Articles Posted in Banking

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This action stemmed from Defendants’ financing of Plaintiffs’ real property located in Wyoming and California. Plaintiffs filed this action in Wyoming against Defendants alleging breach of contract, fraud in the inducement, and violation of a California law governing fraudulent business practices. Plaintiffs sought monetary and punitive damages, rescission and restitution, and an order declaring all encumbrances recorded against their Wyoming property void and expunged. After applying Wyoming law, the district court granted Defendants’ motions to dismiss and for judgment on the pleadings, concluding that Plaintiffs’ breach of contract claims were barred by the statute of frauds and that Plaintiffs failed to plead their fraud and fraud-based claims with the particularity required by Wyo. R. Crim. P. 9(b). View "Elworthy v. First Tennessee Bank" on Justia Law

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After conducting a compliance examination of CalCon Mutual Mortgage Corporation (“CalCon”) the Wyoming Department of Audit, Division of Banking (“Division”) determined that CalCon had violated the Wyoming Residential Mortgage Practices Act in six separate brokering transactions by receiving application fees and “yield spread premiums” exceeding those previously disclosed to its customers. The Division requested that CalCon refund the application fees and yield spread premiums to the borrowers. CalCon objected and requested a contesting case hearing before the Office of Administrative Hearings (“OAH”). The OAH determined that CalCon had violated the Act. The State Banking Commissioner subsequently issued a final order directing CalCon to reimburse the fees. The district court affirmed. The Supreme Court affirmed, holding that the Commissioner properly interpreted Wyo. Stat. Ann. 40-23-114 in determining that CalCon was required to provide a written explanation of increased application fees and yield spread premiums in the transactions at issue. View "Calcon Mut. Mortgage Corp. v. State ex rel. Wyo. Dep’t of Audit, Div. of Banking" on Justia Law

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Gary Hopkins and Randal Burnett formed a LLC and financed the project with a small business administration (SBA) loan. Bank 1 loaned the remainder of the total project costs. Hopkins secured the SBA portion of the loan with third mortgages on his rental properties. Bank 2 subsequently acquired Bank 1. After Burnett bought Hopkins' membership in the LLC, Bank 2 released Hopkins from his loan. However, an agreement entered into by the parties did not mention the third mortgages on the property held by SBA. Burnett subsequently defaulted on his loan obligations, and Bank foreclosed on the mortgage covering the business property. Because Hopkins' third mortgages on his rental properties were not released by SBA, Hopkins was forced to continue to make the payments on the SBA loan. Hopkins and his wife (Plaintiffs) sued Bank 2, Burnett, and the LLC, arguing that, pursuant to the agreement, Bank 2 was supposed to remove Hopkins' liability and the mortgages held on his property. The district court granted summary judgment for Bank 2. The Supreme Court affirmed, holding that the terms of the contract between the parties were unambiguous, extrinsic evidence was not required to discern the parties' intent, and Bank 2 had abided by the terms of the contract. View "Hopkins v. Bank of the West" on Justia Law

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Debtor borrowed money to finance a real estate purchase. Debtor signed a promissory note and secured the loan with a mortgage. Bank of America (BANA) became the owner of the note. After the mortgage was recorded, an assignment of the mortgage to Mortgage Electronic Registration Systems (MERS) was recorded. MERS subsequently assigned the mortgage to BAC Home Loans Servicing (BAC), which was servicing the loan on behalf of BANA. After Debtor defaulted on her home loan, she and her husband filed a Chapter 7 bankruptcy petition. The bankruptcy trustee subsequently initiated an adversary proceeding against BAC, seeking to avoid the mortgage for its failure to comply with the requirements of Wyo. Stat. Ann. 34-2-122 and -123 (the statutes), notice statutes intended to protect third parties from conflicting claims of a principal and agent. The U.S. bankruptcy court filed a certification order to the Wyoming Supreme Court requesting the Court to answer with the mortgage must comply with the requirements of the statutes. The Supreme Court held that the statutes did not apply in this case because there were no conflicting claims by a principal and an agent from which a third party needed protection. View "Barney v. BAC Home Loans Servicing, L.P." on Justia Law

