Justia Civil Procedure Opinion Summaries

This case involved three consolidated interlocutory appeals; each arose from litigation filed by Franklin Collection Service, Inc. (Franklin), against BancorpSouth Bank. Franklin and BancorpSouth had been in litigation for approximately forty months. After Franklin determined that BancorpSouth had failed to file a responsive pleading to the second amended complaint, Franklin applied for and obtained an entry of default by the clerk. Franklin also filed a motion to deem admitted the allegations of the second amended complaint. BancorpSouth filed a motion to set aside the entry of default and a motion for leave to file a responsive pleading to the second amended complaint. The trial court heard each motion and decided to deny Franklin’s motion to deem admitted the allegations of the second amended complaint; to grant BancorpSouth’s motion for leave to file a responsive pleading to the second amended complaint; and to deny BancorpSouth’s motion to set aside the entry of default. Franklin appealed and BancorpSouth cross-appealed. The Mississippi Supreme Court concluded that in light of the colorable defenses presented by BancorpSouth and the lack of prejudice to Franklin, the trial court did not abuse its discretion in allowing BancorpSouth to file an answer to Franklin’s second amended complaint. Therefore, the Court concluded the trial court properly denied Franklin's motion to deem admitted the allegations in the second amended complaint. The Court affirmed two interlocutory orders at issue in Franklin's appeal reversed the order at issue in BancorpSouth's cross-appeal, and remanded this case for further proceedings. View "Franklin Collection Service, Inc. v. BancorpSouth Bank" on Justia Law

In October of 2007, Petitioner Otha Delaney bought a 2003 Chevrolet pick-up truck from Coliseum Motors pursuant to a retail installment sales contract. The dealership subsequently assigned the contract to Respondent First Financial of Charleston, Inc., which acquired a security interest under the UCC. After Delaney failed to make payments, First Financial lawfully repossessed the truck, and on May 2, 2008, it sent Delaney a letter entitled, "Notice of Private Sale of Collateral." Over seven months later, on December 15, 2008, First Financial sold the truck. On October 3, 2011, more than three years after sending notice but less than three years from the sale of the truck, Delaney filed suit against First Financial, seeking to represent a class of individuals who had received notice that allegedly failed to comply with certain requirements in Article 9. After a hearing, the trial court found: (1) the remedy Delaney sought pursuant to section 36-9-625(c)(2) South Carolina Code (2003) was a statutory penalty; (2) the six-year Article 2 limitations period did not apply because Delaney failed to plead breach of contract, the claim solely concerned deficient notice under Article 9, and even if Article 2 applied, the more specific limitations period on penalties governed; and (3) under either limitation period, Delaney's claim was time-barred as his action accrued upon receipt of the allegedly deficient notice. To this last point, the South Carolina Supreme Court determined the trial court erred, holding the notice of disposition of collateral did not accrue until First Financial disposed of the collateral. Accordingly, because Delaney filed this action within three years from that date, the matter was remanded for further proceedings. View "Delaney v. First Financial" on Justia Law

After a 2015 examination, the FDIC assigned Builders Bank a CAMELS (capital adequacy, asset quality, management, earnings, liquidity, and sensitivity to market risk) rating of 4, which exposed the bank to extra oversight. After the Seventh Circuit concluded that some components of a CAMELS rating are open to judicial review, Builders merged into a non-bank enterprise and left the banking business. The district court dismissed the remanded suit as moot. The Seventh Circuit affirmed, rejecting a claim for damages based on paying too much for deposit insurance. The Administrative Procedures Act, 5 U.S.C. 702, waives the government’s sovereign immunity but establishes a right of review only when “there is no other adequate remedy in a court.” There is a potential remedy under 12 U.S.C. 1817(e)(1), which says: In the case of any payment of an assessment by an insured depository institution in excess of the amount due, the Corporation may refund the amount of the excess payment to the insured institution or credit such excess amount toward the payment of subsequent assessments. The Tucker Act, 28 U.S.C. 1491, waives immunity for such a suit but limits venue to the Claims Court. Builders did not cite the FDIC’s sue-and-be-sued clause, 12 U.S.C. 1819(a), as an alternative waiver. Apart from those that affect subject-matter jurisdiction, legal contentions must be presented in the district court. This suit was litigated on remand under the APA, so it fails. View "Builders Bank, LLC v. Federal Deposit Insurance Corp." on Justia Law

