Justia Banking Opinion Summaries

This case presented a battle between banks over the proceeds of the sale of cattle by a financially strapped borrower who had financial dealings with both banks. When Security Savings Bank (Security) obtained the proceeds of the sale, Peoples Trust and Savings Bank (Peoples) claimed a security interest in the proceeds and sued for conversion. The district court granted summary judgment in favor of Peoples. After Security appealed, Peoples commenced garnishment proceedings against Security to enforce its judgment, and Security paid the underlying judgment. The court of appeals then determined that Security had waived its right to appeal and dismissed the case. The Supreme Court affirmed, holding (1) a defendant faced with post-judgment garnishment does not waive a pending appeal by paying the judgment in order to avoid further enforcement proceedings; and (2) the district court correctly determined that Peoples had a security interest in the proceeds superior to Security's interest and that Peoples did not waive its superior position through its course of conduct. View "Peoples Trust & Savings Bank v. Sec. Savings Bank" on Justia Law

A judge preliminarily enjoined Federal National Mortgage Association (Fannie Mae) from proceeding to evict plaintiff, Eaton, from her home, following a foreclosure sale by Green Tree Servicing, as mortgagee. The judge ruled that Eaton likely would succeed on her claim that for a valid foreclosure sale to occur, both the mortgage and the underlying note must be held by the foreclosing party; Green Tree stipulated that it held only Eaton's mortgage. The supreme court vacated the injunction, announcing a new statutory interpretation to apply to foreclosures under the power of sale where statutory notice is provided after the date of this decision. A foreclosure sale conducted pursuant to a power of sale in a mortgage must comply with all applicable statutory provisions, particularly G.L. c. 183, 21, and G.L. c. 244, 14, which authorize a "mortgagee" to foreclose by sale pursuant to a power of sale in the mortgage, and require the "mortgagee" to provide notice and take other steps. The term "mortgagee" is not free from ambiguity, according to the court, but refers to the person or entity then holding the mortgage and also either holding the mortgage note or acting on behalf of the note holder. View "Eaton v. Fed. Nat'l Mort. Ass'n" on Justia Law

This case required the Supreme Court to determine whether Appellee, Mortgage Electronic Registration Systems, Inc. (MERS) had "good cause" for failing to timely release a satisfied real estate lien it held on Gary and Sharon Hall's property. The circuit court concluded that the Halls were not entitled to statutory damages because, although MERS filed a release referencing the wrong mortgage, the Halls provided insufficient notice to MERS of the release's actual deficiency. Thus, the court found MERS had "good cause" not to file a new release once it checked and found it had already filed one. The court of appeals affirmed. The Supreme Court affirmed, holding that MERS satisfied the "good cause" requirement under these particular circumstances. View "Hall v. Mortgage Elec. Registration Sys., Inc." on Justia Law

Defendant MBNA America Bank issued a credit card to Plaintiff Allan Parks. As part of its service to cardholders, MBNA extended credit to Plaintiff by sending him convenience checks that did not include disclosures required by Cal. Civ. Code 1748.9. Plaintiff later sued MBNA on behalf of himself and similarly situated MBNA customers, alleging that the bank engaged in unfair competition by failing to make the disclosures mandated by section 1748.9. MBNA argued that the National Bank Act of 1864 (NBA) preempted the state disclosure law. The trial court granted judgment on the pleadings on MBNA's motion, concluding that the bank's failure to attach the statutorily mandated disclosures to its convenience checks was not unlawful. The court of appeal reversed. The Supreme Court reversed the court of appeal, holding that NBA preempts section 1748.9 because the state law standards act as an obstacle to the broad grant of power given by the NBA to national banks to conduct the business of banking. Remanded. View "Parks v. MBNA Am. Bank, N.A." on Justia Law

Plaintiffs are the sole shareholder and Chairman of Miami Valley Bank and also own stock in a mortgage lender with which the bank had loan agreements. In 2007, the FDIC began investigating the loan agreements. State and federal regulators closed the bank and appointed the FDIC as a receiver. The FDIC purportedly halted its investigation when an accounting expert confirmed that the loans were legal. The mortgage company then petitioned the receiver for $10 million that the bank owed the mortgage lender. In retaliation for the $10 million request, FDIC investigator Stevens allegedly prompted the FDIC to resume the investigation of the bank. The plaintiffs then sued Stevens, alleging that the retaliatory investigation violated the First Amendment, a “Bivens” action. Stevens died after the lawsuit began. The plaintiffs argued that their Bivens action survived his death, regardless of whether their claim would survive under state law. The district court held that state law controls the survivability of Bivens actions, subject to one inapplicable exception. The court applied Ohio law, under which the death of Stevens extinguished the claims against him. The Sixth Circuit affirmed. View "Haggard v. Steven" on Justia Law

