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

Spring Street, seeking to recover against Bayou and its owner Douglas Lam on defaulted promissory notes, claimed that certain transfers that defendants made were fraudulent: (1) Bayou's transfer of "hard assets" to LT Seafood when LT Seafood took over Bayou's retail operations at the 415 East Hamilton location; (2) Douglas Lam's transfer of his 49% interest in LT Seafood to DKL & DTL; and (3) DKL & DTL's subsequent transfer of this 49% interest to Vinh Ngo. The court concluded that Spring Street could pierce DKL & DTL's corporate veil on the basis of fraud and impose individual liability on the LLC members. Accordingly, the court affirmed the district court's summary judgment in favor of Spring Street with regard to these claims. However, the court concluded that Ten Lam and Ngo have raised a genuine dispute of fact as to both which "hard assets" Bayou transferred to LT Seafood and the value of those assets on the date of the transfer. Accordingly, the court vacated the judgment in regards to Spring Street's fraudulent transfer claim against Lam and Ngo for the amount of $150,000 and remanded for further proceedings. View "Spring Street Partners v. Lam, et al." on Justia Law

Issuer Banks appealed the district court's dismissal of their negligence claim as third party beneficiaries of Heartland's contracts with other entities. This case arose out of a group of hackers' breach of Heartland's data systems, compromising confidential information belonging to customers of Issuer Banks. Mindful that the New Jersey Supreme Court has long been a leader in expanding tort liability, and in light of the lack of a developed record illuminating any contractual remedies available to Issuer Banks, the court held that, in this instance, the economic loss doctrine did not bar Issuer Banks' negligence claim at this stage of the litigation. The court declined to decide on the remaining complex issues that Heartland raised. Accordingly, the court reversed and remanded for further proceedings. View "In Re: Heartland Payment Sys., et al." on Justia Law

This case involved the foreclosure sale of certain property owned by plaintiffs. Plaintiffs appealed the district court's dismissal with prejudice of their claims against BAC and NDE under the Texas Debt Collection Act (TDCA), Tex. Fin. Code 392.304(a), the Texas Deceptive Trade Practices Act (DTPA), Tex. Bus. & Com. Code 17.41 et seq., and Texas common law. The court concluded that plaintiffs have alleged sufficient facts to state a claim against BAC for misrepresenting the status or nature of the services that it rendered. Accordingly, the court reversed the district court's dismissal of the TDCA claims under section 392.304(a)(14) as to that basis, remanding for further proceedings. Consequently, the court also reversed the district court's dismissal of plaintiffs' request for an accounting from NDE. The court affirmed in all other respects. View "Miller, et al. v. BAC Home Loans Servicing, L.P., et al." on Justia Law

Lamesa filed suit against Liberty Mutual alleging that Liberty Mutual was liable under a federally-required surety bond for the alleged misconduct of its principal, a trustee in a Chapter 7 bankruptcy proceeding. On appeal, Liberty Mutual appealed the district court's decision to affirm the bankruptcy court's judgment that the trustee had committed gross negligence and Liberty Mutual, as the trustee's surety, was liable for damages under the terms of the bond. The court held that the controlling limitations period in this case was provided by 11 U.S.C. 322(d). Because Liberty Mutual did not contest that Lamesa's claim was timely under that provision, the court affirmed the bankruptcy court's conclusion that Lamesa's suit was not time-barred. On the merits, the court concluded that the bankruptcy court's finding that the trustee was grossly negligent in performing her duties was not clearly erroneous; expert testimony was not necessary to establish that the trustee failed to meet her standard of care; and Liberty Mutual failed to demonstrate that the district court's damage award was clearly erroneous. Accordingly, the court affirmed the judgment of the district court. View "Liberty Mutual Ins. Co. v. USA by Lamesa National Bank" on Justia Law

Plaintiffs, mortgagors who defaulted on their note, appealed the district court's motion to dismiss their suit seeking to enjoin a bank from foreclosing. Plaintiffs argued that the assignments by which the bank obtained the note and corresponding deed of trust were "robo-signed" and therefore invalid. Concluding that plaintiffs had standing, the court reaffirmed that, under Texas law, facially valid assignments could not be challenged for want of authority except by the defrauded assignor. View "Reinagel, Jr., et al. v. Deutsche Bank National Trust Co." on Justia Law

