Justia Banking Opinion Summaries

According to Braden Furniture Company, Inc., between 2003 and 2010, Bonnie Manning, an assistant bookkeeper, accessed Braden Furniture's accounting program and created over 200 unauthorized checks, totaling over $470,000, that she then deposited in her account at Union State Bank. The majority of the checks did not identify a payee. Braden Furniture sued Union State Bank, RBC Bank, and Manpower, Inc., alleging common-law negligence and wantonness and violations of sections 7-3-404(d), 7-3-405(b), and 7-3-406, Ala. Code 1975. Union State Bank moved for a summary judgment. The trial court entered summary judgment for the Bank. Upon review, the issue before the Supreme Court was whether provisions in the Alabama Uniform Commercial Code ("the UCC") displaced common-law claims of negligence and wantonness when a drawer seeks to recover the loss of payment for unauthorized checks. Braden Furniture contended that the trial court erred in holding that the provisions of the UCC displaced its common-law claims of negligence and wantonness because, allowing its common-law claims to proceed did not "create rights, duties and liabilities inconsistent" with the UCC. The Supreme Court concluded that the trial court did not err in entering a summary judgment for Union State Bank in this regard. View "Braden Furniture Company, Inc. v. Union State Bank " on Justia Law

The issue before the Supreme Court in this case was whether particular officers and employees of a bank owed a quasi-fiduciary duty to particular bank depositors. Michael and Theresa Annechino deposited a large amount of money at a bank specifically to ensure that their savings would be protected by the Federal Deposit Insurance Corporation (FDIC). The Annechinos relied on bank employees’ recommendations of how to structure their accounts to meet FDIC coverage rules. Unfortunately, the bank went into receivership, and the FDIC found that nearly $500,000 of the Annechinos’ deposits were not insured. The Annechinos alleged that individual officers and employees of the bank owed them a duty, the breach of which resulted in their loss. The trial court granted summary judgment in favor of the individual defendants, and the Court of Appeals affirmed. Upon review, the Supreme Court affirmed the Court of Appeals. The officers and employees of the bank did not owe the Annechinos a quasi-fiduciary duty. Holding the officers and employees personally liable under these facts would have contravened established law regarding liability for acts committed on behalf of a corporation or principal. View "Annechino v. Worthy" on Justia Law

At issue in this dispute over a mortgage was whether statutes of limitations apply to actions for declaratory judgment. The court of appeals reversed in part the district court's grant of summary judgment to Defendant based on the applicable statute of limitations, holding that to the extent Plaintiff's complaint sought declaratory relief, it was not barred by the statute of limitations. The Supreme Court reversed, holding that because the Uniform Declaratory Judgments Act is a procedural device through which parties may vindicate substantive legal rights, an action for declaratory judgment is barred by an applicable statute of limitations to the same extent that the same cause of action would be barred in a nondeclaratory proceeding. Remanded. View "Weavewood, Inc. v. S & P Home Invs., LLC" on Justia Law

Debtor executed a Balloon Note and Deed of Trust in favor of Wells Fargo for the purchase of a home and subsequently filed for bankruptcy. On appeal, Wells Fargo challenged the district court's amended order granting debtor's motion for summary judgment, finding that Wells Fargo was judicially estopped from filing a claim in the Second Bankruptcy for any amounts that could have been, but were not, claimed in the First Bankruptcy. Because the district court abused its discretion in finding that Wells Fargo adopted inconsistent positions in debtor's bankruptcy proceedings and that the bankruptcy court's acceptance of Wells Fargo's claims in the First Bankruptcy was not negated by debtor's dismissal without discharge, the application of judicial estoppel was not warranted. Accordingly, the court reversed and remanded. View "Wells Fargo Bank, N.A. v. Oparaji" on Justia Law

