Justia Banking Opinion Summaries

This case involved an allegedly fraudulent payment order that resulted in the bank's transfer of $329,500 from plaintiff's account to someone in the Dominican Republic. Plaintiff sued the bank to recover the money and, in response, the bank asserted, inter alia, an affirmative defense premised upon Fla. Stat. 670.202(2), which relieved a bank of liability for fraudulent payment orders in certain situations. The court held that the parties' agreed-upon security procedure did not satisfy section 670.021 and consequently section 670.202(2) did not apply. Accordingly, the court reversed the district court's grant of summary judgment in favor of the bank. View "Chavez v. Mercantil Commercebank, N.A." on Justia Law

Appellant (Bank) loaned money to Appellee (LLC). LLC later filed a putative class action, alleging that Bank had breached its contract by charging interest in excess of the rate stated in the promissory note. LLC claimed Bank was charging more interest than was agreed to by LLC as expressed in the note by charging a rate calculated by a 365/360 method rather than an annual rate. Bank contended the note fixed the interest rate according to the 365/360 method. The trial court granted summary judgment to Bank. The court of appeals reversed, concluding that there was a genuine issue of material fact as to which interest rate was imposed by the note. The Supreme Court reversed and reinstated the trial court's grant of summary judgment, holding that the clause in the promissory note imposing the interest rate was not ambiguous, and fixed the interest rate according to the 365/360 method. View "JNT Props., LLC v. KeyBank Nat'l Ass'n" on Justia Law

Quicken Loans, Inc., a Michigan corporation and a large national mortgage lender doing business in West Virginia, appealed an order of the circuit court denying post-trial motions for amendment of the circuit court's findings of fact and/or conclusions of law and for offset following a verdict which found it liable for common law fraud and various claims under the West Virginia Consumer Credit and Protection Act in connection with a subprime loan made to Plaintiff. The Supreme Court affirmed in part and reversed in part the order of the circuit court, holding (1) the elements of fraud were not met with regard to Quicken's misrepresentation of loan discount points, but the other acts of fraud were proven by clear and convincing evidence; (2) the circuit court correctly found that, given the particular facts of this case, the terms of the loan and the loan product were unconscionable; (3) the circuit court incorrectly cancelled Plaintiff's obligation to repay the loan principal; and (4) because the circuit court's order in punitive damages lacked the necessary analysis and findings, the Court was unable to conduct an adequate review of the punitive damages award. Remanded. View "Quicken Loans, Inc. v. Brown" on Justia Law

Russell Sherman obtained loans for over $1,594,282 from the Whitefish Credit Union (WCU). Russell defaulted in paying the loans. WCU subsequently gave notice of default in a ten-day demand letter. Receiving no response from Russell or his wife, Joan, WCU waited an additional thirty days and then requested that the sheriff serve the Shermans. As it turned out, only Russell was served; Joan was not personally served with process. Russell failed to enter a timely appearance or answer WCU's complaint, and accordingly, the district court entered default judgment against the Shermans. Thereafter, the Shermans filed a motion to vacate and set aside the default judgment. The court denied the motion insofar as it applied to Russell but granted the motion insofar as it applied to Joan. Russell appealed. The Supreme Court affirmed, holding that the district court did not slightly abuse its discretion in denying Russell's motion to vacate and set aside the default judgment entered against him. View "Whitefish Credit Union v. Sherman" on Justia Law

Two real estate developers, a husband and wife, operated through various entities including a corporation and an LLC. In 2002, the corporation borrowed money from a lender; the developers, in their individual capacities, guaranteed this loan and all future advances. The corporation promptly repaid this loan. In 2005, the LLC twice borrowed money from the same lender. The lender originally insisted on a personal guaranty for these loans, but, in order to secure the developer's business, stated that no personal guaranty would be required. In 2006–07, the corporation again borrowed money from the lender in six separate loans. The corporation defaulted on these six loans, and, after the lender foreclosed on the real estate that served as collateral for the loans, the lender sued the developers for the deficiency. The district court granted the lender's motion for summary judgment, holding that the developers' affirmative defenses (1) were barred by the statute of frauds, (2) failed for lack of consideration, and (3) raised no genuine issues of material fact. The developers timely appealed to the Supreme Court. Upon review, the Court held that the developers' affirmative defenses were neither barred by the statute of frauds nor failed for lack of consideration. However, because none of those defenses raised a genuine issue of material fact, the Court affirmed. View "Washington Federal Savings v. Engelen" on Justia Law

