Justia Banking Opinion Summaries

NBI honored White’s check, resulting in an overdraft of his payroll account of $382,000. Unable to recover the money, NBI closed White’s accounts and obtained a judgment in Indiana state court. White was also convicted on criminal charges. In his subsequent bankruptcy, NBI won its adversary proceeding. White sued current and former NBI officers under the Federal Reserve Act, 12 U.S.C. 503, which establishes civil liability for bank officers and directors who violate the Federal Reserve Act and the False Entry Statute. White alleged violation of the False Entry Statute, 18 U.S.C. 1005, by falsifying official bank reports in order to cover up unauthorized transfers made from White’s NBI business accounts. The district court dismissed for failure to allege that he relied on the false statements. The Seventh CIrcuit affirmed: White did not plead that he was harmed as a consequence of the alleged violations. Finding White’s appeal frivolous, the court granted a motion for sanctions.t View "White v. Keely" on Justia Law

Plaintiff filed suit for breach of contract, negligence, wrongful foreclosure, and violations of the Texas Deceptive Trade Practices Act (DTPA), Tex. Bus. & Com. Code 17.50(a)(1)). On appeal, plaintiff challenged the district court's dismissal of her claims, as well as her motion to join a non-diverse defendant. The court concluded that the district court's dismissal of plaintiff's breach-of-contract claim was proper because she failed to allege any facts showing her own performance and did not refute the facts in documents referred to in her complaint, central to her claims, and attached to the motion to dismiss; the dismissal of the negligence claim was proper where any damages stemming from an alleged violation of those solely contractual duties are not redressable in tort; the wrongful-foreclosure claim was properly dismissed where plaintiff never alleged that Wells Fargo disposed of the house at a “grossly inadequate selling price,” nor does she allege that Wells Fargo fraudulently chilled the bidding at the foreclosure sale; and, where plaintiff bases her DTPA claims on Wells Fargo’s failure to make automatic withdrawals to pay the loan, such services cannot form the basis of a DTPA claim because they are incidental to the loan and would serve no purpose apart from facilitating the mortgage loan. Finally, in regard to the motion to join a non-diverse defendant, the district court applied the correct legal standard and its finding of fact were not clearly erroneous. Accordingly, the court affirmed the judgment. View "Villarreal v. Wells Fargo Bank, N.A." on Justia Law

PNC Bank, National Association, and Sonja Moore-Dennis separately appealed a Circuit Court order denying their motion to compel arbitration as to Joseph Franklin's claims against them. Franklin had three bank accounts with the predecessor bank to PNC Bank, RBC Bank (USA), before RBC Bank merged with PNC Bank. Shortly before the merger, PNC Bank, in January 2012, allegedly mailed a welcome letter and a PNC Bank Account Agreement. The account agreement did not contain an arbitration provision. Tamara Franklin, Franklin's niece came to to visit one day. Tamara noticed a document that she thought was a bank statement from PNC Bank. After looking at the document, Tamara was concerned that Franklin owed money to PNC Bank. Franklin said he did not owe PNC Bank any money but that Tamara could call his financial advisor, Sonja Moore-Dennis, if she had any concerns. Franklin alleged that Moore-Dennis was a PNC Bank agent or employee at this time; PNC Bank denies that it had ever employed Moore-Dennis. After investigating the matter, Franklin and Tamara came to the conclusion that Moore-Dennis had been stealing funds from Franklin's accounts. Additionally, it appeared to Franklin and Tamara that Moore-Dennis had created an online banking profile for Franklin but had set up the profile so that account notifications were sent to her e-mail address. Franklin, who is elderly, did not have Internet access or an e-mail address and did not know how to use online banking. Franklin sued PNC Bank and Moore-Dennis alleging fraud, suppression, breach of fiduciary duty, and various forms of negligence and wantonness. PNC Bank moved to compel arbitration, raising the terms of the account agreement as grounds for its motion. The Alabama Supreme Court affirmed the circuit court’s order, finding that the Bank and Moore-Dennis failed to prove that Franklin received the account agreement or accessed a specific web page that contained the arbitration provision as described in the account agreement. View "Moore-Dennis v. Franklin" on Justia Law

While living in Maryland, Petitioner opened a personal line of credit and a credit card account with Respondent. Respondent later filed two complaints against Petitioner in a Maryland district court, one for the outstanding balance on the credit card account and the other for the amount owed on the line of credit. At the time of the filings, Petitioner was living and working in Texas. Respondent was awarded default judgments. Respondent subsequently secured two writs of garnishment in the same actions from the district court. The writs were served on the resident agent of Petitioner’s employer. Petitioner moved to quash the writs, arguing that his wages earned solely for work he performed in Texas were not subject to garnishment in Maryland. The district court denied the motions to quash. The Court of Appeals affirmed, holding that the district court in its continuing and ancillary jurisdiction properly ordered Petitioner’s wages earned in Texas to be subject to garnishment served upon Petitioner’s employer because of the employer’s continuous and systematic business in Maryland. View "Mensah v. MCT Fed. Credit Union" on Justia Law