In July 2003, Michael Bandler and Michael Bandler & Company, Inc., (collectively “Bandler”) sued Charter One for various claims based primarily on Charter One’s alleged failure to honor advertising promises and other representations in connection with Bandler’s checking account at Charter One. Charter One moved to dismiss the case on the ground that Bandler had failed to exhaust his contractual remedy of arbitration before the American Arbitration Association (AAA) as required by Bandler’s depositor agreements with Charter One.  The trial court granted Charter One’s motion to dismiss and indicated that the parties should arbitrate Bandler’s claims as agreed by contract.  The trial court issued a final judgment in favor of Charter One in November 2003, and subsequently denied Bandler’s post-judgment motions for relief. In November 2004, Bandler made a demand to Charter One to arbitrate under the arbitration clauses in his depositor agreement with Charter One, thereby initiating an arbitration proceeding before the AAA.  Bandler’s initial arbitration demand did not include any class-based claims. The issue before the Supreme Court was whether the superior court had authority to review questions regarding arbitrability in the midst of an arbitration, and outside of the specific review provisions in the Vermont Arbitration Act (VAA). Upon review, the Supreme Court concluded that it did not, and reversed the superior court’s ruling concerning the arbitrability of class claims in this case. View "Bandler v. Charter One Bank " on Justia Law

In this case, the Supreme Court interpreted a trust instrument to decide whether the death of Betty Plouf triggered the offset provision of the Plouf Family Trust, and thus, instantaneously satisfied the mortgage lien the Trust held on the home of a beneficiary. The trial court held that it did. The Supreme Court affirmed, holding (1) the trial court had inherent authority to revisit an earlier order finding that the Trust had a first-priority lien; (2) the trial court did not err in ruling that the unambiguous terms of the Trust mandated an offset at the time of Betty's death, thus extinguishing the underlying mortgage; and (3) neither party was entitled to appellate attorney fees. View "SBS Fin. Servs., Inc. v. Plouf Family Trust" on Justia Law

Nancy Ramsey filed a complaint against Baxter Title Company and the company's owner, James Lemieux, for breach of fiduciary duty and duty of care and for punitive damages arising from a real estate transaction. The superior court dismissed Ramsey's complaint for failure to state a claim upon which relief can be granted. The Supreme Court affirmed, holding (1) Ramsey's complaint did not allege the kind of close, confidential relationship necessary for a court to find the existence of a fiduciary duty; and (2) Baxter Title and Lemieux did not owe Ramsey a duty of care to explain to her that the loan she secured was more favorable to the lender than to her. View "Ramsey v. Baxter Title Co." on Justia Law

Shannon Barabas had two mortgages on her Madison County home. The second mortgagee foreclosed on the property without notice to the first. The first mortgagee sought to intervene and obtain relief from the foreclosure judgment, but the trial court denied its motion, finding that the first mortgagee was bound by the default judgment because its assignment of the mortgage was never properly recorded. The Supreme Court reversed, holding (1) the first mortgagee had a right to intervene; and (2) the default judgment was void for lack of personal jurisdiction as to the first mortgagee because it had no notice of the foreclosure proceeding. View "Citimortgage, Inc. v. Barabas" on Justia Law

In 2002, Lehman Brothers International Europe (LBIE) created the "Dante Programme" by which certain special purpose entities issued notes of collateralized debt obligations (the Notes). The Notes were purchased by appellants as well as other investors. The same special purpose entities entered into a swap agreement with Lehman Brothers Special Financing Incorporated (LBSF) whereby LBSF agreed to pay amounts due under the Notes in exchange for certain interests in the collateral that secured the Notes. Appellants and LBSF had competing interests in the Collateral. LBSF subsequently commenced an adversary proceeding in the bankruptcy court against the trustees of the Dante Programme and the issuers of the Notes, seeking declaratory relief with respect to priority in the Collateral. The court held that in the circumstances here, the bankruptcy court's denial of appellants' motions to intervene in the adversary proceeding was a final appealable order. Accordingly, the court vacated and remanded. View "In re: Lehman Brothers Holdings Inc." on Justia Law

This case arose when Highland filed suit against Bank of America for breach of contract and promissory estoppel, alleging that the terms sought by Bank of America in a debt-trade agreement did not conform to the parties' oral agreement. Highland appealed the district court's dismissal under Rule 12(b)(6) of its claims for breach of contract and promissory estoppel. Because the court found that the district court was justified in dismissing Highland's promissory estoppel claim, but that it erred in dismissing Highland's breach of contract claim, the court affirmed in part, and reversed and remanded in part. View "Highland Capital Mgmt. LP v. Bank of America" on Justia Law