Justia Commercial Law Opinion Summaries

Fannie Mae instituted foreclosure proceedings against Nicolle Bradbury for residential property she owed in Maine. Fannie Mae named GMAC Mortgage, the loan servicer, as a party-in-interest. During a deposition, a GMAC employee testified that he did not read the affidavits he signed or execute the affidavits before a notary. Fannie Mae subsequently filed a motion for a protective order to prevent the public disclosure of the deposition, which the district court denied. The district court ultimately dismissed without prejudice the complaint after finding Fannie Mae submitted a bad faith affidavit for purposes of summary judgment. As sanctions, the court ordered Fannie Mae to pay Bradbury for the attorney fees and costs she incurred in demonstrating the bad faith of the affidavit. The Supreme Court affirmed, holding that the district court did not abuse its discretion in (1) declining to find GMAC in contempt even though the affidavit was executed by a GMAC employee; and (2) failing to award Bradbury attorney fees and costs in defending against the motion for a protective order. View "Federal Nat'l Mortgage Ass'n v. Bradbury" on Justia Law

Gene Shields, an agent for State Farm Insurance Companies, opened an account with Bankcorp Bank. The owner of the account was State Farm. Shields's office manager subsequently diverted funds that were due to be deposited into the account, and Shields allegedly suffered at least $77,925 in losses as a result of over 100 overdrafts on the account. Shields sued Bancorp Bank for negligence in failing to notify him of overdrafts. Bancorp moved to compel arbitration based on the account's arbitration clause. The circuit court denied the motion to compel, and Bancorp appealed. At issue on appeal was whether the parties' 2005 agreement to modify the contract entered into by the parties in 1982 controlled when Shields signed the agreement but State Farm was not a party to the contract. The Supreme Court affirmed, holding that the 2005 agreement, which contained the arbitration provision, was not binding because the agreement was entered into in contravention of the rights of the account owner, State Farm. View "BancorpSouth Bank v. Shields" on Justia Law

Defendant, an "infomercialist," violated a court-approved settlement with the FTC by misrepresenting the content of his book, The Weight Loss Cure They Don't Want You to Know About. The district court held him in contempt, ordered him to pay $37.6 million to the FTC, and banned him from making infomercials for three years. The Seventh Circuit vacated the sanctions. On remand, the district court reinstated the $37.6 million remedial fine, explaining that it reached that figure by multiplying the price of the book by the 800-number orders, plus the cost of shipping, less returns, and instructing the FTC to distribute the funds to those who bought the book using the 800-number. Any remainder was to be returned to defendant. The district court also imposed a coercive sanction, a $2 million performance bond, effective for at least five years. The Seventh Circuit affirmed. The district court order, the performance bond in particular, does not violate the First Amendment. View "Fed. Trade Comm'n v. Trudeau" on Justia Law

Plaintiff refinanced her home by executing a promissory note in favor of Saxon Mortgage and a deed of trust (DOT) naming Saxon as beneficiary and a title company as trustee. Saxon assigned the note to Deutsche Bank National Trust Company as trustee for Saxon Asset Securities Trust 2005-3 by endorsing the note in blank. The assignment was not recorded. Plaintiff defaulted under the note. Deutsche Bank then executed a substitution of trustee, removing the title company as trustee and appointing Tiffany and Bosco as the substituting trustee. Tiffany and Bosco recorded a notice of trustee's sale, naming "Deutsche Bank/2005-3" as the current beneficiary in care of Saxon Mortgage Services. An agent of Saxon then executed an assignment of the DOT, assigning all its beneficial interest to Deutsche Bank. The Supreme Court accepted jurisdiction of questions certified by the United State Bankruptcy Court, answering that the recording of an assignment of deed of trust is not required prior to the filing of a notice of trustee's sale under Ariz. Rev. Stat. 33-808 when the assignee holds a promissory note payable to bearer. View "Vasquez v. Saxon Mortgage, Inc." on Justia Law

