Justia Banking Opinion Summaries

North Idaho Resorts (NIR) appealed the district court’s grant of summary judgment in favor of Union Bank, N.A. (Union Bank) in a mortgage priority dispute. The district court held that NIR did not possess a vendor’s lien because NIR was not the owner of record and that any lien NIR might have possessed had no value. The district court further held that if NIR possessed a valid lien, NIR released any such lien as part of a recorded agreement and that Union Bank was a good faith encumbrancer with no actual or constructive knowledge of the lien. On appeal, NIR argued: (1) the district court misconstrued Idaho Code section 45-801 and that the statute did not require the seller to be the owner of record; (2) the remaining conditional purchase price constituted an unpaid and unsecured value; (3) Union Bank knew NIR was still owed money under the contract; and (4) Union Bank did not qualify as a good faith encumbrancer. Finding no reversible error, the Supreme Court affirmed the district court’s judgment. View "Union Bank, N.A. v. North Idaho Resorts" on Justia Law

JV, LLC (JV) appealed the district court’s grant of summary judgment in favor of Union Bank, N.A. (Union Bank) in a mortgage priority dispute. Union Bank sought to foreclose a mortgage on a property known as “Trestle Creek.” JV claimed priority to the Trestle Creek property through a mortgage recorded June 19, 2006. Union Bank’s mortgage was recorded March 25, 2008. Union Bank moved for summary judgment, arguing that JV had subordinated its lien to that of Union Bank. The district court agreed and granted the motion. Finding no reversible error, the Supreme Court affirmed the district court’s judgment. View "Union Bank, N.A. v. JV L.L.C" on Justia Law

BMS provides administrative services to bankruptcy trustees. It uses Rabobank as the depositary for banking services that BMS provides through its software. Crane, the trustee in the Integrated bankruptcy, hired BMS; the contract required Crane to hire Rabobank for banking services in the proceeding. In a separate contract, Crane authorized Rabobank to withdraw its monthly fee. The plaintiff, a law firm, was a creditor of Integrated and filed a bankruptcy claim, ultimately receiving a distribution of $12,472.55. It would have received $12,666.90, but for its part of Rabobank’s fee, and more had Rabobank paid interest on the estate’s deposits. Plaintiff sued under the Bank Holding Company Act, 12 U.S.C. 1972(1)(E), which states that a bank shall not "extend credit, lease or sell property of any kind, or furnish any service, or fix or vary the consideration for any of the foregoing, on the condition … that the customer shall not obtain some other credit, property, or service from a competitor of such bank … other than a condition … to assure the soundness of the credit.” The Seventh Circuit affirmed dismissal. Had Rabobank conditioned its provision of services on the trustee never hiring any other bank in any bankruptcy proceeding, it would constitute exclusive dealing. No one forced Crane to deal with BMS and Rabobank and there was no argument that the fee was exorbitant, or would have been lower with a different bank. View "McGarry & McGarry, LLC v. Rabobank, N.A." on Justia Law

Plaintiff filed a series of lawsuits challenging Chase's efforts to foreclose upon his real property. In this appeal, plaintiff challenges a judgment of dismissal entered after the trial court sustained the demurrer of Chase. The court concluded that plaintiff failed to state a cause of action for violation of the Homeowners Bill of Rights, lack of standing to foreclose, illegal substitution of trustee, and fraud. The court also concluded that the trial court properly considered the declaration of Chase's counsel, among other things, before denying plaintiff's motion for a preliminary injunction. Finally, the court explained that principles of res judicata are fatal to the present lawsuit and theoretical future lawsuits seeking to vindicate the same primary right. Accordingly, the court affirmed the judgment. View "Gillies v. JPMorgan Chase Bank, N.A." on Justia Law

JPMorgan offers to manage clients’ securities portfolios. Its affiliates sponsor mutual funds in which the funds can be placed. Plaintiffs in a putative class action under the Class Action Fairness Act, 28 U.S.C. 1332(d)(2), alleged that customers invested in these mutual funds believing that, when recommending them as suitable vehicles, JPMorgan acts in clients’ best interests (as its website proclaims), while JPMorgan actually gives employees incentives to place clients’ money in its own mutual funds, even when those funds have higher fees or lower returns than third-party funds. The Seventh Circuit affirmed dismissal under the Securities Litigation Uniform Standards Act, 15 U.S.C. 78bb(f), which requires the district court to dismiss any “covered class action” in which the plaintiff alleges “a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security.” Under SLUSA, securities claims that depend on the nondisclosure of material facts must proceed under the federal securities laws exclusively. The claims were framed entirely under state contract and fiduciary principles, but necessarily rest on the “omission of a material fact,” the assertion that JPMorgan concealed the incentives it gave its employees. View "Holtz v. J.P. Morgan Chase Bank, N.A." on Justia Law

