Justia Civil Procedure Opinion Summaries

Plaintiffs appealed from the district court's denial of their motion to remand and its dismissal on the merits of their claims against Wells Fargo and Kozeny. The court concluded that, because plaintiffs did not allege that Kozeny owed a tort duty enumerated in the deed of trust, no reasonable basis in fact and law supported plaintiffs' negligence claim against Kozeny; because there was no reasonable basis in fact and law for either of plaintiffs' negligence and breach of fiduciary claims, it follows that Kozeny was fraudulently joined and that the district court properly denied plaintiffs' motion to remand; the court modified the district court's dismissal of the claims against Kozeny to be without prejudice for lack of subject matter jurisdiction; and because Kozeny - the only nondiverse defendant - was dismissed, the district court properly retained federal diversity jurisdiction over plaintiffs' remaining claims against Wells Fargo. Because plaintiffs failed to state a claim of wrongful foreclosure, fraudulent misrepresentation, violation of the Missouri Merchandising Practices Act, Mo. Rev. Stat. 407.020.1, negligence, or negligent misrepresentation, the district court properly granted Wells Fargo's motion to dismiss. View "Wivell, et al v. Wells Fargo Bank, N.A., et al." on Justia Law

Freed and Weiss were the sole managing members of a legal practice, CLG. Freed claims to have provided CLG’s operating capital through loans of $12 million. Under the partnership agreement between the two, Freed was entitled to repayment before CLG could make distributions to other members. According to Freed, shortly after he received partial repayment from CLG in 2011, Weiss began taking steps to terminate Freed’s control of CLG and to create a new limited liability company without him, by moving CLG funds held by Chase into other accounts, to which Freed lacked access. Freed demanded that Chase freeze CLG accounts. Freed contends that Chase employees informed Weiss, who then removed all funds from Chase. Freed sued Weiss in state court, alleging improprieties primarily regarding access to records and funds, breach of fiduciary duties and of the partnership agreement, and seeking a declaration of voluntary termination of CLG. Weiss counterclaimed, seeking to expel Freed from CLG. Freed sued Chase claiming that Chase facilitated Weiss’s unauthorized transfer, tortious interference with contractual rights, and aiding Weiss’s breaches of fiduciary duties. The suit was removed to federal court and Chase brought third-party claims for indemnity or contribution. Freed filed suit in federal court against Weiss, his father, and CLG, asking the court to force CLG to purchase Freed’s distributional interest. The district court found that abstention in the federal court cases was proper and stayed both pending the outcome of the state court proceedings. The Seventh Circuit agreed.View "Freed v. Weiss" on Justia Law

A Law Firm had an escrow account with a Bank and authorized an employee to sign checks on the account by herself. The employee began embezzling money from the Firm’s various escrow accounts by engaging in a scheme called “check-kiting,” which involved the employee writing and depositing checks between the Bank account and the Law Firm’s account at another bank. More than three years after the last activity on the Bank account the Law Firm sued the Bank, raising four claims, including violations of the Uniform Commercial Code and common-law causes of action. The court of appeals concluded that the claims were barred by the one-year repose period of Ky. Rev. Stat. 355.4-406. The Supreme Court affirmed on other grounds, holding that the claims were barred by the three-year statute of limitations under Ky. Rev. Stat. 355.4-111. View "Mark D. Dean, P.S.C. v. Commonwealth Bank & Trust Co." on Justia Law

Appellant entered into a mortgage contract with Pawtucket Credit Union (PCU) for the purchase of real property in Rhode Island. The mortgage agreement included a private contractual remedy, authorized by R. I. Gen. Laws 34-11-22, that allowed PCU, in the event Appellant defaulted on her loan payments, to accelerate its loan and invoke its statutory power of sale. PCU later declared Appellant in default, invoked its statutory power of sale, and began the foreclosure process. Appellant filed suit against PCU in federal district court, alleging that foreclosure pursuant to section 34-11-22 violated her federal and state due process rights. The district court dismissed the case for lack of subject matter jurisdiction. The First Circuit Court of Appeals affirmed, holding that none of the statutory bases cited in Appellant’s complaint conferred federal jurisdiction. View "Grapentine v. Pawtucket Credit Union" on Justia Law

After the Republic of Argentina defaulted on its external debt, NML, one of its bondholders, prevailed in 11 debt-collection actions filed against Argentina in New York. To execute its judgments, NML sought discovery of Argentina’s property, serving subpoenas on nonparty banks for records relating to global financial transactions. The district court granted motions to compel compliance. The Second Circuit affirmed, rejecting Argentina’s argument that the order transgressed the Foreign Sovereign Immunities Act of 1976 (FSIA), 28 U.S.C. 1330, 1602. The Supreme Court affirmed; the FSIA does not immunize a foreign-sovereign judgment debtor from post-judgment discovery of information concerning its extraterritorial assets. The FSIA replaced factor-intensive loosely-common-law-based immunity with “a comprehensive framework for resolving any claim of sovereign immunity” so that any sort of immunity defense made by a foreign sovereign in a U.S. court must stand or fall on its text. The FSIA established jurisdictional immunity, section 1604, which was waived here. FSIA execution immunity under sections 1609, 1610, 1611, generally shields “property in the United States of a foreign state” from attachment, arrest, and execution. Nothing forbids or limits discovery in aid of execution of a foreign-sovereign judgment debtor’s assets. Even if Argentina is correct that section 1609 execution immunity implies coextensive discovery-¬in-aid-of-execution immunity, there would be no protection from discovery a foreign sovereign’s extraterritorial assets. Section 1609 immunizes only foreign-state property “in the United States.” The prospect that NML’s general request for information about Argentina’s worldwide assets may turn up information about property that Argentina regards as immune does not mean that NML cannot pursue its discovery. View "Republic of Argentina v. NML Capital, Ltd." on Justia Law

This case arose out of a transaction between a bank located in United Arab Emirates and a partnership which had its headquarters in Saudi Arabia. The bank sued the partnership to collect an alleged debt and chose to do so in New York Supreme Court. The partnership filed a third-party complaint against a citizen of Saudi Arabia (“citizen”) and a bank headquartered in the Kingdom of Bahrain. The citizen moved to dismiss the third-party complaint on the ground of forum non conveniens. After the issue was briefed and argued at Supreme Court, the court dismissed both the complaint and the third-party complaint on forum non conveniens grounds. The Appellate Division reversed, concluding that VSL Corp. v. Dunes Hotels & Casinos, Inc. prohibited the dismissal of the main action on forum non conveniens grounds in the absence of a motion seeking that relief and that the dismissal of the third-party complaint was an abuse of discretion. The Court of Appeals reversed, holding (1) VSL did not bar Supreme Court from dismissing the complaint under the circumstances of this case; and (2) Supreme Court was correct as a matter of law in dismissing both the complaint and the third-party complaint. View "Mashreqbank PSC v. Ahmed Hamad A1 Gosaibi & Bros. Co." on Justia Law

Plaintiffs filed suit against Wells Fargo, raising multiple causes of action under state and federal law pertaining to plaintiffs' home loan and deed of trust. At issue was whether, under 28 U.S.C. 1348, a national bank is a citizen of both the state in which its principal place of business is located as designated in the banks' articles of association. The court concluded that, under section 1348, a national bank is a citizen only of the state in which its main office is located. Therefore, the district court had diversity jurisdiction because there was complete diversity between plaintiffs, citizens of California, and Wells Fargo, a citizen of South Dakota. Accordingly, the court reversed the district court's judgment to the contrary and remanded for further proceedings. View "Rouse, et al. v. Wachovia Mortgage" on Justia Law