The Supreme Court affirmed the judgment of the Appellate Court in this interlocutory appeal regarding what preclusive effective to give in this action to the findings and judgment rendered by an English court in a prior action brought by Plaintiff against the named defendant, holding that the Appellate Court correctly found that none of the parties was entitled to the claimed preclusive effect.The English action resulted in a $243,023,089 judgment, plus interest, against the named defendant, Sebastian Holdings, Inc. Plaintiff, Deutsche Bank AG, later commenced the instant action against Sebastian and Alexander Vik, the sole shareholder and sole director of Sebastian. Plaintiff sought to pierce Sebastian's corporate veil and hold Vik personally liable for his corporation's judgment debt. All parties claimed, unsuccessfully, an entitlement to a preclusive effect as a result of the final judgment rendered in the prior English action. The Appellate Court agreed with the trial court that the parties were not entitled to have this action decided in their respective favor on the basis of the alleged preclusive effect of the English judgment. The Supreme Court adopted the Appellate Court's opinion as the proper statement of the issues and the applicable law concerning those issues and affirmed. View "Deutsche Bank AG v. Sebastian Holdings, Inc." on Justia Law

Walter Ward took out a secured loan in 2007 without indicating whether he signed the deed of trust (DOT) conveying his property to the lender in his individual capacity or in his capacity as sole trustee of the trust in which his property was held. That DOT was never recorded. Years later, the lender's successor, JPMorgan Chase Bank, N.A. (Chase) asked for a replacement to foreclose. Walter refused, prompting Chase to sue. The trial court sustained two general demurrers to Chase's complaint, entered a judgment of dismissal, and awarded contractual attorney fees and costs to Walter's son, David Ward, the successor trustee of the trust that held the property. The issue this case presented for the Court of Appeal's review centered on whether Chase could reframe its action by amendment to omit a fatal allegation in its original complaint. Because the Court conclude it could, notwithstanding the sham pleading doctrine, the court should have granted leave to amend. Accordingly, we reverse the judgment and the postjudgment order and direct the court to enter a new order sustaining the general demurrers with leave to amend. View "JPMorgan Chase Bank, N.A. v. Ward" on Justia Law

The FDIC brought two enforcement proceedings against the Bank and three of its directors, and subsequently issued a final order penalizing the Bank. The Bank petitioned for review of both orders under 12 U.S.C. 1818(h)(2) and also filed suit in federal district court, alleging various constitutional violations arising out of the same enforcement proceedings.The Fifth Circuit held that the district court correctly dismissed the Bank's lawsuit for lack of subject matter jurisdiction. The court held that the Thunder Basin factors reinforced the district court's conclusion that the review scheme precluded district court jurisdiction over the Bank's claim. In this case, a finding that the review scheme precludes district court jurisdiction would not foreclose all meaningful judicial review of the Bank's constitutional claims; the Bank has not shown that its suit was wholly collateral to the agency proceedings; and the agency expertise factor pointed toward finding that the district court lacked subject matter jurisdiction. Accordingly, the court affirmed the judgment. View "Bank of Louisiana v. FDIC" on Justia Law

James and Beryl Wicker signed a mortgage agreement for their residence in Punxsutawney, Pennsylvania in favor of Countrywide Bank, FSB (Countrywide) in February 2008. The mortgage agreement indicated that Mortgage Electronic Registration Systems, Inc. (MERS) would act as nominee for Countrywide and its successors and assigns and was designated as the mortgagee. In an assignment of mortgage recorded in November 2011, MERS, as nominee for Countrywide, assigned the mortgage to Bank of America. In May 2012, Bank of America filed a mortgage foreclosure action against the Wickers alleging that the Wickers defaulted on their mortgage as of September 1, 2010. It further averred that it had provided the Wickers with the statutorily required foreclosure notice on September 21, 2011. Bank of America then moved for summary judgment, which the trial court granted in part and denied in part. In so doing, the trial court narrowed the issues for trial to determining whether Bank of America had provided proof of: (1) the required foreclosure notices; (2) the date of default; and (3) the amount of indebtedness. The Pennsylvania Supreme Court granted review to consider the application of Pennsylvania’s business records exception to the rule against hearsay, pursuant to Pennsylvania Rule of Evidence 803(6) and the Uniform Business Records as Evidence Act, 42 Pa.C.S. 6108. The parties agreed that then-current Pennsylvania precedent allowed a records custodian to authenticate documents even if the witness did not personally record the specific information in the documents. The parties disagreed, however, as to whether a records custodian could lay a foundation for documents incorporated into the files of the custodian’s employer when the information in the documents was recorded by a third party, a process which was allowed under the similar but not identical Federal Rule of Evidence 803(6), pursuant to the so-called adopted business records doctrine. The Supreme Court affirmed the Superior Court in concluding that the trial court did not abuse its discretion in allowing the testimony of the records custodian and admitting the documents under the facts of this case. View "Bayview Loan v. Wicker" on Justia Law

