Justia Banking Opinion Summaries

This case was an interlocutory appeal from the trial court's denial of Appellant RBS Citizens, N.A.'s motion for a writ of attachment to Appellee Jan Ouhrabka's property, which Appellee owned jointly with his wife as tenants by entirety.  The trial court held that a creditor like RBS cannot attach property owned jointly by a debtor and a nondebtor when they hold that property as tenants by entirety.  RBS contended on appeal that the estate of tenancy by entirety is an anachronism whose continuing utility should be reconsidered.  In the alternative, RBS argued that Vermont law did not explicitly preclude granting a creditor prejudgment attachment where the property is held jointly by the debtor and a nondebtor in a tenancy by entirety.  Upon review of the applicable legal authority, the Supreme Court disagreed with RBS' argument and affirmed the lower court's decision.

This case arose when plaintiff, Bank of New York (BNY), asserted that it acquired title to the home of defendant pursuant to foreclosure proceedings. At issue was whether the Housing Court had jurisdiction to decide the validity of a challenge to a title, raised by a former homeowner as a defense to a summary process eviction action by a party acquiring the property pursuant to a foreclosure sale. The court vacated the allowance of summary judgment and remanded for further proceedings because the court concluded that the Housing Court had jurisdiction to consider the validity of plaintiff's title as a defense to a summary process action after a foreclosure sale pursuant to G.L.c. 239, section 1.

This case stemmed from credit agreements Lehman entities entered into with Palmdale Hills, LLC entities. Palmdale filed for chapter 11 bankruptcy in November 2008 and Lehman subsequently filed eight motions for relief from Palmdale's stay to foreclose on the collateral securing the loans that were in default. The court held that the Bankruptcy Appellate Panel (BAP) correctly held that Lehman had standing to appeal the bankruptcy court's finding that the automatic stay did not prevent equitably subordinating Lehman's claims. The court also held that the BAP correctly determined that the appeal was not moot. The court further held that the BAP correctly determined that Lehman's automatic stay prevented Lehman's claims from being subordinated. Accordingly the court affirmed the BAP's judgment.

This case stemmed from the replevin actions filed by Klein Bank against debtors. Klein Bank appealed from the Orders of the Bankruptcy Court denying its motions to remand its replevin actions which had been removed from the state court to the bankruptcy court. In denying the motions, the Bankruptcy Court concluded that replevin actions were core proceedings. While this appeal was pending, the United States Supreme Court clarified that core proceedings were limited to those "arising under or arising in" a bankruptcy case. Based on that, the court now concluded that the matters involved in the replevin actions were not core proceedings. Accordingly, the court reversed and remanded to the Bankruptcy Court for further findings on the question of whether the court was required to abstain under 28 U.S.C. 1334(c)(2).

After appellant defaulted on her mortgage, Countrywide Home Loans (Countrywide) foreclosed on the property. Appellant filed suit, alleging that Countrywide violated Minnesota's Farmer-Lender Mediation Act (FMLA), Minnesota Statues 583.20-583.32, by failing to engage in mediation before foreclosure. At issue was whether the district court properly granted summary judgment in favor of Countrywide. The court affirmed the judgment and held that the record failed to create a genuine issue of material fact that the 6.21 acre parcel was "principally used for farming," as defined in the FMLA. The court also held that appellant failed to plead with particularity the circumstances constituting fraud, as required by Federal Rule of Civil Procedure 9(b) and thus, summary judgment in favor of Countrywide was appropriate.

Plaintiffs Debbie and Max Walters appealed from a district court judgment that dismissed their petition for the issuance of a turnover order. In 1990, the Walters' thirteen-year-old son was killed on a hunting trip with his father when a Chinese-manufactured rifle the boy carried allegedly misfired. The Walters sued China and several entities allegedly controlled by China in the U.S. District Court on theories of products liability, negligence, and breach of warranty in connection with the manufacture of the rifle. The Walters eventually won a $10 million default judgment, and sought to enforce it by collecting China's assets in the possession of the respondent banks, Industrial and Commercial Bank of China, Ltd., Bank of China, Ltd. and China Construction Bank Corporation. Citing the Foreign Sovereign Immunities Act of 1976 (FSIA), the district court dismissed the petition with prejudice. Without filing a new petition, the Walters argued on appeal that the Banks lacked standing to assert foreign sovereign immunity on behalf of China, and that China waived any immunity by its conduct underlying the default judgment and by its failure to appear. Upon review of the submitted briefs and the applicable legal authority, the Second Circuit found Plaintiffs' arguments were without merit, and affirmed the district court's decision to dismiss their case.

