Justia Banking Opinion Summaries

In 2005, Mutual Bank of Harvey, Illinois, made loans to the defendants, evidenced by promissory notes. As security the defendants executed mortgages. Mortgage I applies to four properties in Appleton, Menasha, and Milwaukee, Wisconsin. Mortgage II applies to a property in Grand Chute. Mortgage III applies to seven Milwaukee properties. The notes went into default in 2008. In 2009, regulators closed Mutual Bank. The Federal Insurance Deposit Corporation (FDIC) was appointed receiver. Ultimately UCB became the owner and holder of the notes and mortgages on the Wisconsin properties. In 2011, UCB commenced mortgage foreclosure. Defendants argued that under the Illinois “single refiling” rule, 735 ILCS 5/13-217, UCB was barred from enforcing the promissory notes underlying the mortgages since UCB had twice formerly filed an action against the defendants to recover on the notes and voluntarily dismissed each of these prior actions. The Seventh Circuit affirmed that Mortgage I, was governed by Illinois law and that UCB was precluded from foreclosing on Mortgage I. The defendants did not appeal a holding that Wisconsin law applied to Mortgages II and III and that Wisconsin law permitted UCB to foreclose. View "United Central Bank v. KMWC 845, LLC" on Justia Law

JPMorgan Chase Bank, N.A. filed a post-judgment motion to intervene in this foreclosure action to protect its interest as assignee of a mortgage on the real estate of Deborah Walton and Margaret Walton. JPMorgan filed its motion three years after a final judgment foreclosing plaintiff Claybridge Homeowners Association’s judgment lien and six years after the suit began. The trial court denied the motion to intervene as untimely. The Supreme Court affirmed, holding (1) the motion to intervene was untimely because Plaintiff’s lis pendens notice, filed the day the suit began, provided constructive notice of Plaintiff’s foreclosure action; and (2) the notice was valid because it was based on Plaintiff’s enforceable, unrecorded judgment lien and because Plaintiff’s foreclosure action was not a personal claim but an in rem real estate action to enforce a judgment lien. View "JPMorgan Chase Bank, N.A. v. Claybridge Homeowners Ass’n" on Justia Law

Tribeca sued after First American refunded a $1 million deposit to a real estate investor out of an escrow account that Tribeca had opened. Tribeca claimed it was entitled to the deposit and asserted claims for breach of contract, breach of fiduciary duty, fraud, and negligence. The trial judge and court of appeal ruled in favor of First American. The escrow instructions did not require that the funds, which had been deposited by a third party, be subject to Tribeca’s directions. First American’s expert witness testified that its conduct fell within the standard of care and that returning the money to the depositor was proper. The court credited the testimony of that expert above the testimony of the Tribeca expert. View "Tribeca Co. v. First American Title Ins." on Justia Law

Appellants Heang Ouch and Morcos Hanna sought to represent a putative class of borrowers who had not kept up with their mortgage loan payments. The borrowers’ loan servicers made a number of contractually-mandated advances (dubbed “delinquency advances”) of funds to the holders of the notes. The loan servicers also, as agents of the holders of the notes, initiated foreclosure proceedings against the borrowers. The borrowers filed separate suits arguing that, despite their non-payment, the servicers’ delinquency advances constituted payments on the borrowers’ debts, that their mortgages were not in default and, accordingly, that the mortgage-holders lacked the power to foreclose. The district court concluded that the services’ payments were not made “on behalf of” the borrowers. The First Circuit consolidated Ouch’s and Hanna’s appeals and affirmed the district court’s rulings denying an amendment to Ouch’s complaint and dismissing Hanna’s complaint with prejudice, holding that the district court did not err in concluding that the payments were not made “on behalf of” the borrowers. View "Ouch v. Fed. Nat’l Mortgage Ass’n" on Justia Law

Plaintiff filed suit on behalf of himself and a class of similarly situated individuals, alleging that Capital One violated certain provisions of the Federal Debt Collection Practices Act (FDCPA), 15 U.S.C. 1692–1692p, by attempting to collect on defaulted or delinquent credit card accounts that Capital One had acquired from HSBC. The district court dismissed plaintiff's amended complaint. The court concluded that it need look no further than the statutory text to conclude that, under the plain language of the FDCPA, a bank (or any person or entity) does not qualify as a “debt collector” where the bank does not regularly collect or attempt to collect on debts “owed or due another” and where “the collection of any debts” is not “the principal purpose” of the bank’s business, even where the consumer’s debt was in default at the time the bank acquired it. In this case, the amended complaint’s factual matter establishes that Capital One’s collection efforts in this case related only to debts owed to it and that debt collection is only some part of, and not the principal purpose of, Capital One’s business. Therefore, Capital One's activity, as alleged by plaintiff, is not the activity of a “debt collector” under the FDCPA, and plaintiff cannot state a claim under the Act. Accordingly, the court affirmed the judgment. View "Davidson v. Capital One Bank (USA), N.A." on Justia Law

