Justia Banking Opinion Summaries

In a matter of first impression, the issue before the Supreme Court was whether proceedings in aid of execution or judgment collection pursued within an action under the Uniform Fraudulent Transfers Act (UFTA) must be preceded by registration of a foreign judgment in the county of the district court from which execution issued. In 2002, the United States Bankruptcy Court for the Western District of Oklahoma entered summary judgment against Debtors and denied a discharge of the debt to Bank based on Debtors' fraudulent concealment of assets. The Bank initiated various collection procedures against Debtors including garnishment and a hearing on assets in an attempt to satisfy the two judgments. The bankruptcy judgments were registered in Payne County, the location of Debtors' homestead, in July, 2002. Meanwhile, the UFTA action continued to proceed in Oklahoma County against Debtors' relatives. In September, 2007, the trial court entered an order in the UFTA action which determined that a portion of Debtors' income had been fraudulently diverted to a sham corporation for the purpose of avoiding garnishment of that income. However, it was not until November, 2007, that Bank's second amended petition in the UFTA action added Debtors and the corporation as defendants. In December, 2009, a contempt trial against Debtors generated an order filed 2010. That order expressly withdrew and superseded the September, 2007, order. It found one of the Debtors guilty of contempt for failure to obey the 2007 order. In April, 2011, Bank sought contempt to enforce the 2010 order. On August 18, 2011, Bank registered one of the bankruptcy judgments, and one for costs and attorney fees, in Oklahoma County. On March 15, 2012, a trial judge entered an order on Bank's motion to enforce the 2010 contempt order. The trial court found open and wilful violations of the withdrawn 2007 order as well as the 2010 order. The trial court acknowledged that Bank had failed to comply with the statutory requirements of registration of foreign judgments in the county of the court which issued execution, but it determined that those requirements did not apply in a UFTA action. Debtors brought then brought this original proceeding asserting the trial court's lack of jurisdiction to impose the relief granted to Bank. Upon review, the Supreme Court concluded that the belated registration of the foreign judgment in 2011 did not authorize the trial court to retroactively enforce orders which were void for lack of jurisdiction. "When a judgment was registered in Oklahoma County in 2011, the trial court did not retroactively acquire jurisdiction to enforce the provisions of the 2007 and 2010 orders that granted remedies in the nature of execution, including contempt, and threatened incarceration for failure to pay the judgments. The 2011 judgment registration did not make the void portions of the prior orders any less so." Furthermore, the Court held that a trial court may not take judicial notice of findings of fact and conclusions of law encompassed within a void judgment. New findings of fact and conclusions of law regarding any attempt to enforce the bankruptcy judgments are required. View "Vaughn v. Graves" on Justia Law

Plaintiff filed claims against Wachovia for willful noncompliance with certain provisions of the Fair Credit Reporting Act, 15 U.S.C. 1681s-2(a) and for common law defamation. The court held that the district court correctly concluded that there was no private cause of action for violations of section 1681s-2(a). Because the complaint only alleged violations of 1681s-2(a)(1), (2), and (8), the district court properly granted summary judgment on plaintiff's claims under the Act. The court also held that the district court did not abuse its discretion by denying leave to amend in regards to plaintiff's failure to state a claim under section 1681s-2(b) in light of plaintiff's delay and the prejudice to Wachovia. Accordingly, the court affirmed the judgment of the district court. View "Longman v. Wachovia Bank NA" on Justia Law

Defendant worked as an assistant branch manager and pled guilty to embezzlement, 18 U.S.C. 656 after stealing more than $40,000 from the bank by manipulating the electronic security system. He was arrested in the Dominican Republic. The district court imposed a two-level enhancement for abuse of a position of trust (U.S.S.G. 3B1.3) and imposed a sentence of six months in prison, followed by two years of supervision with six months of home confinement. The Seventh Circuit rejected challenges to the sentence. View "United States v. Wasilewski" on Justia Law

A dispute between a bank customer (Customer) and her bank (Bank) over missing endorsements was submitted to arbitration through the American Arbitration Association. The arbitrator issued a written award in Bank's favor and then granted Bank's motion for an order confirming the arbitration award and for entry of judgment on the order. Customer objected, arguing that, pursuant to Nev. Rev. Stat. 38.239, she should have been afforded the opportunity to oppose the motion to confirm and/or to file a competing motion to vacate, modify, or correct the award. The district court denied the motion. The Supreme Court affirmed, holding that the district court erred in summarily confirming the arbitration award against Customer without giving Customer the opportunity to be heard in opposition to the motion to confirm, even though the ninety-day period for Customer to move to vacate, modify, or correct the award had yet to run. View "Casey v. Wells Fargo Bank, N.A." on Justia Law

LVNV Funding, LLC filed a complaint against Rae Nardi for an amount due on her credit card account with Citibank. LVNV claimed, as an assignee, it had a contractual relationship between Nardi and Citibank and a cause of action for recovery of the amount due on the account. Nardi filed a motion for summary judgment, alleging that the failure to attach to the complaint a copy of the agreement between Nardi and Citibank constituted a violation of Ark. R. Civ. P. 10(d). The circuit court granted summary judgment for Nardi, finding that LVNV violated Rule 10(d), which requires that a copy of the "instrument or document" upon which the claim is based be attached to the complaint. The Supreme Court affirmed, holding that compliance with Rule 10(d) is mandatory, and therefore, entry of summary judgment was proper. View "LVNV Funding, LLC v. Nardi" on Justia Law