In these three consolidated appeals, the court must decide issues about the enforceability of German bonds issued during the period between World War I and World War II. The court concluded that the district court had jurisdiction under the Foreign Sovereign Immunities Act, 28 U.S.C. 1330, 1302-1311, over the complaint against Germany filed by Sovereign Bonds regarding its Agra bonds issued in the territory that later became East Germany; all the bonds were subject to the 1953 Validation Treaty and must be validated before they could be enforced in American courts; the complaint filed by World Holdings to enforce its validated bonds was untimely; and the district court did not abuse its discretion when it denied discovery to Sovereign Bonds on the issue of validation. View "World Holdings, LLC v. Federal Republic of Germany" on Justia Law

Leon County appealed the dismissal of its complaint against the FHFA, it's acting director, Fannie Mae, and Freddie Mac, for lack of subject matter jurisdiction. On appeal, Leon County argued that by directing Fannie Mae, Freddie Mac, and the Federal Home Loan Banks to refrain from purchasing mortgages encumbered with certain first-priority lien obligations, some of which were held by Leon County, the FHFA engaged in rulemaking without providing notice and comment pursuant to the Administrative Procedure Act (APA), 12 U.S.C. 4526(b). The court agreed with the district court that, under the specific facts in this case, the FHFA's directive not to purchase Property Assessed Clean Energy (PACE) encumbered mortgages was within the FHFA's broad powers as conservator. Accordingly, because 12 U.S.C. 4617(f) provided that "no court may take any action to restrain or affect the exercise of powers or functions of the [FHFA] as a conservator or receiver," the district court held that section 4617(f) barred Leon County's claims. View "Leon County Florida, et al v. Federal Housing Finance Agency, et al" on Justia Law

Appellant Benefit Bank appealed from the circuit court's order finding that the mortgage it held to certain property was second and subordinate to the interest of Appellee Marilyn Rogers obtained in her divorce. Appellant appealed, arguing, among other things, that the circuit court erred in finding that Appellee's interest was prior to Appellant's interest because the divorce court lacked authority to impose a lien on real property to secure alimony payments. The Supreme Court affirmed the circuit court's order, holding (1) the divorce court did not lack the authority to impose the lien as it did, where it was stipulated to by the divorcing parties; and (2) the circuit court did not err in finding that the lis pendens filed by Appellee created or perfected a lien. View "Benefit Bank v. Rogers" on Justia Law

Plaintiffs, Minnesota homeowners, alleged that neither Aurora nor MERS were entitled to foreclose on the properties at issue and that W&G knowingly made false representations regarding Aurora's authority to foreclose. The court held that the district court properly found that it had subject matter jurisdiction. The court also held that the district court was correct in determining that all of plaintiffs' claims against W&G lacked a reasonable basis in fact and law, therefore W&G was properly dismissed as fraudulently joined. The court partially reversed as to the dismissal of the quiet-title cause of action, but affirmed the dismissal with prejudice of all of plaintiffs' remaining claims. View "Murphy, et al v. Aurora Loan Services, et al" on Justia Law

The Savannah Bank, N.A., (Bank) sought to foreclose on a property owned by Appellant Alphonse Stalliard. Appellant argued that he should not be held liable for a loan closed by a person acting on his behalf under a power of attorney. Appellant alleged, inter alia, that Bank did not conduct reasonable due diligence and did not verify Appellant's ability to pay. He filed a motion seeking additional time for discovery. The master-in-equity denied the motion and ruled in Bank's favor. Appellant appealed that decision, arguing that summary judgment was improper and that the master should have permitted additional time for discovery. Upon review, the Supreme Court held that the master properly denied Appellant's motion. View "Savannah Bank v. Stalliard" on Justia Law