Justia Alabama Supreme Court Opinion SummariesArticles Posted in Banking
GHB Construction and Development Company, Inc. v. West Alabama Bank and Trust
GHB Construction and Development Company, Inc. ("GHB"), sued West Alabama Bank and Trust ("WABT") seeking a judgment declaring that its materialman's lien against property owned by Penny Guin was superior to WABT's mortgage lien secured by the same property owned by Guin. Upon motion by WABT, the circuit court dismissed GHB's complaint. In reversing the circuit court, the Alabama Supreme Court found WABT's argument was based on authority that assumed that a mortgage lien was properly created before the creation of a materialman's lien; the issue then became whether future advances issued subsequent to the creation of the materialman's lien related back to the priority date of the mortgage lien.Because WABT's mortgage lien was created after GHB's materialman's lien, WABT's mortgage lien never had priority over GHB's materialman's lien. The earliest date the future advances issued by WABT to Guin could relate back to was October 16, 2015, the date of the first advance to Guin. "Even if WABT is correct in arguing that the advances made to Guin relate back to the date the mortgage lien was created, based on the allegations of the complaint, it is possible for GHB to prove that its materialman's lien was created before WABT's mortgage lien. Accordingly, we need not analyze WABT's argument; the authority relied upon by WABT is distinguishable from the present case." The matter was remanded for further proceedings. View "GHB Construction and Development Company, Inc. v. West Alabama Bank and Trust" on Justia Law
Evabank v. Traditions Bank, et al.
EvaBank appealed the grant of summary judgment in favor of Traditions Bank, TBX Title, Inc., and Terry Williams. In 2013, EvaBank customers William Michael Robertson and Connie Robertson, entered into a purchase agreement with Terry Williams, pursuant to which Williams agreed to purchase the Robertsons' property located on County Road 35 in Hanceville ("the property"). EvaBank held two mortgages on the property. Williams financed his purchase through Traditions Bank. TBX Title, a Traditions Bank subsidiary, acted as the closing agent for the real-estate transaction. EvaBank faxed Traditions Bank the payoff statement for the wrong EvaBank customer, Michael Roberson, with an address in Moulton, Alabama. TBX Title closed the real-estate transaction between the Robertsons and Williams. Traditions Bank thereafter delivered a check to EvaBank; EvaBank accepted and negotiated the check and applied the proceeds to the loan of Michael Roberson. TBX Title wired the net sales proceeds from the closing to the Robertsons. TBX Title recorded the warranty deed and mortgage and mailed the deed to Williams. When EvaBank contacted William Robertson about his loan being past due; Robertson responded that the loan should have been paid off at the closing with the proceeds from the sale. EvaBank learned at this point that there was a problem with the payoff statement it had provided. EvaBank sent Traditions Bank an e-mail explaining its mistake and noting that it had made a demand upon William Michael Robertson to pay the remaining balance due on the EvaBank mortgages but that Robertson had refused. Accordingly, EvaBank informed Traditions Bank that it would not release it mortgages encumbering the Robertsons' property until the balance on the loan they were securing had been fully satisfied. Traditions Bank sued EvaBank, asserting a claim of slander of title and seeking a judgment declaring that it was the first lienholder on the property. All parties moved for a summary judgment. The trial court entered judgment in favor of Traditions Bank and TBX Title, on the basis of equitable estoppel, on the claims involving those parties and dismissed all other claims. The Alabama Supreme Court determined that Traditions Bank and TBX Title were on notice of one or more discrepancies between the payoff statement and the closing documents, which, through the exercise of due diligence, would have revealed the fact that the payoff statement was not for the loan secured by the Evabank mortgages encumbering the property being sold by the Robertsons. Therefore, the Court concluded as a matter of law, that Traditions Bank and TBX Title's reliance on the payoff statement, without further inquiry, was not reasonable. Accordingly, they could not rely on estoppel as a basis on which to claim a priority interest in the property. View "Evabank v. Traditions Bank, et al." on Justia Law
