Justia U.S. 4th Circuit Court of Appeals Opinion SummariesArticles Posted in Banking
FDIC v. Rippy
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
Posted in: Banking
Elyazidi v. SunTrust Bank
Despite having only a few hundred dollars in her checking account at SunTrust Bank, Appellant cut herself a check for nearly $10,000, resulting in a sizable overdraft. SunTrust hired a Maryland law firm, Mitchell Rubenstein & Associates (MR&A) to bring a debt collection suit. MR&A filed suit on SunTrust’s behalf in a general district court in Virginia. The general district court entered judgment in favor of MR&A. Appellant subsequently filed a complaint against SunTrust and MR&A (collectively, Appellees), alleging that Appellees violated Maryland consumer protection laws and that MR&A violated the Fair Debt Collection Practices Act. The federal district court dismissed Appellant’s suit for failure to state a claim. The Fourth Circuit affirmed, holding that the district court did not err in finding that the counts alleged in Appellant’s complaint failed to state a claim for relief. View "Elyazidi v. SunTrust Bank" on Justia Law
Susquehanna Bank v. United States/Internal Revenue
The Bank commenced this adversary proceeding in Restivo's Chapter 11 bankruptcy case, seeking a judgment declaring that the security interest it acquired on January 4, 2005, had priority over the IRS's tax lien filed on January 10, 2005, regardless of the fact that it did not record its security interest until after the IRS had filed notice of its tax lien. The district court granted the Bank priority. The court rejected the district court's holding that Md. Code. Ann., Real Prop. 3-201 gives the Bank retroactive priority over the IRS, concluding that 26 U.S.C. 6323(h)(1)(A)'s use of the present perfect tense precludes giving effect to the Maryland statute's relation-back provision. However, the court affirmed the judgment based on the ground that under Maryland common law, the Bank acquired an equitable security interest in the two parcels of real property on January 4, regardless of recordation, because its interest became protected against a subsequent lien arising out of an unsecured obligation on that date and that therefore its security interest had priority over the IRS's tax lien under sections 6323(a) and 6323(h)(1). View "Susquehanna Bank v. United States/Internal Revenue" on Justia Law
Minter v. Wells Fargo Bank, N.A.
Plaintiffs filed a class action suit against defendants, alleging that they violated Section 8 of the Real Estate Settlement Procedures Act (RESPA), 12 U.S.C. 2607, by creating a joint venture (Prosperity) to skirt RESPA's prohibition on kickbacks while failing to disclose this business arrangement to its customers. The court concluded that the district court did not abuse its discretion denying plaintiffs' claims because plaintiffs' failed to move for judgment as a matter of law before the jury reached its verdict and because of the highly deferential lenses through which the court must review the issues before it. Accordingly, the court affirmed the judgment of the district court. View "Minter v. Wells Fargo Bank, N.A." on Justia Law
Marshall v. James B. Nutter & Co.
Plaintiff filed suit against Nutter, alleging that Nutter was liable for conspiring with Savings First to violate the Maryland Finder's Fee Act, Md. Code Ann., Com. Law 12-801 to 12-809. Plaintiff borrowed from Savings First in a reverse mortgage transaction and then Nutter purchased the mortgage from Savings First. The court agreed with the district court that Nutter could not be a violator of section 12-804(e) because that statute regulates only mortgage brokers and Nutter was not a "mortgage broker" in the transaction. Accordingly, the court affirmed the district court's grant of summary judgment in favor of Nutter. View "Marshall v. James B. Nutter & Co." on Justia Law
Petry v. Prosperity Mortgage Co.
Plaintiffs filed suit against Prosperity Mortgage, alleging that the fees Prosperity Mortgage charged at closing violated the Maryland Finder's Fee Act, Md. Code Ann., Com. Law 12-801 to 12-809. The court concluded that because Prosperity Mortgage was identified as the lender in the documents executed at closing, it was not a "mortgage broker" as the Act defines that term and therefore was not subject to the Act's provision. Accordingly, the court affirmed the district court's entry of judgment as a matter of law in favor of defendants. View "Petry v. Prosperity Mortgage Co." on Justia Law
Quicken Loans Inc. v. Alig
Plaintiffs filed suit in state court alleging that Quicken Loans originated unlawful loans in West Virginia and that Defendant Appraisers, which included both the named appraisers and the unnamed class of appraisers, were complicit in the scheme. Quicken Loans removed to federal court under the Class Action Fairness Act (CAFA), 28 U.S.C. 1332(d). The district court then granted plaintiffs' motion to remand to state court under the local controversy exception. Quicken Loans appealed. The court vacated and remanded for a determination by the district court as to whether the named defendant appraisers satisfied the "at least 1 defendant" requirement of the local controversy exception. View "Quicken Loans Inc. v. Alig" on Justia Law
Ballard v. Bank of America, NA
Plaintiff filed suit against the Bank, alleging that the Bank violated the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691, by requiring her to serve as her husband's guarantor. Plaintiff sought equitable and injunctive relief, asserting a claim for unjust enrichment and seeking a declaratory judgment. The district court dismissed the complaint with prejudice because plaintiff failed to state a claim upon which relief could be granted and, in any event, waiver and limitation barred her claims. The court concluded that the Bank may have violated ECOA by requiring plaintiff to sign as an unlimited guarantor. However, the court concluded that plaintiff's claim failed where, in exchange for the Bank's restructuring of the loan at issue, she executed waivers to all claims against the Bank on four separate occasions over a period of more than two years. Accordingly, the court affirmed the district court's dismissal. View "Ballard v. Bank of America, NA" on Justia Law
FDIC v. Cashion, III
The FDIC, acting receiver for the Bank, filed an action to recover the deficiency owed on a promissory note executed by defendant and payable to the bank. On appeal, defendant challenged the district court's judgment in favor of the FDIC. The court concluded that the district court did not err in determining that no genuine issue of material fact existed as to the FDIC's status as holder of the Note; the district court did not abuse its discretion in granting the motion to strike defendant's surreply and an affidavit; the court concluded that filing a Form 1099-C was a creditor's required means of satisfying a reporting obligation to the IRS, not a means of accomplishing an actual discharge of debt, nor is it required only where an actual discharge had already occurred; and, in this case, the district court did not err in granting the FDIC's motion for summary judgment because defendant had not come forward with evidence that created a genuine issue of material as to whether the Note had been cancelled or assigned. Accordingly, the court affirmed the judgment. View "FDIC v. Cashion, III" on Justia Law
Grayson Consulting, Inc. v. Wachovia Securities, LLC
This is an adversary proceeding arising out of the bankruptcy of debtor (Derivium). Plaintiff (Grayson), assignee of the Chapter 7 bankruptcy trustee, appealed from a district court judgment affirming the bankruptcy court's decision to grant summary judgment for defendants (Wachovia). The court concluded that the district court did not err in affirming the grant of summary judgment for Wachovia on Grayson's Customer Transfers claim; summary judgment for Wachovia on Grayson's Cash Transfers claim; the bankruptcy court's determinations that the stockbroker defense applied to commissions; and the bankruptcy court's ruling that in pari delicto barred Grayson's tort claims against Wachovia. View "Grayson Consulting, Inc. v. Wachovia Securities, LLC" on Justia Law