Justia Banking Opinion Summaries

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Plaintiffs own two dental practices, several properties that generate rental income, a sports bar, and an indoor basketball gymnasium that they rent out as an event center. Around 2009, they began “buying property” and obtained a $300,000 commercial line of credit from First Southern. In 2013, Plaintiffs sought a loan from Southern to convert a vacant former hotel into apartment units and commercial spaces. Southern approved a “maximum total principal balance” that “will not exceed $1,013,519.00.” Plaintiffs later sought additional funds to complete the renovation. A revised total estimated cost was $1,654,648.65, approximately $712,000 above the total cost for the project represented in Plaintiffs’ loan application. Southern then learned about Plaintiffs’ additional debt burden, refused to loan additional funds, and declined to extend the maturity date on the line of credit. After Scott paid off his debts with Southern, Southern’s automated computer system continued to report Scott’s entire prior payment history, including that he had previously been delinquent on his loans. Southern represented to Plaintiffs that it had contacted a consumer credit agency about the error. The Sixth Circuit affirmed summary judgment in favor of the defendants in a suit under the Fair Credit Reporting Act, 15 U.S.C. 1681. Plaintiffs never notified a consumer reporting agency about their dispute, a prerequisite for prevailing under the Act, which preempts state common law claims involving reporting to consumer reporting agencies. View "Scott v. First Southern National Bank" on Justia Law

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In 2012, California enacted legislation known as the California Homeowner Bill of Rights, or HBOR, which imposed specific limitations regarding the nonjudicial foreclosure of owner-occupied residential real property. The trial court granted Rosana Bustos’ ex parte application for a temporary restraining order (TRO) and order to show cause regarding preliminary injunction, which sought to prevent a trustee’s sale of her home due to several alleged violations of the HBOR related to her submission of a loan modification application. Central to Bustos’ application was a “blatant violation” of the HBOR’s prohibition against dual tracking--when a mortgage servicer continues foreclosure proceedings while reviewing a homeowner’s application for a loan modification. After the trial court denied Bustos’ request for a preliminary injunction and vacated the TRO, it awarded her $4,260 in attorney fees and costs, finding Bustos was a “prevailing borrower” under the HBOR because she obtained injunctive relief in the form of a TRO against her mortgage servicer, Wells Fargo Bank, N.A. On appeal, Wells Fargo argued the trial court erred in interpreting Civ. Code section 2924.12 as authorizing an award of attorney fees and costs to a borrower who obtains a TRO enjoining a trustee’s sale of his or her residence. Wells Fargo alternatively contended the trial court abused its discretion in awarding attorney fees and costs to Bustos under the circumstances of this case. Finding no reversible error, the Court of Appeal affirmed the trial court. View "Bustos v. Wells Fargo Bank, N.A." on Justia Law

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Plaintiffs, a class of borrowers, filed suit in Georgia against their lenders, alleging that their loan agreements violated state usury laws. After removal to federal court, the district court concluded that the forum selection clause and class action waiver were unenforceable based on Georgia public policy. The Eleventh Circuit affirmed, holding that Georgia's Payday Lending Act and Industrial Loan Act articulate a clear public policy against enforcing forum selection clauses in payday loan agreements and in favor of preserving class actions as a remedy for those aggrieved by predatory lenders. View "Davis v. Oasis Legal Finance Operating Co." on Justia Law

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After Legal Outsource defaulted on a loan from Regions Bank, which triggered the default of a loan and mortgage that Regions issued to Periwinkle, the obligors refused to cure the defaults. Regions filed suit to enforce its rights under the loans and mortgage and the obligors filed several counterclaims alleging that Regions violated the Equal Credit Opportunity Act by discriminating against Lisa and Charles based on their marital status when it demanded that they and Legal Outsource guarantee the Periwinkle loan. The Eleventh Circuit affirmed the district court's grant of summary judgment for Regions, holding that Lisa's counterclaims under the Equal Credit Opportunity Act failed because a guarantor does not qualify as an "applicant" under the Act. The court also explained that a limited remand was necessary to correct erroneous language from the amended judgment. View "Regions Bank v. Legal Outsource PA" on Justia Law

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Plaintiff Gregory Moore contacted defendant Wells Fargo, N.A. to discuss possible assistance programs while he was unemployed. Wells Fargo recommended the forbearance plan (Plan) under the Home Affordable Unemployment Program (Unemployment Program) outlined in the United States Department of the Treasury’s Home Affordable Mortgage Program (HAMP) supplemental directive 10-04, May 11, 2010 (Directive 10-04). Wells Fargo explained the Plan would allow Moore to make reduced monthly payments for a period of time and said there was “no downside” to the Plan -- if Moore qualified for a permanent loan modification at the conclusion of the Plan, the arrears would be added to the modified loan balance and, if Moore did not qualify for a permanent loan modification, he would return to making his normal monthly payments. Moore applied for and was accepted to participate in the Plan. Moore made the Plan payments and later applied for a permanent loan modification. Three days after receiving a denial of his permanent loan modification application, Moore received a letter from Wells Fargo stating he was in default on his loan, demanding immediate payment of his normal mortgage payment and the arrears consisting principally of the difference between his normal mortgage payments and the reduced Plan payments (i.e., a balloon payment), and threatening foreclosure. Moore sued to stop the foreclosure and asserted the following causes of action: (1) declaratory relief; (2) negligence; (3) breach of the covenant of good faith and fair dealing; (4) fraud; and (5) violation of Business and Professions Code section 17200, the unfair competition law. In pretrial rulings, the trial court, among other things, adjudicated Moore’s declaratory relief cause of action in favor of Wells Fargo’s contractual interpretation permitting it to demand the balloon payment and dismissed Moore’s negligence cause of action in response to Wells Fargo’s motion for judgment on the pleadings. After Moore rested his case at trial, the trial court granted Wells Fargo’s motion for nonsuit as to Moore’s breach of the implied covenant of good faith and fair dealing cause of action. The trial court further granted Wells Fargo’s motion for judgment notwithstanding the verdict after the jury found Wells Fargo had committed fraud. The trial court also adjudicated the unfair competition law cause of action posttrial, finding in favor of Wells Fargo, and granted Wells Fargo’s motion for costs and attorney fees. The Court of Appeal reversed the trial court's rulings in favor of Wells Fargo, and the jury's verdict in favor of Moore on the intentional misrepresentation cause of action was reinstated. View "Moore v. Wells Fargo Bank, N.A." on Justia Law

