Justia Banking Opinion Summaries

Renasant Bank purchased a Financial Institution Bond (the Bond), which covers losses caused by employees only when certain criteria are met. A Mississippi statute, Miss. Code Ann. 81-5-15, requires bank employees to post fidelity bonds that protect against "acts of dishonesty." The Fifth Circuit held that, assuming arguendo that the Bond was governed by section 81-5-15, the Bond's terms were enforceable as written because they were consistent with the statute. The court agreed with the district court that the Bank failed to produce evidence necessary to support its breach-of-contract claim and thus was entitled to summary judgment. View "Renasant Bank v. St. Paul Mercury Insurance Co." on Justia Law

Two days after Silver Springs Homeowner's Association recorded a notice of foreclosure sale, First Horizon Home Loans recorded its own notice of foreclosure sale. First Horizon was the first to hold its foreclosure sale and bought the property on a credit bid. Before First Horizon recorded its trustee's deed, Silver Springs held its foreclosure sale, at which SFR purchased the same property. SFR sued to quiet title. The district court granted First Horizon summary judgment, finding that Silver Springs had not provided the statutorily required notices pursuant to NRS 116.31162 and NRS 116.311635. The Supreme Court of Nevada reversed and remanded, finding that the district court erred in finding Silver Springs' foreclosure sale invalid. Because NRS 116.31162 requires a homeowner's association (HOA) foreclosing on its interest to record its notice of foreclosure sale, any subsequent buyer purchases the property subject to that notice that a foreclosure may be imminent. Therefore, an HOA need not restart the entire foreclosure process each time the property changes ownership so long as the HOA has provided the required notices to all parties who are entitled. View "SFR Investments Pool 1, LLC v. First Horizon Home Loans" on Justia Law

The Supreme Court affirmed in part and reversed and remanded in part the circuit court’s judgment and decree of foreclosure finding in favor of Bank and against Appellant on his counterclaims against Bank and his third-party complaint against the former vice president of commercial lending at Bank (“VP”). The court held (1) the circuit court erred in failing to submit Appellant’s legal counterclaims and third-party claims to the jury; (2) the circuit court erred in granting Bank and VP’s motion to strike Appellant’s jury trial demand based on a predispute jury-waiver clause contained in the loan agreement; and (3) Marvell Light & Ice Co. v. General Electric Co., 259 S.W. 741 (1924), is overruled to the extent that it holds that there is a per se new business rule preventing lost profits unless the business is an old business. View "Tilley v. Malvern National Bank" on Justia Law

In 2004, U.S. Bank made a business loan to B2B, guaranteed by B2B’s principals, the Yousufs, and secured by a second deed of trust on the Yousufs's property. In 2011, U.S. Bank assigned the note and deed of trust to SMS. SMS, B2B and the Yousufs later executed a “Forbearance Agreement,” reciting that the loan was in default and agreeing that SMS would not exercise its rights as long as B2B made payments according to the agreement’s schedule. Months later, B2B failed to make the required payments. In 2014, SMS was preparing to initiate foreclosure when it learned that in 2007, without the knowledge of U.S. Bank, Cornerstone Title had, under Civil Code 2941(b)(3), recorded a release of the obligation secured by the deed of trust. SMS alleges that Cornerstone had no authority to do so, and that contrary to the release’s language, the secured obligation had not been satisfied or discharged. The court of appeal reversed dismissal of SMS’s suit against Cornerstone. Section 2941(b)(6) imposes broad liability on any title insurance company that issues and records a release under subdivision (b)(3). SMS, as the holder of an obligation, has the right to prove damages against Cornerstone, as a title company that recorded a release of that obligation. That SMS acquired the obligation from U.S. Bank is irrelevant. View "SMS Financial XXIII, LLC v. Cornerstone Tile Co." on Justia Law

Sparrow obtained two loans from Countrywide, each secured by a deed of trust on Hercules, California property: a residential mortgage of $205,080 and a home equity line of credit (HELOC) of $15,000. Both deeds of trust were recorded on December 16, 2003, with the Contra Costa County Recorder’s Office; the HELOC deed as instrument 0603657 and the mortgage deed of trust as 0603058. The HELOC was assigned to the Bank and the mortgage was assigned to Nationstar. Following Sparrow’s default on the HELOC, the trustee conducted a nonjudicial sale of the property and received $105,000. After payment to the Bank and of the costs of the sale, a surplus of $73,085.50 remained, which was claimed by Sparrow, the Owners’ Association, and Nationstar. The trustee deposited the funds with the court. The court of appeal affirmed that Nationstar, as a senior lienholder, was not entitled to any of the proceeds of the sale under Civil Code section 2924k. Absent evidence of timing that was determinative, the trial court reasonably relied on the apparent intent of the parties to determine the priority of the two liens. Given that Countrywide was the lender on both loans, the reasonable expectation is that it would secure the larger mortgage loan in the primary position. View "MTC Financial, Inc. v. Nationstar Mortgage" on Justia Law

