Justia Banking Opinion Summaries

The debtors are limited partnerships that own real estate on which they operate low-income housing. In their Chapter 11 cases, the bankruptcy court concluded that, for purposes of determining the value of the secured portion of the bank’s claims under 11 U.S.C. 506(a), determination of the fair market value of various apartment complexes included consideration of the remaining federal low-income housing tax credits. The court also concluded that various rates and figures used by the bank’s appraiser were more accurate. The Sixth Circuit affirmed. A major component of the value of the bank’s claims was determination was whether the value of the remaining tax credits would influence the price offered by a hypothetical willing purchaser of the property that serves as collateral for the claims. View "In re: Creekside Senior Apts" on Justia Law

Wescott Agri-Products, Inc., a Perishable Agricultural Commodities Act (PACA)-licensed wholesale supplier of perishable agricultural commodities, sold produce to a company that later ceased business operations after Sterling State Bank seized the company's assets because it failed to make scheduled loan payments. Wescott demanded payment from the bank, claiming the bank had seized assets subject to trust under the PACA, but the bank refused. Wescott sued the bank, asserting various claims, including violations of the PACA and a conversion claim. The district court granted the bank summary judgment on Wescott's conversion claim and summary judgment in favor of Wescott on its PACA claim. Wescott then appealed the district court's denial of attorney fees on costs. The Eighth Circuit Court of Appeals affirmed, holding that the district court did not abuse its discretion by refusing to award Wescott attorney fees and costs, as the fees were excessive and unreasonable, and Wescott's unprofessional conduct in the case did not warrant an award of fees. View "Wescott Agri-Products, Inc. v. Sterling State Bank" on Justia Law

Following the collapse of two investment vehicles known as SIV-Lites, Oddo Asset Management (Plaintiff) commenced this action against Barclays Bank PLC, Barclays Capital Inc. (collectively, Barclays), and The McGraw-Hill Companies, Inc., claiming aiding and abetting breach of fiduciary duty and tortious interference with contract. Supreme Court dismissed the complaint. The appellate division affirmed, concluding (1) the collateral managers of the SIV-Lites did not have a contract or relationship with Plaintiff such as would give rise to an underlying fiduciary duty, and (2) Plaintiff's tortious interference claim failed because Plaintiff did not allege an actual breach of the underlying contract. The Court of Appeals affirmed, holding (1) the collateral managers appointed to oversee the assets of the SIV-Lites did not owe a fiduciary duty to Plaintiff, and (2) Plaintiff failed to state a cognizable claim for tortious interference with contract. View "Oddo Asset Mgmt. v. Barclays Bank PLC" on Justia Law

Defendant, a loan officer, recruited buyers to obtain mortgage loans for which they were not qualified by using false information. He was convicted of conspiracy to commit wire fraud and bank fraud, 18 U.S.C. 1349, and bank fraud, 18 U.S.C. 1344. The Second Circuit affirmed. The district court did not err by allowing jurors, after the beginning of jury deliberations and after receiving various cautionary instructions, to take the indictment home to read on their own time. View "United States v. Esso" on Justia Law

Glacier Kitchens, Inc., CR Weaver Trust, and the Estate of Grace Weaver (collectively "Defendants") appealed the denial of their motion to set aside the default judgments issued against them in district court. Weaver filed a complaint against Plaintiff Mountain West Bank (MWB) alleging breach of contract, unfair trade practices, and a violation of the implied covenant of good faith and fair dealing. MWB filed its answer and counterclaim for judicial foreclosure. MWB attempted to serve the Defendants at the residence of Weaver by personally serving Weaver’s daughter Elizabeth Weaver (Elizabeth). Elizabeth bore no relationship to the Defendants, other than she is Weaver’s daughter. Weaver filed a pro se answer to MWB’s counterclaim as it related to him. The Defendants failed to file an answer or otherwise appear. As a result, MWB applied for entries of default against them. Weaver filed a pro se motion to set aside the judgments against Defendants. In his motion, Weaver noted that Elizabeth was not legally qualified to accept service on behalf of the Defendants. MWB objected and argued that Weaver had failed to explain why Elizabeth was not authorized to accept service on behalf of the Defendants. MWB additionally contended that Weaver, as a non-attorney, could not appear on behalf of the Defendants. The Supreme Court dismissed Weaver's appeal without prejudice due to the fact that as a pro se appellant, Weaver was unable to bring an appeal on behalf of the Defendants. Defendants through counsel made a motion to set aside the default judgments arguing MWB's alleged faulty service. The Defendants' motion to set aside the default judgments was deemed denied pursuant to M. R. Civ. P. 60(c) (2009) when the District Court failed to rule on them within 60 days. It is from that denial that the Defendants appealed. Upon review, the Supreme Court concluded that the district court erred when it failed to set aside the default judgments issued against Defendants due to the problem with service. Accordingly, the Court reversed the district court and remanded the case for further proceedings. View "Mtn. West v. Glacier Kitchens, Inc." on Justia Law

