Justia Banking Opinion Summaries

In 2011, Federal Home Loan Bank of Boston (Bank), a federally-chartered entity pursuant to 12 U.S.C. 1432(a), filed suit against multiple defendants, including Moody’s Corporation and Moody’s Investors Service, Inc. (collectively, Moody’s), in Massachusetts state court alleging that various rating agencies falsely gave out triple-A ratings to mortgage-backed securities that were riskier than indicated by their ratings. Some of the defendants, but not Moody’s, removed the case to the Massachusetts federal district court on the grounds that the Bank was federally chartered. Moody’s then moved to dismiss on the ground that the Massachusetts district court lacked personal jurisdiction over it. The district judge ultimately granted the motion, concluding that personal jurisdiction was lacking after Daimler AG v. Bauman, and entered separate and final judgment in favor of Moody’s. The district judge also denied the Bank’s motion to sever its claims against Moody’s from those against the other defendants and transfer them to the Southern District of New York. The First Circuit vacated the district court’s dismissal order, holding that the district court erred in concluding that it lacked statutory power to transfer the claims against Moody’s to the Southern District of New York. Remanded. View "Fed. Home Loan Bank of Bost v. Moody's Corp." on Justia Law

Abbey Springs Condominium Association, Inc. and Abbey Springs, Inc. (collectively, Abbey Springs) have a policy forbidding both current and subsequent unit owners from utilizing recreational facilities until unpaid condominium assessments are paid in full. Following a foreclosure action and sheriff’s sale of the property to Walworth State Bank, the Bank paid the former owner’s outstanding assessment under protest. The Bank filed suit against Abbey Springs, asserting that the policy violates Wisconsin law by impermissibly reviving a lien on the condominium units that was eliminated by the foreclosure action. The court of appeals reversed. The Supreme Court reversed, holding that the condominium policy effectively revived the lien against the property that the foreclosure judgment entered against Abbey Springs and the former unit owners had extinguished, and therefore, the policy violates well-established foreclosure law and the foreclosure judgment entered in the underlying foreclosure action. Remanded. View "Walworth State Bank v. Abbey Springs Condo. Ass’n" on Justia Law

Plaintiff, daughter of Martin Schmidt, filed suit against Wells Fargo in Texas state court for negligence, promissory estoppel, and conversion. After removal to federal court, the district court granted summary judgment based on California Probate Code 13106(a), which discharges the holder of funds “from any further liability with respect to the money or property” upon receipt of an affidavit conforming to certain statutory requirements. The court concluded that, because plaintiff has failed to probate her father’s will, the only statutory claim that she may possibly have is under California’s laws of intestate succession, which give a decedent’s surviving children a share in the estate not passing to the decedent’s surviving spouse. A claim under the laws of intestacy, however, is inferior to a claim under the laws of testate succession, and it is questionable whether a claim to a percentage of an estate equates to a claim to specific assets in the estate, like the Wells Fargo bank accounts at issue here. The court also noted that plaintiff has waived any argument based on intestate succession by failing to raise the issue in the district court or in her briefs on appeal. Therefore, the court held that it is immaterial that plaintiff gave Wells Fargo actual notice or whether she reasonably and detrimentally relied on any representation by Wells Fargo’s Houston employees. The California legislative scheme grants Wells Fargo immunity from any injury that plaintiff may have suffered from the disbursement of funds to her stepmother. Accordingly, the court affirmed the judgment. View "Di Angelo v. Wells Fargo" on Justia Law

After David Walker received a loan from Guaranty to produce his crops of soybeans and corn, Guaranty took a production-money security interest in Walker’s crops, and Walker later delivered these crops to Agrex d/b/a FGDI under a series of contracts. Because Walker failed to fulfill all of his contracts with FGDI, FGDI applied a set-off to the amount it owed Walker for his crops in order to cover its losses arising from the undelivered crops. Guaranty filed suit against FGDI seeking to recover the entire amount due Walker under his contracts with FGDI. The district court granted summary judgment to Guaranty. The court affirmed the judgment because FGDI took Walker’s crops subject to Guaranty’s security interest under the Food Security Act of 1985, 7 U.S.C. 1621, 1631. View "Guaranty Bank & Trust Co. v. Agrex, Inc." on Justia Law

