On Wednesday, the Judicial Panel on Multidistrict Litigation rejected consolidation of 62 class actions involving Paycheck Protection Program (“PPP”) loans under the federal Coronavirus Aid, Relief, and Economic Security (“CARES”) Act in a multidistrict litigation (“MDL”).  These actions claim to represent a class of accounting firms (and other consultants) that allegedly worked as agents on behalf of applicants for PPP loans – typically small business clients. Plaintiffs contend the CARES Act and implementing regulations require lenders to pay them “agent fees” for preparing loan applications.

Continue Reading Lenders Gain Big Win Resisting MDL Consolidation in PPP Agent Fees Class Action Litigation

In Forbes v. Platinum Mortgage, Inc., No. 1180985, 2020 WL 746533 (Ala. Feb. 14, 2020), the Alabama Supreme Court upheld the validity of a home mortgage.  There, the husband borrowed $175,000, securing the loan with a mortgage on the couple’s home.  The husband signed the mortgage for himself and signed on behalf of his wife – pursuant to a Power of Attorney from his wife.  Later, the wife was declared incompetent and ultimately died.  The conservator sued, seeking to nullify the loan and contending that the Power of Attorney was forged.

Continue Reading A Properly Notarized Power of Attorney Provides Authority to Execute Mortgages

The story is becoming all too common.  A merchant (or consumer) is convinced to wire money to a fraudulent account because of an incorrect belief that they are wiring the money to the real party.  A common example is a fraudster convincing a purchaser of a home to wire money in the mistaken belief that they are wiring the money to a closing attorney or agent.  Another common example is a fraudster convincing a company to wire money in the mistaken belief that they are paying a valid vendor.  These transactions can involve millions of dollars and it is rare that the money can be recovered after it is sent.

Can insurance cover these losses?  Recently the Eleventh Circuit decided Principle Solutions Group, LLC v. Ironshore Indemnity, Inc., 944 F.3d 886, (11th Cir. Dec. 9, 2019).  There, the insured employer filed an action against insurer, seeking coverage for a wire transfer of funds made by insured’s employee to scammers.  The employer claimed coverage under the “fraudulent instruction” provision of its commercial crime insurance policy, and asserted bad faith.


Continue Reading “Cyber” Insurance Found to Cover Fraudulent Wire Transfer

Earlier this week, two Alabama businesses sued their insurers for refusing to pay losses related to COVID-19. The first lawsuit, Wagner Shoes v. Auto-Owners Insurance Co., No. 7:20-cv-465 (N.D. Ala. Apr. 6, 2020), was brought by a shoe store in Tuscaloosa. The second suit, Ollie Irene v. Farmers Insurance Exchange, No. 01-CV-2020-901319 (Jefferson County Cir. Court April 7, 2020), was filed by nationally recognized Mountain Brook restaurant, Ollie Irene.

Continue Reading First Alabama lawsuits filed over COVID-19 insurance denial

Last October, we reported here how the Eleventh Circuit in Muransky v. Godiva had broken with other circuits regarding the application of the Supreme Court’s opinion in Spokeo v. Robins. Last week, the Eleventh Circuit sua sponte vacated its October 2018 opinion and issued a new opinion.

Continue Reading Eleventh Circuit sua sponte vacates prior Spokeo opinion

Alabama law permits the creation of public corporations known as “improvement districts,” which can then issue bonds that are similar to bonds issued by a municipal corporation. These bonds can be used to finance improvements within the district. In Aliant Bank v. Four Star Investments, Inc., the Alabama Supreme Court allowed claims against the directors of one of these improvement districts to go forward despite claims of immunity. The Court also allowed certain fraud claims to go forward against the directors as well as other related individuals and entities. In addition to authorizing lenders to bring suit, the opinion also serves as a strong reminder that lenders should monitor their collateral and promptly investigate any signs of misconduct.


Continue Reading Alabama Supreme Court: Lender can sue directors of a public improvement district for negligence, breach of fiduciary duty

In a case of first impression for the Court, the Eleventh Circuit recently addressed whether federal district courts retain original subject matter jurisdiction over state law claims included in a class action filed pursuant to the Class Action Fairness Act (“CAFA”) even after all class claims have been dismissed.  In Wright Transportation, Inc. v. Pilot

In Turner v. Wells Fargo, N.A., No. 2150230, Wells Fargo foreclosed on a home after the homeowners tendered a bad check and attempted to send catch-up payments that did not include required penalty fees.  Wells Fargo, which purchased the home in foreclosure, obtained summary judgment in the trial court after initiating an ejectment action

There is no more pressing problem facing business organizations today, of all types, than cybersecurity threats. For a highly regulated industry like banking, regulators are watching closely to see how the IT governance structure at a bank can manage this risk.

Recently, the Federal Financial Institutions Examination Council, which coordinates the examination process at all

The residential mortgage market underwent a significant regulatory change on October 3, 2015, when the TILA-RESPA Integrated Disclosure (TRID) rule went into effect.  TRID was promulgated by the Consumer Financial Protection Bureau (CFPB).  As the name implies, TRID combines the disclosure requirements of the Truth in Lending Act (TILA) and the Real Estate Settlement Procedures