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Case Summaries

Banking Law

[09/03] Allied Maritime, Inc. v. Descatrade SA
An order vacating the process of maritime attachment and garnishment issued on April 15, 2009 attaching defendant's assets to secure a putative foreign arbitral award and dismissal of the complaint for lack of jurisdiction is affirmed where the district court properly concluded that it lacked jurisdiction over defendant’s bank account in Paris, France, the suspense account created by the bank in response to the attachment order, and any other intangible property arising from an electronic funds transfer.

[08/31] Force Framing, Inc. v. Chinatrust Bank
In plaintiff's suit against defendant-lender for a bonded stop notice, trial court's grant of defendant's motion for summary judgment because plaintiff served the statutorily required 20-day preliminary notice on another lender, and not defendant, is reversed where: 1) the trial court erred when it granted summary judgment because there is a triable issue of fact regarding the reasonableness of plaintiff's belief that another lender was the lender for the project; 2) defendant's argument that plaintiff could not have held a good faith belief that the other lender was the actual lender because plaintiff did not check the county records for the deed of trust that the lender recorded in 2005 is rejected; and 3) the court is not persuaded that, as a matter of law, pursuant to Kodiak, plaintiff had constructive notice that defendant was the actual lender and could not have held a good faith belief that the other lender was the actual lender.

[08/30] Metavante Corp. v. Emigrant Savings Bank
In plaintiff's suit for breach of contract against defendant-bank for nonpayment of fees under the parties' Technology Outsourcing Agreement, judgment of the district court is affirmed where: 1) an expert's testimony was both relevant and reliable; 2) district court correctly determined that plaintiff did not breach the Agreement's performance warranty and its duty of good faith; 3) district court did not err in concluding that any reliance by defendant on the alleged misrepresentations of plaintiff was not reasonable; 3) district court committed no reversible error in determining that defendant's fraud claims were without merit; 4) district court determined correctly that defendant's success on the in-house issue does not render it a "prevailing party" within the meaning of the contract; and 5) the district court acted within the bounds of its discretion in determining that no additional guarantee of reasonableness was required.

[08/30] Lechoslaw v. Bank of America
In plaintiff's suit against a bank for damages, claiming that a four-and-a-half month delay in receiving his $31,787.34 disrupted the construction of a motel and restaurant in Poland and caused him severe emotional distress, judgment of the district court is affirmed where: 1) plaintiff has failed to meet his burden of proving that the Bank in Poland met the requirements for the exercise of personal jurisdiction, and trial court did not abuse its discretion in finding that the Bank did not waive its defense of lack of personal jurisdiction; 2) there was no abuse of discretion on the facts in the court's exclusion of the statement as offered against Bank of America (BoA); 3) there was no evidence that BoA violated chapter 93A in any of its dealings with plaintiff, and the district court properly entered judgment in its favor; and 4) it was not an abuse of discretion for the courts not to reopen discovery according to the Hague Convention.

[08/27] Jefferson State Bank v. Lenk
In an estate administrator's suit against a bank to recover money as a result of unauthorized transactions, approximately two years before she was appointed as the administrator, judgment of the court of appeals' is reversed and judgment is rendered in favor of the bank as the statute of repose in section 4.406 of the Business and Commerce Code bars the administrator's claims because she failed to notify the bank of any unauthorized transactions within sixty days of being appointed estate administrator.

[08/27] Paloian v. Lasalle Bank, N.A.
In a debtor-hospital's trustee's action to recover, as fraudulent conveyances, some loan payments made during the last years before hospital entered bankruptcy, judgment of the district court is vacated and remanded where: 1) LaSalle Bank is an "initial transferee" as an entity that receives funds for use in paying down a loan, or passing money to investors in a pool, is an "initial transferee" even though the recipient is obliged by contract to apply the funds according to a formula; 2) because the hospital was solvent in August 1997, the ensuing months' debt service cannot be recaptured as a fraudulent conveyance; and 3) on remand, the bankruptcy court is instructed to determine whether the transfer of the accounts receivable to MMA Funding was a true sale, such that MMA Funding served as the bankruptcy-proofing intermediary that the lenders desired.

[08/26] Bank of Am., N.A. v. UMB Fin. Servs., Inc.
In an appeal from a series of orders in which the district court declined to compel plaintiff to submit to arbitration and declined to stay litigation pending the outcome of such arbitration, the orders are affirmed where: 1) plaintiff never signed an agreement containing an arbitration clause, and the document plaintiff did sign, the employment agreement, did not incorporate the arbitration clause of the FINRA contracts by reference or otherwise; and 2) the court need not reach the question of waiver since the district court properly determined there was no existing right to arbitration in this case.

