Justia Banking Opinion Summaries

Citibank provided sales financing to Illinois retailers who offered customers the option of financing their purchases, including the amount of Illinois tax due on the purchases. Citibank originated or acquired consumer charge accounts and receivables from the retailers on a non-recourse basis. When a customer financed a purchase using that account, Citibank remitted to the retailer the amount the customer financed, which included some or all of the purchase price and the sales tax owed based on the selling price. The retailers then remitted the sales tax to the state. Under the agreements between Citibank and the retailers, Citibank acquired “any and all applicable contractual rights relating thereto, including the right to any and all payments from the customers and the right to claim Retailer’s Occupation Tax (ROT) refunds or credits.” Citibank filed a claim for tax refunds under 35 ILCS 120/6 for ROT taxes paid through retailers on transactions that ultimately resulted in uncollectible debt. The Department denied Citibank’s claim. The Illinois Supreme Court reinstated the denial, noting the legislature’s clearly expressed preference in the statutory framework for reporting, remission, and refund only through the retailer. Sophisticated lending institutions no doubt anticipate the eventuality of default and can order their commercial relationships accordingly. View "Citibank, N.A. v. Illinois Department of Revenue" on Justia Law

The M/V Deep Blue purchased fuel from a supplier, the supplier purchased the fuel from an affiliate, and the affiliate subcontracted with Radcliff. Radcliff subsequently asserted a maritime lien on the Deep Blue in a bid to recover directly from the ship, giving rise to this litigation. The Fifth Circuit affirmed the district court's determination that Radcliff did not have a lien on the Deep Blue. Instead, a lien had arisen in favor of the global fuel supplier, and was duly assigned to ING Bank, an intervenor in the suit. View "Barcliff, LLC v. M/V Deep Blue" on Justia Law

Judgment creditors of the Islamic Republic of Iran and Iran's Ministry of Intelligence and Security sought to enforce underlying judgments obtaining the turnover of $1.68 billion in bond proceeds allegedly owned by Bank Markazi. The Second Circuit held that the settlement agreements released plaintiffs' non-turnover claims with respect to some but not all of the banks; the assets at issue were in fact located abroad, but that those assets may nonetheless be subject to turnover under state law pursuant to an exercise of the court's in personam jurisdiction, inasmuch as the district court has the authority under New York State law to direct a non‐sovereign in possession of a foreign sovereignʹs extraterritorial assets to bring those assets to New York State; and those assets will not ultimately be subject to turnover, however, unless the district court concludes on remand that such in personam jurisdiction exists and the assets, were they to be recalled, would not be protected from turnover by execution immunity. Accordingly, the court affirmed in part, vacated in part, and remanded for further proceedings. View "Peterson v. Islamic Republic of Iran" on Justia Law

At issue was whether the City of Fairmont, which entered into a lease purchase agreement for equipment with Comvest, Ltd., may assert claims and defenses against Blue Ridge Bank - to whom Comvest assigned its interest in the lease purchase agreement, including its right to the City’s monthly payments - based on Comvest’s conversion of funds designated for the purchase of the equipment. The Supreme Court held (1) the Bank took its assignment subject to the City’s claims and defenses arising from Comvest’s breach of the lease purchase agreement; and (2) therefore, the City may assert claims and defenses against the Bank based on Comvest’s conversion. View "Blue Ridge Bank, Inc. v. City of Fairmont" on Justia Law

This case arose out of the foreclosure of nine commercial condominium units owned by Michael Hulsey and SM Commercial Properties, LLC. Prior to a sheriff’s sale, SM Commercial Properties filed bankruptcy. Eventually the bankruptcy stay was lifted and the sale took place. Washington Federal bought the property with a credit bid and then asserted a deficiency against Hulsey. The district court found that Washington Federal failed to prove both the existence of a deficiency as well as the fair market value of the property. On appeal, Washington Federal argued: (1) Hulsey was precluded from litigating the fair market value of the property based on the bankruptcy court proceedings; and (2) the district court erred when it determined that Washington Federal failed to prove the existence of the deficiency and the fair market value of the property. Both parties appealed the district court’s denial of attorney’s fees, but Hulsey dismissed his cross-appeal at the time of oral argument. The Idaho Supreme Court affirmed dismissal of Washington Federal’s claim for a deficiency, but vacated the judgment denying Washington Federal’s costs and attorney’s fees incurred to enforce the judgment and decree of foreclosure. View "Washington Federal v. Hulsey" on Justia Law

