Articles Posted in Banking

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A property owner defaulted on his obligations, and the construction lender foreclosed the property at issue in this appeal. The general contractor had a materialman’s lien on the property. At the foreclosure sale, the purchase price for the property was significantly lower than the total amounts owed. The sole issue before the chancery court was which lien had priority – that of the construction lender, or that of the contractor. The chancery court found that the contractor’s lien had priority. Because the chancery court did not abuse its discretion in arriving at that conclusion, the Mississippi Supreme Court affirmed. View "Whitney Bank v. Triangle Construction Company, Inc." on Justia Law

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The McMullans filed a complaint against U.S. Bancorp, U.S. Bank N.A. (collectively the Bank), and the Johnson Group. In answering the complaint, all defendants pled improper venue. The McMullans filed an amended complaint. The Johnson Group answered, again pleading improper venue, and filed a cross claim against the Bank. The Bank answered the McMullans’ amended complaint and the Johnson Group’s cross-claim, pleading improper venue in both. The Johnson Group filed a motion to change venue, joined by the Bank. The trial court denied the motion, holding that the defendants had waived venue because they had unduly delayed pursuit of the defense and had substantially participated in the litigation. The Bank sought and was granted permission to file this interlocutory appeal, which was joined by the Johnson Group. Upon review, the Mississippi Supreme Court found the trial court erred in denying the motion to transfer venue because the Bank consistently pled improper venue, joined the Johnson Group’s motion to transfer, and did not otherwise substantially participate in the litigation. View "U.S. Bancorp v. McMullan" on Justia Law

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Earnest Magee sued Covington County Bank (CCB) for conversion after it seized collateral for a promissory note and later sold the property at auction. CCB moved under Mississippi Rule of Civil Procedure 12(b)(6) to dismiss, arguing: (1) that the statute of limitations had expired; (2) that it had a contractual right to the property; and (3) that Magee’s claim was barred by issue preclusion. The circuit judge denied CCB’s motion and finding no reversible error, the Supreme Court affirmed. View "Covington County Bank v. Magee" on Justia Law

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The residence of Brent and Amy Hubbard secured a note and deed of trust held by Trustmark National Bank. Additionally, the Hubbards obtained a second loan, which was secured by a note and second deed of trust held by BancorpSouth on the same residence. Trustmark foreclosed on the first deed of trust and sold the property. More than a year later, BancorpSouth sued the Hubbards for money due under the second note. The Hubbards admitted they were in default, but asserted as an affirmative defense that BancorpSouth’s claim was time barred under the one-year statute of limitations prescribed in Mississippi Code Section 15-1-23. After a hearing on the motion, the circuit court found Section 15-1-23 inapplicable and ruled instead that Mississippi Code Section 15-1-49 provides the proper limitations period (three years). The circuit court entered judgment in favor of BancorpSouth. On appeal, the Hubbards argued that the circuit court erred in granting BancorpSouth’s judgment on the pleadings because the action was barred by the one-year statute of limitations prescribed by Section 15-1-23. The Supreme Court affirmed the circuit court’s grant of judgment on the pleadings. However, the three-year statute of limitations provided under Section 15-1-49 was inapplicable in this case; the proper limitations period for suits on promissory notes for nonforeclosing lenders is Mississippi Code Section 75-3-118, which provided a six-year statute of limitations, rather than the three-year statute of limitations set forth in Section 15-1-49.View "Hubbard v. BancorpSouth Bank " on Justia Law

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BancorpSouth Bank filed a complaint for declaratory judgment, judicial foreclosure, and other relief against Van Buren Group, LLC, a corporation that organized the construction of thirty condominiums in Oxford. Four purchasers and two members moved for summary judgment, which the chancellor granted. The Court of Appeals affirmed the grant of summary judgment as to the four purchasers; however, it reversed and remanded as to the two members. The Supreme Court granted BancorpSouth’s subsequent petition for writ of certiorari. After review of the matter, the Supreme Court held that that an issue of material fact existed with respect to the purchasers. Therefore, the Court reversed the chancery court’s grant of summary judgment and remanded the case for further proceedings. View "BancorpSouth Bank v. Brantley, Jr." on Justia Law

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First National Bank of Clarksdale (FNB) secured a loan of more than $800,000 with a deed of trust on real property in Oxford with the understanding that the bank would become the primary lien holder on the realty. FNB acquired title insurance from Mississippi Valley Title Insurance Company against the risk of an undiscovered superior lien holder. No formal title search on the property was performed, although Mississippi Valley’s agent did discover the existence of another deed of trust on the property held by Community Trust Bank (CTB). The agent never relayed this information to FNB or to Mississippi Valley and issued the policy without regard to this prior recorded lien. Years later, CTB’s loan went into default and CTB initiated foreclosure proceedings, which alerted FNB to the existence of CTB’s deed of trust on the property. FNB brought suit in Chancery Court to be subrogated to the primary lien holder position on the property in the amount that it had paid to satisfy the original primary deed of trust. After a bench trial, the chancellor found that the doctrine of equitable subrogation applied and granted primary status to FNB. CTB appealed. Upon review, the Supreme Court reversed: based upon the facts presented, subrogation was not equitable. View "Community Trust Bank of Mississippi v. First National Bank of Clarksdale" on Justia Law

