Case Summaries

Banking Law

[07/03] Gen. Elec. Capital Corp. v. Future Media Prods., Inc.
In an appeal brought by an oversecured creditor in a bankruptcy matter, an order denying the creditor default interest and attorney's fees is reversed and remanded where: 1) the bankruptcy court improperly applied the circuit court's rule from In re Entz-White Lumber and Supply, Inc., 850 F.2d 1338 (9th Cir. 1988), to the facts of this case; and 2) the bankruptcy court should apply a presumption of allowability for the contracted for default rate, "provided that the rate is not unenforceable under applicable non-bankruptcy law."

[07/02] Cavin v. Home Loan Ctr., Inc.
In a suit involving a mailer sent by defendant announcing its mortgage program and claiming that defendant violated the Fair Credit Reporting Act by failing to present plaintiffs' with a firm offer of credit, summary judgment for defendant is affirmed where: 1) the letter at issue presented a firm offer of credit, despite the absence of some material terms and the minimal number of consumers who obtained the loan; and 2) thus, defendant did not violate the FCRA.

[07/02] US v. Erpenbeck
A sentence for bank fraud and conspiracy to obstruct justice is affirmed where: 1) the arguments raised by defendant in his appeal had no merit; 2) any errors committed by the court at sentencing were either harmless or militated in defendant's favor; and 3) the government agreed to waive arguments in its cross-appeal in the absence of a remand.

[06/25] AG Capital Funding Partners v. State Street Bank and Trust Co.
In an action alleging breach of contract, violation of federal Trust Indenture Act, breach of fiduciary duty, and negligence based on defendant's alleged failure to deliver debt transaction registration statements required to secure a debt, the court of appeals finds that: 1) plaintiffs' contract and Trust Indenture Act claims were barred by a release previously executed by plaintiffs as part of a bankruptcy settlement and that no fiduciary duties existed; however; 2) because negligence claims were not barred by the release and there were issues of fact as to whether defendant owed and violated a duty of care, plaintiffs' cause of action for negligence is reinstated.

[06/25] Plains Commerce Bank v. Long Family Land & Cattle Co.
In a discrimination, breach of contract, and bad faith suit brought in Tribal Court by an Indian couple against a non-Indian bank, which sold land that it owned, and had previously leased to plaintiffs, on a tribal reservation to non-Indians, judgment and award for plaintiffs is reversed where the tribal court lacked jurisdiction to adjudicate a discrimination claim concerning the non-Indian bank's sale of fee land it owned.

[06/25] Ellis v. Grant Thornton LLP
In a suit for negligent misrepresentation arising from plaintiff's acceptance of a job as president of a small community bank based on audit reports made by defendant, judgment against defendant is reversed where: 1) plaintiff was not the member of a limited group for whose benefit the report was prepared; 2) defendant was hired for the benefit of the company and not for the benefit of potential employees; 3) more than tenuous awareness is required in order to impose liability since it would turn the Restatement rule relied upon by the court into a foreseeability approach that has been rejected; 4) defendant was not assuming the risk that third parties would rely on its report; and 5) the report stated that it was not intended to be used by third parties, and as such, plaintiff could not rely on statements made based on the report.

[06/20] Wooley v. Faulkner
In a bankruptcy proceeding in which appellants' loans to the company subject to the bankruptcy proceedings were equitably subordinated and converted from secured to unsecured loans, the district court's affirmance of the bankruptcy court's decision is reversed and the case remanded where: 1) the court made no finding that appellants breached any obligations to the company or its creditors, nor did they engage in inequitable conduct when they made the loan to the company; and 2) the court made no finding that appellants' transactions with the debtor caused harm to either the debtor or unsecured creditors.

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Commercial Law

[07/02] Deckers Corp. v. US
In a suit contesting the proper classification of three styles of sports sandals under the Harmonized Tariff Schedule of the United States, a decision holding that the merchandise was properly classified under subheading 6404.19.35 is affirmed where the sandals at issue have open toes and open heels, and lack the features of the named exemplars of 6406.11.80, and thus the imported goods are not classifiable under that subheading notwithstanding their claimed status as athletic footwear.

[07/02] Cavin v. Home Loan Ctr., Inc.
In a suit involving a mailer sent by defendant announcing its mortgage program and claiming that defendant violated the Fair Credit Reporting Act by failing to present plaintiffs' with a firm offer of credit, summary judgment for defendant is affirmed where: 1) the letter at issue presented a firm offer of credit, despite the absence of some material terms and the minimal number of consumers who obtained the loan; and 2) thus, defendant did not violate the FCRA.

[06/30] Waltrip v. Kimberlin
In a priority dispute between competing liens, by a judgment creditor and debtor's attorney, over settlement proceeds, judgment finding the judgment lien had priority over the attorney lien is reversed and remanded where: 1) the creditor had a lien which did not cover commercial tort claims while the settlement proceeds at issue stemmed from commercial tort claims; 2) the attorney lien was created by the retainer agreement between plaintiffs and counsel, and it was created before creditor filed a notice of lien in the pending action; and 3) the notice of lien did not relate back to prior liens, as those liens covered different property.

