Southeast Financial Litigation Monitor

Legal Developments Affecting the Financial Services Industry in Alabama, Florida, Georgia & Mississippi

Last month, the Eleventh Circuit revisited the U.S. Supreme Court’s controversial decision in Spokeo, Inc. v. Robins, and appears to have set a low bar for plaintiffs to clear in establishing standing. The case, Muransky v. Godiva Chocolatier, Inc., Case No. 16-16486 (11th Cir. October 3, 2018) came before the Eleventh Circuit on appeal from the United States District Court for the Southern District of Florida after the district court approved a settlement plan…
Earlier this month, the United States Court of Appeals for the Eleventh Circuit issued a decision that could make it easier for manufacturers to force consumers into arbitration via “shrinkwrap” agreements—packaged contracts which bind consumers by merely opening and keeping a product.  In Dye v. Tamko Building Products, Inc., Case No. 17-14052 (11th Cir. Nov. 2, 2018), the Eleventh Circuit considered an appeal of a district court’s order compelling arbitration and dismissing a lawsuit by…
Georgia regulates the small loan industry with usury laws like the Payday Lending Act and Industrial Loan Act. But, as the Georgia Supreme Court recently held, these Acts can reach only as far as their texts allow. In Ruth v. Cherokee Funding, LLC, the Georgia Supreme Court held money advanced by a litigation finance company is not a “loan” under either the PLA or the ILA where the litigant’s obligation to repay depends on the…
The Alabama Civil Court of Appeals recently issued a decision, International Management Group, Inc. v. Bryant Bank, No. 2170744, which, among other things, limits the potential for summary judgment in fraudulent transfer cases, especially where actual fraud must be proven. In this case, Bryant Bank sued International Management Group (“IMG”) following its alleged insolvency, seeking to void a series of insider transfers of mortgages securing promissory notes to Bryant Bank. IMG’s principal, Michael Carter had…
On October 19, 2018, the Alabama Court of Civil Appeals issued an opinion in Chandler v. Branch Banking & Trust Company (No. 2160999), holding that a joint owner of property at issue in an ejectment action is a necessary and indispensable party, even where the non-party property owner’s interests are closely aligned with a named party. Practically, this ruling emphasizes the importance of joining all necessary parties to an ejectment action when it is filed.…
In Patel, et al v. Specialized Loan Servicing LLC, et al, No. 16-12100 (11th Cir. 2018), the Eleventh Circuit held that claims against a loan servicer for “artificially inflated” force-placed insurance premiums were barred by the filed rate doctrine. In Patel, the plaintiff alleged that loan servicers and insurance companies breached implied covenants of good faith and fair dealing, as well as various deceptive and unfair trade practice statutes, by purchasing force-placed insurance for…
Earlier this month, Florida’s Supreme Court clarified that the 60-day period to claim surplus funds from judicial foreclosure sales begins from the county clerk’s issuance of the certificate of disbursements, not from when the property is actually sold at auction.  In Bank of New York Mellon v. Glenville, Docket No. SC17-954, 2018 WL 4327881 (Fla. Sept. 6, 2018), the Court considered whether a bank had timely filed its claim for surplus funds when it…
In a win for defendants, the Eleventh Circuit recently held that a party does not waive its right to compel arbitration for the claims of unnamed class members even if it has waived that right as to the named class representatives. In Gutierrez v. Wells Fargo Bank, NA, the plaintiffs filed a putative class action against Wells Fargo alleging it had committed certain unlawful practices related to the charging of overdraft fees. The plaintiffs…
Alabama has joined approximately 17 other states in adopting the Uniform Voidable Transactions Act (the “VTA”) to replace the Uniform Fraudulent Transfer Act (the “FTA”). The VTA will govern transactions occurring on or after January 1, 2019. The VTA clarifies issues that had become points of contention in avoidance actions under the FTA. For example, the new law makes clear that a finding of fraud (as that term is used in common law) is not…
Dollar General reported its employee Rebecca Keyes to the police for embezzlement, causing her to be arrested.  Keyes later sued Dollar General under a number of legal theories, including malicious prosecution, false imprisonment, and intentional infliction of emotional distress.  The trial court ordered arbitration for all of her claims, but the Mississippi Supreme Court reversed for all but one claim.  The Court found that disputes over the alleged embezzlement and the fraudulent conversion of property…