Justia Banking Opinion Summaries

Baek purchased property through his LLC and obtained financing from Labe Bank; Frank was the loan officer. Frank later moved to NCB and asked Baek to move his business, representing that NCB would provide a larger construction loan at a lower rate. In 2006, Baek entered a construction loan with NCB for $11,750,000. Baek executed a loan agreement, mortgage, promissory note, and commercial guaranty. Baek’s wife did not sign the guaranty at closing. NCB maintains that, 18 months after closing, she signed a guaranty. One loan modification agreement bears her signature but Baek‐Lee contends that it was forged and that she was out of the country on the signing date. NCB repeatedly demanded additional collateral and refused to disburse funds to contractors. The Baeks claim that NCB frustrated Baek’s efforts to comply with its demands. In 2010, NCB filed state suits for foreclosure and on the guaranty. The Baeks filed affirmative defenses and a counterclaim, then filed a breach of contract and fraud suit against NCB. The Baeks later filed a federal Racketeer Influenced and Corrupt Organizations Act, 18 U.S.C. 1964(c), suit alleging fraud. The state court granted NCB summary judgment. The federal district court dismissed, citing res judicata. The Seventh Circuit affirmed. There has been a final judgment on the merits with the same parties, in state court, on claims arising from a single group of operative facts. View "Baek v. Clausen" on Justia Law

The Supreme Court affirmed the judgment against Borrowers in this action brought by Bank seeking to recover a deficiency owed by Borrowers after it exercised powers of sale under deeds of trust. On appeal, Borrowers argued, among other things, that the district court erred in awarding an excessive verdict for Bank that was unsupported by the evidence. The Supreme Court disagreed, holding (1) there was sufficient evidence to support the amount of damages awarded by the district court; and (2) the district court did not err by refusing Borrowers’ requested jury instructions. View "First National Bank North Platte v. Cardenas" on Justia Law

The Fifth Circuit affirmed the district court's judgment against Midwest in an action alleging that the Bank was liable under Mississippi statutory and common law for its participation in a scheme involving fraudulent checks. The court held that Midwest lacked a cause of action under Mississippi Code 75-3-404(d); the Bank did not owe a duty of reasonable care to Midwest, a non-customer; Midwest failed to allege the existence of a civil conspiracy; Midwest failed to plausibly allege a conversion claim under Mississippi Code 75-3-420; and the district court did not abuse its discretion by dismissing as moot Midwest's motion for sanctions. View "Midwest Feeders, Inc. v. Bank of Franklin" on Justia Law

The Fifth Circuit affirmed the district court's judgment against Midwest in an action alleging that the Bank was liable under Mississippi statutory and common law for its participation in a scheme involving fraudulent checks. The court held that Midwest lacked a cause of action under Mississippi Code 75-3-404(d); the Bank did not owe a duty of reasonable care to Midwest, a non-customer; Midwest failed to allege the existence of a civil conspiracy; Midwest failed to plausibly allege a conversion claim under Mississippi Code 75-3-420; and the district court did not abuse its discretion by dismissing as moot Midwest's motion for sanctions. View "Midwest Feeders, Inc. v. Bank of Franklin" on Justia Law

The First Circuit affirmed the district court’s order dismissing a suit that challenged the lawfulness of a 2012 foreclosure sale of a Massachusetts home.In their complaint, Plaintiffs, who formerly owned the property at issue, alleged that Defendants - OneWest Bank, Indymac Mortgage Services, Ocwen Servicing, and the Federal National Mortgage Association - had engaged in unfair and predatory mortgage lending and loan servicing practices. The complaint set forth nine claims. The district court granted Defendants’ motion to dismiss all of the claims. The First Circuit affirmed, holding that the district court did not err in (1) dismissing three claims for which Plaintiffs sought a judgment declaring that the foreclosure sale was void; (2) dismissing for lack of standing the claim in which Plaintiffs sought to quiet title; (3) dismissing the claim for breach of the duty of good faith and reasonable diligence on the basis that there was no such duty; and (4) dismissing Plaintiffs’ remaining claims. View "Flores v. OneWest Bank, F.S.B." on Justia Law

The circuit court applied the proper standard of law to the facts of record when it concluded that Nationstar Mortgage LLC acted in bad faith and then awarded attorney fees to Robert Stafsholt. Further, Nationstar may collect interest on the principal amount of the loan accrued during litigation because Stafsholt would receive a windfall if he was both excused from paying interest and received his attorney fees. Specifically, the Supreme Court held (1) circuit courts may include attorney fees as part of an equitable remedy “in exceptional cases and for dominating reasons of justice”; and (2) the circuit court properly exercised its discretion in this case. View "Nationstar Mortgage LLC v. Stafsholt" on Justia Law

