Justia Banking Opinion Summaries

Beach, a debtor in possession, sought to avoid Live Oak’s blanket lien on all of its assets. In Florida, a creditor’s financing statement that does not list the debtor’s correct name is “seriously misleading” and ineffective to perfect the creditor’s security interest. Fla. Stat. 679.5061(2). Live Oak asserted that abbreviating “Boulevard” to “Blvd.” did not render the financing statements defective or seriously misleading. Florida Statute 679.5061(3), establishes a safe harbor for defective financing statements. The bankruptcy court granted Live Oak summary judgment.Noting that lower courts, applying Florida law, have reached different conclusions regarding the application of the statutory safe harbor, the Eleventh Circuit certified to the Florida Supreme Court the questions: (1) Is the “search of the records of the filing office under the debtor’s correct name, using the filing office’s standard search logic,” as provided for by Florida Statute 679.5061(3), limited to or otherwise satisfied by the initial page of twenty names displayed to the user of the Registry’s search function? (2) If not, does that search consist of all names in the filing office’s database, which the user can browse to using the command tabs displayed on the initial page? (3) If the search consists of all names in the filing office’s database, are there any limitations on a user’s obligation to review the names and, if so, what factors should courts consider when determining whether a user has satisfied those obligations? View "1944 Beach Boulevard, LLC v. Live Oak Banking Co." on Justia Law

Brett Deslonde appealed the grant of summary judgment entered in favor of Nationstar Mortgage, LLC, doing business as Mr. Cooper ("Nationstar"), and The Bank of New York Mellon, as trustee for Nationstar Home Equity Loan Trust 2007-C ("BNYM"), on Deslonde's claim seeking reformation of a loan-modification agreement on the ground of mutual mistake. In December 2006, Deslonde purchased real property in Fairhope, Alabama with a loan from Nationstar. Deslonde subsequently defaulted on his mortgage payments and applied for a loan modification through Nationstar's loss-mitigation program. By letter dated February 2014, Nationstar notified Deslonde that he had been approved for a "trial period plan" under the federal Home Affordable Modification Program ("the federal program"). Under the federal program, Deslonde was required to make three monthly trial payments in the amount of $1,767.38 and to submit all required documentation for participation in the program, including an executed loan-modification agreement. In July 2014, Nationstar informed Deslonde that his request for a loan modification under the federal program had been denied because he had not returned an executed loan-modification agreement or made the trial payments. That letter informed Deslonde that there were other possible alternatives that might be available to him if he was unable to make his regular loan payments. Deslonde submitted a second application package for loss mitigation in October 2014. Under the executed modification agreement from the second application, Deslonde made monthly payments sufficient to cover only interest and escrow charges on the loan. The loan-modification period, however, expired in November 2016, at which time the monthly payments reverted to the premodification amount so as to include principal on the loan. After the loan-modification period expired, Deslonde made three additional monthly payments, but he then ceased making payments altogether. In an attempt to avoid foreclosure, Deslonde filed a complaint against Nationstar and BNYM in the Baldwin Circuit Court ("the trial court"), requesting a temporary restraining order enjoining foreclosure of the mortgage, a judgment declaring the parties' rights under the executed modification agreement, and reformation of the executed modification agreement on the ground of mutual mistake. Finding that the trial court did not err in granting summary judgment in favor of Nationstar and BNYM, the Alabama Supreme Court affirmed. View "Deslonde v. Nationstar Mortgage, LLC, d/b/a Mr. Cooper et al." on Justia Law

The Supreme Court reversed the holdings of the lower courts in this case, holding that wages can be "earnings" under Kan. Stat. Ann. 60-2310(a)(1) even after they are paid if the employee can specifically and directly identify the funds as wages.Plaintiff sued Defendant for $3,008, and Defendant consented to the judgment. At issue was a garnishment order issued under Kan. Stat. Ann. 61-3505(b)(1). Defendant objected to the garnishment, arguing that the funds in his bank account were "earnings" and could only be garnished under Kan. Stat. Ann. 61-3507. The district court and court of appeals ordered the bank to pay the withheld funds, concluding that Defendant's wages lost their status as "earnings" and could be garnished under section 61-3505 once his paycheck was deposited in his bank account. The Supreme Court reversed, holding (1) "paid" wages may in certain circumstances be deemed earnings for purposes of garnishment; and (2) this case must be remanded for further factual findings. View "Stormont-Vail Healthcare, Inc. v. Sievers" on Justia Law

