Justia Contracts Opinion Summaries

This putative class action was one of a number of breach-of-contract suits being brought against financial institutions nationwide by mortgagors who claimed that they were improperly forced to increase flood insurance coverage on their properties. The plaintiff in this case asserted that Bank of America's demand that he increase his flood coverage by $46,000 breached both the terms of his mortgage contract and the contract's implied covenant of good faith and fair dealing. The district court concluded that the pertinent provision of the mortgage unambiguously permitted the lender to require the increased flood coverage and, hence, it granted the defendants' motion to dismiss the complaint. The First Circuit Court of Appeals vacated the judgment of dismissal in favor of the Bank, holding that the mortgage was reasonably susceptible to an understanding that supported the plaintiff's breach of contract and implied covenant claims. Remanded. View "Kolbe v. BAC Home Loans Servicing, LP" on Justia Law

This was an appeal of a judgment which held that a mechanic’s lien had priority over a mortgage. The judgment was predicated upon the district court's refusal to permit the mortgagee to withdraw an admission made in open court by its counsel that the mechanic's lien was valid. Upon review of the matter, the Supreme Court reversed the district court and held that the mechanic's lien was invalid because the lien did not show that it was verified before a person entitled to administer oaths. View "First Federal Savings Bank of Twin Falls v. Riedesel Engineering, Inc." on Justia Law

When AFC filed for bankruptcy in 2009, the FDIC was appointed receiver for AFC’s subsidiary, AmTrust and sought payment from AFC under 11 U.S.C. 365(o), which requires that a party seeking Chapter-11 bankruptcy fulfill “any commitment . . . to maintain the capital of an insured depository institution.” The FDIC argued that AFC made such a commitment by agreeing to entry of a cease-and-desist order requiring AFC’s board to “ensure that [the Bank] complies” with the Bank’s own obligation to “have and maintain” capital ratios of 7 percent (Tier 1) and 12 percent (total). The district court found that the order was not a capital-maintenance commitment under section 365(o). The Sixth Circuit affirmed. The cease-and-desist order is ambiguous and could reasonably be read as establishing either an oversight role or a capital-maintenance commitment and the bulk of the extrinsic evidence favored the “oversight” reading. View "Fed. Deposit Ins. Corp. v. Amtrust Fin. Corp." on Justia Law

Mountain West Bank obtained a summary judgment against Helena Christian School and several individual defendants (HCS) following HCS’s default on loans from Mountain West. HCS appealed the decision of the Montana First Judicial District Court. The issues on appeal were: (1) whether the District Court erred by granting Mountain West’s motion for summary judgment without complying with the requirements of 71-1-222, MCA; and (2) whether the District Court erred by entering a judgment that did not comply with 25-9-203, MCA. Upon review, the Supreme Court reversed and remanded, giving the lower court the mandate to compute and state the exact judgment amount, including interest, pertaining to the unsecured loan; for the secured loan, the court must comply with the provisions of 71-1-222, MCA. Upon receipt of notice of the proceeds received in the sheriff’s sale, in the event of a deficiency, the court must determine the appropriate rate of interest vis-a-vis the deficiency, and enter an order of judgment computing and stating the amount owed by Defendants. View "Mtn. West Bank, NA v. Helena Christian School, Inc." on Justia Law

The procedural background of the extensive litigation underlying this case was discussed in Madsen IV. Following the Supreme Court's decision in that case, Appellant Nancy Madsen filed a new complaint alleging grounds for the same relief that was sought by the earlier complaint. The new complaint was dismissed as barred by res judicata, and this appeal followed. The Supreme Court affirmed, holding that the litigation preceding the filing of Appellant's new action definitively resolved her claims and erected a res judicata bar to any subsequent complaint raising claims that could have and should have been raised in that litigation. View "Madsen v. JPMorgan Chase Bank, N.A." on Justia Law

This case involved unanswered questions of Georgia law that are central to this appeal. Because these questions are determinative of the case and there are no controlling precedents from the Supreme Court of Georgia, the court respectfully certified the following questions for resolution: (1) Whether a security deed that lacks the signature of an unofficial witness should be considered "duly filed, recorded, and indexed" as required by O.C.G.A. 44-13-33, such that a subsequent hypothetical bona fide purchaser would have constructive notice when the deed incorporates the covenants, terms, and provisions of a rider that contains the attestations required by O.C.G.A. 44-13-33 and said rider was filed, recorded, and indexed with the security deed; and (2) If the answer to question one was in the negative, whether such a situation would nonetheless put a subsequent hypothetical bona fide purchaser on inquiry notice. View "Gordon v. Wells Fargo Bank, N.A." on Justia Law

