Justia U.S. 1st Circuit Court of Appeals Opinion Summaries

ROK Builders LLC (ROK) constructed a hotel for Moultonborough and had a mechanic's lien on the property. 2010-1 SFG Venture LLC (SFG) was the assignee of the construction lender and had a mortgage on the hotel. After Moultonborough filed for bankruptcy, SFG initiated an adversary proceeding against ROK in bankruptcy court, seeking a declaration that its mortgage was senior to ROK's lien to the extent the construction lender had disbursed loan funds to ROK. ROK, in turn, asserted that its lien was senior to SFG's mortgage. The New Hampshire bankruptcy court and district court entered judgment in favor of SFG. The First Circuit Court of Appeals affirmed, holding that the bankruptcy court did not err in concluding that N.H. Rev. Stat. Ann. 447:12-a established the seniority of SFG's mortgage over ROK's mechanic's lien to the extent of the amount of money the construction lender disbursed to ROK. View "ROK Builders, LLC v. 2010-1 SFG Venture, LLC" on Justia Law

Appellant signed a loan agreement with Bank for a line of credit for his business (Business). Appellant later defaulted on the loan, and Bank brought a collection action against Appellant, his wife, their conjugal partnership, and Business. The FDIC subsequently took over the Bank as receiver and obtained summary judgment in its favor on the collection action. The district court also dismissed Appellants' counterclaim for lack of jurisdiction, finding that Appellants had not timely taken the steps necessary to maintain an action against the FDIC. The First Circuit Court of Appeals affirmed, holding (1) summary judgment was properly granted on the collection action because factual disputes did not remain concerning Bank's role in causing Appellants to breach their loan agreement and whether Appellants should be released from their obligations under that agreement; and (2) the district court correctly dismissed Appellants' counterclaims on jurisdictional grounds, as the Bank had insufficient assets to make any distribution on the claims of general unsecured creditors, including Appellants if they prevailed on their counterclaim, and therefore, the claim was not redressable. View "Fed. Deposit Ins. Corp., as receiver for R-G Premier Bank of P.R. v. Estrada-Rivera" on Justia Law

Plaintiffs, who stopped paying their mortgage in April 2010, filed this try title action challenging the authority of Defendant U.S. National Bank Association to foreclose on their home pursuant to a March 2011 assignment of the mortgage loan on Plaintiffs' home. U.S. Bank moved to dismiss the complaint for failure to state a claim under the Massachusetts try title statute. The federal district court granted the motion, holding (1) a petitioner must allege that an adverse claim clouds his record title to state a claim under the try title statute; and (2) U.S. Bank's efforts to foreclose on Plaintiffs' home did not amount to an adverse claim under Massachusetts law. The First Circuit Court of Appeals affirmed, holding (1) Petitioners were required to allege an adverse claim to withstand U.S. Bank's motion to dismiss; and (2) the allegations in the petition did not satisfy the Fed. R. Civ. P. 12(b)(6) standard. View "Lemelson v. U.S. Bank Nat'l Ass'n" on Justia Law

Plaintiffs in this consolidated interlocutory appeal were defaulted mortgagors of Rhode Island real estate. Defendants were the corresponding mortgagees, Plaintiffs' agents or assignees, who allegedly held Rhode Island mortgagees' legal titles and asserted the right to foreclosure for default on mortgage terms. Plaintiffs brought this action alleging that the ostensible assignments of their mortgagees' legal titles were invalid, leaving the assignees without the right to foreclose. The district court imposed a stay in the nature of a preliminary injunction against foreclosure and possessory proceedings and appointed a special master to mediate the claims. Defendants appealed and filed a mandamus petition, claiming that the district court erred in failing to provide notice and hearing before issuing the stay and in failing to set limits of time and cost when referring the mortgagors' cases to the special master. The First Circuit Court of Appeals remanded with instructions to hold a prompt hearing with reasonable notice on the question of whether the injunction should be continued and to establish specific limits of time and expense if the reference for mediation was to remain in effect. View "In re Mortgage Foreclosure Cases" on Justia Law

In an attempt to avert the foreclosure of her home, Plaintiff sought to modify the terms of her mortgage pursuant to the Home Affordable Modification Program (HAMP), a federal initiative that incentivizes lenders and loan servicers to offer loan modifications to eligible homeowners. When Plaintiff's efforts did not result in a permanent loan modification, she sued Wells Fargo Bank and American Home Mortgage Servicing, alleging that their conduct during her attempts to modify her mortgage violated Massachusetts law. The district court dismissed Plaintiff's complaint for failure to state a claim. The First Circuit Court of Appeal (1) affirmed the district court's judgment as to the dismissal of Plaintiff's claims of breach of contract, breach of the implied covenant of good faith and fair dealing, and intentional and negligent infliction of emotional distress; and (2) vacated the dismissal of Plaintiff's other breach of contract claim, Plaintiff's unfair debt collection practices claim under Mass. Gen. Laws ch. 93A, and her derivative claim for equitable relief. Remanded. View "Young v. Wells Fargo Bank, N.A." on Justia Law

