Justia Banking Opinion Summaries

Plaintiff filed suit against WAF and RMS, alleging breach of a reverse mortgage agreement and fraudulent inducement. Plaintiff primarily argued that the property’s foreclosure could have been avoided if WAF had not issued a Home Equity Conversion Mortgage (a HECM) in violation of the United States Housing and Urban Development (HUD) guidelines. The court held that HUD regulations govern the relationship between the reverse-mortgage lender and HUD as insurer of the loan. HUD regulations do not give the borrower a private cause of action unless the regulations are expressly incorporated into the lender-borrower agreement. The court affirmed the district court's summary judgment dismissal, holding that plaintiff cannot assert a claim against defendants for breach of HUD regulations, there was no breach of contract, and no valid fraudulent inducement claim. View "Johnson v. World Alliance Fin. Corp." on Justia Law

A mandatory arbitration clause is contained in each deposit agreement for customers of appellee SunTrust Bank. The clause permits an individual depositor to reject the agreement’s mandatory arbitration clause by giving written notice by a certain deadline. SunTrust claimed it drafted the arbitration clause in such a way that only an individual depositor may exercise this right to reject arbitration on his or her own behalf, thereby permitting that individual to file only an individual lawsuit against the bank. But SunTrust asserted that even if, as it has been determined here, the filing of a lawsuit prior to the expiration of the rejection of arbitration deadline operated to give notice of the individual plaintiff’s rejection of arbitration, the complaint could not be brought as a class action because the filing of a class action could not serve to reject the arbitration clause on behalf of class members who have not individually given notice. Jeff Bickerstaff, Jr., who was a SunTrust Bank depositor, filed a complaint against SunTrust on behalf of himself and all others similarly situated alleging the bank’s overdraft fee constitutes the charging of usurious interest. At the time Bickerstaff opened his account (thereby agreeing to the terms of SunTrust’s deposit agreement), that agreement included a mandatory arbitration provision. In response to the ruling of a federal court in an unrelated action finding the arbitration clause in SunTrust’s deposit agreement was unconscionable at Georgia law, and after Bickerstaff’s complaint had been filed, SunTrust amended the arbitration clause to permit a window of time in which a depositor could reject arbitration by sending SunTrust written notification that complied with certain requirements. SunTrust had not notified Bickerstaff or its other customers of this change in the arbitration clause of the deposit agreement at the time Bickerstaff filed his complaint, but the complaint, as well as the first amendment to the complaint, was filed prior to the amendment’s deadline for giving SunTrust written notice of an election to reject arbitration. It was only after Bickerstaff’s complaint was filed that SunTrust notified Bickerstaff and its other existing depositors, by language printed in monthly account statements distributed on August 24, 2010, that an updated version of the deposit agreement had been adopted, that a copy of the new agreement could be obtained at any branch office or on-line, and that all future transactions would be governed by the updated agreement. SunTrust appealed the order denying its motion to compel Bickerstaff to arbitrate his claim, and the Court of Appeals affirmed the trial court, finding that the information contained in the complaint filed by Bickerstaff’s attorney substantially satisfied the notice required to reject arbitration. Bickerstaff appealed the order denying his motion for class certification, and in the same opinion the Court of Appeals affirmed that decision, holding in essence, that the contractual language in this case requiring individual notification of the decision to reject arbitration did not permit Bickerstaff to reject the deposit agreement’s arbitration clause on behalf of other putative class members by virtue of the filing of his class action complaint. The Georgia Supreme Court reversed that decision, holding that the terms of the arbitration rejection provision of SunTrust’s deposit agreement did not prevent Bickerstaff’s class action complaint from tolling the contractual limitation for rejecting that provision on behalf of all putative class members until such time as the class may be certified and each member makes the election to opt out or remain in the class. Accordingly, the numerosity requirement of OCGA 9-11-23 (a) (1) for pursuing a class complaint was not defeated on this ground. View "Bickerstaff v. SunTrust Bank" on Justia Law

Freestone Insurance Company was a Delaware-domiciled insurer that was placed in liquidation. The liquidation proceeding was governed by the Uniform Insurers Liquidation Act (the Uniform Act). The order that placed Freestone into liquidation contained an injunction (the Anti-Suit Injunction) barring third parties from pursuing claims against Freestone other than through the statutory process for receiving evaluating, and paying claims (the Claims Process). U.S. Bank National Association (the Bank) moved to lift the Anti-Suit Injunction, claiming that it wished to litigate against Freestone outside of the Claims Process and establish the amount of its claims and its status as a general creditor of Freestone. The Court of Chancery denied the Bank’s motion, holding that granting relief on the facts of this case would contravene the policies of the Uniform Act, interfere with the Claims Process, and impose unnecessary costs on Freestone and the Insurance Commissioner of the State of Delaware, who was serving as the receiver for Freestone. View "In re Liquidation of Freestone Ins. Co." on Justia Law

After seeking a mortgage modification under the Home Affordable Modification Program Plaintiff filed a complaint against Wells Fargo Bank, N.A. and Homeward Residential Inc., claiming breach of contract, unfair debt collection under Mass. Gen. Laws ch. 93A, and derivative equitable relief. A federal district court dismissed Plaintiff’s action in its entirety. The First Circuit vacated and remanded, holding that Plaintiff’s complaint sufficiently alleged that Defendants failed to offer her a mortgage modification in a timely manner and that Plaintiff had sufficiently pled damages for her Chapter 93A claim. On remand, the district court granted summary judgment in favor of Defendants. The First Circuit affirmed, holding that Plaintiff’s breach of contract and Chapter 93A claims failed, and therefore, her derivative claim for equitable relief failed as well. View "Young v. Wells Fargo Bank, N.A." on Justia Law