The language in the reverse mortgages at issue in this case incorporated the statutory power of sale as set forth in Mass. Gen. Laws ch. 183, 21 and allowed the Mortgagee to foreclose on the mortgaged property in accordance with the requirements in section 21.Three Homeowners obtained loans from Mortgagee secured by reverse mortgages on their homes. Later, alleging default, Mortgagee sought to foreclose on the mortgages. Mortgagee brought separate actions against each borrower or the executors of their estate seeking a declaratory judgment allowing it to foreclose pursuant to the statutory power of sale. The trial judge granted Mortgagee’s motion for partial judgment on the pleadings, concluding that Mortgagee’s reverse mortgage incorporated the statutory power of sale by reference. The Court of Appeals affirmed, holding that the language of Mortgagee’s reverse mortgages incorporated the statutory power of sale as defined in section 21. View "James B. Nutter & Co. v. Estate of Murphy" on Justia Law

Cita Trust appealed the district court's dismissal of its complaint against Fifth Third Bank in a commercial contract dispute action. The Eleventh Circuit affirmed, holding that the district court did not err by dismissing the complaint as untimely and enforcing the contractual one-year limitation period. In this case, the agreement's limitation provision was reasonable, clear, and unambiguous. Furthermore, the district court did not abuse its discretion when it denied Cita leave to amend its complaint, because Cita did not properly move for leave to amend. View "Cita Trust Company AG v. Fifth Third Bank" on Justia Law

The DC Circuit reversed the district court's dismissal of a complaint for lack of subject matter jurisdiction. This appeal stemmed from plaintiff's efforts to recover fraudulent transfers made as a part of a Ponzi scheme. The complaint alleged that because plaintiff's letter to the president of Washington Mutual had advised Washington Mutual and the FDIC of her claim, she was entitled to receive, and had not received, mailed notice of the bar date under the Financial Institution Reform, Recovery, and Enforcement Act (FIRREA), 12 U.S.C. 1821. The court held that, taken together, the allegations in the amended complaint showed that although plaintiff mailed a letter to the bank's subsidiary, she did not receive mailed notice of the bar date from the FDIC, and consequently she did not file her claim with the FDIC until months after the bar date had passed, despite being an experienced trustee actively pursuing related bankruptcy claims. View "Feldman v. FDIC" on Justia Law

Fong, born in China in 1931, moved to San Francisco as a young man and became a real estate investor. Fong had a banking relationship with the Bank, where he had more than $3.5 million dollars on deposit. Loans involving the Bank, Fong, and UTGI, a California corporation formed by young investors who were family friends of Fong, whom Fong was assisting in establishing a real estate investment business, were not timely paid. The Bank liquidated assets Fong had pledged as collateral. In a suit claiming conversion and financial abuse of an elder under Welfare and Institutions Code section 15610.30, Fong alleged that he did not understand certain documents and that documents were forged. The trial court granted the Bank summary judgment and determined that as the “prevailing party” the Bank was “entitled to its reasonable attorneys’ fees and costs,” of $202,069.75 and $6,290.05. The court of appeal reversed finding a triable issue of material fact regarding the genuineness of Fong’s signature on the documents authorizing repayment of a loan with respect to one of Fong’s conversion claims. View "Fong v. East West Bank" on Justia Law

The district court erred in ruling that the coguarantors of a loan were not entitled to contribution from other guarantors of an underlying debt because the funds used to make the payments on the debt were provided to them by their respective parents.Here, the parents of the coguarantors provided funds to their children to pay part of the underlying debt. The funds were placed in accounts owned or co-owned by the coguarantors, who then paid down a debt with funds drawn from these accounts. The coguarantors sought contribution from the other guarantors of the underlying debt. The district court and court of appeals ruled against the coguarantors. The Supreme Court vacated the decision of the court of appeals and reversed the judgment of the district court, holding that the coguarantors were entitled to contribution from other guarantors on the undisputed facts of this case. View "Shcharansky v. Shapiro" on Justia Law