Justia Banking Opinion Summaries

The issue before the Supreme Court was whether the appearance of impartiality/conflict of interest in disciplinary proceedings before the Oklahoma Real Estate Appraiser Board (the Board) required invalidation of the proceedings. In December of 2005, Appellee real estate appraiser Beverly Bowen appraised a parcel of real property for her client BancFirst (Bank). By July of 2007, after having sat vacant for 19 months, the property sold at a sheriff's sale which resulted in a loss to the private mortgage insurer (insurer). The insurer filed a grievance against the appraiser with the Board alleging possible appraisal fraud. The insurer hired another local appraiser, JoElla Jones (Jones/review appraiser), to reappraise the property nineteen months after Bowen's initial appraisal. Apparently, the property remained unoccupied the entire time, and it may have been vandalized. Jones reviewed Bowen's work. She valued the property at $197,000.00 or $58,000 below Bowen's appraisal. While the dispute between the bank and the insurer regarding the property's value was ongoing, the bank discovered that Jones had a personal and direct history with Bowen: the appraisers had known one another for more than 26 years. Learning this information prompted the bank to write a letter to the insurer notifying them of the unmistakable conflict of interest and alleging that if a mistake in an appraisal occurred, it was made by the review appraiser. Soon thereafter, the Board brought disciplinary proceedings against Bowen. Notwithstanding the conflict of interest, a probable cause committee (committee) of the Board held a hearing. The Board adopted the committee's findings of fact and conclusions of law but modified the disciplinary recommendation. The trial court held another hearing reversing the Board's discipline, finding that the appearance of impropriety was so apparent on the face of the record that reversible legal error occurred. The Board appealed and the Court of Civil Appeals reversed the trial court. Upon review, the Supreme Court found that under the fact of this case, the disciplinary proceedings required invalidating proceedings because of the appearance of impartiality. The Court affirmed the trial court.

Defendant appealed from a judgment convicting him of (1) conspiracy to violate the Iranian Transaction Regulations (ITR) and operate an unlicensed money-transmitting business; (2) violating the ITR; (3) operating an unlicensed money-transmitting business; and (4) two counts of making false statements in response to government subpoenas. On appeal, defendant argued that the district court erred in several respects when instructing the jury on the conspiracy, ITR, and money-transmitting counts; defendant was entitled to a new trial on the false statement counts because the government constructively amended the indictment; the government committed misconduct in its rebuttal summation, which he claimed necessitated a new trial on all counts; and defendant should be resentenced because the district court miscalculated the applicable offense level. The court reversed Count One to the extent it alleged a violation of the ITR as an overt act and vacated and remanded to the extent it was based on the money-transmission violation as an overt act; reversed Count Two; vacated and remanded Count Three; and affirmed Counts Four and Five.

In 2004 and 2005, while allegedly bedridden and taking prescription pain medication, Plaintiff Gregory Erkins took out two successive loans on his house. The proceeds of the second, larger loan were used in part to pay off the first. In early 2007, Plaintiff ceased making regular payments and this loan fell into default. His house was listed for foreclosure sale. Also, at some point between February 2005 and November 2007, the loan was assigned from Ameriquest Mortgage Company to Appellee Bank of New York Trust Company, N.A. Acting pro se, Plaintiff filed suit in the superior court against Alaska Trustee, LLC, Bank of New York (the current holder of the loan), and JP Morgan Chase Bank, N.A. (JP Morgan) (a party apparently unconnected to the proceedings except in that Bank of New York was listed as its successor). Plaintiff disputed the terms of the second loan, and argued fraud as well as lack of contractual capacity at the time of its origination. Several months after Plaintiff filed his complaint, as a trial date was about to be set, counsel for the defendants presented Plaintiff with a forbearance agreement. This agreement contemplated postponing the foreclosure sale in exchange for $2,000 monthly payments. Plaintiff executed this agreement. Allegedly unbeknownst to Plaintiff, the agreement also contained a waiver of claims broad enough to cover his claims against the defendants. Nine months later, the defendants moved for summary judgment, arguing that this waiver of claims functioned as a settlement and released all of Plaintiff's claims in this suit. The superior court granted summary judgment to the defendants, finding no genuine issue of material fact barring judgment that they were not liable for any tort of Ameriquest, and that Plaintiff had released his claims in the forbearance agreement. Upon review, the Supreme Court affirmed that portion of the superior court’s decision finding that defendants could not be held liable for the alleged torts of Ameriquest. But the Court reversed that portion of the superior court’s order concluding that Plaintiff released his claims against the defendants by entering into a forbearance agreement because a genuine issue of material fact existed as to whether the inclusion of the waiver of claims provision in the forbearance agreement constituted constructive fraud.