This case came to the Georgia Supreme Court by way of three certified questions from the United States Court of Appeals for the Eleventh Circuit. As the receiver of the Buckhead Community Bank, the Federal Deposit Insurance Corporation (FDIC) sued nine former directors and officers of the Bank in federal district court, alleging that the former directors and officers were negligent and grossly negligent under Georgia law for their approval of ten commercial real-estate loans. At the conclusion of the trial, the jury found that some of the former directors and officers were negligent in approving four of ten loans at issue, and awarded the FDIC $4,986,993 in damages. The district court entered a final judgment in that amount and held the former directors and officers jointly and severally liable. They timely appealed to the Eleventh Circuit, arguing the district court erred by failing to instruct the jury on apportionment, which, they say, was required by OCGA 51-12-33 because purely pecuniary harms (such as the losses at issue here) were included within “injury to person or property” under Georgia’s apportionment statute. Concluding that these arguments required answers to questions of law that “have not been squarely answered by the Georgia Supreme Court or the Georgia Court of Appeals,” the Eleventh Circuit certified questions of Georgia law to the Georgia Supreme Court. The Georgia Court concluded OCGA 51-12-33 did apply to tort claims for purely pecuniary losses against bank directors and officers, but did not abrogate Georgia’s common-law rule imposing joint and several liability on tortfeasors who act in concert insofar as a claim of concerted action invokes the narrow and traditional common-law doctrine of concerted action based on a legal theory of mutual agency and thus imputed fault. View "Federal Deposit Insurance Corporation v. Loudermilk" on Justia Law

SE Property Holdings, LLC ("SEPH") appealed the grant of summary judgment entered in favor of Bank of Franklin ("BOF") on BOF's claim demanding specific performance of a contractual provision. In March 2005, Vision Bank, a Florida company, loaned Bama Bayou, LLC, formally known as Riverwalk, LLC ("the borrower"), $6,000,000. Multiple individuals allegedly personally guaranteed repayment of the loan ("the guarantors"). In June 2008, pursuant to a "participation agreement," Vision Bank conveyed to BOF a 25 percent interest in the loan. Vision Bank conveyed additional participation interests in the loan to other banks. The borrower and the guarantors allegedly defaulted on their obligations with respect to the loan, and in January 2009 Vision Bank filed suit against them. The borrower and the guarantors asserted counterclaims against Vision Bank and brought BOF into the action as an additional counterclaim defendant. In April 2009, Vision Bank foreclosed on a mortgage securing the loan. Vision Bank was the highest bidder at the foreclosure sale and thereafter executed foreclosure deeds in favor of BOF and the other participating banks. In 2012, Vision Bank sold its operating assets to Centennial Bank and relinquished its Florida bank charter. Vision Bank and SEPH entered into an "agreement and plan of merger," whereby Vision Bank merged "with and into" SEPH. In October 2016, the trial court entered an order setting aside the foreclosure sale and declaring the foreclosure deeds void. Among other things, BOF asserted in its cross-claim that SEPH had an obligation to repurchase BOF's participation interest in the loan. In support, BOF pointed to the participation agreement between BOF and SEPH's predecessor, Vision Bank. The court granted BOF's motion for summary judgment on its claim for specific performance based on the participation agreement. SEPH argued on appeal that the trial court erred in determining that a "proceeding" involving Vision Bank's termination of existence was "commenced," so as to invoke the contractual provision; it asserted Vision Bank's voluntary merger with SEPH was not a "proceeding." The participation agreement in this case stated that BOF's participation interest was conveyed without recourse, but the contract provision provided BOF at least some security in the form of a right to force the repurchase of its participation interest in the event of the financial deterioration of the originating bank, i.e., Vision Bank. The Alabama Supreme Court concluded the voluntary merger like the one entered into by Vision Bank and SEPH is not a "proceeding" as that term is used in the participation agreement, and reversed the trial court's judgment ordering SEPH to purchase BOF's participation interest. View "SE Property Holdings, LLC, f/k/a Vision Bank v. Bank of Franklin" on Justia Law

First Midwest sued defendants for breach of a promissory note. Defendants responded that First Midwest or its predecessor had already sued them twice for the same breach of the same promissory note: once in a foreclosure suit in 2011 and once in a breach of promissory note suit in 2013. First Midwest claimed that the first lawsuit involved a claim for foreclosure on a mortgage, which is different from a breach of a promissory note. The circuit court agreed, but the appellate court reversed. The Illinois Supreme Court affirmed the appellate court’s decision. In Illinois, a plaintiff who voluntarily dismisses a claim has only one opportunity to refile that same claim. Whether two lawsuits assert the same claim does not depend solely on how the plaintiff titles the complaint. A lawsuit for breach of a promissory note asserts the same cause of action as a prior foreclosure complaint when that foreclosure complaint specifically requested a deficiency judgment based on the same default of the same note. View "First Midwest Bank v. Cobo" on Justia Law