Justia Banking Opinion Summaries

In 2011 Lehman filed suit, claiming Gateway was obliged to make good on mortgage loans that Lehman’s subsidiary purchased almost 10 years earlier from Arlington Capital. In 2007 contracts, Arlington agreed to indemnify Lehman for losses on those loans. The following year, Arlington sold its assets to Gateway. The district court held that although it was clear Arlington was liable to Lehman on three loans, it was unclear whether Gateway was liable for Arlington’s debts and a trial was necessary to determine whether a de facto merger had taken place between Gateway and Arlington. After considering the evidence, the court concluded that a de facto merger had occurred and held Gateway for $450,000 plus interest. The Third Circuit affirmed. Gateway violated FRCP 10 when it failed to include in the appellate record a transcript necessary to evaluate its principal claim, so that claim forfeited. Gateway’s other claims lacked merit. View "Lehman Bros. Holdings Inc v. Gateway Funding Diversified Mortg. Servs., LP" on Justia Law

In 2013, the Superior Court granted Branch Banking and Trust Company's ("BB&T") motion for summary judgment on its foreclosure and breach of contract claims. In 2014, the Superior Court entered a final judgment order awarding damages to BB&T. The Eids failed to file a timely notice of appeal of thatorder. Instead, a little over two months after the entry of the final judgment order, the Eids filed a motion with the Superior Court under Rule 60(b) seeking vacatur of the final judgment order, contending that their counsel never received actual notice of the final judgment order. The Superior Court granted the Eids' motion to vacate. Then trial court entered a new final judgment order from which the Eids could file a timely notice of appeal. BB&T filed an appeal from the Superior Court's grant of the Rule 60(b) motion to vacate, and the Eids filed a cross-appeal of the Superior Court's grant of summary judgment in favor of BB&T. BB&T raises three issues on appeal: (1) that pursuant to Rule 77(d), the trial court lacked authority to grant the motion to vacate the final judgment order; (2) that the trial court erred as a matter of law when it applied a vague and undefined "interest of justice" standard to the motion to vacate; and (3) that the trial court abused its discretion in granting the motion to vacate because the Eids failed to establish that they were entitled to relief under Rule 60(b)(1) or (b)(6). On cross-appeal, the Eids also raised three issues: (1) that BB&T lacked standing to institute a foreclosure; (2) that the affidavit supporting the motion for summary judgment was defective; and (3) that BB&T failed to demonstrate that there were no genuine issues of material fact. After review, the Supreme Court agreed with BB&T that the trial court improperly granted the motion to vacate the final judgment, and reversed that decision. View "Branch Banking & Trust Co. v. Eid" on Justia Law

Plaintiffs asserted six causes of action against Wells Fargo Bank, N.A. (Wells Fargo), the Federal National Mortgage Association (Fannie Mae), Erika Knapstein, Bank of the West, and Jeff T. Courtney arising out of the foreclosure and subsequently sale of Plaintiffs’ residence. As a premise for all causes of action, Plaintiffs asserted that the assignment of their mortgage was defective. The district court dismissed Bank of the West and Courtney for failure to prosecute and granted summary judgment in favor of Wells Fargo, Fannie Mae, and Knapstein. The Supreme Court affirmed, holding (1) whether the assignment of the mortgage was properly executed was not a material issue in the causes of action addressed in this appeal because Plaintiffs could not show an injury arising from the assignment, and therefore, Plaintiffs lacked standing to assert any cause of action that dependent upon the validity of the assignment; and (2) the district court correctly dismissed Courtney for failure to prosecute, but Bank of the West should have been dismissed from the action for lack of standing. View "Marcuzzo v. Bank of the West" on Justia Law

Salazar was born in Mexico in 1945. He speaks little English and cannot write English. His wife attended school through the second grade. She does not speak, read or write English. They operate a food truck. In 1992, they purchased commercial property on Brundage Lane in Bakersfield. Most of the businesses occupying the property were run by their children, who did not pay rent. They also had rent-paying tenants. In 2005, a deed of trust and assignment of rents was recorded, listing as collateral the Brundage Property and another parcel. The debt was a promissory note for $350,000. The proceeds bought the other property. Both purport to have been made by the Salazars, who claim that the signatures were forged (presumably by their son) and not made at their direction. Notice of default and election to sell under deed of trust were recorded in 2005. Their daughter, Marina, negotiated with the lender. When the son disappeared in 2009, Salazar started making payments. Marina signed her parents’ names to a forbearance agreement that identified the Salazars as “borrower” and released all claims. In 2012, the Salazars sought quiet title. The trial court granted summary judgment on the three-year limitations period, but did not address affirmative defenses, holding that the 2005 notices triggered the statute of limitations. The court of appeal reversed. Notices of default under a void deed of trust provided notice of a cloud on title, but did not dispute or disturb the possession of the property; the statute of limitations does not bar their action. View "Salazar v. Thomas" on Justia Law

Appellants borrowed money from Colonial Bank and granted the bank a security interest in their real property. The FDIC assigned Appellants’ loan to Branch Banking and Trust Company, Inc. (BB&T) after placing Colonial into receivership. After Appellants defaulted on their loan, BB&T instituted an action for a judicial foreclosure of the secured property. Two years later, Nev. Rev. Stat. 40.459(1)(c), which implements certain limitations on the amount of a deficiency judgment that can be recovered by an assignee creditor, became effective. After the property was sold at a sheriff’s sale, BB&T filed a motion seeking a deficiency judgment against Appellants for the remaining balance of the loan. The district court awarded a deficiency judgment to BB&T, finding that section 40.459(1) did not apply to BB&T’s application for a deficiency judgment. The Supreme Court affirmed on the grounds that section 40.459(1)(c) was preempted by the federal Financial Institutions Reform, Recovery and Enforcement Act (FIRREA) to the extent that section 40.459(1)(c) limits deficiency judgments that may be obtained from loans transferred by the FDIC, as section 40.459(1)(c) conflicts with FIRREA’s purpose of facilitating the transfer of the assets of failed banks to other institutions. View "Munoz v. Branch Banking & Trust Co." on Justia Law

