Justia U.S. 8th Circuit Court of Appeals Opinion Summaries

For about three years ending in 2009, five schemers bilked unsuspecting investors of an estimated $190 million in a Minnesota Ponzi scheme. They took more than $79 million of the investors’ funds with the help of Associated Bank. After the scheme was exposed, the district judge in a related case appointed a receiver to take custody of funds owned by the schemers’ estates and by organizations under their control (receiver entities). The receiver filed suit on behalf of the receiver entities, alleging Associated Bank aided and abetted the scheme. The district court granted Associated Bank’s motion to dismiss. The Eighth Circuit reversed and remanded, stating that, while it could not predict whether a jury will find Associated Bank either had actual knowledge of or substantially assisted in the asserted torts, the facts alleged in the complaint give the receiver’s claims “facial plausibility.” The receiver pled “factual content that allows the court [and a jury] to draw the reasonable inference that the defendant is liable for the misconduct alleged.” View "Zayed v. Associated Bank, N.A." on Justia Law

Oliver was manager and part-owner of PSC. Oliver and PSC sought to refinance property on Lake Superior. Meecorp required additional collateral. Oliver identified 14 other income-producing properties and his interest in each. The sum of the “Oliver values” was more than $1 million. Gandolf, owned by Oliver and PSC, supplied: cash-flow projections, the value of Oliver’s interests, member-control agreements, certificates of good standing, and Schedule K-1s for Gandolf-owned LLCs associated with each property. Gandolf did not supply the deeds of ownership. Meecorp concluded that Oliver, individually, could not pledge adequate collateral for a loan of $1.32 million, having no direct interest in the properties. Meecorp requested that Gandolf, as owner of the remaining governance rights and the 100% owner of the financial rights, pledge its interests in the LLCs. Oliver, as Gandolf’s representative, signed the pledge. Meecorp delivered the funds. Oliver and PSC defaulted. Meecorp learned that neither Oliver nor Gandolf’s LLCs owned the pledged properties; Gandolf’s LLCs were general partners in undisclosed limited partnerships that owned each property. Undisclosed limited partners owned up to 99.99% of the equity in the properties; limited-partnership organizational documents prohibited the general partners (LLCs) from pledging their interests without consent. Meecorp sued. The district court granted Meecorp summary judgment on its breach-of-the-note claim against PSC and its breach-of-guaranty claim against Oliver, awarding $2,366,191.88, and entered judgment against Gandolf for breach-of-the-guaranty and against Gandolf, Oliver, and PSC for fraud. The Eighth Circuit affirmed. View "Meecorp Capital Mkts., LLC v. Oliver" on Justia Law

The Mortgage Electronic Registration System (MERS) is a national electronic registry that does not originate, assign, or service mortgages, but charges a fee when members record or transfer a mortgage on the registry. Initially, mortgages are recorded with the county recorder and MERS becomes the mortgagee of record. With subsequent transfers, MERS remains the mortgagee of record in county property records, but tracks the transfers for priority purposes on its registry. Transfers of mortgages are not recorded in the county where the property is located. Counties brought a class action, alleging that Lenders violated Minnesota law by allowing mortgagees to circumvent recordation in the counties. The district court dismissed, finding no duty to record a mortgage assignment under Minnesota law. The Eighth Circuit affirmed that the recording statute is not mandatory and declined to certify the question to the Minnesota Supreme Court. View "Ramsey Cnty. v. MERSCORP Holdings, Inc." on Justia Law

Markert, President of Pinehurst Bank, approved nominee loans to friends and family of bank customer Wintz. The loan proceeds were used to cover Wintz’s $1.9 million overdraft at the Bank. A jury convicted Markert of willful misapplication of bank funds by a bank officer, 18 U.S.C. 656. At sentencing, applying U.S.S.G. 2B1.1(b)(1), the district court found that Markert’s offense caused an actual loss equal to the amount of the loans, resulting in a 16-level enhancement and a guidelines range of 87 to 108 months in prison. The court sentenced Markert to 42 months. The Eighth Circuit remanded for resentencing. After considering arguments, but without an evidentiary hearing, the court reduced its prior finding by $60,000, to reflect repayments prior to detection and re-imposed the same 42-month term. The Eighth Circuit again remanded, holding that the government failed to sustain its burden to prove actual loss. While “the loss here cannot be zero,” the court declined to give the government a third chance to present evidence and ordered that, on remand, actual loss for sentencing purposes is zero, reducing the guidelines range to 12-18 months. Markert has already served more than 18 months; the court directed that he be immediately released. View "United States v. Markert" on Justia Law

