Justia U.S. 5th Circuit Court of Appeals Opinion Summaries

Coastal filed suit against Chase Bank, asserting claims of conversion and negligence under the Texas Uniform Commercial Code (UCC) and money had and received under the common law. At issue on interlocutory appeal was whether section 3.405 of the UCC can serve as an affirmative defense to a common law "money and received" claim and whether settlement credits in Texas reduce the nonsettling defendant's liability rather than the plaintiff's total loss. The court concluded that the money had and received claim as applied in this situation must simply incorporate the affirmative defense provided by section 3.405. Therefore, the district court did not err in its determination that section 3.405 could so be applied. Further, the district court was correct in holding that the settlement credit should be applied to reduce the nonsettling defendant's liability, not the plaintiff's total loss. On remand, however, the district court must give Coastal an opportunity to demonstrate that allocation of the settlement amount is appropriate. Accordingly, the court affirmed and remanded for further proceedings.View "Coastal Agricultural Supply v. JP Morgan Chase Bank, N.A." on Justia Law

Plaintiff briefly had a checking account with Union Planters Bank and had signed a signature card binding her to arbitration. Union Planters merged with Regions Bank. Years after closing her account, plaintiff was injured in an automobile accident. The lawyer she retained allegedly embezzled plaintiff's portion of the settlement and she sued Trustmark Bank, where the lawyer maintained his accounts, for negligence and conversion. Regions moved to compel arbitration based on the arbitration agreement. Because the events leading to plaintiff's claim - a car accident, a settlement, and embezzlement of the funds through an account that a third party held with the bank - have nothing to do with her checking account opened years earlier for only a brief time, the notion that her claim falls within the scope of the arbitration agreement is "wholly groundless." Accordingly, the court affirmed the district court's denial of the motion to compel arbitration.View "Douglas v. Trustmark National Bank" on Justia Law

GE Plaintiffs filed suit against Worthington under the Texas Uniform Fraudulent Transfer Act (TUFTA), Tex. Bus. & Comm. Code 24.009(a), seeking to void transfers that Worthington received from the GE Plaintiffs' predecessor-in-interest, allegedly with notice of the transfers' fraudulent nature. The jury found in favor of the GE Plaintiffs and the district court entered judgment for the amount of the transfers. The court concluded that the factual commonality in this case did not suffice to count the contractual dispute settlement against TUFTA's limit on recovery for a single avoidance "claim," or to render Citibank a joint tortfeasor for one-satisfaction rule purposes. Accordingly, the district court did not err in denying Worthington a settlement credit for the settlement proceeds that the GE Plaintiffs received from Citibank. The court rejected Worthington's argument that the district court erred as a matter of law in interpreting TUFTA's good faith defense as an objective standard. Accordingly, the court affirmed the judgment of the district court. View "GE Capital Commercial, Inc., et al. v. Wright & Wright, Inc." on Justia Law

This case arose out of a Loan Agreement and Term Note between Regions and First KT and a Limited Guaranty Agreement executed by defendant as a security for the loan. Baron has since acquired all of Regions' rights against defendant. Regions, as the former plaintiff, had filed suit against defendant for the total amount due on the Guaranty. On appeal, defendant challenged the district court's grant of Regions' motion for summary judgment. The court concluded that defendant's claim that First KT made payments that reduced the amount under the Guaranty was fairly classified as an affirmative defense under Louisiana law; the district court did not abuse its discretion in finding that defendant was long familiar with the payment claim he sought to raise, that he failed to raise it in a pragmatically sufficient time, and that the delay prejudiced Baron, L.L.C. on its ability to respond to the claim; and therefore, the court affirmed the judgment of the district court. View "Regions Bank v. Tauch" on Justia Law

Plaintiffs filed suit against defendants after plaintiffs failed to make the required payments on their home equity loan. On appeal, plaintiffs challenged the district court's dismissal of their claims. Determining that the court had appellate jurisdiction, the court concluded that plaintiffs failed to controvert evidence that a letter was indeed sent to them notifying them of the change to their loan servicer. Accordingly, the court affirmed the district court's grant of Bank of America's and Deutsche Banks' motion for summary judgment in part on plaintiffs' Real Estate Settlement Procedures Act (RESPA), 2 U.S.C. 2605, claim. The court concluded that plaintiffs have made no factual allegations that Morgan Stanley was involved in the alleged unlawful conduct in connection with plaintiffs' home equity loan and the district court did not err in granting Morgan Stanley's motion to dismiss. The district court also did not err in granting Barrett Daffin's motion to dismiss. Finally, the district court did not abuse its discretion in denying plaintiffs' motion for sanctions and motion to compel discovery. Accordingly, the court affirmed the judgment of the district court. View "Haase, et al. v. Countrywide Home Loans, Inc., et al." on Justia Law