This case arose when the FDIC filed a complaint against appellants for sums due under various promissory notes. Appellants then entered into a Stipulated Judgment in favor of FDIC and against appellants. CadleRock moved ex parte to re-open the case to allow it to file the necessary pleadings to revive the Stipulated Judgment and the district court granted the motion. CadleRock then filed an ex parte motion to revive the Stipulated Judgment (Revived Judgment) as it pertained to appellants and the district court granted the motion. Five years later, CadleRock commenced collection and served appellants with pleadings and appellants moved to vacate and annul. At issue on appeal was the district court's order denying appellants' Federal Rule of Civil Procedure 60(b)(4) motion to vacate. The court concluded that the Revived Judgment was not void under Rule 60(b)(4); appellants' due process challenges failed; and, given that appellants have not shown an actual conflict between federal and state law, their preemption claim failed. Accordingly, the court affirmed the district court's judgment. View "FDIC v. SLE, Inc., et al." on Justia Law

Plaintiff, seeking damages and declaratory relief, brought a diversity action against two national banking associations, alleging violations of Louisiana consumer protection law in connection with a mortgage foreclosure proceeding. The district court dismissed the action in part pursuant to the Rooker-Feldman doctrine and in part for failure to state a claim of a statutory exemption under Louisiana law. The court concluded that the district court had jurisdiction to hear plaintiff's claims, which were "independent claims" for Rooker-Feldman purposes. However, plaintiff's complaint must be dismissed nonetheless for failure to state a claim where the Louisiana consumer protection law did not provide plaintiff with an avenue of relief because both banks were exempt and where plaintiff had not disputed that her declaratory judgment could be dismissed under Louisiana's preclusion principles. Accordingly, the court affirmed the judgment. View "Truong v. Bank of America, N.A., et al" on Justia Law

Debtor filed for leave to appeal the bankruptcy court's interlocutory judgment in the district court. While the motion was pending, the bankruptcy court, sua sponte, certified its judgment for direct appeal to this court, pursuant to 28 U.S.C. 158(d)(2)(A)(i) and (iii). The court agreed with the bankruptcy court's ruling on cross-motions for partial summary judgment in favor of FGB that the Multiple Indebtedness Mortgage that FGB recorded was valid and that the property underlying that mortgage, the Deluxe Motel, secured both the loan FGB made to debtor and the loan FGB made to a second entity. Accordingly, the court affirmed the judgment and remanded for further proceedings. View "Hari Aum, L.L.C. v. First Guaranty Bank" on Justia Law

Wells Fargo appealed from a district court decision affirming confirmation of a Chapter 11 cramdown plan. Debtors had obtained a loan from Morgan Stanley to renovate hotel properties and Wells Fargo eventually acquired the loan from Morgan Stanley. As a preliminary matter, the court held that the appeal was not equitably moot. On the merits, the court held that the bankruptcy court's 5% cramdown rate calculation on the basis of a straightforward application of the prime-plus approach was not erroneous. Accordingly, the court affirmed the judgment. View "Wells Fargo Bank National Assn v. TX Grand Prairie Hotel Realty, et al" on Justia Law

Fire Eagle appealed the district court's decision affirming a bankruptcy court's grants of summary judgment in two consolidated matters. The court held that the bankruptcy court's jurisdiction extended to the underlying adversary actions and declined to reverse the district court's holding to that effect. The bankruptcy court's entering an order in the two adversary proceedings without reference to the district court was within its statutory authority. There was no constitutional bar to the bankruptcy court's exercise of its jurisdiction over the two adversary actions. Venue was proper in the Western District of Texas. The transfer of venue of the Bischoff Adversary to the Western District of Texas was proper. Finally, the court affirmed the bankruptcy court's grant of summary judgment. View "Fire Eagle, L.L.C. v. Bischoff, et al" on Justia Law