Justia Banking Opinion Summaries

Defendants William Grommesh and Jon Pansch appealed the grant of summary judgment in favor of American Federal Bank in its action to enforce four guaranties. The defendants argued the district court erred in granting summary judgment because the court misinterpreted the guaranties, and genuine issues of material fact exist regarding the defendants’ defenses. Finding no reversible error, the North Dakota Supreme Court affirmed. View "American Federal Bank v. Grommesh, et al." on Justia Law

Plaintiff filed suit under the Electronic Fund Transfer Act (EFTA) against JPMorgan Chase Bank, alleging that she was the victim of unauthorized electronic fund transfers from her checking account at Chase. Chase reimbursed plaintiff for some of those losses, but refused to repay $300,000 of the funds stolen from her account. The district court dismissed plaintiff's complaint at the pleading stage on the ground that her lengthy delay in reporting the unauthorized withdrawals to Chase barred her claims as a matter of law.The Ninth Circuit concluded that the district court misinterpreted the relevant provision of the EFTA and reversed the dismissal of plaintiff's EFTA claim. The panel concluded that, under 15 U.S.C. 1693g(a), a consumer may be held liable for unauthorized transfers occurring after the 60-day period only if the bank establishes that those transfers "would not have occurred but for the failure of the consumer" to timely report the earlier unauthorized transfer reflected on her bank statement. In this case, plaintiff met her pleading burden by alleging facts plausibly suggesting that even if she had reported an unauthorized transfer within the 60-day period, the subsequent unauthorized transfers for which she sought reimbursement would still have occurred. The panel affirmed the district court's dismissal of plaintiff's state law claims, concluding that plaintiff's claim for breach of contract failed because a Privacy Notice appended to her Deposit Account Agreement did not impose any substantive duties on Chase. Furthermore, plaintiff's claim for breach of the implied covenant of good faith and fair dealing failed because the Deposit Account Agreement expressly permitted Chase to close plaintiff’s accounts. View "Widjaja v. JPMorgan Chase Bank, N.A." on Justia Law

Plaintiff appeals two concurrent orders denying his petition to confirm an arbitration award and granting Comerica Bank's petition to vacate the award on the ground that the arbitrator made a material omission or misrepresentation in his disclosure of prior cases involving the parties' lawyers.The Court of Appeal concluded that, because the bank failed to seek the arbitrator's disqualification within 15 days of discovering the facts requiring disqualification and before the arbitrator decided the pending fee motion, it forfeited the right to demand disqualification. Accordingly, the court reversed the order vacating the award based on the arbitrator's disqualification. Because the bank identified no other grounds for denying the petition to confirm the award, the court granted that petition. View "Goodwin v. Comerica Bank, N.A." on Justia Law

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