NEWS

Case Summaries

[05/09] Starr Int’l Co., Inc. v. US
In a suit arising out of a loan from the Federal Reserve Bank of New York under which the federal Government acquired a majority stake in American International Group, Inc. (AIG)’s equity, which the Government eventually converted into common stock and sold, brought by an AIG shareholder alleging that the Government’s acquisition of AIG equity and subsequent actions relating to a reverse stock split were unlawful, the Claims Court’s judgment that the Government committed an illegal exaction and remand with instructions to dismiss the equity-acquisition claims that seek direct relief is: 1) vacated in part where plaintiffs lack standing to pursue the equity-acquisition claims directly, as those claims belong exclusively to AIG; and 2) affirmed in part as to the denial of direct relief for the reverse-stock-split claims.

[05/03] Berman v. HSBC Bank
In an action brought by a plaintiff who was denied a loan modification by defendant bank, seeking injunctive relief under Civil Code section 2924.12 on the theory that the bank’s denial letter was a material violation of section 2923.6(d) in that the letter only provided fifteen days for appeal instead of the thirty days as provided under that statute, the trial court’s judgment sustaining the demurrer to plaintiff’s complaint without leave to amend based on the conclusion that he had not alleged a violation of section 2923.6, is reversed where the denial letter constituted a material violation of section 2923.6 because it substantially misstated the time plaintiff was allowed by the law to appeal defendant’s denial of his application for a loan modification.

[05/01] Bank of America Corp. v. Miami
In a City’s suit against two national Banks, alleging violations of the Fair Housing Act (FHA), which prohibits racial discrimination in connection with real-estate transactions, 42 U.S.C. sections 3604(b) and 3605(a), alleging that the Banks’ discriminatory conduct led to a disproportionate number of foreclosures and vacancies in majority-minority neighborhoods, which impaired the City’s effort to assure racial integration, diminished the City’s property-tax revenue, and increased demand for police, fire, and other municipal services, the Eleventh Circuit Court of Appeals’ decision vacating the District Court’s dismissal of the complaint is vacated where: 1) the City is an ‘aggrieved person’ authorized to bring suit under the FHA; but 2) the Eleventh Circuit erred in concluding that the complaints met the FHA’s proximate-cause requirement based solely on the finding that the City’s alleged financial injuries were foreseeable results of the Banks’ misconduct.

[03/29] Galvin v. U.S. Bank, NA
In an appeal arising out of a suit by defaulting borrowers who seek to assign fault to the manner in which a creditor foreclosed on its collateral, in this instance a multi-million dollar home located on Martha’s Vineyard, the district court’s judgment is: 1) reversed as to judgment in favor of creditor on its deficiency claim where it failed to comply with a Massachusetts statute that regulates the availability of actions for such judgments; but 2) affirmed in all other respects.

[03/13] Ivanoff v. Bank of America
In a suit against a bank alleging violations of the federal Truth In Lending Act (TILA), 15 U.S.C. section 1601 et seq., and California’s unfair competition law (UCL), Bus. & Prof. Code section 17200 et seq., fraudulent omission/concealment and injunctive relief, the trial court’s judgment in favor of defendant is affirmed over plaintiff’s arguments that the court improperly applied the doctrines of res judicata (claim preclusion) and collateral estoppel (issue preclusion) based on her prior unsuccessful lawsuit against the bank for breach of contract, and erred in denying her an opportunity to amend her complaint.

[03/09] Fried v. JP Morgan Chase & Co
In a suit by a homeowner with a modified mortgage. alleging the lender wrongfully extended her mortgage insurance premiums, the district court’s decision is affirmed where a servicer may not rely on an updated property value, estimated by a broker, to recalculate the length of a homeowner’s mortgage insurance obligation following a modification, and instead the ending of that obligation must remain tied to the initial purchase price of the home.

[02/16] Bank of New York Mellon v. Citibank
In a case arising out of the simultaneous refinancing of a home equity line of credit by two different lenders in 2006, which resulted in a dispute over the priority of their recorded deeds of trust, the trial court’s judgment sustaining defendant’s demurrers, which alleged that all of plaintiff’s causes of action were barred by the three-year statute of limitations in Code of Civil Procedure section 338, is reversed where plaintiff has stated a claim for equitable subrogation, which is not subject to that statute.