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In 2005, the Wyo Central Federal Credit Union (Credit Union) filed an action in state district court against Mark Broderick (Broderick) seeking judgment and foreclosure on a note and mortgage on which Broderick had defaulted. Broderick immediately filed a Chapter 13 bankruptcy petition, which stayed the Credit Union’s state court action. Following the conclusion of the bankruptcy proceedings, which cured Broderick’s original default under the note and mortgage but did not discharge the debt, Broderick again defaulted on the note. In 2010, the Credit Union amended its original complaint and again sought judgment and foreclosure on its note and mortgage. The district court granted the Credit Union summary judgment both on the amount the Credit Union demanded as due and owing under the note and on the attorney fees and costs it requested pursuant to the mortgage enforcement terms. Broderick raised the following issues on appeal, all of them relating to the award of attorney fees and costs: (1) whether the determination by a state court of an oversecured creditor’s attorney fees incurred in a bankruptcy proceeding is subject to the Preemption Doctrine; (2) whether the Credit Union should be denied its attorney fees by its failure to submit these fees to the Bankruptcy Court for approval; and (3) whether the Credit Union proved its damages with a reasonable degree of certainty. Upon review, the Supreme Court determined that the district court acted within its discretion in its award of fees and costs to the Credit Union, and its order did not violate bankruptcy law or procedure. View "Broderick v. Wyo Central Fed. Credit Union" on Justia Law

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After the owner of a construction project defaulted on its obligations to various creditors, mortgage holder Pinnacle Bank foreclosed on the real property securing its mortgage. Junior mortgage holder American National Bank (ANB) and construction lienholder Michael's Construction, Inc. (Michael's) both sought payment from the surplus funds resulting from the foreclosure proceeding. The district court declared that ANB's mortgage was superior to Michael's lien, but denied ANB's request for contractual interest from the date of foreclosure through the date of final judgment. The Supreme Court (1) affirmed the district court's order regarding the priority of liens; but (2) reversed the order regarding interest, holding that the district court did not have the discretion to limit ANB's recovery by denying it interest at the contractual rate from the time of foreclosure through final judgment. Remanded to determine the amount of interest due ANB under the promissory note for that time period. View "Michael's Constr., Inc. v. Am. Nat'l Bank " on Justia Law

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Earl and Nawana Wallace (the Senior Wallaces) borrowed $15,789 from Pinnacle Bank - Wyoming to finance a vehicle the Senior Wallaces purchased for their son and his wife (the Junior Wallaces). The collateral for the loan was the vehicle the Senior Wallaces bought for and titled in the Junior Wallaces' names. To that end, the Junior Wallaces signed a third party security agreement pledging the vehicle as collateral. The Junior Wallaces subsequently filed a bankruptcy petition. The bankruptcy trustees eventually sold the vehicle to benefit the bankruptcy estate. The Senior Wallaces thereafter stopped making payments on the loan. Pinnacle then filed a complaint seeking damages in the amount of the principal due on the note. The district court granted Pinnacle's motion for summary judgment. The Supreme Court affirmed, holding that none of the Senior Wallaces' asserted defenses excused them from meeting their loan obligation. View "Wallace v. Pinnacle Bank - Wyo." on Justia Law

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This was the second of two related lawsuits filed by Torrington Livestock Cattle Company (TLCC) against Daren and Jennifer Berg. In the first suit, Daren was found liable for breach of contract, conversion, and fraud. The court entered judgment in the favor of TLCC in the amount of $517,635, but the judgment remained unsatisfied. While the first suit was pending, the Bergs signed a promissory note with the First Bank of Torrington. As collateral, the bank acquired security interests in a variety of the Bergs' property, including livestock and ranching equipment. Later, the bank assigned the promissory note to TLCC. After the Bergs did not make the first payment, TLCC commenced the instant action, alleging breach of contract for promissory note and to enforce security agreement. The district court determined that no material issues of fact existed and TLCC was entitled to summary judgment. The Supreme Court summarily affirmed the judgment of the trial court based upon the deficient brief offered by the Bergs and their failure to follow the rules of appellate procedure. View "Berg v. Torrington Livestock Cattle Co." on Justia Law

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The Wyoming Division of Banking performed a Wyoming Uniform Consumer Credit Code compliance examination of Onyx Acceptance Corporation and determined it was improperly charging its Wyoming customers fees for making payments by telephone or internet. The Division ordered Onyx to stop charging the fees and refund the fees collected. The Office of Administrative Hearings issued a recommended order granting summary judgment for the Division. Consistent with the recommended decision, the administrator of the Code issued an order finding that Onyx violated the Code when it charged the fees. The district court reversed, concluding that the fees were not covered by the Code and, therefore, Onyx did not violate the Code by charging them to customers who opted to pay by phone or internet. The Supreme Court affirmed, holding that Onyx did not violate the Code and summary judgment in its favor was appropriate. Remanded. View "Vogel v. Onyx Acceptance Corp." on Justia Law