Hawley McIntosh purchased a home located within a common-interest community. McIntosh’s first mortgage lender subsequently foreclosed on McIntosh’s home. Scott Ludwig purchased the property and subsequently transferred the property by quitclaim deed to Ikon Holdings, LLC. Ikon acknowledged that it acquired the property subject to the homeowner association’s (Horizons) superpriority lien but disagreed that the lien included nine months, rather than six months, of unpaid assessments or the collection fees and foreclosure costs Horizon was seeking to recoup. Thereafter, Ikon filed the underlying declaratory relief action. The district court granted partial declaratory relief, concluding that Horizons’ covenants, conditions, and restrictions (CC&Rs) limited its superpriority lien to an amount equal to six months of assessments, which did not offend Nev. Rev. Stat. 116.3116(2)’s superpriority provision providing for nine months of assessments. The Supreme Court affirmed in part and reversed in part, holding (1) a superpriority lien for common expense assessments pursuant to section 116.3116(2) does not include collection fees and foreclosure costs incurred by an HOA; and (2) an HOA’s CC&Rs that purport to create a superpriority lien covering certain fees and costs over six months preceding foreclosure are superseded by the terms of the superpriority lien created by section 116.3116(2). View "Horizons at Seven Hills Homeowners Ass’n v. Ikon Holdings, LLC" on Justia Law

After obtaining a final judgment against Patrick Sill, JBK Associates, Inc. served garnishment writs on Wells Fargo Advisors, LLC in order to collect on the judgment from Sill’s bank account. Sill filed a motion to dissolve the garnishment writ on the grounds that the funds in that account were entitled to homestead protection. The account contained the sale proceeds from Sill’s home. Sill then purchased securities with a portion of the money. The trial court granted Sill’s motion. The Fourth District Court of Appeal affirmed, concluding that the use of the proceeds was not inconsistent with the purposes of Arizona’s homestead exemption. The Supreme Court affirmed, holding that because Sill manifested his intent to reinvest the sale proceeds into a new homestead, Sill’s actions did not eliminate his homestead protection. View "JBK Assocs., Inc. v. Sill Bros., Inc." on Justia Law

Charles and Donna Nickerson appeal from the grant of summary judgment in favor of PHH Mortgage and J.P. Morgan Chase Bank. The suit involved an action for judicial foreclosure of a loan by PHH Mortgage against the Nickersons, and third-party claims against J.P. Morgan Chase by the Nickersons. The Nickersons argued they were entitled to relief based on: mistakes by the court; surprise due to the actions and withdrawal of their former counsel; excusable neglect due to their reliance on their former counsel; new evidence showing PHH did not have standing to pursue foreclosure; fraud regarding PHH’s chain of title, the amount of default, and coercion of the Nickersons at closing; and misconduct of the opposing parties regarding the depositions of the Nickersons and the submission of a fraudulent affidavit. The district court denied the Nickersons’ motions, concluding that the Nickersons failed to present admissible evidence to support their claims. Finding no reversible error in the trial court's decision to grant summary judgment in favor of PHH Mortgage, the Supreme Court affirmed. View "PHH Mortgage v. Nickerson" on Justia Law