Aliant Bank v. Wrathell, Hunt & Associates, LLC
Aliant Bank, a division of USAmeribank ("Aliant"), sued various individuals and business entities involved in a failed effort to develop the Twelve Oaks subdivision in Odenville, alleging that, as a result of those defendants' conspiracy and wrongful actions, Aliant's security interest in the property upon which the Twelve Oaks subdivision was to be built had been rendered worthless. The Circuit Court ultimately entered a number of orders either dismissing Aliant's claims or entering a summary judgment in favor of the various defendants. Aliant has filed three appeals; we affirm in part and reverse in part in appeals no. 1150822 and no. 1150823 and affirm in appeal no. 1150824. After careful consideration of all the claims, the Alabama Supreme Court affirmed those judgments in part and reversed them in part. In appeal no. 1150822, the Court reversed summary judgment against Aliant (1) on the negligence and breach-of-fiduciary duty claims asserted against the Board members in count four of Aliant's complaint; (2) on the fraudulent-misrepresentation and fraudulent-suppression claims asserted against Smith and Twelve Oaks Properties in count seven of Aliant's complaint; and (3) on the conspiracy claims asserted against Smith, Twelve Oaks Properties, Four Star Investments, Mize, and Billy Smith in count seven of Aliant's complaint. The Court affirmed summary judgment against Aliant and in favor of the various Twelve Oaks defendants in all other respects. In appeal no. 1150823, the Court reversed summary judgments against Aliant on the conspiracy claims asserted against Hunt and WHA in count seven of Aliant's complaint; however, the Court affirmed those summary judgments with regard to all other claims asserted by Aliant against Hunt and WHA. Finally, in appeal no. 1150824, the Court affirmed summary judgment against Aliant and in favor of the EOS defendants on all counts. View "Aliant Bank v. Wrathell, Hunt & Associates, LLC" on Justia Law
Wells Fargo Bank, N.A. v. National Bank of Commerce
Wells Fargo Bank, N.A. appealed a circuit court's denial of its claim for attorney fees against National Bank of Commerce ("NBC"). The claim at issue in this appeal stemmed from a lawsuit concerning the deposit of a check issued by Jennifer Champion, treasurer of Jefferson County, for $178,916.42 in settlement of claims made in Winston v. Jefferson County, a class-action lawsuit concerning excess tax bids. The check was drawn on Jefferson County's account with Wachovia Bank, N.A. (a predecessor to Wells Fargo), and it was jointly payable to the order of Carl Prewitt, Debra Prewitt, Renasant Bank, and Moore Oil Co., Inc. ("Moore Oil"). After the check was issued, it was mailed to the Prewitts, received by Debra Prewitt. The check was stamped "for deposit only," and it was deposited to an account in the name of Liberty Investing, LLC ("Liberty Investing"), at Red Mountain Bank (a predecessor to NBC), using a remote scanner that was provided by NBC's predecessor to Creative Edge Landscaping, Inc. It is undisputed that the check was deposited without endorsements and that the Prewitts were not signatories on the Liberty Investing account. Wells Fargo's predecessor paid the check and debited Jefferson County's account. The Prewitts received the proceeds of the check over time through a series of withdrawals and transfers from the Liberty Investing account. Moore Oil became aware of the check, and by a letter it demanded that Jefferson County pay Moore Oil the amount of the check because, Moore Oil contended, it was entitled to the proceeds of the check. The Alabama Supreme Court fetermined Wells Fargo's claim for reimbursement of attorney fees expended in defense of the claim brought by Moore Oil lacked support in the applicable statutory scheme. Furthermore, neither of the "special equity" rules under which Wells Fargo claimed entitlement to reimbursement of its attorney fees was applicable in this situation. Finding no reversible error as to the denial of attorney fees to Wells Fargo, the Supreme Court affirmed the trial court. View "Wells Fargo Bank, N.A. v. National Bank of Commerce" on Justia Law
Aliant Bank v. Four Star Investments, Inc.