Defendant Peter Bernegger and his co-defendant were charged in a six-count indictment with various counts of mail fraud, wire fraud, bank fraud, and conspiracy for inducing investors to invest money in two start-up companies based on several misrepresentations. Bernegger was convicted of mail and bank fraud and was sentenced to seventy months in prison and ordered to pay restitution of approximately $2 million. The Fifth Circuit affirmed as modified, holding (1) the district court did not err in refusing to sever the bank fraud count from the mail and wire fraud counts; (2) the district court did not violate the Sixth Amendment or abuse its discretion in denying Bernegger the opportunity to cross-examine a witness about an alleged discrepancy in Bernegger's testimony; (3) the district court did not plainly err by not declaring a mistrial sua sponte based on the format of the indictment; (4) there was sufficient evidence to support the jury's verdict finding Berneggar guilty of mail fraud; and (5) because the district court clearly erred in calculating the total loss amount, the restitution amount was incorrect and was therefore modified to reflect the correct total loss amount of $1,725,000.

Hackers breached the security of the database for the grocery store where plaintiffs shop. The district court determined that plaintiffs failed to state a claim under Maine law for breach of fiduciary duty, breach of implied warranty, strict liability, and failure to notify customers. Although the court concluded that plaintiffs adequately alleged breach of implied contract, negligence, and violation of the unfair practices portion of the Maine Unfair Trade Practices Act, it dismissed those claims because alleged injuries were too unforeseeable and speculative to be cognizable under Maine law. The First Circuit affirmed in part, but reversed dismissal of the negligence and implied contract claims. Mitigation damages are available under those claims, for card replacement costs and credit insurance.

Defendant was prohibited from possessing a computer or accessing the internet while on home confinement, after being released from prison following a 2005 plea of guilty to wire, mail, and bank fraud. He nonetheless used the internet for a check-kiting scheme and, in 2010, was charged under 18 U.S.C. 1344 (bank fraud), 18 U.S.C. 1341 (mail fraud) and with escape. He was found guilty and sentenced to concurrent terms of 80 months, followed by supervised release with limits on internet and computer use. The First Circuit affirmed, first holding that a jury could reasonably infer that the banks were FDIC-insured at the time of the offenses and that defendant used the mail as part of his schemes. The special conditions imposed on release are reasonably related to the goals of supervised release. The calculation of loss, including a fraudulent $1.4 million check that did not result in any actual loss, was not clear error.

This case arose from a consolidated appeal. In the underlying cases, the respective property owners failed to satisfy their debt obligations to professional lending institutions, which precipitated the foreclosure proceedings. In both cases, the professional lenders asserted that their respective mortgages were superior to the general tax liens filed pursuant to Ky. Rev. Stat. 134.420(2). The circuit court entered a judgment granting the professional lenders' liens priority over the other liens. The court of appeals determined that the circuit court had erred in reordering the priorities and reversed the judgment. The Supreme Court affirmed the court of appeals, holding (1) the prior-recorded section 134.420(2) tax liens enjoyed priority pursuant to the long established first-to-file doctrine; and (2) the doctrine of equitable subrogation does not act to relieve a professional lender of a negligent title examination.

A group of investors (Borrowers) bought a golf course by contributing part of the purchase amount in cash and financing the remaining balance through a nonrecourse loan with Community Bank of Nevada (CBN). To facilitate the sale, William Walters entered into a separate guaranty with CBN where he personally guaranteed the loan. Prior to the Borrowers' default and the eventual foreclosure of the golf course, Walters filed a complaint against CBN, asserting causes of action for declaratory relief and breach of the implied covenant of good faith and fair dealing. CBN counterclaimed, asserting breach of guaranty against Walters. The district court granted summary judgment in part to CBN, concluding that no genuine issues of material fact existed as to Walters' guaranty liability to CBN. Walters filed a petition for a writ compelling the district court to vacate its partial summary judgment in favor of CBN and to preclude CBN from recovering any amount from Walters under his guaranty. The Supreme Court denied the writ, holding (1) CBN complied with the deficiency application requirements of Nev. Rev. Stat. 40, and (2) CBN was not attempting double recovery because double recovery was not an issue in this case.

In this dispute between a law firm and two banks, the issues presented were (1) the scope of the duty a payor bank owed to a non-customer depositor of a counterfeit check and (2) the scope of the duty a depository bank owed its customer when it acted as a collecting bank during the check collection process. The court held that neither the depository/collecting bank nor the payor bank violated any duty owed to the depositor and that summary judgment dismissing the complaint was properly granted.

Defendant-Appellant Alan Tukes appealed his federal conviction for bank robbery, arguing that the government’s evidence was insufficient to prove that the bank was insured by the Federal Deposit Insurance Corporation (“FDIC”) at the time of the crime. At trial, a prosecutor asked the bank’s branch manager: “Now, the Compass Bank, is that a bank that is federally insured by the [FDIC]?” She responded: “Yes, it is.” When asked whether the bank “has” any documentation proving its insured status, she replied: “Yes. We have a certificate.” When asked whether the certificate “hangs” in the branch, the manager replied in the affirmative. The district court admitted the certificate, dated November 8, 1993, into evidence. The government offered no additional evidence of the bank’s insured status. At summation, Defendant argued that the government had not proven that the bank was FDIC insured at the time of the robbery. The jury returned a guilty verdict. Viewing the evidence in the light most favorable to the government, the Tenth Circuit concluded "it is clear that a rational juror could have concluded beyond a reasonable doubt that the bank was insured at the time of the robbery." The Court affirmed Defendant's conviction.