The Supreme Court reversed in part the judgment of the trial court sustaining Plaintiffs' administrative appeal and remanding this case to the Commissioner of Banking for further proceedings as to Plaintiffs' entitlement to tribal sovereign immunity in administrative proceedings, holding that the trial court erred in part.At issue was whether a business entity shared sovereign immunity with Otoe-Missouria Tribe of Indians, a federally-recognized tribe. On appeal, Plaintiffs - Clear Creek Lending, Great Plains Lending, LLC, and John Shotton, chairman of the Tribe - claimed that the trial court improperly allocated the burden of proving entitlement to tribal sovereign immunity to Plaintiffs, improperly required proof of a functioning relationship between the entities and the tribe, and improperly failed to find Shotton immune in further administrative proceedings. The Supreme Court reversed in part, holding (1) the entity claiming arm of the tribe status bears the burden of proving its entitlement to that status; (2) Great Plains was an arm of the tribe and Shotton was entitled to tribal sovereign immunity but not injunctive relief; and (3) there was insufficient evidence that Clear Creek was an arm of the tribe as a matter of law. View "Great Plains Lending, LLC v. Department of Banking" on Justia Law

Palladinetti and others purchased 30 Chicago-area apartment buildings and resold individual apartments as condominiums. Using a process that Palladinetti helped create, his co-defendants bought the buildings, falsely representing to lenders that they had made down payments. Palladinetti served as his co-defendants’ attorney for the purchases and sales and as the registered agent for LLCs formed to facilitate the scheme. The group recruited buyers for the condominiums and prepared their mortgage applications, misrepresenting facts to ensure they qualified for the loans.Palladinetti and his co-defendants were charged with seven counts of bank fraud, 18 U.S.C. 1344(1) and (2), and nine counts of making false statements on loan applications, 18 U.S.C. 1014 and 2. Count one involved a $345,000 mortgage that Palladinetti’s wife obtained for the purchase of a residence. That mortgage application was prepared using the group’s fraudulent scheme in July 2005. The government agreed to dismiss all other counts if Palladinetti were convicted on count one. Because Palladinetti stipulated to almost all elements of section 1344(1), the trial was limited to whether the bank he defrauded was insured by the FDIC when the mortgage application was submitted.The Seventh Circuit affirmed his conviction. The testimony and exhibits demonstrated that one entity was continuously insured, 1997-2008, that on the date the mortgage was executed that entity was “Washington Mutual Bank” and also did business as “Washington Mutual Bank, FA,” and that entity was the lender for the mortgage at issue. View "United States v. Palladinetti" on Justia Law

Halkbank, a commercial bank that is majority-owned by the Government of Turkey, was charged with crimes related to its participation in a multi-year scheme to launder billions of dollars' worth of Iranian oil and natural gas proceeds in violation of U.S. sanctions against the Government of Iran and Iranian entities and persons. Halkbank moved to dismiss the indictment but the district court denied the motionThe Second Circuit held that it has jurisdiction over the instant appeal under the collateral order doctrine. The court also held that, even assuming the Foreign Sovereign Immunities Act (FSIA) applies in criminal cases—an issue that the court need not, and did not, decide today—the commercial activity exception to FSIA would nevertheless apply to Halkbank's charged offense conduct. Therefore, the district court did not err in denying Halkbank’s motion to dismiss the Indictment. The court further concluded that Halkbank, an instrumentality of a foreign sovereign, is not entitled to immunity from criminal prosecution at common law. View "United States v. Bankasi" on Justia Law