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The Mississippi Department of Revenue (MDOR) issued a subpoena to Pikco Finance, Inc. (Pikco), requesting documentation pertaining to Pikco's nonpayment of finance company privilege taxes. Pikco filed a petition to quash the subpoena on the basis that MDOR's ability to audit and tax under Mississippi's Finance Company Privilege Tax law was preempted by the National Bank Act. The circuit court granted Pikco's petition to quash, and MDOR appealed. The issue on appeal was whether MDOR's use of its statutory subpoena power in administration of the Finance Company Privilege Tax was preempted by the National Bank Act. Upon review, the Supreme Court reversed and remanded, finding that Pikco was subject to the subpoena. View "Mississippi Dept. of Revenue v. Pikco Finance, Inc." on Justia Law

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Carolyn Epperson filed a complaint against SOUTHBank in circuit court alleging that the bank had breached its contract with her by failing to give her the funds from certain certificates of deposit upon her request. The bank had denied Epperson's request because she did not present the original certificates. The trial court granted summary judgment for SOUTHBank, finding that contractual language required presentation of the original certificates for withdrawal. Epperson appealed the trial court's judgment, and the Supreme Court assigned the case to the Court of Appeals. The Court of Appeals reversed the trial court’s judgment and rendered judgment in favor of Epperson. SOUTHBank filed a petition for writ of certiorari, which the Supreme Court granted. Upon review, the Court found that the contractual language pertaining to withdrawals gave SOUTHBank discretion to require certain forms to be used for withdrawal, to refuse or restrict early withdrawals, and to assess penalties for early withdrawal. These terms were consistent and allowed SOUTHBank to require presentation of the original CD or CDs for withdrawal. The contract was unambiguous, and the trial court's grant of summary judgment was therefore appropriate. View "Epperson v. SouthBank" on Justia Law

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Dr. Carroll Meador filed a complaint against Mississippi Baptist Health Systems, Inc. (MBHS), Trustmark National Bank (Trustmark), and Doe Defendants 1 through 10, for breach of fiduciary duties, interference with fiduciary duties, interference with contract rights, interference with prospective business advantage, intentional infliction of emotional distress, deceit, fraud, and retaliatory discharge. The complaint stemmed from the doctor's employment with MBHS and a large line of credit he obtained from Trustmark. A dispute between the parties ended with the bank suing the doctor for defaulting on the loan, and the doctor declaring bankruptcy. Several defendants sought to remove the case to the federal district court. The district court granted remand of the case, finding the federal bankruptcy proceedings in the case had been concluded and only state claims remained. Then Defendants Trustmark, MBHS and several codefendants filed a motion for summary judgment and motion to dismiss. The doctor appealed the ultimate outcome of the trial court's decision in favor of Defendants. Upon review, the Supreme Court found that the trial court abused its discretion in refusing to strike portions of the doctor's affidavit, and in denying Trustmark and MBHS' motions for summary judgment. The Court reversed the trial court's decision and remanded the case for further proceedings. View "Trustmark National Bank v. Meador" on Justia Law

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This case came before the Supreme Court on interlocutory appeal from the Circuit Court of Warren County in which the circuit court affirmed in part and reversed in part the county court's grant of summary judgment for Plaintiff James Hobson, Jr. Defendants Chase Home Finance, LLC, and Priority Trustee Services of Mississippi, LLC (collectively, Chase) appealed the circuit court's affirmance of their liability. Plaintiff cross-appealed the circuit court's order that vacated the county court's award and ordered trial on damages. The dispute arose from Plaintiff's purchase of real property at a foreclosure sale. He tendered a cashier's check to Chase's agent, for which Chase gave Plaintiff a receipt. Approximately two weeks later, Chase returned Plaintiff's check and refused to tender a deed to the property, stating that the foreclosure sale had been cancelled due to the original borrower's reinstatement. Plaintiff sued for breach of contract, arguing that Defendants breach was grossly negligent, and requested actual and punitive damages along with attorney's fees. Upon review, the Supreme Court found that the borrower's alleged reinstatement prior to the foreclosure sale created a genuine issue of dispute regarding Chase's liability, and, therefore, the Court held that the circuit court erred in affirming the county court's grant of summary judgment as to liability. Accordingly, the Court reversed the circuit court's judgment and remand to the county court for further proceedings. View "Chase Home Finance, L.L.C. v. Hobson" on Justia Law