Aliant Bank, a division of USAmeribank ("Aliant"), sued various individuals and business entities involved in a failed effort to develop the Twelve Oaks subdivision in Odenville, alleging that, as a result of those defendants' conspiracy and wrongful actions, Aliant's security interest in the property upon which the Twelve Oaks subdivision was to be built had been rendered worthless. The Circuit Court ultimately entered a number of orders either dismissing Aliant's claims or entering a summary judgment in favor of the various defendants. Aliant filed three appeals. In appeal no. 1150822, the Alabama Supreme Court reversed summary judgment against Aliant: (1) on the negligence and breach-of-fiduciary duty claims asserted against the Board members in count four of Aliant's complaint; (2) on the fraudulent-misrepresentation and fraudulent-suppression claims asserted against Bobby Smith and Twelve Oaks Properties in count seven of Aliant's complaint; and (3) on the conspiracy claims asserted against Smith, Twelve Oaks Properties, Four Star Investments, Mize, and Billy Smith in count seven of Aliant's complaint. The Court affirmed summary judgment against Aliant and in favor of the various Twelve Oaks defendants in all other respects. In appeal no. 1150823, the Court reversed the summary judgments entered against Aliant on the fraudulent misrepresentation and conspiracy claims asserted against Pfil Hunt, and his management company Wrathell, Hunt & Associates, LLC, in count seven of Aliant's complaint; however, the Court affirmed those summary judgments with regard to all other claims asserted by Aliant against Hunt and WHA. Finally, in appeal no. 1150824, the Court affirmed summary judgment against Aliant and in favor of the Engineers of the South, LLC defendants on all counts. View "Aliant Bank v. Four Star Investments, Inc." on Justia Law
Blackmon v. Renasant Bank
In 2004, Deborah and Brian Blackmon executed an agreement establishing a home-equity line of credit with Renasant Bank secured by a mortgage on the Blackmons' house. In addition to making withdrawals on the home-equity line of credit, the Blackmons also made payments on the home-equity line of credit during that time. In 2013, Brian Blackmon died. Following Brian’s death, Deborah made five separate payments on the home equity line of credit. The payments made did not satisfy the entirety of the money the Blackmons owed Renasant Bank under the terms of the home-equity line of credit, and Deborah failed to make any additional payments. Deborah denied that she had executed the home-equity line of credit or the mortgage and, thus, denied liability for any outstanding balance due under the home-equity line of credit. Renasant Bank sued Deborah and the estate seeking a judgment declaring that the Blackmons had executed the agreement establishing a home-equity line of credit with Renasant Bank and a mortgage on the Blackmons' house securing the home-equity line of credit and asserting a claim of breach of contract seeking to recover the amount of money owed under the terms of the home-equity line of credit. Deborah and the estate filed an answer to Renasant Bank's complaint and asserted a counterclaim, requesting a judgment declaring that the mortgage on the Blackmons' house was not enforceable. The trial court granted partial summary judgment in favor of the bank and the Blackmons appealed. After review, the Supreme Court dismissed this appeal as the Blackmons’ appeal was of a nonfinal judgment. View "Blackmon v. Renasant Bank" on Justia Law
Ex parte Arvest Bank.
Arvest Bank petitioned for mandamus relief, seeking to have the Autauga Circuit Court to vacate its order denying Arvest's motion to quash a writ of execution obtained by Iberiabank f/k/a Capitalsouth Bank ("Iberia") against real property owned by Evelyn Niland ("Evelyn"). Thomas Karrh, II transferred the property Iberia wanted to sell to Evelyn and her husband Raymond Niland as joint tenants with right of survivorship. The Nilands quitclaimed the property to Evelyn, removing Raymond from the title. Raymond stopped paying an existing debt to Iberia. Iberia obtained a judgment against Raymond for close to $125,000. Iberia filed a lien against all of Raymond's property. Evelyn transferred the property back to herself and Raymond, attempting to create a joint tenancy with the right of survivorship. At the same time Evelyn tried this transfer, she and her husband executed a mortgage to Arvest Bank. Iberia secured a writ of execution against the property; Arvest intervened to try to quash a sheriff's sale of the property. Raymond died shortly thereafter. The trial court granted the intervention and stayed the sale proceedings, but after Iberia opposed these actions, the sheriff's sale was permitted to proceed. Finding that Evelyn indeed did create a joint tenancy with the right of survivorship, the Supreme Court found that Iberia's interest was extinguished with Raymond's death, and that Iberia could not attach its writ to the property. The order denying Arvest's motion to quash the writ of execution was reversed and the case remanded for the trial court to grant Arvest's request. View "Ex parte Arvest Bank." on Justia Law
Moore-Dennis v. Franklin