First National Keystone Bank retained an independent accounting firm to audit its records at a time that members of the bank's management were fraudulently concealing the bank's financial condition. The accounting firm issued a clean audit concerning the bank. It was later discovered that the bank had overstated its assets by over $500 million. Upon investigation, the FDIC concluded that the law firm that represented the bank had engaged in legal malpractice. The FDIC settled its claims against the law firm. The accounting firm was later found liable to the FDIC in federal district court for a negligent bank audit. The accounting firm subsequently sued the law firm, alleging fraud, negligent misrepresentation, and tortious interference with the accounting firm's contract to perform the audit. The circuit court granted summary judgment in favor of the law firm. The Supreme Court affirmed, holding that the claims of the accounting firm against the law firm were, in reality, contribution claims rather than direct or independent claims and were, therefore, barred by the settlement agreement between the law firm and the FDIC. View "Grant Thornton, LLP v. Kutak Rock, LLP" on Justia Law

Deutsche Bank, the holder of a note and mortgage on the Pelletiers' home, filed a complaint for foreclosure against the Pelletiers. The Pelletiers filed a motion to dismiss and asserted affirmative defenses through which they sought rescission as a remedy. The district court entered summary judgment for the Pelletiers, ruling that, because the bank offered no evidence to oppose the facts offered by the Pelletiers in support of rescission, and because the evidence offered by the Pelletiers established that they had timely notified the bank of their rescission right, they were entitled to judgment on their demand for rescission as a matter of law. The Supreme Court affirmed the judgment of the district court but remanded for further proceedings to determine how the rescission should be effectuated. View "Deutsche Bank Nat'l Trust Co. v. Pelletier" on Justia Law

Appellant bank sued Appellees, a corporation and its members, after loans granted to Appellees went into default and Appellees transferred certain property into a trust. After a jury rendered its verdicts, the circuit court (1) granted foreclosure against the property securing the debts, (2) dismissed Appellant's claim to avoid the transfer of one of the properties in the trust and ruled that the deed of another property in the trust was void, and (3) denied Appellant's various post-trial motions. The Supreme Court reversed and remanded on direct appeal and affirmed on cross-appeal, holding (1) the circuit court erred in submitting Appellant's foreclosure and fraudulent-transfer claims to the jury because they were equitable in nature; and (2) the circuit court properly granted Appellant's motion for a directed verdict on Appellee's abuse-of-process claim. Remanded. View "Nat'l Bank of Ark. v. River Crossing Partners, LLC" on Justia Law

After Dorothy Leighton failed to pay taxes on her property and the Town of Blue Hill recorded a tax collector's lien certificate on the property, the Town filed a complaint against Leighton for forcible entry and detainer (FED), seeking possession of the property and costs. The district court entered judgment in Leighton's favor. The superior court vacated the district court's judgment and remanded with instructions to issue a writ of possession in favor of the Town. On appeal, Leighton contended that the Town was required, as a matter of law, to prove that it held current title to the property in the FED action. The Supreme Court affirmed, holding that because the Town produced evidence that it held title superior to Leighton by virtue of the statutorily-foreclosed tax lien mortgage on the property, the Town presented sufficient evidence that it was entitled to possession of the property. View "Town of Blue Hill v. Leighton" on Justia Law

Plaintiff, sued by a competitor and by consumers for unfair trade practices, false and misleading advertising, and deceptive labeling, among other claims, sought indemnity and defense costs from its insurer. The insurer claimed that the suit fell within an exclusion for "antitrust violations, price fixing, price discriminations, unfair competition, deceptive trade practices and/or monopolies." The district court ruled in favor of the insurer. The First Circuit affirmed, finding that the policy headings were not determinative and that the paragraph at issue clearly excluded coverage. View "Welch Foods, Inc. v. Nat'l Union Fire Ins.Co. of Pittsburgh" on Justia Law

Hackers breached the security of the database for the grocery store where plaintiffs shop. The district court determined that plaintiffs failed to state a claim under Maine law for breach of fiduciary duty, breach of implied warranty, strict liability, and failure to notify customers. Although the court concluded that plaintiffs adequately alleged breach of implied contract, negligence, and violation of the unfair practices portion of the Maine Unfair Trade Practices Act, it dismissed those claims because alleged injuries were too unforeseeable and speculative to be cognizable under Maine law. The First Circuit affirmed in part, but reversed dismissal of the negligence and implied contract claims. Mitigation damages are available under those claims, for card replacement costs and credit insurance. View "In Re: Hannaford Bros Co. Cust" on Justia Law