[08/25] Fireside Bank Cases
In coordinated class actions challenging a lender's collection practices, trial court's entry of dismissals with prejudice against all class members against whom the lender had previously secured judgments in separate collection actions is affirmed where: 1) plaintiffs' contention that the trial court was empowered by the UCL to grant class-wide relief to judgment debtors without a factual showing of grounds to avoid the judgments against them is rejected, and, since no other basis for relief on their behalf was ever suggested, the court did not err by concluding that the UCL afforded no basis for the class-wide affirmative relief sought in this class action; and 2) the appeal is dismissed as moot insofar as it is taken from orders denying leave to intervene and refusing to certify a subclass consisting of judgment debtors.

[08/18] Carvalho v. Equifax Info. Servs., LLC
In an action against credit reporting agencies alleging violations of the California Consumer Credit Reporting Agencies Act (CCRAA), summary judgment for defendants is affirmed where: 1) because the face of plaintiff's superior court complaint lacked any indication of the amount in controversy, it did not trigger the first thirty-day removal period; 2) because section 1785.25(a) was the only substantive CCRAA furnisher provision specifically saved by the Fair Credit Reporting Act, plaintiff's section 1785.25(f) claim was preempted; and 3) unless plaintiff raised a genuine issue as to whether the disputed item was inaccurate, her CCRAA section 1785.16 claims failed as a matter of law.

[08/17] Greenwood Corp. v. CompuCredit Corp.
The order of the district court denying certain credit providers' motion to compel arbitration is affirmed where the district court correctly concluded that the arbitration agreement was void because the Credit Repair Organization Act (CROA) specifically prohibited provisions disallowing any waiver of a consumer's right to sue in court for CROA violations.

[08/16] Malack v. BDO Seidman, LLP
In plaintiff's putative securities fraud class action against an accounting firm that assisted American Business Financial Services, Inc. (American Business), a subprime mortgage originator based on section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5, claiming that defendant defrauded plaintiff and other investors by providing American Business clean audit opinions that were used to register the notes at issue with the Securities and Exchange Commission (SEC), district court's denial of class certification is affirmed as the fraud-created-the-market theory lacks a basis in common sense, probability, or any of the other reasons commonly provided for the creation of a presumption, and as such, the court declines to recognize a presumption of reliance based on the theory.

[08/12] Scanscot Shipping Servs GmbH v. Metales Tracomex LTDA
In plaintiff's appeal from the district court's order vacating the attachment of certain electronic fund transfers (EFTs) held by garnishee Wachovia Bank in New York City, which the district court had previously attached pursuant to Rule B of the Supplemental Admiralty Rules for Certain Admiralty Maritime Claims of the Federal Rules of Civil Procedure, the order is affirmed where: 1) EFTs for which the defendant is both the originator and the beneficiary are not the property of the defendant and, therefore, may not be attached pursuant to Rule B; 2) when an intermediary bank responds to an order of attachment, later determined to be wrongful, by sequestering the wrongly attached funds in a non-EFT suspense account, a creditor may not then reattach those funds in the new account; and 3) Jaldhi's retroactivity was not subject to a case-by-case rebuttable presumption.

[08/11] Perlas v. GMAC Mortgage, LLC.
In plaintiffs' suit against a commercial mortgage lender, arising from the lender's foreclosure of underlying security after plaintiffs failed to make the required loan payments, trial court's dismissal of their action is affirmed as plaintiffs' claim, that they could rely upon GMAC's knowingly false determination that they qualified for the loans as a determination by GMAC that they could afford the loans, is rejected.

[08/06] MBI Group, Inc. v. Credit Foncier du Cameroun
In an action against the government of Cameroon and a state-owned mortgage finance corporation, alleging a breach of an agreement to develop low-cost housing, the dismissal of the action based on forum non conveniens is affirmed where: 1) plaintiffs consistently worked to undermine their suit in Cameroon, and the district court did not abuse its discretion in concluding that their efforts succeeded; and 2) the district court did not abuse its discretion in finding that the public and private interests strongly favored dismissal.

[07/30] Swanson v. Citibank, N.A.
In a pro se's suit against Citibank and other individual defendants claiming that defendants discriminated against her on the basis of her race (African-American) when Citibank turned down her application for a home-equity loan, district court's dismissal of the suit for failure to state a claim is affirmed in part, reversed in part and remanded where: 1) district court erred in dismissing plaintiff's Fair Housing Act claim against Citibank as the complaint included all that the plaintiff needed to put in the complaint; 2) district court did not err in dismissing plaintiff's fraud claim against Citibank as there was absence of particular information required under Rule 9; 3) district court erred in dismissing plaintiff's Fair Housing Act claims against the appraisal defendants as she has pleaded enough to survive a motion under Rule 12(b)(6); and 4) district court correctly dismissed plaintiff's common-law fraud claim against the appraisal defendants as she has not adequately alleged that she relief on their appraisal, nor has she pointed to any out-of-pocket losses that she suffered because of it.

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