Justia Banking Opinion Summaries

Joseph (Joe) Mandolfo sued his brother Mario and American National Bank (ANB). At one time, Joe owned several businesses, some of which had accounts with ANB. After his brother Mario lost his job as a teacher, Joe hired Mario to work for him. Joe alleged that Mario had, with the help of ANB, wrongfully deposited checks intended for Joeâs business, into his own account. From 1995 until 2000, Joe contended that Mario embezzled about $1.2 million. The district court granted summary judgment to Joe against Mario. The court however, also granted summary judgment to ANB, concluding that a statute of limitations barred Joeâs claims against the bank. Joe appealed the grant of summary judgment to the bank. The Supreme Court concluded that Joeâs claims were governed by the Uniform Commercial Code, and as a result, were subject to a three-year statute of limitations. Joe did not discover Marioâs misappropriations until 2003. Accordingly, the Court affirmed the lower courtâs decision to dismiss Joeâs claims against the bank as untimely.

Plaintiff, a former Nelnet, Inc. ("Nelnet") loan advisor, alleged that certain Nelnet marketing practices were continuing violations of the Federal Family Education Loan Program ("FFELP") established under Part B of the Higher Education Act of 1965, 20 U.S.C. 1071, that rendered Nelnet liable under the False Claims Act ("FCA"), 31 U.S.C. 3729(a). Plaintiff joined JPMorgan Chase & Co. and Citigroup, Inc. as defendants alleging they were knowing participants in a conspiracy to submit false claims. At issue was whether the district court properly dismissed plaintiff's third amended complaint. The court affirmed the dismissal and held that there was no abuse of discretion in dismissing plaintiff's claims where plaintiff failed to plead fraud with sufficient particularity and for failure to state a claim under Federal Rule of Civil Procedure 9(b).

Homeowners fell behind on their mortgage and the bank initiated foreclosure. The homeowners filed a Chapter 13 bankruptcy. The judge denied their motion for rescission of the mortgage and for damages, based on noncompliance with state laws. The district court and First Circuit affirmed. The homeowners signed right-to-cancel forms required under the Massachusetts Consumer Credit Cost Disclosure Act, modeled after the federal Truth in Lending Act (15 U.S.C. 1635); technical flaws in the form cannot serve as a basis for invalidating a transaction five years later. Similarly, a slight delay in receipt of a required high-cost loan disclosure did not justify rescission five years later.