Justia U.S. 11th Circuit Court of Appeals Opinion Summaries

In 2010 the Georgia Department of Banking and Finance closed Community Bank & Trust. St. Paul, which provided liability coverage to the Bank’s officers and directors, sought a declaratory judgment in response to a separate lawsuit (underlying action) brought by the Federal Deposit Insurance Corporation (FDIC), as receiver for the Bank, against Miller and Fricks, former Bank officers. In that action, the FDIC alleged gross negligence and breaches of fiduciary duty related to the Bank’s Home Funding Loan Program and claimed more than $15 million in damages. Finding the policy’s an “insured-versus-insured” exclusion unambiguous, the district court held that there was no coverage. The exclusion precludes coverage only for actions brought “by or on behalf of any Insured or Company in any capacity.” Neither the exclusion nor the defined terms make any reference to the FDIC, regulators, or any liquidating entity. St. Paul argued that the FDIC “steps into the shoes” of the bank, as a receiver. The Eleventh Circuit reversed, finding the provision ambiguous. View "St. Paul Mercury Ins. Co. v. Fed. Deposit Ins. Corp." on Justia Law

Plaintiff sought to rescind a loan she entered into with the trustee of a mortgage investment trust, and the district court granted rescission, finding that the mortgaged property was plaintiff's "principal dwelling" and the trustee failed to give plaintiff adequate notice of her right to rescind. In this case, the trustee failed to comply with two requirements of the Truth in Lending Act, 15 U.S.C. 1635, and a related regulation where he instructed plaintiff to sign simultaneously the loan documents and a postdated waiver of her right to rescind the transaction and the trustee failed to give plaintiff two copies of the notice of her right to rescind. The court concluded that the record fairly supports the district court's findings of fact; plaintiff was entitled to rescission because the trustee failed to give plaintiff clear and conspicuous notice of her right to rescind; but the district court lacked the discretion to deny plaintiff statutory damages, attorney's fees, and costs. Accordingly, the court affirmed in part, reversed in part, and remanded for a determination of the amounts owed. View "Harris v. Schonbrun" on Justia Law

Plaintiff filed suit seeking declaratory and injunctive relief against a Georgia post-judgment garnishment statute. Plaintiff obtained funds from a workers' compensation settlement after suffering a permanent disability on the job. Plaintiff also received Social Security disability payments. One of plaintiff's creditors issued a garnishment summons that resulted in the freezing of plaintiff's worker's compensation funds for four months before plaintiff's creditor finally conceded that plaintiff's funds were exempt from garnishment and agreed to the dissolution of the hold on his funds. The court concluded that plaintiff had Article III standing and that his claim is not moot. The court declined to pass on the constitutionality of Georgia's post-judgment garnishment statute before ensuring that all interested parties have had notice and a chance to present all evidence and argument, and the district court has had an opportunity to examine and consider that evidence and argument on the merits. Accordingly, the court reversed the district court's sua sponte dismissal of plaintiff's suit for lack of standing and remanded, because it was substantially likely that plaintiff and his wife's exempt funds will soon be the subject of a garnishment summons again. View "Strickland v. Alexander, et al." on Justia Law

A 2004 judgment entered against John Zelaya was rendered in the United States District Court for the Southern District of New York and was registered in the Southern District of Florida. ZC was not party to the suit that led to the judgment and, instead, the prevailing parties assigned their interests in the judgment to ZC. ZC then sought a writ of execution against Zelaya from the Southern District of Florida. In 2010, Zelaya deposited the full amount of the judgment into the district court's registry where the district court then dissolved writs of garnishment against all of the banks at issue, granted Zelaya's motion for a satisfaction judgment, and awarded attorney fees and costs to Deutsche Bank. The court concluded that it had jurisdiction over the consolidated appeal; the district court did not err in allowing Zelaya to deposit the disputed funds into the court's registry; the district court did not err in granting Zelaya's motion for a satisfaction of the judgment; the district court did not err in its award of attorney fees and costs to Deutsche Bank; and, therefore, the court affirmed the judgment. View "Zelaya/Capital Int'l Judgment, LLC v. Zelaya, et al." on Justia Law

Coquina invested in a Ponzi scheme perpetrated by Scott Rothstein and lost over $6.7 million when his scheme collapsed. Coquina then filed suit against TD Bank, claiming that the bank made material misrepresentations and took other actions to help Rothstein perpetrate the fraud. The court concluded that Coquina had Article III standing; the district court did not err in regards to the testimony of TD Bank's regional vice president; although the district court erroneously admitted into evidence the settlement agreement between Coquina and the Trustee, the error did not cause substantial prejudice to TD Bank; the court affirmed the damages award and rejected TD Bank's arguments concerning the award; and affirmed the sanctions imposed. The court also found no abuse of discretion in the district court's denial of Coquina's motion to amend. Accordingly, the court affirmed the judgment of the district court in all respects.View "Coquina Investments v. TD Bank, N.A." on Justia Law