Heine and Yates, bank executives, were convicted of conspiracy to commit bank fraud (18 U.S.C. 1349) and 12 counts of making a false bank entry (18 U.S.C. 1005). The government told the jury that the two conspired to deprive the bank of accurate financial information in its records, the defendants’ salaries, and the use of bank funds.The Ninth Circuit vacated. There is no cognizable property interest in the ethereal right to accurate information. Distinguishing between a scheme to obtain a new or higher salary and a scheme to deceive an employer while continuing to draw an existing salary, the court held that the salary-maintenance theory was also legally insufficient. Even assuming the bank-funds theory was valid, the government’s reliance on those theories was not harmless. The court instructed the jury that it could find the defendants guilty of making false entries as co-conspirators, so the court also vacated the false-entry convictions. The court noted that insufficient evidence supported certain false entry convictions. View "United States v. Yates" on Justia Law

The Fifth Circuit affirmed the district court's dismissal of plaintiff's putative class action against the Bank for failure to state a claim because extended overdraft charges were not "interest" under the National Bank Act of 1864. In this case, deference to the Office of the Comptroller of the Currency's interpretation of these regulations is appropriate, and the agency's determination in Interpretive Letter 1082 that the type of bank fees at issue here—that the Bank refers to as extended overdraft charges—are noninterest charges is a sufficient basis to resolve this case. The court explained that, because extended overdraft charges are non-interest charges, they are not subject to the Act's usury limits. Finally, the court concluded that plaintiff already availed herself of the opportunity the district court provided to conduct discovery, and because plaintiff's complaint is deficient under Federal Rule of Civil Procedure 8, she is not entitled to discovery. View "Johnson v. BOKF National Ass'n" on Justia Law

The City of Oakland sued under the Fair Housing Act, claiming that Wells Fargo’s discriminatory lending practices caused higher default rates, which triggered higher foreclosure rates that drove down the assessed value of properties, ultimately resulting in lost property tax revenue and increased municipal expenditures. In 2020, the Ninth Circuit affirmed the denial of Wells Fargo's motion to dismiss claims for lost property-tax revenues and affirmed the dismissal of Oakland's claims for increased municipal expenses.On rehearing, en banc, the Ninth Circuit concluded that all of the claims should be dismissed. Under the Supreme Court’s 2017 holding, Bank of America Corp. v. City of Miami, foreseeability alone is not sufficient to establish proximate cause under the Act; there must be “some direct relation between the injury asserted and the injurious conduct alleged.” The downstream “ripples of harm” from the alleged lending practices were too attenuated and traveled too far beyond the alleged misconduct to establish proximate cause. The Fair Housing Act is not a statute that supports proximate cause for injuries further downstream from the injured borrowers; the extension of proximate cause beyond that first step was not administratively possible and convenient. Oakland also failed sufficiently to plead proximate cause for its increased municipal expenses claim. View "City of Oakland v. Wells Fargo & Co." on Justia Law

The Supreme Court affirmed the judgment of the circuit court determining that Arthur and Jerilyn Gregg were not estopped from asserting that their son-in-law, Tyler McGregor, had no rights in their cattle, and therefore, First Dakota National Bank did not have a security interest in the Greggs' cattle, holding that the circuit court did not err.Tyler and Rebecca McGregor operated a cattle feedlot, and First Dakota was their lender. In 2015, Tyler agreed to feed 289 head of cattle owned by the Greggs. When First Dakota conducted an inspection of the McGregors' cattle operation, Tyler misled the bank into believing that he owned the Greggs' cattle. First Dakota later filed this declaratory judgment action seeking a judgment against the Greggs for the value of the cattle returned to the Greggs. The court held that the Greggs were not estopped from asserting that the McGregor had no rights in the Greggs' cattle, and therefore, First Dakota could not claim a security interest in them. The Supreme Court affirmed, holding that the evidence did not support the first inquiry necessary to establish an estoppel claim. View "First Dakota National Bank v. Gregg" on Justia Law