[02/16] Willner v. Dimon
In a pro se complaint seeking a declaration that bank defendants cannot foreclose on plaintiffs’ home, the district court’s dismissal of certain counts for lack of subject matter jurisdiction pursuant to the Financial Institutions Reform, Recovery and Enforcement Act of 1989 and other counts for failure to state a claim, is affirmed where the district court lacked subject matter jurisdiction over most of the counts that the plaintiffs appeal because they did not first submit the claims underlying those counts to administrative review.

[02/01] Kalnoki v. First American Trustee Servicing Solutions, LLC
In an action alleging wrongful foreclosure-related causes of action, the trial court’s judgment is: 1) affirmed as to dismissal of the second amended complain where plaintiffs failed to allege a cause of action on any theory; 2) affirmed as to the award of attorney fees; but 3) reversed as to the rental disbursement order where the court erred in disbursing to Wells Fargo the rental funds on deposit with the court.

[01/24] Gillies v. JPMorgan Chase Bank, N.A.
In a suit concerning allegations of claimed wrongful foreclosure procedures and bank-defendant’s standing to foreclose, the trial court’s judgment sustaining defendant’s demurrer without leave to amend is affirmed where plaintiff’s allegations did not state facts sufficient to constitute a cause of action,

[01/20] Consumer Fin. Prot. Bureau v. Great Plains Lending, LLC
In an action arising out of the investigation into the Tribal Lending Entities to determine whether small-dollar lenders violated federal consumer financial laws, the district court’s decision compelling the Tribal Lending Entities to comply with civil investigative demands issued by Consumer Financial Protection Bureau is affirmed where: 1) the Consumer Financial Protection Act was a law of general applicability, and it applied to tribal businesses, like the Tribal Lending Entities involved in this appeal; 2) Congress did not expressly exclude Tribes from the Bureau’s enforcement authority; and 3) none of the three exceptions in Donovan v. Coeur d’Alene Tribal Farms, 751 F.2d 1113, 1115 (9th Cir. 1985), to the enforcement of generally applicable laws against Indian tribes applied to this case.

[01/18] Lightfoot v. Cendant Mortgage Corp.
In a mortgagee’s suit filed in state court against the Federal National Mortgage Association (Fannie Mae), a federally chartered corporation that participates in the secondary mortgage market, alleging deficiencies in the refinancing, foreclosure, and sale of their home, the Ninth Circuit’s affirmation of the district court’s denial of plaintiffs’ motion to remand the case to state court and judgment against plaintiffs is reversed where Fannie Mae’s sue-and-be-sued clause of 12 U.S.C. section 1723a(a) does not grant federal courts jurisdiction over all cases involving Fannie Mae.

[12/13] Mendoza v. JPMorgan Chase Bank
In a borrower’s suit alleging wrongful foreclosure, declaratory relief, and quiet title, the trial court’s dismissal of the second amended complaint is affirmed where plaintiff, the borrower, does not have standing to challenge the alleged irregularities in the securitization of her loan.

[12/12] Shaw v. US
In a case in which defendant used identifying numbers of a bank account belonging to bank customer in a scheme to transfer funds from that account to accounts at other institutions from which defendant was able to obtain customer’s funds, the Ninth Circuit’s decision affirming defendant’s conviction of violating 18 U.S.C. section 1344(1), which makes it a crime to knowingly execute a scheme..to defraud a financial institution, is vacated and remanded where: 1) Subsection (1) of the bank fraud statute covers schemes to deprive a bank of money in a customer’s deposit account; and 2) with regard to the parties’ dispute over whether the District Court improperly instructed the jury that a scheme to defraud a bank must be one to deceive the bank or deprive it of something of value, instead of one to deceive and deprive, the Ninth Circuit is left to determine whether that question was properly presented and if so, whether the instruction given is lawful, and, if not, whether any error was harmless in this case.