Appellant's mother (Miller) opened a checking account with Bank. Appellant alleged that Miller added him as joint owner of the account with right of survivorship. After Miller died, Appellant withdrew all of the funds in the account. Miller's Estate brought an action against Appellant, alleging that the funds Appellant had withdrawn from the account belonged to the Estate. The probate court determined that Miller was the sole owner of the checking account and that the funds Appellant had withdrawn were the property of the Estate. The Supreme Court affirmed. Appellant later sued the Bank, seeking damages for breach of contract and negligence for failing to retain the records that would show his ownership of the account. Appellant also sought punitive damages. The superior court dismissed the action based on the doctrine of collateral estoppel, concluding that the precise issue of ownership was common to both proceedings. The Supreme Court (1) affirmed as to the breach of contract and punitive damages claims; but (2) vacated as to the negligence claim, holding that Appellant's negligence claim against the Bank was not barred by collateral estoppel, as the probate court did not adjudicate the factual issues related to this claim. View "Gray v. TD Bank, N.A." on Justia Law

Washington Mutual foreclosed on property before receiving assignment and transfer of the promissory note and the delinquent home mortgage and before recording it. The homeowner brought a lawsuit for an allegedly false claim of ownership under the Fair Debt Collection Practices Act, 15 U.S.C. 1692, against the law firm acting for the purported mortgagee. She claimed violation of the Act, the Ohio Consumer Sales Practices Act, and intentionally inflicted emotional distress. The district court dismissed, finding that she did not state a claim under the Act and declining to exercise supplemental jurisdiction. The Sixth Circuit reversed. The filing of foreclosure action by the law firm, claiming ownership of the mortgage by its client, constituted a "false, deceptive or misleading representation" under the Act because the bank had not obtained transfer of the ownership documents. The homeowner adequately alleged that the misidentification caused confusion and delay in trying to contact the proper party concerning payment and resolution of the problem. View "Wallace v. WA Mut. Bank, F.A." on Justia Law

In the recent decision in Bates v. Cohn, the Court of Appeals reiterated that a borrower challenging a foreclosure action must ordinarily assert known and ripe defenses to the conduct of the foreclosure sale in advance of the sale. After the sale, the borrower is ordinarily limited to raising procedural irregulatories in the conduct of the sale, although the Court left open the possibility that a borrower could assert a post-sale exception that the deed of trust was itself the product of fraud. This case arose out of the foreclosure of a deed of trust for the residence of Darnella and Charles Thomas by Jeffrey Nadel and others. In apparent hope of fitting their post-sale exceptions within the question left open in Bates, the Thomases alleged certain defects in the chain of title of the note evidencing their debt and characterized them as a "fraud on the judicial system." The Court of Appeals affirmed, holding that the alleged defects did not establish that the Thomases' deed of trust was the product of fraud. View "Thomas v. Nadel" on Justia Law

Griffin, a futures commission merchant, went bankrupt in 1998 after one of its customers, Park, sustained trading losses of several million dollars and neither Park nor Griffin had enough capital to cover the obligations. The Bankruptcy Court first relied on admissions by the controlling Griffin partners that they failed to block a wire transfer, allowing segregated customer funds to be used to help cover Park’s (and thus Griffin’s) losses. On remand, the court reversed itself and held that the trustee failed to establish that the partners actually caused the loss of customer funds and failed to establish damages. The district court affirmed, applying the Illinois version of the Uniform Commercial Code to a series of transactions that was initiated by the margin call that caused Griffin’s downfall. The Seventh Circuit affirmed, stating that there is no reason why the transactions at issue (which involved banks in England, Canada, France, and Germany, but not Illinois) would be governed by Illinois law. The Bankruptcy Court’s first decision appropriately relied on the partners’ admission that they failed in their obligation to protect customer funds, which was enough to hold them liable for the entire value of the wire transfer. View "Inskeep v. Griffin" on Justia Law

At issue in this appeal was whether the Maryland Credit Services Businesses Act (CSBA) applies to a tax preparer who receives payment from a lending bank for facilitating a consumer's obtention of a refund anticipation loan (RAL) where the tax preparer receives no direct payment from the consumer for this service. In this case, the circuit court dismissed Consumer's CSBA claim for failure to state a claim, concluding that the General Assembly enacted the CSBA to regulate credit repair agencies and not RAL facilitators. The court of special appeals affirmed. The Supreme Court affirmed, holding (1) the plain language of the CSBA most logically is understood as reflecting the legislative intent that the "payment of money or other valuable consideration" in return for credit services flow directly from the consumer to the credit service business; and (2) therefore, under the CSBA, Tax Preparer in this case was not a "credit services business" nor a "consumer"; and (3) accordingly, the CSBA did not apply in this case. View "Gomez v. Jackson Hewitt, Inc." on Justia Law