Plaintiffs filed suit against Regions alleging that Regions settled a check presented by them at less than par in violation of Florida Statute 655.85 (Counts I and II). Plaintiffs also claimed that Regions was unjustly enriched when it settled their check at less than par (Counts III and IV). Under section 655.85, a financial institution may not settle any check drawn on it otherwise than at par. The court concluded that, because federal law preempted section 655.85 with respect to national banks, by operation of 12 U.S.C. 1831(a)(j)(1), so too does it preempt section 655.85 with respect to Regions, an out-of-state bank. And because plaintiffs have premised their unjust enrichment claims on the same facts as they lay out in Counts I and II, Counts III and IV are similarly preempted. View "Pereira, et al. v. Regions Bank" on Justia Law

Plaintiff (the customer) filed suit against State Street (the custodian bank), alleging in essence that it had a duty to notify him that the securities in his account were worthless. The district court granted State Street's motion to dismiss the contract claims on the ground that State Street had a merely administrative role in managing plaintiff's accounts and thus owed him no duty to guard against his investment advisor's misconduct. The district court concluded that plaintiff's negligence claims were barred by Florida's economic loss rule and plaintiff had not sufficiently alleged knowledge on the part of State Street in regards to the aiding and abetting claims. The court affirmed, holding that, under these facts, the custodian bank breached no duty, contractual or otherwise, by accepting on behalf of its customer securities that later turn out to be fraudulent and listing those securities on monthly account statements issued to the customer. Plaintiff's allegations failed to state claims for breach of contract; plaintiff failed to establish that State Street owed him an independent duty to monitor the investments in his account, verify their market value, or ensure they were in valid form; therefore, he failed to state valid negligence claims; plaintiff's allegations were insufficient to state a claim for aiding and abetting; and plaintiff's claims for breach of fiduciary duty and negligent misrepresentation also failed. View "Lamm v. State Street Bank and Trust" on Justia Law

Plaintiff and other checking account customers filed suit against the Bank for allegedly charging excessive overdraft fees in breach of their account agreement. The district court denied the Bank's renewed motion to compel arbitration. The court concluded that state law applied when courts determined whether a valid arbitration agreement is in effect, and the Federal Arbitration Act's, 9 U.S.C. 1 et seq., presumption did not; under North Carolina law, the Bank Agreement was entirely superseded, and the arbitration agreement in that agreement therefore became ineffective; the district court properly looked to the PNC Agreement to determine whether the parties agreed to arbitrate their disputes; under North Carolina law, the PNC Agreement's silence was insufficient to form such an agreement; based on the terms of the agreement, the PNC Agreement applied retroactively; and because the agreement governing the dispute at hand did not permit the Bank to compel arbitration, the district court properly denied the motion. Accordingly, the court affirmed the judgment of the district court. View "Dasher v. RBC Bank (USA)" on Justia Law

Plaintiff filed suit against her mortgage lender, Wells Fargo, alleging that Wells Fargo breached the mortgage-loan contract and violated extracontractual duties by requiring her to have more flood insurance than the amount set by federal law. At issue was whether a covenant included in all contracts for home mortgage loans guaranteed by the FHA unambiguously permitted mortgage lenders to require their borrowers to obtain flood insurance beyond the amount the agency required. The court concluded that the covenant unambiguously made the federally required flood-insurance amount the minimum, not the maximum, the borrower must have. Accordingly, plaintiff could not prevail on her claims against Wells Fargo and the court affirmed the district court's dismissal of the complaint for failure to state a claim. View "Feaz v. Wells Fargo Bank, N.A., et al." on Justia Law

This interlocutory appeal arose from an action filed by the FDIC, as receiver for Integrity Bank, against former Bank directors and corporate officers (defendants). The FDIC sought to recover losses that the Bank suffered as a result of defendants' alleged negligent conduct. The court certified questions of state law regarding the standard of care established in O.C.G.A. 7-1-490 and Georgia's business judgment rule to the Supreme Court of Georgia. Because the FDIC has failed to demonstrate the existence of an established and long-standing common law rule barring defendants' affirmative defenses, and because the court must decline to create a barring rule, the FDIC was unentitled to partial summary judgment. Accordingly, the court affirmed in part and certified questions in part. View "FDIC v. Skow, et al." on Justia Law