This case arose from the infamous Ponzi scheme perpetrated by Bernard Madoff. Between October and December 2008, Plaintiff MLSMK Investment Company invested $12.8 million with Madoff's investment company. Defendants JP Morgan Chase & Co. (JPMC) and JP Morgan Chase Bank (Chase) were trading partners in Madoff's legitimate market-making business and the bank with which Madoff maintained his accounts. MLSMK lost its money when Madoff was arrested and his assets seized. MLSMK subsequently filed suit, alleging that Defendants had conspired with Madoff to "fleece" his victims in violation of federal racketeering laws. Furthermore, MLSMK alleged that Defendants knew of Madoff's fraudulent scheme, and "eagerly" continued to receive the substantial fees derived from Madoff's market-making and banking activities. The district court dismissed MLSMK's petition in its entirety, concluding that the complaint did not adequately plead any of the claims purportedly contained therein. The Second Circuit previously upheld the district court's decision to dismiss MLSMK's petition on its state-law claims, but the federal racketeering issue was one of first impression for the Court. Upon review of the submitted briefs and the applicable legal authority, the Court concluded that the racketeering claim must also be dismissed because it was barred by a section of the Private Securities Litigation Reform Act (PSLRA). Accordingly, the court affirmed that portion of the district court's judgment pertaining to federal law.

Plaintiffs James Adams, Stanley Dye and Ed Holcombe were all shareholders in Altrust Financial Services, Inc. They sued Altrust, the Peoples Bank of Alabama (collectively, Altrust) and Dixon Hughes, LLC, Altrust's public-accounting firm, for violating the Alabama Securities Act. Altrust is a holding company that fully owns, controls and directs the operations of the Bank. Altrust and the Bank share common officers and directors and issue consolidated financial statements. Shareholders voted to reorganize the company in 2008 from a publicly held company to a privately held company. The move would have freed the company of certain reporting obligations imposed by the federal Securities Exchange Act and allowed the company to elect Subchapter S status for tax purposes. Relying on information in a proxy statement, Plaintiffs elected not to sell their shares of Altrust stock and instead voted for reorganization. Plaintiffs alleged that the proxy statement and financial reports contained material misrepresentations and omissions that induced them to ultimately sign shareholder agreements that made them shareholders in the newly reorganized Altrust. Plaintiffs contended that if (in their view) instances of mismanagement, self-dealing, interested-party transactions and "skewing" of company liabilities had been fully disclosed, they would have elected to sell their shares rather than remain as shareholders. Upon review, the Supreme Court found that Plaintiffs' allegations were not specific to them but to all shareholders, and as such, they did not have standing to assert a direct action against the company. Because Plaintiffs did not have standing to assert claims against Altrust, they also lacked standing to assert professional negligence claims against the accounting firm. The Court remanded the case for further proceedings.

Plaintiff appealed the district court's grant of defendant's motion to dismiss where plaintiff claimed that defendant violated a section of California's Rees-Levering Act (Act), Cal. Civ. Code 2983.2(a), which required a car loan lender to provide certain post-repossession notices to a defaulting borrower prior to selling the repossessed car. At issue was whether the Act's notice requirements were preempted by the National Bank Act (NBA), 12 C.F.R. 7.4008, and its regulations. The court held that because the Act sections at issue were directed toward debt collection and were therefore not preempted by the NBA, the court reversed the judgment of the district court and remanded for further proceedings.

This criminal appeal arose from a "finite reinsurance" transaction between American International Group, Inc. (AIG) and General Reinsurance Corporation (Gen Re). Defendants, four executives of Gen Re and one of AIG, appealed from judgments convicting them of conspiracy, mail fraud, securities fraud, and making false statements to the Securities and Exchange Commission. Defendants appealed on a variety of grounds, some in common and others specific to each defendant, ranging from evidentiary challenges to serious allegations of widespread prosecutorial misconduct. Most of the arguments were without merit, but defendants' convictions must be vacated because the district court abused its discretion by admitting the stock-price data and issued a jury instruction that directed the verdict on causation.