Justia Banking Opinion Summaries

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that purport to create a superpriority lien covering certain fees and costs over six months preceding foreclosure are superseded by the terms of the superpriority lien created by section 116.3116(2).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

Plaintiffs filed suit against Green Tree to prevent it from foreclosing on plaintiffs' home. Plaintiffs alleged that Green Tree lacked authority to foreclose. The district court granted Green Tree's motion to dismiss based on plaintiffs' lack of standing to challenge the assignment between creditors and concluded that plaintiffs' notice claim failed to state a plausible claim for relief under Ashcroft v. Iqbal. The court concluded that plaintiffs' invalid assignment claim is nearly identical to the claim in Quale v. Aurora Loan Services, LLC, where the court determined the homeowners did not have standing to raise such a claim because they “were not injured by the assignment” and any harm to the homeowners was not fairly traceable to the allegedly invalid assignment. The court also rejected plaintiffs' contention that the district court erred in dismissing their amended complaint where plaintiffs failed to state a facially plausible claim for relief. Accordingly, the court affirmed the judgment. View "Brown v. Green Tree Servicing LLC" on Justia Law

The Blanchards agreed to sell Marathon County property to the Hoffmans, who paid $30,000 up front. The land contract balance was due in 2015, with an option to close early by paying off the Blanchards’ new $142,000 mortgage, obtained as part of the agreement. The parties signed a separate “rental agreement,” under which the Hoffmans paid $500 per month. The land contract was not recorded. The lender obtained an Assignment of Leases and Rents as collateral, but did not obtain an Assignment of Land Contract. The bank recorded its mortgage and the Assignment. In 2014, the Blanchards filed a bankruptcy petition. The trustee filed an adversary proceeding against the lender under 11 U.S.C. 544(a)(3), which grants him the position of a bona fide purchaser of property as of the date of the bankruptcy, to step ahead of the mortgage and use the Blanchards’ interest in the land contract for the benefit of unsecured creditors. The trustee argued that a mortgage can attach a lien only to real property and that the Blanchards' interest under the land contract was personal property. The district court affirmed summary judgment in favor of the bank. The Seventh Circuit affirmed. A mortgage can attach a lien to a vendor’s interest in a land contract under Wisconsin law; this lender perfected its lien by recording in county land records rather than under UCC Article 9. View "Liebzeit v. Intercity State Bank, FSB" on Justia Law

The Blanchards agreed to sell Marathon County property to the Hoffmans, who paid $30,000 up front. The land contract balance was due in 2015, with an option to close early by paying off the Blanchards’ new $142,000 mortgage, obtained as part of the agreement. The parties signed a separate “rental agreement,” under which the Hoffmans paid $500 per month. The land contract was not recorded. The lender obtained an Assignment of Leases and Rents as collateral, but did not obtain an Assignment of Land Contract. The bank recorded its mortgage and the Assignment. In 2014, the Blanchards filed a bankruptcy petition. The trustee filed an adversary proceeding against the lender under 11 U.S.C. 544(a)(3), which grants him the position of a bona fide purchaser of property as of the date of the bankruptcy, to step ahead of the mortgage and use the Blanchards’ interest in the land contract for the benefit of unsecured creditors. The trustee argued that a mortgage can attach a lien only to real property and that the Blanchards' interest under the land contract was personal property. The district court affirmed summary judgment in favor of the bank. The Seventh Circuit affirmed. A mortgage can attach a lien to a vendor’s interest in a land contract under Wisconsin law; this lender perfected its lien by recording in county land records rather than under UCC Article 9. View "Liebzeit v. Intercity State Bank, FSB" on Justia Law