Appellant purchased nonrecourse notes (Notes) in the amount of two million dollars, issued by the Puerto Rico Conservation Trust Fund (PRCTF). The Notes were not registered under the Securities Act based on an exemption from registration. The Notes later went into default, and Appellant sued Banco Popular de Puerto Rico (BPPR), trustee of the Notes, and Wilmington Trust Company (WTC), indenture trustee of the securities that the PRCTF purchased with Note proceeds. Appellant brought suit in federal district court, premising his assertion of subject matter jurisdiction on the Edge Act and the Trust Indenture Act of 1939 (TIA). The district court dismissed the amended complaint for want of subject matter jurisdiction. The First Circuit Court of Appeals affirmed, holding (1) Appellant's suit did not arise under federal law; and (2) the district court did not abuse its discretion in refusing to permit Appellant to file a delayed amended complaint asserting a new theory of liability because Appellant proffered no good reason for the delay. View "Nikitine v. Wilmington Trust Co." on Justia Law

Appellants purchased nonrecourse notes (Notes) in the amount of two million dollars, issued by the Puerto Rico Conservation Trust Fund (PRCTF). The Notes were not registered under the Securities Act based on an exemption from registration. The Notes later went into default, and Appellants sued Banco Popular de Puerto Rico (BPPR), trustee of the Notes, and Wilmington Trust Company (WTC), indenture trustee of the securities that the PRCTF purchased with Note proceeds. Appellants brought their suit in federal district court, premising their assertion of subject matter jurisdiction on the Edge Act and the Trust Indenture Act of 1939 (TIA). The district court dismissed the amended complaint for want of subject matter jurisdiction. The First Circuit Court of Appeals affirmed, holding that Appellants' suit did not arise under federal law. View "Calderon-Serra v. Wilmington Trust Co." on Justia Law

Former employees (Plaintiffs) of a failed bank taken into receivership by the Federal Deposit Insurance Corporation (FDIC) sued Banco Popular de Puerto Rico (BPPR), a bank that subsequently acquired the failed bank's deposits and certain assets on claims for severance pay. The FDIC intervened, asserting that the district court lacked jurisdiction over the claims because Plaintiffs either failed to file administrative claims with the FDIC or failed to challenge in federal court the FDIC's disallowance of their administrative claims. BPPR moved for summary judgment, arguing that it was not liable for any severance claims for at least three different merits-based reasons. The district court granted summary judgment for BPPR and did not address the question of whether it had jurisdiction. The First Circuit Court of Appeals vacated entry of summary judgment for Defendants and remanded with instructions to dismiss for lack of subject-matter jurisdiction, holding that Plaintiffs' failures to comply with the Financial Institutions Reform, Recovery, and Enforcement Act administrative claims process triggered the statutory bar, and Plaintiffs could not avoid the jurisdictional bar by failing to name the FDIC as a defendant. View "Acosta-Ramirez v. Banco Popular de Puerto Rico" on Justia Law

Defendant bought a custom-made yacht with the help of a loan from Barclays Bank. When Defendant stopped making payments on the loan, Barclays repossessed the yacht and sold it pursuant to the Florida UCC. Barclays got less than what Defendant owed on the yacht, and therefore, Barclays sued Defendant for the deficiency. Defendant moved for summary judgment, arguing that Barclays was barred from recovering the deficiency because, in violation of the mortgage's terms, it did not provide Defendant with proper notice of the sale. The district court denied Defendant's motion and sua sponte granted summary judgment in favor of Barclays. The First Circuit Court of Appeals affirmed, holding that the notice Barclays provided to Defendant was sufficient. View "Barclays Bank PLC v. Poynter" on Justia Law

Plaintiffs, Massachusetts residents, bought a three-dwelling in Massachusetts, financing the entire purchase price with two mortgage loans from Plaza Home Mortgage (Plaza). After the collapse of the housing market, Plaintiffs sued Plaza, alleging state common law and statutory violations in making the loans. The district court dismissed for failure to state a claim. The First Circuit Court of Appeals affirmed, holding (1) the district court correctly dismissed Plaintiffs' claim based on Plaza's alleged violation of the Massachusetts covenant of good faith and fair dealing; and (2) Plaintiffs' claim based on a violation of the Massachusetts consumer protection was correctly dismissed as time-barred. View "Latson v. Plaza Home Mortgage, Inc." on Justia Law