. View "Case v. St. Mary's Bank " on Justia Law

Dittmer appealed the district court's dismissal under Federal Rule of Civil Procedure 12(b) of their two lawsuits against a failed bank, the FDIC as the bank's receiver, and the successor representative to the Estate of John Peters. Barkley is a Missouri general partnership with two equal partners, John Peters and Joe Dittmer. In the first of two eventual lawsuits arising out of a 2006 loan transaction to Barkley, Dittmer, representing Joe Dittmer's half interest in Barkley, sued Premier Bank, seeking declaratory judgment that the loan should be declared void as to Dittmer and sought to enjoin the bank from selling encumbered property. The suit was filed in Missouri state court, and the primary basis for Dittmer's complaint was that Peters did not have authority from his partner, Joe Dittmer, to mortgage Barkley property for this transaction. The second suit included the same claims as the first case but included various Dittmer successors as plaintiffs, and both the FDIC and the personal representative were added as defendants. The court found that under 12 U.S.C. 1821(j), the district court correctly dismissed Dittmer's claims for injunctive and declaratory relief; given the language of the Missouri Uniform Partnership Act, Mo. Rev. Stat. 358.090(1), the amended partnership agreement, and the power of attorney documents, the district court correctly dismissed the claim in the second suit against the FDIC; and the court agreed with the district court that the doctrine of res judicata required dismissal of the second suit. Accordingly, the court affirmed the judgment. View "Dittmer Properties v. FDIC, et al" on Justia Law

Plaintiffs and defendants obtained class certification and settlement approval for a nationwide class action involving three related lawsuits, alleging violations of the Fair Debt Collection Practices Act, 15 U.S.C. 1692-1692p and state law, based on the practice of “robo-signing” affidavits in debt collections. Eight individuals objected. The Sixth Circuit reversed, holding that the disparity in the relief afforded under the settlement to the named plaintiffs (exoneration of debts, $2000, and prospective injunctive relief) and the unnamed class members ($17 and prospective injunctive relief) made the settlement unfair. The class notice was inadequate and, although the class satisfies four of the six certification requirements (numerosity, commonality, typicality and predominance), the representation is not adequate under Rule 23(a) nor is the class action vehicle superior. View "Vassalle v. Midland Funding LLC" on Justia Law