Justia Banking Opinion Summaries

Catherine Rodriguez defaulted on her loan and elected for foreclosure mediation. At a third, unsuccessful mediation between Nationstar Mortgage, LLC, as the agent of the Bank of New York Mellon (BONY), and Rodriguez, Nationstar presented an uncertified, inaccurate copy of the promissory note. Thereafter, BONY filed a complaint for judicial foreclosure. Upon learning that the note presented at the third mediation was inaccurate, Rodriguez filed a petition for judicial review of the mediation against Nationstar and BONY (collectively, Nationstar). The district court excused the untimeliness of the petition based on good cause and found that the note’s certification was false and that Nationstar knew of the falsity. The court sanctioned Nationstar $100,000. The Supreme Court reversed, holding that the district court lacked jurisdiction to consider the petition for judicial review because the filing of such a petition is not permitted beyond the thirty-day time period provided in Nevada’s Foreclosure Mediation Rule 21(2), even when a party discovers fraud months after the mediation. View "Nationstar Mortgage v. Rodriguez" on Justia Law

In 2003, Valley View and, Bedford Downs, wanted to operate “racinos,” combination horse tracks and casinos. Each would need the last harness-racing license available in Pennsylvania to do so. Valley View agreed to acquire Bedford for $55 million, with Citizens Bank acting as escrow agent. Valley View borrowed money from Credit Suisse. Valley View then obtained the harness-racing license, but failed to secure the needed gambling license and filed for Chapter 11 bankruptcy. The Trustee sued Merit, a 30% shareholder in Bedford, alleging that Bedford’s transfer to Valley View was avoidable under 11 U.S.C. 544, 548(a)(1)(b), and 550, and the money was properly part of the bankruptcy estate. Merit maintained that the transfer was protected under the safe harbor, 11 U.S.C. 546(e), which protects transfers that are “margin payment[s]” or “settlement payment[s]” “made by or to (or for the benefit of)” certain entities including commodity brokers, securities clearing agencies, and “financial institutions” and transfers “made by or to (or for the benefit of)” the same types of entities “in connection with a securities contract.” Merit relied on the involvement of Citizens Bank and Credit Suisse. The district court agreed with Merit. The Seventh Circuit reversed; section 546(e) does not protect transfers that are simply conducted through financial institutions (or the other section 546(e) entities), where the entity is neither the debtor nor the transferee but only the conduit. View "FTI Consulting, Inc. v. Merit Mgmt. Group, LP" on Justia Law

Appellant filed two legal actions. Appellant filed a complaint in federal court alleging violations of his due process and equal protection rights. The federal district court dismissed the complaint, and Appellant appealed. Appellant also filed this original action seeking a writ of mandamus to compel an employee of JPMorgan Chase Bank to pay him a certain amount of money. The court of appeals dismissed the complaint. The Supreme Court affirmed, holding that Appellant’s claims were barred by res judicata, Appellant had an adequate remedy in the ordinary course of law, and Appellant failed to identify a clear legal right to the relief he sought. View "State ex rel. McQueen v. Weibling-Holliday" on Justia Law

Ocean Communities Federal Credit Union filed a foreclosure complaint against Guy Roberge and Lisa Pombriant concerning certain residential property. The district court granted a summary judgment for foreclosure and sale in favor of the Credit Union in the amount of $144,998.97, concluding that the Credit Union established its entitlement to a summary judgment as to each element of foreclosure. The Supreme Judicial Court vacated the judgment of the district court, holding that the Credit Union’s summary judgment filings failed to establish at least four of the necessary eight elements for a residential foreclosure. Remanded for a trial. View "Ocean Cmtys. Fed. Credit Union v. Roberge" on Justia Law

American Express Bank FSB filed a complaint alleging that Diane Deering owed $22,339.94 in credit card debt. After a trial, the district court entered judgment in favor of American Express in that amount. On appeal, Deering argued that the trial court erred in admitting American Express’s business records pursuant to the business records exception to the hearsay rule. Specifically, Deering challenged the trial court’s determination that American Express provided the required foundation for admission of the documents. The Supreme Judicial Court affirmed, holding that the trial court did not err or abuse its discretion in admitting the records over Deering’s objections. View "American Express Bank FSB v. Deering" on Justia Law

Claimants-Appellants appealed an award of summary judgment which forfeited to the United States various claimants’ interests in multiple properties, including a 36‐story office building located at 650 Fifth Avenue in Manhattan, real properties in Maryland, Texas, California, Virginia, and New York, and the contents of several bank accounts. Also at issue is the September 9, 2013 order denying a motion to suppress evidence seized from the Alavi Foundation’s and the 650 Fifth Avenue Company’s office. The court vacated the judgment as to Claimants Alavi Foundation and the 650 Fifth Ave. Co., of which Alavi is a 60% owner because there are material issues of fact as to whether the Alavi Foundation knew that Assa Corporation, its partner in the 650 Fifth Ave. Co. Partnership, continued after 1995, to be owned or controlled by Bank Melli Iran, which is itself owned or controlled by the Government of Iran, a designated threat to this nation’s national security; the district court erred in sua sponte considering and rejecting claimants’ possible statute of limitations defense without affording notice and a reasonable time to respond; in rejecting claimants’ motion to suppress evidence seized pursuant to a challenged warrant, the district court erred in ruling that claimants’ civil discovery obligations obviate the need for any Fourth Amendment analysis; and the district court erred in its alternative ruling that every item of unlawfully seized evidence would have been inevitably discovered. Accordingly, the court vacated and remanded for further proceedings. View "In re 650 Fifth Avenue and Related Properties" on Justia Law

In 2007, Naifeh and Ristic obtained a loan from WaMu for San Francisco property. WaMu provided a disclosure of the loan terms as required by the Truth in Lending Act (TILA, 15 U.S.C. 1601). After the borrowers defaulted, Naifeh sent letters, asserting that she and Ristic were rescinding the loan under “Regulation Z” (12 C.F.R. 226.33(b)) based on TILA disclosure deficiencies. A month before the scheduled foreclosure sale Naifeh caused several documents to be recorded with the county, purporting to show she owed nothing on the loan. Naifeh was present at the trustee’s sale, distributing notices representing that the trustee knew there were contrary claims to title. No one bid. A Trustee’s Deed was recorded, granting title to BofA. Naifeh continued to record documents. BofA filed suit, seeking cancellation of instruments and quiet title. The trial court held that Naifeh’s notice of rescission was insufficient. Because of a decision subsequently issued by the U.S. Supreme Court, the court of appeal vacated and remanded for adjudication of the rescission defense. A borrower may rescind the loan transaction under TILA without filing suit, but when the rescission is challenged, a court may decide whether the notice was timely and whether the TILA procedure should be modified in light of particular circumstances. View "U.S. Bank Nat'l Ass'n as Tr. v. Naifeh" on Justia Law

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