[11/23] Strubel v. Comenity Bank
In a suit alleging that certain disclosures made by defendant in connection with plaintiff’s opening of a credit card account violated the Truth In Lending Act (TILA), specifically, 15 U.S.C. section 1637(a)(7), the district court’s grant of summary judgment to defendant is affirmed where: 1) because plaintiff fails to demonstrate the concrete injury necessary for standing with respect to two of the challenged disclosures, those two TILA claims are dismissed for lack of jurisdiction; and 2) although plaintiff adequately demonstrates standing to pursue her other disclosure challenges, those challenges fail as a matter of law.

[10/19] US v. O’Donnell
Conviction for bank fraud under 18 U.S.C. section 1344 is affirmed where defendant was aware that Countrywide Bank, FSB was involved in approving the loan he sought to obtain through fraud, and so possessed the specific intent to defraud a financial institution required by the statute.

[10/14] Arch Trading Corp. v. Republic of Ecuador
In a suit brought by five companies against the Republic of Ecuador and two of its instrumentalities for claims arising out of the Ecuadorean government’s alleged seizure of a number of the companies’ assets in Ecuador beginning in July 2008, the district court’s dismissal for want of subject matter jurisdiction under the Foreign Sovereign Immunities Act (FSIA) is affirmed where: 1) the plaintiffs cannot invoke the FSIA’s takings exception to sovereign immunity because the instrumentalities are not ‘engaged in a commercial activity in the United States,’ see 28 U.S.C. section 1605(a)(3); and 2) the activities of various subsidiaries and separate entities are not imputable to them in light of the presumption of legal separateness established in First National City Bank v. Banco Para el Comercio Exterior de Cuba, 462 U.S. 611 (1983).

[10/07] McCray v. Federal Home Loan Mortgage
In an action for damages against the Federal Home Loan Mortgage Corporation (Freddie Mac), alleging that, in the administration of and collection efforts on the loan, the defendants violated the Fair Debt Collection Practices Act (FDCPA), 15 U.S.C. section 1692 et seq. the Truth in Lending Act (TILA), section 1601 et seq., and the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. section 2601 et seq., stemming from the alleged failure to provide plaintiff with notices and requested information as purportedly required by these statutes, the District Court’s dismissal of plaintiff’s FDCPA and TILA claims and, following discovery, grant of Wells Fargo’s motion for summary judgment on her RESPA claim, are: 1) reversed as to the FDCPA claim where plaintiff adequately alleged that the White Firm and the Substitute Trustees were ‘debt collectors,’ as that term is used in the FDCPA; and 2) affirmed as to the TILA claim.

[09/07] Lucioni v. Bank of America, N.A.
In a suit brought by a borrower on a home loan against lending banks, seeking an injunction to prevent a foreclosure, the trial court’s sustainment of the lenders’ demurrers and entry of a judgment of dismissal are affirmed where: 1) the availability of injunctive relief under the 2013 Homeowner’s Bill of Rights (HBOR) is governed exclusively by its two provisions–Civil Code sections 2924.12(a)(1) and 2924.19(a)(1)–in which the Legislature authorized the courts to interpose such relief into the nonjudicial foreclosure scheme; 2) neither provision authorizes a court to enjoin a violation of section 2924(a)(6); and thus, 3) no injunctive relief is available for a violation of that section.

[08/29] Moss v. First Premier Bank
In a case arising out a payday loan agreement in which the parties agreed to arbitrate their disputes before the National Arbitration Forum (NAF), which no longer accepts consumer arbitrations, the District Court’s judgment vacating a prior order compelling arbitration is affirmed where the District Court could not appoint a substitute arbitrator because the language of the arbitration agreement contemplated arbitration only before NAF.

[08/24] Licci v. Lebanese Canadian Bank, SAL
In an international action, brought by several dozen civilians of differing nationalities seeking to hold defendant bank liable for allegedly facilitating Hezbollah rocket attacks that injured or killed plaintiffs’ family members, the district court’s dismissal in favor of defendant is affirmed where the Alien Tort Statute claims at issue on appeal cannot be used to impose corporate liability under Kiobel v. Royal Dutch Petroleum Co., 621 F.3d 111, 145 (2nd Cir. 2010).

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