In 2011, Georgia Trust Bank secured a judgment against Virgil Lovell for $1.2 million. The next year, Georgia Trust failed, and its assets went into receivership with the Federal Deposit Insurance Corporation, which later sold the judgment to Community & Southern Bank. When CSB was unable to collect the full amount of the judgment, it discovered a number of recent transactions in which Lovell and his companies had conveyed their respective interests in properties that, CSB believed, otherwise would have been available to satisfy the judgment. In 2015, CSB filed a lawsuit against Lovell, his wife, and several of his companies, asserting claims under the Uniform Fraudulent Transfers Act (UFTA) to set aside those conveyances as fraudulent transfers. The trial court dismissed some of those claims on the ground that they did not state claims upon which relief might properly be granted. After reviewing the transfers, the Georgia Supreme Court affirmed in part, and reversed in part. The Court found that trial court erred when it dismissed a claim under the UFTA against Lovell, his wife, and Ankony Land, LLC, relating to property in Habersham County: the trial court rested its dismissal of the claim upon the time bar of former OCGA 18-2-79 (1), and did not consider the other grounds asserted by Lovell, his wife, and Ankony Land for dismissing the claim. The trial court reasoned that former Section 18-2-79 (1) was a statute of repose, not a statute of limitation, and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) did not, it concluded, preempt statutes of repose. CSB contended that this conclusion was in error, and with that contention, the Supreme Court agreed. The Court reversed the trial court on this point, affirmed in all other respects, and remanded the case for further proceedings. View "Community & Southern Bank v. Lovell" on Justia Law

In 2009, Bancorp, which provides checking and savings accounts to individuals, purchased a bankers’ professional liability insurance policy from Federal. The policy stated: [Federal] shall pay, on behalf of an Insured, Loss on account of any Claim first made against such Insured during the Policy Period … for a Wrongful Act committed by an Insured or any person for whose acts the Insured is legally liable while performing Professional Services, including failure to perform Professional Services" but that Federal “shall not be liable for Loss on account of any Claim … based upon, arising from, or in consequence of any fees or charges” (Exclusion 3(n)). The 2010 Swift Complaint sought damages for Bancorp's "unfair and unconscionable assessment and collection of excessive overdraft fees.” Swift sought to represent a class of all U.S. BancorpSouth customers who "incurred an overdraft fee as a result of BancorpSouth’s practice of re-sequencing debit card transactions from highest to lowest.” In 2016, Bancorp agreed to pay $24 million to resolve all the claims, $8.4 million of which was for attorney’s fees, plus $500,000 in class administrative costs. Federal denied coverage. The Seventh Circuit agreed that Exclusion 3(n) excluded from coverage losses arising from fees and affirmed the dismissal of breach of contract claims and a bad faith claim. View "BancorpSouth Inc. v. Federal Insurance Co." on Justia Law

A property owner defaulted on his obligations, and the construction lender foreclosed the property at issue in this appeal. The general contractor had a materialman’s lien on the property. At the foreclosure sale, the purchase price for the property was significantly lower than the total amounts owed. The sole issue before the chancery court was which lien had priority – that of the construction lender, or that of the contractor. The chancery court found that the contractor’s lien had priority. Because the chancery court did not abuse its discretion in arriving at that conclusion, the Mississippi Supreme Court affirmed. View "Whitney Bank v. Triangle Construction Company, Inc." on Justia Law

The Fifth Circuit dismissed this interlocutory appeal from an order denying a motion for a preliminary injunction to stop a foreclosure. The court applied In Matter of Sullivan Cent. Plaza, I, Ltd., and held that the appeal was moot because the subject property was sold at a foreclosure sale. The court rejected plaintiff's argument that the instant appeal was not moot simply because defendants purchased the foreclosed property and were before the court on appeal. The court reasoned that it could not enjoin that which had already taken place. View "Dick v. Colorado Housing Enterprises, LLC" on Justia Law

FHFA, as conservator for government-sponsored enterprises (GSEs), filed suit against defendants, alleging violations of the Securities Act of 1933 and analogous "Blue Sky laws," the Virginia Securities Act, and the D.C. Securities Act. The FHFA alleged that representations regarding underwriting criteria for certificates tied to private-label securitizations (PLLs) was a material misstatement. The district court rendered judgment in favor of the FHFA under Sections 12(a)(2) and 15 of the Securities Act, and analogous provisions of the Virginia and D.C. Blue Sky laws. The district court also awarded rescission and ordered defendants to refund the FHFA a total adjusted purchase price of approximately $806 million in exchange for the certificates. The Second Circuit found no merit in defendants' argument and held that defendants failed to discharge their duty under the Securities Act to disclose fully and fairly all of the information necessary for investors to make an informed decision whether to purchase the certificates at issue. Accordingly, the court affirmed the judgment. View "Federal Housing Finance Agency v. Nomura Holding America, Inc." on Justia Law