If a LaSalle Bank custodial account had a cash balance at the end of a day, the cash would be invested in (swept into) a mutual fund chosen by the client. The Trust had a custodial account with a sweeps feature. After LaSalle was acquired by Bank of America, clients were notified that a particular fee was being eliminated. The trustee, who had not known about the fee, brought a putative class action in state court, claiming breach of the contract (which did not mention this fee) and violation of fiduciary duties. The bank removed the suit to federal court, relying on the Securities Litigation Uniform Standards Act, 15 U.S.C. 78bb(f), which authorizes removal of any “covered class action” in which the plaintiff alleges “a misrepresentation or omission of a material fact in connection with the purchase or sale of a covered security.” The statute requires that such state‑law claims be dismissed. The district court held that the suit fit the standards for removal and dismissal. The Seventh Circuit affirmed. The complaint alleged a material omission in connection with sweeps to mutual funds that are covered securities; no more is needed. The Trust may have had a good claim under federal securities law, but chose not to pursue it; the Act prohibits use of a state-law theory. View "Goldberg v. Bank of America, N.A." on Justia Law

Builders Bank is insured and regulated by the Federal Deposit Insurance Corporation (FDIC), which conducts a “full‐scope, on‐site examination” every 12-18 months, 12 U.S.C. 1820(d). After a 2015 examination, the FDIC assigned the Bank a rating of four under the Uniform Financial Institutions Rating System, which has six components: capital, asset quality, management, earnings, liquidity, and sensitivity (CAMELS). The highest rating is one, the lowest five. The Bank claims that its rating should have been three and that the lower rating was arbitrary and capricious. The Seventh Circuit vacated the district court’s dismissal. The presence of capital as one of the CAMELS components does not necessarily mean that the rating as a whole is committed to agency discretion for the purposes of 5 U.S.C. 701(a)(2). The FDIC has discretion to set appropriate levels of capital for each institution, 12 U.S.C. 3907(a)(2), but the Bank argued that it takes the FDIC’s capital requirements as given and challenged only its application of the “asset quality, management, earnings, liquidity, and sensitivity” factors. The court did not determine whether other components of a CAMELS rating may be committed to agency discretion. View "Builders Bank v. Federal Deposit Insurance Corp." on Justia Law

Plaintiffs’ Indianapolis home had a mortgage serviced by J.P. Morgan Chase. In 2011 plaintiffs accused Chase of paying the wrong homeowner’s insurer using $1,422 from their escrow account. They had switched insurers without telling Chase. When Chase learned of the change, it promptly paid the new insurer and informed plaintiffs that their old insurer would send a refund. Chase told them to forward the refund to replenish the depleted escrow. When the refund came, plaintiffs kept the money. Chase adjusted their mortgage payment to make up the shortfall. When plaintiffs refused to pay the higher amount, the mortgage went into default. Instead of curing, they requested information under the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2601–2617, which requires the bank to correct account errors and disclose account information. They demanded that Chase reimburse their escrow. Chase sent a complete account history. Plaintiffs divorced, ending their 25-year marriage. They sued Chase, claiming that its response was inadequate under RESPA and caused more than $300,000 in damages—including the loss of their marriage— and claiming breach of the implied covenant of good faith and fair dealing. The Seventh Circuit affirmed summary judgment for Chase. Chase’s response complied with its RESPA duties. To the extent that any requested information was missing, plaintiffs suffered no actual damages. Nor did Chase breach the duty of good faith and fair dealing, assuming that Indiana would recognize the implied covenant in this context. View "Perron v. J.P. Morgan Chase Bank, N.A." on Justia Law

At issue in this case was whether, under Connecticut law, after a judgment debtor’s wages have been garnished, the remaining wages are exempt from execution, and whether the transfer of those wages to a third party constitutes a fraudulent transfer. Pursuant to two state court judgments, The Cadle Company was Terry Fletcher’s judgment creditor, Fletcher owing the company more than $3 million. Since at least 2005, Terry has transferred more than $300,000 of his residual wages to the bank account of his wife, Marguerite Fletcher. The Cadle Company sued the Fletchers in federal district court, alleging, inter alia, that the transfer violated the Connecticut Uniform Fraudulent Transfer Act (CUFTA). The district court granted the Fletchers’ motion for partial summary judgment, granted The Cadle Company’s motion for partial summary judgment, and ultimately rendered judgment for The Cadle Company in the amount of $401,426 on its CUFTA claim. The Fletchers appealed to the Second Circuit Court of Appeals. The Second Circuit subsequently certified a question to the Supreme Court, which the Court accepted. The Supreme Court answered that Terry’s residual wages would not have been exempt from execution if he had retained possession of them, and therefore, they were subject to execution after Terry transferred them to his wife’s account. View "Cadle Co. v. Fletcher" on Justia Law

Plaintiffs were affiliated commercial entities that sought to enforce the auction sale of a syndicated loan against Bank. When Bank accepted Plaintiffs’ bid and then refused to transfer the loan, Plaintiffs brought this action alleging breach of contract and breach of the implied covenant of good faith and fair dealing. In response, Defendant argued that it had no obligation to transfer the loan because the parties never executed a written sales agreement and Plaintiffs failed to submit a timely cash deposit. Supreme Court granted Plaintiffs’ motion for summary judgment on the breach of contract cause of action. The Appellate Division reversed. The Court of Appeals reversed, holding that Plaintiffs established their entitlement to summary judgment because the prerequisites of executing a written sales agreement and submitting a timely cash deposit were not conditions precedent to formation of the parties’ contract and did not render their agreement unenforceable. View "Stonehill Capital Mgt., LLC v. Bank of the West" on Justia Law