In 2011, Schriener obtained a residential mortgage from Quicken Loans that was secured by a deed of trust. Quicken Loans acquired the deed of trust that the parties used from Wolters Kluwer Financial Services, Inc. for a fee. Quicken Loans assisted Wolters Kluwer in preparing the deed of trust by providing necessary information. The deed of trust, however, was not written or reviewed by an attorney licensed to practice law in Missouri. In connection with Schriener’s residential mortgage, Quicken Loans charged him an “origination charge” of $575.00 and “adjusted origination charges” of $1,705.63. These charges are reflected on the parties’ HUD-1 settlement statement. The HUD-1 did not list a fee for the preparation of the deed of trust. Schriener filed a putative class action, alleging that Quicken Loans improperly engaged in law business under Mo. Rev. Stat. 484.020; violated the Missouri Merchandising Practices Act, Mo. Rev. Stat. 407.010; and was unjustly enriched. The district court dismissed for failure to state a claim. The Eighth Circuit affirmed, based on Shriener’s concession that Quicken did not charge him for the deed of trust. View "Schriener v. Quicken Loans, Inc." on Justia Law

McIvor claims that she used TransUnion's online system to dispute a $242 debt alleged against her by Credit Control. She reported, "Creditor agreed to remove this account from my file. This account is settled." TransUnion reported McIvor's dispute to Credit Control as required by the Fair Credit Reporting Act, 15 U.S.C. 1681. McIvor alleged that Credit Control then "provided updated credit information regarding the Debt to [TransUnion] on April 20, 2013 without stating that [she] had disputed it," and TransUnion "in turn verified the Debt to [McIvor] on April 21, 2013." McIvor attached exhibits to the complaint showing screenshots of the investigation request, her updated credit file, and the resolution summary TransUnion provided. She alleged violation of 15 U.S.C. 1692e(8) by “false, deceptive, or misleading representation or means in connection with the collection of any debt.” The Eighth Circuit affirmed dismissal. McIvor neither plausibly alleged that the communication at issue was "false, deceptive, or misleading" nor that it was "in connection with the collection of any debt." View "McIvor v. Credit Control Servs, Inc." on Justia Law

The Bank filed suit against the Hanna Parties for breach of contract after the Hanna Parties failed to pay the balance due on a loan when it matured. The Hanna Parties counterclaimed, alleging fraud, breach of fiduciary duty, negligence, deceptive trade practices, and breach of contract by the Bank, and demanding reformation or rescission. The district court granted summary judgment in favor of the Bank as to the counterclaims. A jury concluded that the Hanna Parties did not breach the contract and the district court denied the Bank's post-verdict motions for judgment as a matter of law and for a new trial. Both parties appealed. The court concluded that the case was properly submitted to a jury, and the Bank is precluded from seeking a judgment as a matter of law, but that the jury's verdict was against the great weight of the evidence, so the court reversed and remanded for a new trial on the Bank's breach-of-contract claims. The court agreed with the district court that the Hanna Parties' counterclaims failed as a matter of law and affirmed the district court's grant of summary judgment for the Bank as to those claims.View "Bank of America v. JB Hanna, et al." on Justia Law

The official liquidator of Palm Beach Funds filed suit against U.S. Bank for aiding and abetting a breach of fiduciary duty, willful and wanton negligence, and gross negligence. The claims arose from the Palm Beach Funds' investment through accounts maintained at U.S. Bank in what turned out to be a Ponzi scheme. The court affirmed the district court's dismissal of the amended complaint where the liquidator has not stated a plausible claim that U.S. Bank knew of and substantially supported a breach of fiduciary duty. Further, in regard to the negligence claims, the liquidator failed to allege that U.S. Bank had a duty to provide information to the Palm Beach Funds about the flow of funds in and out of the collateral account.View "Varga v. U.S. Bank Nat'l Assoc." on Justia Law

This case arose when an investment advisor committed fraud by opening a doing-business-as ("d/b/a") bank account using the name of his employer when he did not have the employer's authority to do so. The employer's insurance company subsequently filed suit against the bank, alleging that the bank negligently failed to inquire into whether the former advisor had authority to open the d/b/a account. The court affirmed the district court's dismissal of the suit because the bank owed no recognized duty to the employer.View "National Union Fire Ins. Co. v. Hometown Bank, N.A., et al." on Justia Law

Plaintiffs, who guaranteed loans for their husbands' company, appealed the district court's grant of summary judgment in favor of Community on their claim under the Equal Credit Opportunity Act (ECOA), 15 U.S.C. 1691 et seq. The court concluded that the text of the ECOA clearly provides that a person does not qualify as an applicant under the statute solely by virtue of executing a guaranty to secure the debt of another. Therefore, a guarantor does request credit and therefore cannot qualify as an applicant under the unambiguous text of the ECOA. Consequently, the court concluded that a guarantor is not protected from marital-status discrimination by the ECOA. The district court did not err in granting summary judgment to Community on plaintiffs' ECOA claim or their ECOA-based affirmative defense. Plaintiffs' argument that the district court erred in striking their demand for a jury trial is moot. View "Hawkins, et al. v. Community Bank of Raymore" on Justia Law