Justia Banking Opinion Summaries

Porayko entered bankruptcy in 2009, having $10,000 in a checking account at TCF. Crowell, holding a $73,000 judgment against Porayko, served Porayko with a citation to discover assets, asserting a lien. 735 ILCS 5/2-1402(m). Crane, the bankruptcy trustee, argued that only a citation served directly on the bank would establish a lien. The bankruptcy judge lifted the automatic stay, 11 U.S.C. 362(d). The district court and Seventh Circuit affirmed. The statute provides that a citation to discover assets creates a lien on all “nonexempt personal property, including money, choses in action, and effects of the judgment debtor,” including “all personal property belonging to the judgment debtor in the possession or control of the judgment debtor or which may thereafter be acquired or come due to the judgment debtor.” A bank account may be an intangible interest, but intangible rights are personal property and a checking account’s holder controls the right to designate who receives the funds on deposit, which makes its value a form of “personal property” under Illinois law. View "Crane v. Crowell" on Justia Law

In 1986, appellee personally guaranteed a loan made by Petra to AEGIS. Appellee subsequently sued Petra in district court in late 2008, seeking a declaratory judgment that he did not have any obligations under a Guaranty Agreement. Petra counter-sued in early 2009, seeking to enforce the Guaranty Agreement. The court concluded that Petra's claim was time-barred where the limitations period began in 1987 when AEGIS declared bankruptcy and appellee was obligated to pay Petra under the Guaranty Agreement, and the limitations period expired in 1999. The court also concluded that Petra should have the opportunity to produce evidence sufficient to create a substantial question of material fact to the governing issues of the case. Accordingly, the court vacated the district court's grant of summary judgment and remanded for further proceedings. View "Farouki v. Petra Int'l. Banking Corp., et al" on Justia Law

Selma Development, LLC (Selma) obtained a loan from TierOne Bank (TierOne) that was guaranteed with six individual guaranty agreements. Selma later defaulted on the note. The property was sold at a trustee's sale, but the sale price was insufficient to cover the debt. TierOne brought an action seeking payment from the guarantors (Defendants). After a hearing, the trial court concluded that the fair market value of the property greatly exceeded the amount received from the trustee's sale. The court then granted TierOne's motion for summary judgment and entered judgment against Selma for $306,230 and against Defendants for $586,229. The Supreme Court vacated the trial court's judgment remanded, holding (1) once the trial court determined that the fair market value of the property was greater than the amount received at the trustee's sale, it had to determine whether the Nebraska Trust Deeds Act applied to the guarantors, and accordingly, its order determining fair market value was not a final order; and (2) Defendants offered evidence which created a genuine issue of material fact regarding their defenses, precluding summary judgment. View "Selma Dev., LLC v. Great W. Bank" on Justia Law

Plaintiffs sued Wells Fargo for fraudulent misrepresentation and promissory estoppel after Wells Fargo initiated foreclosure when plaintiffs stopped paying on their mortgage loan. The court held that plaintiffs have not stated a plausible claim for fraudulent misrepresentation regarding the modification of their home loan and therefore, the district court did not err in dismissing plaintiffs' claims under Rules 12(b)(6) and 9(b). The court also held that plaintiffs have not stated a plausible claim for promissory estoppel and the district court did not err in dismissing their claim. View "Freitas, et al v. Wells Fargo Home Mortgage, Inc." on Justia Law

Eleven plaintiffs who obtained home loans from Countrywide Bank, sought to challenge alleged racial disparities dating back to 2002 and resulting from Countrywide’s loan-pricing policy for home mortgages. The district court denied class certification, finding that the proposed class failed to satisfy Federal Rule of Civil Procedure 23(a)’s commonality requirement. The Sixth Circuit affirmed. Plaintiffs challenged policies that grant broad discretion to local agents; they do not claim that a uniform policy or practice guides how local actors exercise their discretion, such that the corporate guidance caused or contributed to the alleged disparate impacts. To justify certification, class members must unite acts of discretion under a single policy or practice, or through a single mode of exercising discretion; the mere presence of a range within which acts of discretion take place will not suffice to establish commonality. View "Miller v. Countrywide Fin. Corp." on Justia Law

Plaintiff bank (Bank) claimed to be the holder of a mortgage given by Defendant. Bank filed a complaint in equity in the land court under the Massachusetts Soldiers' and Sailors' Civil Relief Act to determine if Defendant was entitled to foreclosure protections under the Federal Servicemembers Civil Relief Act (SCRA). Defendant conceded she was not entitled to protection under the SCRA but moved to dismiss the complaint on the ground that Bank lacked standing to bring a servicemember proceeding because it was not the clear holder of her note or mortgage. The land court denied Defendant's motion, determining that Bank had standing based on its right to purchase Defendant's mortgage. The court then authorized Bank to make an entry and to sell the property covered by the mortgage. The Supreme Court vacated the land court's judgment, holding (1) because Defendant was not entitled to appear or be heard at the servicemember proceeding, the land court should not have accepted or entertained Defendant's filings; (2) only mortgagees or those acting on behalf of mortgagees having standing to bring servicemember proceedings; and (3) in the present case, the judge used the incorrect standard in making the determination that Bank had standing. Remanded. View "HSBC Bank USA, N.A. v. Matt" on Justia Law