The Government filed suit to determine whether its 2004 tax lien on a foreclosed property had priority over several other competing interests in the property. The district court granted summary judgment for the Government. US Bank held an interest via a 2006 deed of trust, and appealed the district court's judgment. In chronological order, the 2004 deed of trust was recorded (March 29, 2004), the date the Government’s tax lien for unpaid 2004 taxes was assessed (November 21, 2005), and the date the 2006 deed of trust was recorded (July 11, 2006). The court concluded that the release-first sequencing combines with the lengthy gap in recording to prevent the court from considering the release of the 2004 deed of trust and recordation of the 2006 deed of trust to have occurred sufficiently contemporaneously to be part of the same transaction. Allowing U.S. Bank to stretch the notion of “same transaction” to include a more-than-two-month gap between release of an old deed of trust and recordation of a new one would undermine the integrity of the recording statute. The court concluded that the district court did not err by granting summary judgment to the Government because no genuine issue of material fact remains as to whether the 2006 deed of trust retained the priority of the released 2004 deed of trust. View "United States v. US Bank Nat'l Ass'n" on Justia Law

Bank filed this foreclosure action against Debtors. Debtors counterclaimed, alleging that Bank did not own the promissory note or the mortgage at the time it commenced the foreclosure action. The trial court granted summary judgment for Bank, finding that Bank was the holder of the note and the assignee of the mortgage prior to the commencement of the action. The court of appeals reversed, concluding (1) only the current holder of both the note and the mortgage has standing to file a foreclosure action, and (2) genuine issues of material fact existed regarding whether Bank owned the note at the time it commenced the foreclosure action. The Supreme Court reversed, holding (1) when debt on a promissory note secured by a mortgage has been discharged by a bankruptcy court, the holder of the mortgage has standing to foreclose on the property and to collect the deficiency on the note from the foreclosure sale of the property; and (2) no genuine issue of material fact existed regarding any of the elements of Bank’s foreclosure action. View "Deutsche Bank Nat’l Trust Co. v. Holden" on Justia Law

In an antitrust class action brought on behalf of approximately 12 million merchants against Visa and Mastercard, as well as other various banks, plaintiffs alleged conspiracy in violation of Section 1 of the Sherman Act, 15 U.S.C. 1. After the parties agreed to a settlement releasing all claims, the district court certified two settlement-only classes and approved the settlement. Numerous objectors and opt‐out plaintiffs appealed and argued that the class action was improperly certified and that the settlement was unreasonable and inadequate. The court concluded that class members of the (b)(2) class were inadequately represented in violation of both FRCP 23(a)(4) and the Due Process Clause. The court also concluded that procedural deficiencies produced substantive shortcomings in this class action and the settlement. Consequently, the court concluded that the class action was improperly certified and the settlement was unreasonable and inadequate. The court vacated the district court's certification of the class action and reversed the approval of the settlement. The court remanded for further proceedings. View "In re Payment Card Interchange Fee and Merchant Discount Antitrust" on Justia Law

OneWest commenced a foreclosure action against defendant. The district court denied defendant's cross-motion to dismiss and granted OneWest's motion for summary judgment. The district court held in part that a national bank such as OneWest is a citizen only of the state in which its main office is located - not also of the state of its principal place of business - and that OneWest’s main office is indisputably in California. The court agreed with the district court and joined its sister circuits in holding that, for purposes of subject matter jurisdiction, a national bank is a citizen only of the state in which its main office is located. The court also concluded that OneWest had standing to foreclose based on LSA's assignment of all of its rights that FDIC previously had to defendant's loan as the conservator and receiver of IndyMac Federal. Accordingly, the court affirmed the judgment. View "OneWest Bank, N.A. v. Melina" on Justia Law

Plaintiff-lender Deutsche Bank National Trust Company (as trustee) appealed a superior court decision to grant defendant-borrower Kevin Pinette's motion to dismiss. The lender tried to foreclose on property of Pinette, but the superior court dismissed its claims on foreclosure, the unpaid balance on a promissory note, and a deficiency judgment on the ground that they were barred by claim preclusion, as lender had previously instituted an identical action against borrower in 2013, which had been dismissed for failure to prosecute. On appeal, the lender argued that because the 2013 action did not actually adjudge the enforceability of the note and mortgage, the dismissal did not have preclusive effect. Further, lender urged the Vermont Supreme Court to hold that in the mortgage foreclosure context, dismissals with prejudice did not bar subsequent actions based upon new defaults occurring after dismissal of the prior action. Finding no reversible error, the Supreme Court affirmed. View "Deutsche Bank v. Pinette" on Justia Law

A Bank filed an action against four Guarantors on their personal guaranties of an LLC’s debts. That action resulted in three appeals by the Guarantors. The first appeal was generated after the district court granted the Bank’s motions for summary judgment but failed to adjudicate a cross-claim. The second appeal was taken from execution and garnishment proceedings that occurred while the first appeal was pending. The third appeal was taken after one Guarantor moved to vacate the summary judgment order and the district court denied the motion and dismissed the pending cross-claim. The Supreme Court vacated the final orders in the second appeal and affirmed the judgment in the third appeal, holding (1) the execution and garnishment proceedings were void because they were commenced prior to judgment; and (2) the district court correctly overruled the Guarantor’s motion to vacate the summary judgment order. View "Cattle Nat’l Bank & Trust Co. v. Watson" on Justia Law