Republic bought more than $50 million worth of residential-mortgage-backed securities from Bear Stearns. It did not read the relevant offering documents before investing. As the national economy crumbled in 2007 and 2008, so did the value of the investments. Republic brought suit in 2009, alleging that Bear Stearns and one of its employees fraudulently induced it to buy, and then to retain, the securities. It claimed that a series of misrepresentations and omissions, both oral and in the written offering documents, were actionable under common-law theories of fraud and negligent misrepresentation, and under the Blue Sky Law, Kentucky’s securities statute. The district court dismissed. The Sixth Circuit affirmed. Republic cannot maintain any of its common-law fraud, negligent-misrepresentation, or Kentucky Blue Sky Law claims. It failed to adequately plead actionable misrepresentations or omissions of fact, complained of risks disclosed in offering documents that it failed to read before investing tens of millions of dollars in risky securities, and attempted to maintain claims that are time-barred. View "Republic Bank & Tr. Co. v. Bear Stearns & Co., Inc." on Justia Law

During 2000-2002, defendant and co-defendant were associated in five instances of depositing large bad checks (one for $15,000,000) in three different bank accounts (the one at issue in the name of a defunct corporation), then writing checks against the resulting, ostensible account balances or requesting substantial wire transfers from them. They were indicted for conspiracy to commit bank and wire fraud, 18 U.S.C. 371, bank fraud, 18 U.S.C. 1344, wire fraud, 18 U.S.C. 1343, and money laundering, 18 U.S.C. 1957. Defendant was charged both as a principal and as aiding and abetting co-defendant, who negotiated guilty pleas. Defendant was convicted. He appealed, claiming insufficiency of the evidence to show anything more than his mere (innocent) presence at some events in the sequence of the transactions charged, and abridgement of his Sixth Amendment right to jury trial when the trial judge closed the courtroom doors during jury instructions. The First Circuit affirmed. View "United States v. Christi" on Justia Law

The bank appealed the judgment of the bankruptcy court dismissing its complaint against debtor. At issue was whether the requisite elements of a claim of nondischargeability under 11 U.S.C. 523(a)(2)(A) have been satisfied. The court held that the record supported the bankruptcy court's finding that there was no evidence that debtor made a false statement to the bank prior to the bank's advancing the funds at issue. Accordingly, the court affirmed the judgment dismissing the bank's complaint against debtor. View "Montgomery Bank, N.A. v. Steger" on Justia Law

Principals of Cybercos defrauded lending institutions out of more than $100 million in loan. In 2002, Huntington granted Cyberco a multi-million-dollar line of credit, and Cyberco granted Huntington a continuing security interest and lien in all of Cyberco's personal property, including deposit accounts. After discovering the fraud, the government seized approximately $4 million in Cyberco assets, including $705,168.60 from a Huntington Bank Account. Cyberco principals were charged in a criminal indictment with conspiring to violate federal laws relating to bank fraud, mail fraud, and money laundering. Count 10 issued forfeiture allegations against individuals regarding Cyberco assets, including the Account. In their plea agreements, defendants agreed to forfeit any interest they possessed in the assets or funds. The district court entered a preliminary order of forfeiture with regard to the assets, including the Account. Huntington filed a claim, asserting ownership interest in the forfeited Account. The district court found that Huntington did not have a legal claim. On remand, the district court again denied the claim. The Sixth Circuit reversed. A party who takes a security interest in property, tangible or intangible, in exchange for value, can be a bona fide purchaser for value of that property interest under 21 U.S.C. 853(n)(6)(B). View "United States v. Huntington Nat'l Bank" on Justia Law

In 2005, Appellants Billy and Jeanette Baber executed a promissory note ("Note") payable to Ameriquest Mortgage Company, Inc. ("Lender"). To secure payment of the Note, Appellants executed and delivered to Mortgage Electronic Registration Systems, Inc. (MERS), as nominee for Lender, as mortgagee, a mortgage which conveyed and mortgaged to the mortgagee certain real property located in Oklahoma County. In both the Note and Mortgage, Ameriquest Mortgage Company is named as the Lender and Payee. Appellants defaulted on the Note. Appellee initiated foreclosure proceedings in 2006. A copy of the non-indorsed Note and Mortgage was included with the petition. In their answer, Appellants demanded strict proof of the ownership of the Note and Mortgage. Appellee U.S. Bank as trustee for the Lender, moved for summary judgment; in an attached affidavit, Appellee asserted it currently held both the Note and Mortgage at issue, and again produced a copy of both the unindorsed Note and Mortgage. The trial court granted judgment on the Note and foreclosure on the mortgage in favor of U.S. Bank. Appellants moved to vacate that judgment, arguing they were denied their statutory right to respond to the bank's cross-motion for summary judgment that the motion was not delivered to them in a timely fashion and that they did not receive notice of a hearing that occurred on September 5, 2010. Upon review, the Supreme Court found that the bank by its unindorsed Note and Mortgage, did not prove that it was entitled to enforce either. The Court reversed the trial court's grant of summary judgment and remanded the case for further proceedings. View "U.S. Bank National Ass'n v. Baber" on Justia Law