Bank sued five guarantors (Guarantors) following defaults on the underlying notes. During discovery, Bank tendered requests for admissions to each of Guarantors, including a request to admit the specific amount due on the note for principal, accrued interest, and a prepayment fee. Ultimately, the district court (1) entered judgment in favor of the Bank with respect to the principal and accrued interest due from Guarantors, but (2) based in part on Guarantors' answers to the requests for admissions, determined Bank was not entitled to prepayment fees. The Supreme Court reversed the rulings in each case on the prepayment fee issue, holding that the district court erred when it treated the Guarantors' answers to Bank's requests for admissions as denials rather than admissions that Guarantors owed prepayment fees. Remanded. View "U.S. Bank Nat'l Ass'n v. Peterson" on Justia Law

Plaintiffs alleged that defendant, the servicer of their home loan, violated the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2605, because it did not respond adequately to three letters in which they challenged the monthly payment due on their loan. The district court granted defendant's motion to dismiss the claim because a servicer must receive a valid "qualified written request" to incur the duty to respond under section 2605, and it determined that the letters were not qualified written requests that triggered the statutory duty. Because plaintiffs' letters to defendant challenged the terms of their loans and requested modification of various loan and mortgage documents, they were not qualified written requests relating to the servicing of plaintiffs' loan. Because section 2605 did not require a servicer to respond to such requests, the district court correctly dismissed plaintiffs' claim and the court affirmed the judgment. View "Medrano, et al v. Flagstar Bank, FSB, et al" on Justia Law

MTA, Inc. appealed a circuit court order which held that its claims against Merrill Lynch, Pierce, Fenner & Smith, Inc. were subject to an arbitration agreement and compelling MTA to arbitrate those claims. MTA entered into a deferred compensation agreement ("the DCA") with its employee, Yvonne Sanders. Pursuant to the terms of the DCA, MTA was obligated to pay Yvonne $270,000 in 120 equal monthly installments beginning the month following her 50th birthday or, in the event Yvonne died before reaching her 50th birthday, to pay her children, Tiffany Sanders and Roderick Dedrick, a total of $750,000 in 120 equal monthly installments beginning the month after her death. MTA thereafter obtained a $1,000,000 life insurance policy on Yvonne to fund the death benefit provided in the DCA in the event it became payable. On October 22, 1999, Yvonne died at the age of 43. MTA thereafter received the $1,000,000 it was owed under the life-insurance policy. However, MTA did not begin making payments to Tiffany and Roderick as called for by the DCA. Instead, Tiffany and Robert asked MTA to establish a rabbi trust to handle the payments, presumably to allow for more favorable tax treatment for Tiffany and Roderick. MTA executed a trust agreement with Thomas W. Dedrick, Sr., Tiffany and Roderick's uncle and a licensed broker employed by Merrill Lynch, establishing the trust and depositing into it an initial sum of $506,450. The trust agreement also provided that Thomas would act as trustee of the trust. Subsequent to the creation of the trust some intermittent payments were made from the trust to Tiffany and Roderick before payments ceased in late 2009. The sum total of the payments made did not equal $750,000. In 2011, Tiffany and Roderick filed an action against MTA asserting breach-of-contract and unjust-enrichment claims and seeking $213,777, the amount they allege was still due them pursuant to the DCA. Merrill Lynch moved to compel arbitration of MTA's claims against it pursuant to the arbitration provisions in the account-authorization form. MTA opposed that motion, arguing that it was not a party to those contracts, and, following a hearing on the matter, the trial court granted Merrill Lynch's motion to compel arbitration and dismissed MTA's third-party claims against Merrill Lynch. Upon review, the Supreme Court reversed that order, holding that MTA was not a signatory to those contracts and that the scope of the arbitration provisions in those contracts was too narrow to encompass disputes between Merrill Lynch and other entities not a party to those contracts. The case was remanded for further proceedings. View "MTA, Inc. v. Merrill Lynch, Pierce, Fenner & Smith, Inc." on Justia Law

Appellant, a Nevada homeowner, elected mediation pursuant to the Nevada Foreclosure Mediation Program (FMP) to produce a loan modification. When the mediation did not result in a loan modification, Appellant filed a petition for judicial review asking for sanctions against Respondent, BAC Home Loans Servicing, LP (BAC), alleging that BAC failed to comply with the FMP's document production and good faith requirements. The district court rejected Appellant's petition, finding (1) there was no irregularity as to the submitted documents; (2) BAC met its burden of showing a lack of bad faith; and (3) absent a timely appeal, a letter of certification would issue. The Supreme Court affirmed, holding (1) although BAC's document production lacked a key assignment, Appellant filled the gap with a document he produced; and (2) the district court therefore did not abuse its discretion in denying sanctions and allowing the FMP certificate to issue. View "Einhorn v. BAC Homes Loans Servicing" on Justia Law

Southwest sells title reports to consumer lenders, containing information available in public records. Southwest’s reports include the owner’s name and address, marital status, and amounts of outstanding mortgages, liens or judgments against the property. Reports do not include social security numbers, payment history, previous addresses, employment information, birthdate, or outstanding account balances, as would typically appear in a credit report prepared by credit reporting agencies. Unlike a credit reporting company, Southwest endeavors to include only unsatisfied liens encumbering the property. Fuges had a $35,000 line of credit from PNC, secured by her home. In 2008, she applied for payment protection insurance; PNC ordered a credit report from a credit reporting agency and a property report from Southwest, which was arguably inaccurate concerning tax delinquency and a judgment lien. PNC initially denied her application, but later granted her request. Fuges filed a putative class action against Southwest, alleging violation of the Fair Credit Reporting Act, 15 U.S.C. 1681-1681x. The district court dismissed many claims because she had not taken actions required by FCRA, then entered summary judgment for Southwest, reasoning that no reasonable jury could find willful violation of FCRA, because Southwest reasonably interpreted the statute as inapplicable. The Third Circuit affirmed. View "Fuges v. SW Fin. Serv., Ltd." on Justia Law