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After Ellen Gittel Gordon defaulted on her mortgage, the loan servicer initiated nonjudicial foreclosure proceedings to sell her home at auction. Gordon submitted multiple loan modification applications and appeals in an attempt to keep her home but ultimately, all were rejected. As a result, Gordon initiated the underlying action in district court to enjoin the foreclosure sale. Upon the filing of a motion to dismiss that was later converted to a motion for summary judgment, the district court dismissed Gordon’s action and allowed the foreclosure sale to take place. Gordon timely appealed. The Idaho Supreme Court concluded none of the reasons Gordon offered were sufficient to reverse the district court judgment, and affirmed dismissal of Gordon’s complaint. View "Gordon v. U.S. Bank" on Justia Law

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Brintley is blind. To navigate the internet, she uses a screen reader that scans webpages and narrates their contents. The technology struggles with some material, especially pictures and video. With some effort, companies can make their websites fully screen-reader compatible. The credit unions, established under Michigan law, maintain a limited brick-and-mortar presence; both operate websites. Brintley tried to browse these websites but found her screen reader unable to process some of their content. A “tester” of website compliance with the Americans with Disabilities Act, Brintley sued the credit unions, seeking compensatory and injunctive relief, arguing that the websites were a “service” offered through a “place of public accommodation,” entitling her to the “full and equal enjoyment” of the websites. 42 U.S.C. 12182(a). The district court rejected an argument that Brintley failed to satisfy Article III standing. The Sixth Circuit reversed. To establish standing, Brintley must show that she sustained an injury in fact, that she can trace the injury to the credit unions’ conduct, and that a decision in her favor would redress the injury. Brintley must show an invasion of a “legally protected interest” that is “concrete and particularized” and “actual or imminent” and that affects her in some “personal and individual way.” Brintley lacks eligibility under state law to join either credit union and her complaint does not convey any interest in becoming eligible to do so. View "Brintley v. Belle River Community Credit Union" on Justia Law

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Plaintiff filed suit against LGE, alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the Electronic Fund Transfer Act (EFTA). The district court dismissed plaintiff's claims under Federal Rule of Civil Procedure 12(b)(6) and held that the two parties' agreements unambiguously permitted LGE to assess overdraft fees using the available balance calculation method. The Eleventh Circuit reversed and held that the agreements were ambiguous as to whether LGE could rely on an account's available balance, rather than its ledger balance, to assess overdraft fees. Therefore, the court held that plaintiff properly pleaded a claim for breach of contract, and breach of the implied covenant of good faith and fair dealing. The court also held that plaintiff alleged a claim under the EFTA because the Opt-In Agreement could describe either the available or the ledger balance calculation method for unsettled debts; plaintiff had no reasonable opportunity to affirmatively consent to LGE's overdraft services; and LGE was not protected from liability by the safe harbor. Accordingly, the court remanded for further proceedings. View "Tims v. LGE Community Credit Union" on Justia Law

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The Fifth Circuit affirmed the district court's denial of JMPC's motion to compel certain post-judgment discovery. The court held that, although the district court's reliance on the June 2011 date as relevant to DTC's knowledge of any potential claims by JPMC was clearly erroneous, the error was harmless. The court also held that the district court did not abuse its discretion by tying discovery to a time period associated with the Cathay agreement; the district court did not abuse its discretion by limiting discovery to the 2012 breach and the amount of the judgment specifically tied to that one breach; and the district court's proportionality determination was reasonable. View "JP Morgan Chase Bank, N.A. v. Datatreasury Corp." on Justia Law

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Wolfington brought a claim under the Truth in Lending Act, 15 U.S.C. 1601, stemming from reconstructive knee surgery he received from Reconstructive Orthopaedic Associates (the Rothman Institute). Wolfington alleged that Rothman failed to provide disclosures required by the Act when it permitted him to pay his deductible in monthly installments following surgery. The district court entered judgment, rejecting Wolfington’s claim because it determined he had failed to allege that credit had been extended to him in a “written agreement,” as required by the Act’s implementing regulation, Regulation Z. The court also sua sponte imposed sanctions on Wolfington’s counsel. The Third Circuit affirmed in part, agreeing that Wolfington failed to adequately allege the existence of a written agreement, but concluded that counsel’s investigation and conduct were not unreasonable. In imposing sanctions, the district court placed emphasis on the statement by Rothman’s counsel, not Wolfington’s. The statement by Wolfington’s counsel did not amount to an “unequivocal” admission that there was no written agreement. View "Wolfington v. Reconstructive Orthopaedic Associates II, PC" on Justia Law