AT&T notified Walton that she owed $268.47 on her closed AT&T account number 119864170 and that failure to pay “may cause your account to be referred to an outside collection agency.” Walton did not pay the bill. She received a debt-collection letter from EOS, stating that she owed AT&T $268.47 on account 864119170. AT&T had swapped the first three digits with the second three in providing the information. Walton contacted EOS, acknowledged that her name and mailing address were correct, but falsely denied that the last four digits of her social security number matched those the representative gave to confirm her identity. After investigating, EOS sent Walton another letter stating it had verified that her name, address, and her social security number, and stating a balance of $268.47. EOS again listed an incorrect account number. EOS reported Walton’s debt to credit-reporting agencies, informing them that the account was disputed. Walton wrote to the agencies to dispute the debt; the agencies notified EOS. After learning that she disputed the account number, EOS advised the agencies to delete Walton’s debt record. Walton sued under the Fair Debt Collection Practices Act, 15 U.S.C. 1692, for not verifying her debt with the creditor, and the Fair Credit Reporting Act, 15 U.S.C. 1681, for not reasonably investigating the disputed information. The Seventh Circuit affirmed summary judgment, finding that EOS complied with its statutory obligations. View "Walton v. EOS CCA" on Justia Law

California Pacific Bank petitioned for review, challenging the constitutionality of the Banking Secrecy Act (BSA), 31 U.S.C. 5311-5330, and its implementing regulations, and alleged that the FDIC Board of Directors' decision, which found that the Bank violated the BSA and ordered it to implement a plan to bring the Bank into compliance, was not supported by substantial evidence. The Ninth Circuit denied the petition for review, holding that the Bank did not waive its constitutional challenges; the BSA and its implementing regulations were not unconstitutionally vague; neither the FDIC's investigation nor the ALJ was unconstitutionally biased against the Bank; the FDIC acted in accordance with the law by relying on the Federal Financial Institutions Examination Council Manual to clarify its four pillars regulation; and the FDIC Board's decisions were supported by substantial evidence. View "California Pacific Bank v. FDIC" on Justia Law

California Pacific Bank petitioned for review, challenging the constitutionality of the Banking Secrecy Act (BSA), 31 U.S.C. 5311-5330, and its implementing regulations, and alleged that the FDIC Board of Directors' decision, which found that the Bank violated the BSA and ordered it to implement a plan to bring the Bank into compliance, was not supported by substantial evidence. The Ninth Circuit denied the petition for review, holding that the Bank did not waive its constitutional challenges; the BSA and its implementing regulations were not unconstitutionally vague; neither the FDIC's investigation nor the ALJ was unconstitutionally biased against the Bank; the FDIC acted in accordance with the law by relying on the Federal Financial Institutions Examination Council Manual to clarify its four pillars regulation; and the FDIC Board's decisions were supported by substantial evidence. View "California Pacific Bank v. FDIC" on Justia Law

Adrian established Red Brick Properties, to purchase, rehabilitate, and resell homes. Adrian's wife, Daniela, the only employee with a real estate license, served as office manager. They sought buyers who did not have good enough credit or a down payment and assisted them in applying for mortgage loans. In 2007-2009, Red Brick sold 45 houses, providing the down payment for each sale; the loan applications falsely stated that the buyers were using their own money. After closing, Red Brick provided the buyers with additional money, to ensure that they could make at least two payments before defaulting. Bank of America which provided the loans for 32 sales, all processed by one loan officer, opened an investigation. A jury convicted Adrian and Daniela of wire fraud, 18 U.S.C. 1343 and conspiracy to commit wire fraud, 18 U.S.C. 1349. Following a remand, the PSR recommended a total loss amount of $1,835,861; the court sentenced Adrian to 36 months’ imprisonment, Daniela to 21 months’ (both sentences were below the Guidelines range), and imposed a $30,000 fine on each. The Seventh Circuit affirmed, rejecting a challenge to the intended loss calculation under U.S.S.G. 2B1.1, and the decision to deny Daniela a minor-role reduction under U.S.S.G. 3B1.2. Bank of America’s losses qualified as an “intended loss” regardless of its level of complicity. View "United States v. Tartareanu" on Justia Law