The Bank sought to vacate an arbitration award in favor of 21st Century. The court concluded that the district court did not clearly err in determining that the Bank had actual or constructive notice of the arbitration; the record contained several communications showing that various bank organizers knew of the forthcoming proceedings; and because the Bank had actual or constructive notice and Bernstein Seawell & Kove v. Bosarge requires no more, the court did not need to decide whether 21st Century failed to comply with section 15.2 of the Agreement. The court also concluded that the contract did not expressly require senior management to engage in negotiations; even if senior management were required to engage in a second round of negotiations, the Agreement did not expressly condition the ability to arbitrate a dispute on failed senior management negotiations; and the record supported the district court's finding regarding good-faith negotiations on the operational level. Accordingly, the court affirmed the judgment of the district court. View "21st Century Financial Services v. Manchester Financial Bank" on Justia Law

Amzak appealed the district court's summary judgment on its loan loss claims against its title insurance policy provider and related entities. The court concluded that Amzak failed to show that it suffered actual loss because of a failure of title and STL could not be held responsible for any harm suffered by Amzak. The court formalized the holding in First State Bank v. American Title and likewise rejected the guarantee rationale of Citicorp Savings of Illinois v. Stewart Title Guaranty Co., and agreed with the district court's rejection of Amzak's argument that STL breached the title policy at the time of the loan because its mortgage was voidable at that time. The court also disposed of Amzak's negligence claim where STL's delay in making a complete filing of Amzak's mortgage was not a legal cause of Amzak's loss. Accordingly, the court affirmed the judgment of the district court. View "Amzak Capital Mgmt. v. Stewart Title" on Justia Law

This dispute arose out of a complicated bankruptcy proceeding. On appeal, Lender challenged the district court's judgment which, in relevant part, disallowed Lender's claim for a contractual prepayment consideration. Applying Colorado law, a lender was not entitled to a prepayment penalty when the lender chooses to accelerate the note. Absent a clear contractual provision to the contrary or evidence of the borrower's bad faith in defaulting to avoid a penalty, a lender's decision to accelerate acts as a waiver of a prepayment penalty. In this instance, the plain language of the contract plainly provided that no Prepayment Consideration was owed unless there was an actual prepayment, whether voluntary or involuntary. Accordingly, the acceleration of the Note due to GCMM's default by nonpayment under Article 4 did not trigger the obligation to pay the Prepayment Consideration under Article 6. View "Bank of New York Mellon v. GC Merchandise Mart, L.L.C., et al." on Justia Law

Plaintiff filed suit against Wells Fargo in state court, raising claims related to Wells Fargo's foreclosure and Freddie Mac's attempts to evict plaintiff. Wells Fargo then removed the case to federal court where the district court dismissed all of plaintiff's claims. At issue on appeal was whether Wells Fargo could move for attorney's fees pursuant to Federal Rules of Civil Procedure 54(d)(2). Here, the deed of trust at issue provided for attorney's fees to compensate Wells Fargo, inter alia, for the prosecution or defense of a claim. The language of the contract and the nature of the claim were the dispositive factors concerning whether the fees were an element of damages or collateral litigation costs. In this instance the court concluded that the motions for attorney's fees provided by contract were permissible under Rule 54(d)(2). Accordingly, the court reversed and remanded. View "Richardson v. Wells Fargo Bank, N.A., et al." on Justia Law

Acting as receiver, the FDIC conveyed substantially all of WaMU's assets and liabilities to JPMorgan Chase, including certain long-term real-estate leases. At issue was whether the owners of the leased tracts could enforce the leases against Chase by virtue of the FDIC's conveyance. The court held that, in the interest of maintaining uniformity in the construction and enforcement of federal contracts, the landlords did not qualify as third-party beneficiaries. The court concluded, however, that the landlords have "standing" to prove the content of the Agreement and that the Agreement, properly construed, was a complete "assignment" sufficient to create privity of estate under Texas law. Accordingly, the court affirmed the judgment of the district court. View "Excel Willowbrook, L.L.C., et al. v. JPMorgan Chase Bank, N.A., et al." on Justia Law