Plaintiff filed suit against Fannie Mae, seeking to quiet title on the ground that Wells Fargo waived its right to foreclose by accepting payments for sixteen months after the initial default, so it could not sell the property at issue to Fannie Mae. The court concluded that Wells Fargo engaged only in conduct that was contemplated by the DOT’s non-waiver provisions and thus was entirely consistent with its intent to preserve the right to accelerate and foreclose. Therefore, plaintiff failed to allege any facts that would make his claim to relief plausible. Accordingly, the court affirmed the district court's dismissal of his suit. View "Martin v. Federal National Mtge Assoc." on Justia Law

Relators filed suit under the False Claims Act, 31 U.S.C. 3729(b)(2)(A), against various lenders and loan servicers, alleging that defendants certified that loans purchased by Fannie Mae and Freddie Mac were free and clear of certain home owner association liens and charges when they were not. At issue was whether Fannie Mae and Freddie Mac are officers, employees, or agents of the federal government for purposes of the Act. The court concluded that the district court properly held that a claim presented to Fannie Mae or Freddie Mac is not presented to an “officer, employee or agent” of the United States. Fannie Mae and Freddie Mac are private companies, albeit companies sponsored or chartered by the federal government. The court's prior decision in Rust v. Johnson, where it held that Fannie Mae was a federal instrumentality for state/city tax purposes, does not change the result, because Rust does not address Fannie Mae or Freddie Mac’s status under the False Claims Act. Accordingly, the court affirmed the judgment. View "United States ex rel. Adams v. Aurora Loan Servs." on Justia Law

The dispute in this receivership action centered on the receiver’s sale of commercial property owned by P.T.A. Realty, LLC to NMLM Realty, LLC. NMLM’s agent, Liberty Title & Escrow Company, failed to list all the municipal taxes owed on the property, resulting in an overpayment of funds to Bank of America, N.A. NMLM filed a petition for restitution against the Bank, which Liberty incorporated in its own petition for restitution against the Bank. The Bank argued that it was insulated from a restitution claim as a third-party creditor that received the payment in good faith and without notice of Liberty’s error. A hearing justice ruled in favor of the Bank. NMLM and Liberty filed a joint notice of appeal. The Supreme Court affirmed, holding (1) there was no evidence that, at the time the proceeds from the sale were disbursed, the Bank knew that it was receiving an overpayment of funds; and (2) therefore, the Bank received the excess funds in good faith, and NMLM and Liberty could not seek the return of their erroneous payment predicated on the theory of unjust enrichment. View "Bank of America, N.A. v. P.T.A. Realty, LLC, et al." on Justia Law

Various members of the Doty family gave three deeds of trust (DOT) conveying specific tracts of real estate to West Gate Bank, Inc. as security for certain loans. The DOTs also secured future advances given by the Bank. One advance was documented by Promissory Note 257. The Dotys defaulted on Note 257, and therefore, the Bank exercised its power of sale under one DOT and applied the funds generated by the sale to Note 257. The Dotys later brought a declaratory judgment action asking the district court to declare that the Bank was barred by Neb. Rev. Stat. 76-1013 from recovering any amount still owed under Note 257. The district court granted summary judgment in favor of the Dotys, concluding that the Bank was barred by the three-month statute of limitations in section 76-1013 from taking action to collect amounts due on Note 257. The Supreme Court reversed, holding that the district court (1) correctly determined that section 76-1013 precludes the Bank from bringing a personal deficiency action against the Dotys for the balance owed under Note 275; but (2) erred in determining that the three-month statute of limitations set forth in section 76-1013 applies to successive foreclosures on remaining collateral. Remanded. View "Doty v. West Gate Bank, Inc." on Justia Law

Plaintiffs obtained residential mortgage loans from M&T to finance the purchase of their homes and, because the loans exceeded 80% of the value of the residences, agreed to pay for private mortgage insurance. As is customary, M&T selected the insurers who, in turn, reinsured the insurance policy with M&T Reinsurance, M&T’s captive reinsurer. Beginning in 2011, counsel sent letters to Plaintiffs advising that they were investigating claims concerning M&T’s captive mortgage reinsurance. Plaintiffs agreed to be part of a lawsuit against M&T and filed a putative class action complaint alleging violations of the anti-kickback and anti-fee-splitting provisions of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2607, and unjust enrichment. After discovery, the court granted M&T summary judgment, finding the claims time-barred and that Plaintiffs could not equitably toll the limitations period because none of them had exercised reasonable diligence in investigating any potential claims under RESPA. The Third Circuit affirmed, noting that the one-year statute of limitations runs “from the date of the occurrence of the violation,” View "Cunningham v. M&T Bank Corp." on Justia Law

Plaintiff was a borrower on a home loan secured by a deed of trust. The deed of trust was assigned multiple times. After Plaintiff’s home was sold at public auction, Plaintiff filed this wrongful foreclosure action alleging that the assignment of the deed of trust to the foreclosing party bore defects rendering the assignment void. The court of appeals concluded that Plaintiff could not state a cause of action for wrongful foreclosure based on the allegedly void assignment because she lacked standing to assert improprieties in the assignment where, as an unrelated third party to that assignment, Plaintiff was unaffected by such deficiencies. The Supreme Court reversed, holding that a home loan borrower who has suffered a nonjudicial foreclosure has standing to sue for wrongful foreclosure based on an allegedly void assignment even though she was in default on the loan and was not a party to the challenged assignment because an allegation that the assignment was void will support an action for wrongful foreclosure. View "Yvanova v. New Century Mortgage Corp." on Justia Law