BNY appealed the district court's grant of summary judgment for Morgan Stanley, arguing that the district court erred in concluding, as a matter of law, that Morgan Stanley was not contractually obliged to repurchase a mortgage loan allegedly issued in breach of a contract representation because (1) the Trustee’s duty to give “notice to cure” within three business days of becoming aware of a material breach was a condition precedent to the seller’s repurchase obligation, and (2) that condition was not performed within the specified three days, but two to four weeks later. The court concluded that the contract at issue did not require notice to cure as a condition precedent to Morgan Stanley remedying breach where the phrase “notice to cure” does not appear in the contract. In this case, the contract contains distinct provisions for giving notice of breach and making request for cure, neither of which is cast in the express language of condition. Therefore, the request for cure is not a condition precedent to Morgan Stanley’s remedy obligations, and the timeliness of a request for cure, as well as of a notice of breach, is properly construed as a promise and reviewed for substantial performance. The court also concluded that the notice of breach and request for cure in this case cannot be held untimely as a matter of law, particularly when reviewed for substantial performance. Accordingly, the court reversed and remanded for further proceedings. View "Bank of New York Mellon Trust v. Morgan Stanley Mortgage" on Justia Law

The Danielses obtained a $650,000 adjustable rate loan secured by a deed of trust on their Santa Cruz residence. When their interest rate adjusted upward, they spent years in unsuccessful attempts to obtain a loan modification from their then-loan servicer, Bank of America (BofA). In the process, they fell behind on their loan payments, allegedly at the behest of BofA. They sued BofA and several other entities to prevent a non-judicial foreclosure sale of their home and to collect monetary damages. The trial court dismissed without leave to amend. The court of appeal reversed and remanded, holding that: when a lender acquires by assignment a loan being administered by a loan servicer, the lender may be liable to the borrower for misrepresentations made by the loan servicer, as the lender‟s agent, after that assignment; and, a loan servicer may owe a duty of care to a borrower through application of the “Biakanja” factors, even though its involvement in the loan does not exceed its conventional role. View "Daniels v. Select Portfolio Servicing, Inc." on Justia Law

This was a case involving a dispute over a mistakenly released deed of trust, which secured a 2004 residential mortgage between Ralph Sheets and the lender, Bank of America, N.A., f/k/a Countrywide Home Loans, Inc. (Countrywide); the servicer of the loan; and the trustee who executed the mistaken release (companies collectively referred to as “Bank of America”). Sheets borrowed $65,250 from Countrywide. He executed a promissory note, secured by a deed of trust to his home in New Meadows. Between December of 2004 and April of 2009, Sheets timely paid the amounts due on the note. In 2008, Countrywide sent Sheets a letter telling Sheets that he “may” qualify for a lower interest rate on a refinancing loan and estimating he had $88,056 equity in the home. Around this time, Bank of America acquired and merged with Countrywide. In the late spring of 2009, Sheets applied for a new loan (the 2009 Refinancing). Closing on the new loan was scheduled for October 27. Sheets testified that the title company agent at the closing would not let him execute the documents because they were “bad” and incomplete. Thus, the 2009 Refinancing did not close. Sheets arrived home and found proposed closing documents, but he did not sign the documents because he did not agree with the terms contained therein. The trustee of the deed of trust, ReconTrust Company, N.A. (ReconTrust), erroneously recorded a full reconveyance of the deed of trust securing Sheets’ original note. How the erroneous reconveyance came to be recorded was not clear. Bank of America claimed that it caused the reconveyance to be recorded because it mistakenly proceeded as if the 2009 Refinancing had closed. On March 29, 2010, Bank of America sent Sheets a letter asking Sheets to stipulate to rescinding the reconveyance. The next day, Bank of America filed a complaint against Sheets seeking reinstatement of the deed of trust. On May 25, 2010, Bank of America sent Sheets a notice of its intent to commence foreclosure proceedings. Sheets filed an answer, counterclaim, demand for jury trial, and third party complaint against the third-party defendants in this action. He brought counterclaims for: (1) breach of contract; (2) specific performance; (3) violation of the Idaho Consumer Protection Act; (4) violation of the federal Fair Credit Reporting Act; (5) slander of credit; and (6) violation of Idaho Code section 45-1502. In 2012, Bank of America filed two motions for summary judgment, seeking reinstatement of the deed of trust and dismissal of Sheets’ counterclaims. The district court granted summary judgment reinstating the deed of trust and dismissing Sheets’ counterclaims. Finding no error in the grant of summary judgment, the Supreme Court affirmed. View "Sheets v. Bank of America" on Justia Law