PNC Bank, National Association, and Sonja Moore-Dennis separately appealed a Circuit Court order denying their motion to compel arbitration as to Joseph Franklin's claims against them. Franklin had three bank accounts with the predecessor bank to PNC Bank, RBC Bank (USA), before RBC Bank merged with PNC Bank. Shortly before the merger, PNC Bank, in January 2012, allegedly mailed a welcome letter and a PNC Bank Account Agreement. The account agreement did not contain an arbitration provision. Tamara Franklin, Franklin's niece came to to visit one day. Tamara noticed a document that she thought was a bank statement from PNC Bank. After looking at the document, Tamara was concerned that Franklin owed money to PNC Bank. Franklin said he did not owe PNC Bank any money but that Tamara could call his financial advisor, Sonja Moore-Dennis, if she had any concerns. Franklin alleged that Moore-Dennis was a PNC Bank agent or employee at this time; PNC Bank denies that it had ever employed Moore-Dennis. After investigating the matter, Franklin and Tamara came to the conclusion that Moore-Dennis had been stealing funds from Franklin's accounts. Additionally, it appeared to Franklin and Tamara that Moore-Dennis had created an online banking profile for Franklin but had set up the profile so that account notifications were sent to her e-mail address. Franklin, who is elderly, did not have Internet access or an e-mail address and did not know how to use online banking. Franklin sued PNC Bank and Moore-Dennis alleging fraud, suppression, breach of fiduciary duty, and various forms of negligence and wantonness. PNC Bank moved to compel arbitration, raising the terms of the account agreement as grounds for its motion. The Alabama Supreme Court affirmed the circuit court’s order, finding that the Bank and Moore-Dennis failed to prove that Franklin received the account agreement or accessed a specific web page that contained the arbitration provision as described in the account agreement. View "Moore-Dennis v. Franklin" on Justia Law
Aliant Bank v. Carter
Aliant Bank appealed the entry of an injunction against it by the Shelby Circuit Court enjoining it from interfering with a contract for the sale of real property between Kimberly and Kerry Carter, on the one hand, and Gregory and Robyn Nunley, on the other. The Carters owned, as joint tenants, a piece of real property located in Shelby County. The Carters used the property to secure a mortgage from Mortgage Electronic Registration Systems, Inc. ("MERS"). In addition to the MERS mortgage, three creditors secured judgments against Kerry Carter against the property. Aliant was fourth to secure its judgment lien against Kerry Carter. On August 21, 2014, the Carters entered into a contract with the Nunleys for the sale of the property. At the time the Carters entered into the contract, the judgment liens against the property had not been satisfied. The preliminary settlement statement for the sale of the property indicated that a portion of the sale proceeds would be used to pay off the outstanding mortgage held by MERS on the property. The first judgment creditor thereafter agreed to release its judgment lien on the property in exchange for a smaller portion of the sale proceeds. The record did not indicate that the second or third judgment creditor agreed to release its judgment lien against the property. However, the record was clear that Aliant refused to release its judgment lien against the property. Apparently, Aliant's refusal to execute a release of its judgment lien inhibited the closing of the contract. On September 14, 2014, the Carters sued Aliant, alleging that Aliant had intentionally and maliciously refused to execute a partial release of the property "in order to prohibit [Kerry] Carter from being able to fulfill his obligations under the purchase contract even though all profits due Kerry Carter are being disgorged and paid to the appropriate judgment creditor, [the first judgment creditor]." The trial court granted an injunction against Aliant. Subsequently, Aliant petitioned the Alabama Supreme Court for a writ of mandamus directing the circuit court to vacate its injunction order. The Supreme Court treated Aliant's petition for a writ of mandamus as a timely notice of appeal. After the Supreme Court recharacterized Aliant's petition, Aliant filed its appellant's brief. Instead of filing an appellee's brief, the Carters moved to dismiss Aliant's petition as moot, alleging that the property had been foreclosed upon by MERS. The Carters did not present the Supreme Court with any evidence indicating that MERS had, in fact, foreclosed upon the property. Aliant opposed the motion to dismiss. After review, the Supreme Court agreed with the Carters that the injunctive relief they requested was no longer attainable and that, consequently, the case was no longer justiciable. Accordingly, the Supreme Court dismissed Aliant's appeal. View "Aliant Bank v. Carter" on Justia Law
U.S. Bank National Ass’n v. Shepherd
U.S. Bank National Association ("USB"), successor in interest to Bank of America, N.A., which was the successor by merger to LaSalle Bank, National Association, as trustee for Structured Asset Investment Loan Trust, Mortgage Pass-Through Certificates, Series 2004-4 ("the Trust"), and Bank of America, N.A. ("BOA"), separately appealed a $3.9 million judgment entered against them on trespass and wantonness claims asserted by Chester and Emily Shepherd. USB also appealed the trial court's judgment in favor of the Shepherds on its claims related to an alleged error in a mortgage executed by the Shepherds upon which the Trust had foreclosed. The Alabama Supreme Court reversed. "'Every single one of these cases . . . rejects the availability of negligence and wantonness claims under Alabama law under comparable circumstances to those identified by the [plaintiffs]. Every one of these cases undercuts the legal viability of [the plaintiffs' negligence and wantonness claims], and rejects the very arguments articulated by the [plaintiffs] in opposing dismissal of those causes of action. ... the mortgage servicing obligations at issue here are a creature of contract, not of tort, and stem from the underlying mortgage and promissory note executed by the parties, rather than a duty of reasonable care generally owed to the public. To the extent that the [plaintiffs] seek to hold defendants liable on theories of negligent or wanton servicing of their mortgage, [those negligence and wantonness claims] fail to state claims upon which relief can be granted.'" View "U.S. Bank National Ass'n v. Shepherd" on Justia Law