In the underlying putative class action, counsel for the named plaintiffs obtained a collection of records owned by JPMorgan Chase Bank, N.A. (Chase). Plaintiffs sought to rely on the documents to pursue claims sounding in fraud, deceit, and conversion against Chase. A dispute arose as to whether portions of the Chase records were shielded from discovery and litigation under a provision of Bank Secrecy Act and related regulations. A magistrate judge reviewed all of the disputed documents in camera and concluded that the majority of the documents were not shielded by statute or regulation. Chase then initiated this mandamus proceeding, asking the First Circuit to intervene by declaring that the Act and related regulations shielded an additional fifty-five pages of Chase records from production or use in the putative class action. The First Circuit denied the petition for writ of mandamus, holding that, even assuming that the Act and regulations apply, the documents at dispute would not be shielded from discovery or use in litigation. View "In re JPMorgan Chase Bank, N.A." on Justia Law

Junior creditor Car-X Associates Corporation sued a mortgagee to foreclose on a lien. In addition to the mortgagee, Car-X’s complaint named senior creditor Huntington National Bank as a defendant to answer as to any interest it may have in the real estate. When Huntington failed to timely respond to the complaint and summons Car-X obtained a default judgment against Huntington. Huntington moved to set aside the default judgment under Indiana Trial Rule 60(B)(1) because of its excusable neglect and under Indiana Trial Rule 60(B)(8) because such relief would be just and equitable under the circumstances. The trial court denied the motion. The Supreme Court (1) affirmed the trial court’s denial of Huntington’s motion to set aside the default judgment for excusable neglect; but (2) remanded to the trial court to reconsider whether equitable reasons support granting Huntington’s motion under Trial Rule 60(B)(8), especially in light of Huntington’s meritorious defense to the underlying foreclosure suit, the substantial amount of money involved, and Car-X’s lack of prejudice from the delay. View "Huntington Nat’l Bank v. Car-X Assocs. Corp." on Justia Law

This case arose out of a failed development project undertaken by BRN Development, Inc. in Coeur d’Alene. The project was for the development of a high-end 325-unit residential and golf course community on the west side of Lake Coeur d'Alene known as "Black Rock North." American Bank was the lender for this project. The Bank ultimately brought a foreclosure action against BRN. BRN brought a cross-claim against Taylor Engineering, Inc., alleging negligence for its role in the development. Taylor recorded a lien against the development. BRN defaulted on the loan, and the Bank named BRN, Taylor, and any other entity claiming an interest in the development. Taylor made a demand on BRN for payment for services rendered. The demand stated that Taylor would "complete the necessary documents" and request the necessary signatures from the local government entities involved in the final PUD approval. Taylor advised BRN that "if the final subdivision approval is not completed and recorded by May 29, 2009, the PUD and preliminary plat approval will expire, the PUD and plat will not vest in the recorded ownership to the real property involved, and the property will revert to its prior zoning and density." This statement was erroneous; it was undisputed that the final plat did not need to be recorded by May 29 in order to vest the PUD. In BRN's cross-claim against Taylor, it alleged professional negligence, negligent and intentional misrepresentation, and failure to disclose based on the erroneous statement Taylor made in its demand letter. The district court separated the claims between Taylor and BRN from the remainder of the American Bank litigation and ultimately held that Taylor was not liable to BRN. BRN appealed. The Supreme Court found no reversible error with the district court's judgment that BRN failed to meet its burden of proving its claims against Taylor, and affirmed that court's judgment. View "American Bank v. BRN Dev." on Justia Law

The FDIC-R filed a civil action against several officers and directors of a North Carolina bank, Cooperative Bank, alleging that the officers and directors were negligent, grossly negligent, and breached their fiduciary duties, resulting in the failure of the Bank. On appeal, the FDIC-R argued that the district court erred in finding that North Carolina’s business judgment rule shields the officers and directors from allegations of negligence and breach of fiduciary duty, and that there was insufficient evidence to support claims of gross negligence. The court vacated the district court’s grant of summary judgment on the FDIC-R’s claims of ordinary negligence and breach of fiduciary duty as to the Officer Defendants because the court found that there is sufficient evidence to rebut the initial evidentiary presumption of the North Carolina business judgment rule; reversed and remanded the district court’s order denying as moot the FDIC-R’s cross-motion for summary judgment, as well as its order denying as moot the FDIC-R’s motion to exclude the declaration of Robert T. Gammill and the attached exhibits; and affirmed the district court’s judgment with respect to the remaining claims. View "FDIC v. Rippy" on Justia Law

Defendants executed a note and mortgage deed in favor of a third party, and after several transactions, all rights created by the instruments were assigned to Wells Fargo Bank, N.A. Defendants later defaulted, and Wells Fargo initiated this action for foreclosure. Defendants moved for summary judgment, asserting that the notice of default issued by Wells Fargo did not comply with Me. Rev. Stat. 14, 6111. The district court granted Defendants’ motion and entered summary judgment for them. In that same order, the court dismissed the foreclosure action without prejudice. The court then amended its previous order so that summary judgment was granted “in part.” The Supreme Judicial Court vacated the court’s orders of partial summary judgment and dismissal of the foreclosure action, holding that the trial court erred by granting less than full summary judgment and by dismissing the foreclosure action without prejudice. Remanded for reinstatement of the initial entry of full summary judgment in favor of Defendants. View "Wells Fargo Bank, N.A. v. Girouard" on Justia Law