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

In this action involving a Texas mortgage dispute, the Fifth Circuit held that there was ambiguity in the contract's escrow provisions and thus the district court erred by granting summary judgment to defendants on claims arising from that ambiguity. The court noted that, at this stage, it was premature to conclude that defendants were entitled to their foreclosure counterclaim. Therefore, the court vacated the foreclosure ruling and remanded for reconsideration. The court affirmed the district court's grant of summary judgment for defendants on the Real Estate Settlement Procedures Act claim, and the district court's judgment on the Texas Debt Collection Practices Act claim. View "Wease v. Ocwen Loan Servicing, LLC" on Justia Law

The Fifth Circuit affirmed the district court's dismissal of plaintiff's claim that the bank was vicariously liable for the failure of the bank's loan servicer to comply with the Real Estate Settlement Procedures Act (RESPA). The court held that plaintiff did not plead an agency relationship between the bank and the loan servicer, an essential element of a vicarious liability claim. Furthermore, even if the bank had an agency relationship with the loan servicer, the bank cannot be held vicariously liable, as a matter of law, for the servicer's alleged RESPA violations. View "Christiana Trust v. Riddle" on Justia Law

The Fifth Circuit affirmed the district court's grant of summary judgment for HSBC in an action seeking to foreclose on defendant's property. The court held that HSBC was the holder of the home equity note and that defendant failed to present evidence raising an issue of material fact as to HSBC's ownership of the note. The court also held that HSBC's suit was timely because defendant's bankruptcy suit tolled the statute of limitations for 127 days. Finally, the court held that defendant waived his argument that the district court erred when it signed and entered a final judgment that authorized a foreclosure sale of the property, without complying with Texas Rule of Civil Procedure 309. View "HSBC Bank USA, NA v. Crum" on Justia Law

After the magistrate judge concluded, on remand, that defendants met the remaining requirements to foreclose on their mortgage under Texas law, the Fifth Circuit reversed and rendered judgment in favor of Deutsche Bank. The court held that the magistrate judge defied a previous mandate and contravened the law of the case doctrine by concluding that the court's prior opinion was clearly erroneous and that failure to correct the error would result in manifest injustice. In this case, the magistrate judge found no impediment to foreclosure other than a supposed defect in the assignment, and any such imperfection did not change the fact that MERS and its successors and assigns were entitled to foreclose on defendants' property. View "Deutsche Bank National Trust Co. v. Burke" on Justia Law

The Fifth Circuit affirmed the district court's denial of claimants' motion to release property under civil forfeiture law. The property at issue stemmed from the sale of synthetic cannabinoids that were a controlled substance or controlled substance analogues intended for human consumption.Determining that the court had jurisdiction over the appeal, the court held that, assuming arguendo, Supplemental Rule G(2)(f) applied in reviewing pretrial property restraints outside the motion-to-dismiss context, the district court used the right standard. In this case, the district asked whether the government's complaint "demonstrated with sufficient particularity for the current stage of the proceedings that defendants intentionally commingled tainted funds with untainted funds for the purpose of facilitating the alleged money laundering.” The court held that the facts here were sufficient to support this standard. The court also held that probable cause for forfeiture existed based on the charge for conspiracy to commit mail and wire fraud. View "United States v. $472,871.95 in Funds Seized" on Justia Law

The Fifth Circuit vacated the district court's grant of summary judgment in an action brought by a landowner against the City over the City's use of his residential property to drain and filter storm-sewer runoff. The court held that there were disputed factual issues as to whether the City had an easement over the landowner's land and he was entitled to a declaratory judgment and monetary damages. The court also held that, even if the City has an easement, there was a disputed factual issue regarding whether the City must accommodate the landowner's use of his property by installing subsurface drain pipes as it has done elsewhere in the City. The court held that the landowner's Fifth Amendment takings claim was time-barred and affirmed the district court's judgment as to this claim. View "Redburn v. City of Victoria" on Justia Law

The city owned land and a townhome in New Orleans after 1998; its previous owner, Jett, neglected to pay his taxes. Notwithstanding its recorded ownership, the city instituted Code Enforcement proceedings against Jett in 2012. The Garretts purchased the property on October 2, 2015, and recorded the conveyance on October 14. They claim that the building was structurally sound. The city continued to pursue Jett. An administrative judgment was entered on October 30, ordering Jett to pay fines and warning that the building could be demolished. A lien was recorded on December 7. The Garretts were not named and received no notice. On January 15, 2016, their realtor noticed a sign advising upcoming demolition of the property. They contacted the city, which canceled the lien. E-mail exchanges indicated that the Garretts intended to resolve all code issues. On January 27, the city demolished the townhouse. Denying the Garretts' request for compensation, the city sent a bill for the demolition costs. They did not appeal but filed suit alleging denial of due process and just compensation. The district court dismissed the claim as jurisdictionally unripe because they failed to seek compensation in state court. The Fifth Circuit vacated, finding the due process claim, predicated on lack of notice and a hearing, ripe, given the uncertainty of remedies in a state court inverse condemnation suit. The court concluded that the other claims were ripe or would be best resolved in the same suit. View "Archbold-Garrett v. New Orleans City" on Justia Law

The Fifth Circuit reversed the district court's grant of summary judgment for Wilmington Trust, holding that the lender was not entitled to foreclosure because it failed to prove that it provided adequate notice of intent to accelerate. The court held that Texas common law imposes notice requirements before acceleration that is clear and unequivocal. In this case, Wilmington Trust failed to meet its burden to show clear and unequivocal notice of intent to accelerate prior to filing suit. View "Wilmington Trust, N.A. v. Rob" on Justia Law

Vendors and contractors provided materials and services in connection with an offshore mineral lease. Under the Louisiana Oil Well Lien Act, La. Rev. Stat. 9:4863(A)(1), 9:4864(A)(1), they secured liens on the lessee’s operating interest upon the commencement of labor. They timely recorded the liens. The lessee later sold “term overriding royalty interests” to OHA. In the lessee’s subsequent bankruptcy proceeding, the service providers intervened, seeking to enforce their liens on OHA’s royalty interests. The district court agreed with the bankruptcy court and dismissed their complaints, concluding that the statute that created the liens extinguished them via a safe-harbor provision. The Fifth Circuit affirmed. The safe-harbor question is one of statutory interpretation: Was OHA’s purchase of the overriding royalties a purchase of “hydrocarbons that are sold or otherwise transferred in a bona fide onerous transaction by the lessee or other person who severed or owned them” at severance? The royalties were “sold,” the transaction was “bona fide,” and the seller was a “lessee.” OHA purchased more than an interest in proceeds; it purchased an interest in the to-be-produced hydrocarbons themselves. A purchase of overriding royalties is a purchase of “hydrocarbons” under the statute, so the lienholders’ failure to provide pre-purchase notice renders their liens extinguished. View "OHA Investment Corp. v. Schlumberger Technology Corp." on Justia Law

In this consolidated appeal stemming from the bankruptcy of nineteen companies that were tenants-in-common of a student housing development called the Reserve, the Fifth Circuit reversed in part and affirmed in part the bankruptcy court's judgment. The court reversed the bankruptcy court's reduction of UTSA's share of net proceeds from 21.17% to 3.14%, based on serious procedural deficiencies, the lack of notice to UTSA regarding the imposition of a constructive trust, and the remedy's violation of the terms of the Code. The court held, however, that the bankruptcy court did not err in reducing Woodlark's proof of claims from $510,475,98 to $410,097.78. The court remanded for further proceedings. View "UTSA Apartments, LLC v. UTSA Apartments 8 LLC" on Justia Law