Vanderbilt sued to foreclose against appellees for defaulting on their installment payments on a mobile home and appellees responded by claiming that they had been released from any underlying debt on the retail installment contract. Intervenors claimed that Vanderbilt, CMH, and their parent company CHI, had filed false liens on their land as collateral for appellees' retail installment contract. The court affirmed the judgment and award of damages with respect to intervenors' claims. The court reversed and remanded the judgment as to Vanderbilt's claims against appellees, as well as appellees' counterclaims. View "Vanderbilt Mtge. and Fin. Inc. v. Flores, et al." on Justia Law

Missouri Bank sued OneBeacon for breach of contract and vexatious refusal to pay. The court held that the district court did not err by granting summary judgment for Missouri Bank on its breach-of-contract claim and rejected OneBeacon's claim that it did not breach Insuring Agreement (D) by denying Missouri Bank's claim because Insuring Agreement (D) did not cover losses resulting from fraudulent faxes. The court also held that the district court's finding that OneBeacon had reasonable cause to deny Missouri Bank's vexatious refusal to pay claim was not clearly erroneous. View "Missouri Bank and Trust Co. v. OneBeacon Ins. Co." on Justia Law

Central Mortgage and Morgan Stanley entered into a contract concerning the purchase of servicing rights for loans that Morgan Stanley planned to sell to Fannie Mae and Freddie Mac (the agencies) and private investors. Subsequently, many of the loans for which Morgan Stanley sold the servicing rights began to fall delinquent. The agencies exercised their contract right to put delinquent agency loans back to Central Mortgage. Central Mortgage then filed a complaint against Morgan Stanley for breach of contract. The Chancery Court granted Morgan Stanley's motion to dismiss. The Supreme Court reversed and remanded, holding that the claims were legally sufficient to withstand the motion. Central Mortgage then filed an amended complaint to add new claims for additional agency loans (new loans) that had been put back by the agencies and to challenge the private loans. Morgan Stanley moved to dismiss the amended complaint. The Chancery Court (1) denied the motion to dismiss to the extent that it rehashed theories that the Court and Supreme Court already considered in the context of its original motion to dismiss; but (2) granted the motion to dismiss the claims related to the new loans because those claims were barred by Delaware's statute of limitations. View "Central Mortgage Co. v. Morgan Stanley Mortgage Capital Holdings LLC" on Justia Law

Regions Bank ("Regions"), as sole trustee of the J.F.B. Lowrey Trust ("the Lowrey Trust"), appealed a circuit court's order that denied Regions' motion to award it attorney fees and costs. Sam G. Lowrey, Jr., and Shelby Lowrey Jones, two of the current beneficiaries of the Lowrey Trust ("the beneficiaries") cross-appealed the trial court's judgment in favor of Regions on their breach-of-fiduciary-duty claim. The beneficiaries claimed that Regions failed to protect and preserve the assets of the Lowrey Trust, which consisted primarily of approximately 20,000 acres of timberland located in Monroe and Conecuh Counties and which have been the subject of much intra-family litigation. The trial court entered a detailed order in favor of Regions, rejecting the beneficiaries' claims of mismanagement of the trust assets and taxing costs against the beneficiaries. Regions filed a bill of costs and a supplemental bill of costs detailing all the expenses incurred in defending the claim, and attaching supporting documentation. The beneficiaries filed a motion to review taxation of costs and a motion to vacate the judgment. The trial court did not rule on the motions, and all post-trial motions were deemed denied by operation of law. Regions timely appealed, and the beneficiaries filed a cross-appeal. Upon review of the record of the five-day bench trial and the considerable documentary evidence, the Supreme Court held that there was substantial evidence to support the trial court's decision on the beneficiaries' breach-of-fiduciary-duty claim. Thus, the Court affirmed the trial court's judgment in favor of Regions on that claim. The Court reversed the trial court's ruling on Regions' motion for attorney fees, and remanded this case back to the trial court for a hearing on Regions' attorney-fee motion to consider the reasonableness of the attorney fee. View "Regions Bank v.Lowrey" on Justia Law