At issue in this case was the Pendergrass rule, which establishes a limitation on the fraud exception to the parol evidence rule. Plaintiffs restructured their debt with a Credit Association in an agreement. Plaintiffs did not make the required payments, and the Credit Association recorded a notice of default. Eventually, Plaintiffs repaid the loan, and the Association dismissed its foreclosure proceedings. Plaintiffs then filed this action seeking damages for fraud and negligent misrepresentation and including causes of action for rescission and reformation of the restructuring agreement. Relying on the Pendergrass rule, the trial court granted summary judgment to the Credit Association, ruling that the fraud exception did not allow parol evidence of promises at odds with the terms of the written agreement. The court of appeal reversed, holding that the Pendergrass rule did not apply in this case. The Supreme Court affirmed, holding that Bank of America Ass'n v. Pendergrass was ill-considered, and should be overruled. View "Riverisland Cold Storage, Inc. v. Fresno-Madera Prod. Ass'n" on Justia Law

Plaintiffs brought this civil enforcement action under the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. 1001 et seq., alleging that defendants, the Bank, and individual members of the Bank's Corporate Benefits Committee, engaged in prohibited transactions and breached their fiduciary duties by selecting and maintaining Bank-affiliated mutual funds in the investment menu for the Bank's 401(k) Plan and the Bank's separate but related Pension Plan (collectively, the Plans). The court affirmed the district court's dismissal of the Pension Plan claims in the Second Amended Complaint on the basis that plaintiffs lacked Article III standing. The district court correctly determined that plaintiffs' remaining claims were time-barred under the limitations period in 29 U.S.C. 1113(1)(A). Finally, the district court's dismissal of the Third Amended Complaint with prejudice did not constitute an abuse of discretion where plaintiffs failed to file a motion to amend and had already amended their original complaint three times. Accordingly, the court affirmed the judgment of the district court. View "David v. Alphin" on Justia Law

Klie purchased property with financing from Coldwell Banker, which assigned its rights to the Federal National Mortgage Corporation (Fannie Mae) but continued to service the loan. The assignment was never recorded. In 2007, servicing rights transferred to JP Morgan. Coldwell Banker assigned its rights in the note and mortgage (none) to JP Morgan, which reassigned to Fannie Mae. Chase, an arm of JP Morgan, serviced the loan until Klie died. With the loan in default, Chase’s law firm, RACJ, prepared an assignment of the note and mortgage that purported to establish Chase’s right to foreclose and filed a foreclosure actionf, naming Glazer, a beneficiary of Klie’s estate. The court entered a decree of foreclosure, but later vacated and demanded that RACJ produce the original note. Chase dismissed the foreclosure without prejudice. Glazer filed suit, alleging that Chase and RACJ violated the Fair Debt Collection Practices Act, 15 U.S.C. 1692, and Ohio law by falsely stating that Chase owned the note and mortgage, improperly scheduling a foreclosure sale, and refusing to verify the debt upon request. Chase and RACJ moved to dismiss. The district court dismissed. The Sixth Circuit reversed, holding that mortgage foreclosure is debt collection under the Act. View "Glazer v. Chase Home Fin. LLC" on Justia Law

Taxpayer owned fifteen acres of land in Ludlow, Massachusetts. Taxpayer obtained a commitment from Bank to make a loan to fund development on the land. The commitment stipulated that the loan would be made to Taxpayer or "nominee" and that, if Taxpayer assigned the commitment to a nominee, he would be required to guarantee the loan personally. Taxpayer subsequently transferred title of the property to an LLC he formed. Later, the loan became delinquent, and Bank foreclosed on unsold lots in the development. After selling the lots at auction, Bank filed this interpleader action to determine who had the right to the surplus proceeds. The United States claimed an interest in the fund, as did the town of Ludlow. At issue was who was the "nominee" of Taxpayer for purposes of the federal tax lien that attached to Taxpayer's property. The district court held in favor of the United States, concluding that the LLC was Taxpayer's nominee. The First Circuit Court of Appeals affirmed, holding that the nature of the relationship between Taxpayer pointed to the fact that the LLC was a "legal fiction," and therefore, the district court did not err in concluding that the LLC was Taxpayer's nominee. View "Berkshire Bank v. Town of Ludlow, Mass." on Justia Law