Respondent borrowed nearly $17 million from Appellant’s predecessor-in-interest. The loan was secured by real property located in Texas. The Guarantors entered into a guaranty agreement to pay any debt remaining if Respondent defaulted. When Respondent defaulted, the Texas property was sold at a nonjudicial foreclosure sale under Texas law. Appellant then sought a deficiency judgment against Respondent and the Guarantors under Nevada law. The district court granted summary judgment in favor of Respondent and the Guarantors, finding that Appellant’s nonjudicial foreclosure in Texas did not comply with the terms of Nev. Rev. Stat. 107.080. The Supreme Court reversed, holding that Nev. Rev. Stat. 40.455(1), which permits a creditor or deed-of-trust beneficiary to bring an action for a deficiency judgment after the foreclosure sale or trustee’s sale held pursuant to section 107.080, does not preclude a deficiency judgment in Nevada when the nonjudicial foreclosure sale upon property located in another state is conducted pursuant to that state’s laws instead of section 107.080. Remanded. View "Branch Banking & Trust Co. v. Windhaven & Tollway, LLC" on Justia Law

In 2001, representatives from the Moody Bible Institute of Chicago and Sysix Financial signed a master agreement, laying the groundwork for future leases of equipment from Sysix to Moody. In 2008, two lease schedules for computer items were executed; they appeared to have been signed by Moody’s vice president and Sysix’s president. Sysix assigned its interest in both leases to Rockwell, which acquired loans from PNB to finance the leases. PNB procured indemnification coverage for those loans from RLI in the form of a financial institution bond. Sysix’s president had forged the signature of Moody’s vice president on both lease schedules. Moody never agreed to either schedule nor did it ever receive any of the promised equipment. PNB notified RLI of its potential loss, but PNB itself soon went under. As receiver for PNB, the FDIC sued RLI. The district court granted summary judgment in FDIC’s favor. The Seventh Circuit affirmed, finding that the plain language of the bond covered FDIC’s losses The Financial Institutions Reform Recovery and Enforcement Act limitations period applies,12 U.S.C. 1821(d)(14), so the suit was timely. View "Fed. Deposit Ins. Corp. v. RLI Ins. Co." on Justia Law

The complaint alleged that in May 2010, a notice of default was recorded against plaintiffs’ Pasadena residence. In August 2011, a notice of trustee sale was recorded. Plaintiffs retained Rex Law to negotiate a loan modification with Wells Fargo, which agreed to continue the trustee sale scheduled to October 17, 2011. On October 17, 2011, a paralegal from the Rex Law firm spoke with Wells Fargo representative Munoz, who stated that plaintiffs were “under active review for a modification and, therefore, there no longer was a trustee [sale] date scheduled.” In fact, a sale date of December 16, 2011 was scheduled. The house was sold at that sale. On December 10, 2011, the same paralegal spoke with Munoz and told her that plaintiffs’ tax returns were available. Munoz instructed him to submit the returns, but said nothing about the upcoming sale. The trial court rejected plaintiffs’ claim of promissory estoppel. The court of appeal affirmed, noting that no promise was made and that plaintiffs had no equity in the property and, therefore, no detrimental reliance. View "Granadino v. Wells Fargo Bank, N.A." on Justia Law

Plaintiffs are trustees under “Coogan Trust Accounts,” which are statutorily required accounts to preserve 15 percent of a minor’s gross earnings for artistic or creative services for the benefit of the minor until the minor turns 18 or is emancipated (Fam. Code, 6750.) They filed a class action lawsuit on behalf of themselves and others against Bank of America, alleging breach of written contract, breach of the implied covenant of good faith and fair dealing, conversion, and unlawful and unfair business practices. The complaint claimed that the bank made withdrawals from Cogan Trust Accounts, including for monthly service fees, without court approval. The trial court dismissed. The court of appeal reversed. A bank may not debit a Coogan Trust Account for service fees without court approval (section 6753 (b)). The state law prohibition on a debit by a national bank is not preempted by federal law. View "Phillips v. Bank of America" on Justia Law

Appellants Branch Banking & Trust Company ("BB&T"), Rusty Winfree, and Todd Fullington appealed a Circuit Court judgment in favor of Rex ("Sonny") and Claudene Nichols on the Nicholses' claims against the appellants, and on BB&T's counterclaim against the Nicholses. The dispute arose over loans made by BB&T's predecessor-in-interest, Colonial Bank. After a development loan was made, but before it could be paid back, Colonial became insolvent and entered receivership. BB&T purchased much of Colonial's assets, including the loan made to the Nicholses for development of their parcel. After refusing to extend the terms of the original Colonial loan, or to provide any additional funds to finish the development, the Nicholses stopped making payments on their loan and sued alleging fraud, reformation, negligence, wantonness, and breach of fiduciary duty against all appellants. Against BB&T, the Nicholses also alleged a claim of unjust enrichment and sought damages on a theory of promissory estoppel. After careful consideration, the Supreme Court concluded the circuit court erred in entering a judgment in favor of the Nicholses and on BB&T's counterclaim. The case was remanded for further proceedings. View "Branch Banking & Trust Co. v. Nichols" on Justia Law