[06/26] Morgan Stanley Capital Group Inc. v. Pub. Util. Dist. No. 1 of Snohomish County
In a case involving wholesale-energy contracts and the Mobile-Sierra doctrine under which the FERC must presume that the rate set out in a freely negotiated wholesale-energy contract meets the "just and reasonable" requirement imposed by law, judgment granting petitions for review of FERC decisions upholding certain contracts is affirmed where: 1) contrary to the Ninth Circuit's view, the FERC was required to apply the Mobile-Sierra presumption in evaluating the contracts in this case and the FERC may abrogate a valid contract only if it harms the public interest; 2) the Ninth Circuit's "zone of reasonableness" test, used to evaluate a buyer's rate-challenge, fails to accord an adequate level of protection to contracts; but 3) nevertheless, two flaws in the FERC's analysis provided alternate grounds for affirmance.

[06/26] Absher v. Autozone, Inc.
Civil Code section 1747.08, which prohibits merchants from obtaining personal identification information from credit card users, does not apply to a refund for the return of merchandise purchased by credit card.

[06/24] N. Am. Freighter Car Ass'n v. Surface Transp. Bd.
Petition for review of a decision denying petitioner's challenge to "storage" and "demurrage" charges, which a railway company imposed in 2001 for empty private freight cars that remain on its tracks beyond a base free time period, is denied over claims that the charges violate three provisions of the Interstate Commerce Commission Termination Act of 1995 (ICCTA): 1) 49 U.S.C. section 10702(2), which requires that a railroad "establish reasonable ... practices" related to transportation and service; 2) 49 U.S.C. section 10746, which requires that demurrage charges fulfill two enumerated objectives; and 3) 49 U.S.C. section 10745, which authorizes a rail carrier to compensate a shipper for providing a service related to transportation.

[06/20] Eberhard v. Marcu
In a case involving the authority of a federal securities receiver over property claimed by a third party, the circuit court rules that: 1) a receiver cannot employ a state's commercial law to set aside a conveyance when representing only the transferor; and 2) a third party is entitled to a jury trial under the Seventh Amendment to determine ownership of property claimed by a receiver.

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Contracts

[07/03] Gen. Elec. Capital Corp. v. Future Media Prods., Inc.
In an appeal brought by an oversecured creditor in a bankruptcy matter, an order denying the creditor default interest and attorney's fees is reversed and remanded where: 1) the bankruptcy court improperly applied the circuit court's rule from In re Entz-White Lumber and Supply, Inc., 850 F.2d 1338 (9th Cir. 1988), to the facts of this case; and 2) the bankruptcy court should apply a presumption of allowability for the contracted for default rate, "provided that the rate is not unenforceable under applicable non-bankruptcy law."

[07/03] United Steel, Paper & Forestry, etc. v. TriMas Corp.
In an action to compel arbitration under the Labor-Management Relations Act (LMRA) arising out of the parties' dispute over a neutrality agreement, summary judgment for union is affirmed where the district court correctly: 1) found that the dispute was covered by the language of the arbitration clause; and 2) left consideration of certain extrinsic evidence to the arbitrator.

[07/02] City of Geneseo v. Utilities Plus
In an action to recover damages from corporate defendant based on claims of contractual breach, unjust enrichment, promissory estoppel, and fraud, summary judgment for defendant is affirmed where: 1) defendant's president was found to lack actual authority to enter a binding contract on the company's behalf; 2) the doctrine of apparent authority, which was limited under state laws, did not alternatively create a contract to be enforced; and 3) plaintiff had no basis to recover damages under alternative principles of contractual remedies.

[07/01] G.K. Alan Assoc., Inc. v. Lazzari
In a civil lawsuit involving defendant's alleged acts of fraud and embezzlement, a ruling finding that summary judgment for either party was precluded is affirmed where inquiries as to defendant's actual intent for the wrongdoings charged, and plaintiff's knowledge of defendant's ongoing fraud or embezzlement practices, were factual issues properly resolved at trial.

[07/01] In the Matter of Fiveco, Inc. v. Haber
In the context of a party commencing a proceeding to permanently stay arbitration after the 20-day limitations period for objecting to arbitration under CPLR 7503(c), such petitions are time-barred unless the basis of a party's objection falls within the exception set forth in Matter of Matarasso (Continental Cas. Co.) (56 NY2d 264 [1982]). That exception does not apply, however, when an arbitration provision found within a contract prevents finding that the parties never agreed to arbitrate.

[07/01] Police Benevolent Ass'n of NY State Troopers v. Div. of NY State Police
In an appeal seeking a judgment determining that state troopers have a right to counsel or union representation in "critical incident reviews" under their collective bargaining agreement, the court of appeals finds that: 1) while the parties negotiated a right to representation for administrative interrogations, they failed to enumerate any such right with regard to critical incident reviews; and 2) by limiting the representation rights to those provided within the bargaining agreement, the parties effectively waived any representation right troopers may have had during critical incident reviews.

[07/01] JPMorgan Chase & Co. v. Comm'r of Internal Revenue
In a case involving the taxation of JPMorgan's income from swap transactions, a ruling that certain income deferrals it attempted were not proper and that JPMorgan's valuation methodology did not clearly reflect income, is affirmed where there was no error in a tax court's acceptance of the Commissioner's computations regarding the amounts of certain carve-outs.

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