Justia Banking Opinion Summaries

In 2004, Brown obtained a $450,000 loan secured by a deed of trust recorded against her Oakland property, identifying Washington Mutual as the lender and beneficiary and CRC as the trustee. Washington Mutual failed in 2008. The FDIC was appointed its receiver and sold Chase many of the assets and liabilities (P&A Agreement). In 2011, CRC recorded a notice of default as trustee for Chase, claiming that Brown was in arrears by $60,984.42. Chase then assigned the deed of trust to Deutsche Bank; CRC remained as the trustee and recorded a notice of sale. In 2012, Brown filed the first of three lawsuits challenging the foreclosure. In 2013, CRC executed a third notice of sale. Two days later, Brown filed her third lawsuit, alleging that the assignment to Deutsche Bank was invalid and the foreclosure proceedings were initiated without authority. The trial court granted a request for judicial notice, which covered foreclosure-related documents, filings from the earlier lawsuits, and the P&A Agreement, then dismissed without leave to amend. The court of appeal affirmed. Brown‟s contention that Deutsche Bank and CRC lacked authority to enforce the deed of trust was contradicted by matters subject to judicial notice. View "Brown v. Deutsche Bank Nat. Trust Co." on Justia Law

Relators filed a qui tam action under the False Claims Act (FCA), 31 U.S.C. 3729(a)(1)(A), alleging that Wells Fargo defrauded the government within the meaning of the FCA by falsely certifying that they were in compliance with various banking laws and regulations when they borrowed money at favorable rates from the Federal Reserve’s discount window. The district court granted defendants’ motion to dismiss. The district court held that the banks’ certifications of compliance were too general to constitute legally false claims under the FCA and that relators had otherwise failed to allege their fraud claims with particularity. The court agreed, concluding that it has long recognized that the FCA was not designed to reach every kind of fraud practiced on the Government. Even assuming relators’ accusations of widespread fraud are true, they have not plausibly connected those accusations to express or implied false claims submitted to the government for payment, as required to collect the treble damages and other statutory penalties available under the FCA. Accordingly, the court affirmed the dismissal of the suit. View "Bishop v. Wells Fargo" on Justia Law

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