Citizens National Bank of Paintsville v. MCNB Bank and Trust Company

Filing 130

OPINION AND ORDER: I. MCNB's motion to limit references to facts solely relevant to the issue of the breach of contract (DE 105 ). This motion is DENIED as premature. Court will hear argument as to these two items of evidence at the pretria l conference. II. Citizens' motion in limine regarding various issues (DE 108 ). As set forth below, this motion is GRANTED in part, DENIED in part, and DEFERRED in part until after oral argument is heard at the pretrial conference. See 1-5. III. Citizens' motion to update damages through the trial date (DE 98 ). This motion is GRANTED. Court will hear argument on this issue at the pretrial conference. Signed by Judge Karen K. Caldwell on 2/17/2016. (RCB)cc: COR

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF KENTUCKY
SOUTHERN DIVISION at PIKEVILLE

CIVIL ACTION NO. 7:12-CV-102-KKC
CITIZENS NATIONAL BANK OF PAINTSVILLE,

v.

PLAINTIFF,

OPINION AND ORDER

MCNB BANK AND TRUST COMPANY

DEFENDANT.

This matter is before the Court on various motions filed by the parties in
anticipation of the trial of this matter.
The parties entered into a total of four agreements through which the defendant sold
the plaintiff an interest in four loans. The Court has already determined that the
defendant, MCNB Bank and Trust Company, breached the agreements when it unilaterally
terminated them by repurchasing its interest in the loans. (DE 82, Summ. J. Opinion.) The
Court further determined that issues of fact remained regarding the calculation of the
damages suffered by the plaintiff, Citizens National Bank of Paintsville. This matter is set
for a jury trial on March 7, 2016 in Pikeville, Kentucky.
I.

MCNB’s motion to limit references to facts solely relevant to the
issue of the breach of contract (DE 105)

This motion is DENIED as premature. MCNB objects to this category of
evidence as irrelevant and more prejudicial than probative. It does not, however,
identify any specific evidence that it seeks to exclude. The Court agrees that any
evidence relevant only to the breach of contract should not be admitted as that issue
has been decided as a matter of law. That broad statement will provide the parties
with some guidance. For more specific rulings regarding the relevance and potential
prejudice of particular evidence, MCNB should object to specific items of evidence as
Citizens proffers them at trial.

In its response, Citizens discusses two specific pieces of evidence which it
argues should be admissible because they are relevant to its damages. First, are the
minutes from the September 12, 2011 MCNB Board meeting. The second piece of
evidence is a report commissioned by MCNB’s Board of Directors and completed by
James Shrewsbury. The Court will hear argument as to these two items of evidence
at the pretrial conference.
II.

Citizens’ motion in limine regarding various issues (DE 108)

As set forth below, this motion is GRANTED in part, DENIED in part, and
DEFERRED in part until after oral argument is heard at the pretrial conference.
1) Citizens’ motion to exclude any evidence that it was required to
buy mortgage-backed securities in order to mitigate its damages
This motion is DENIED. With this motion, Citizens simply reasserts
arguments made in support of its prior motion on this issue (DE 56). The
court denied the prior motion (DE 83, Opinion and Order) and, for the
same reasons, denies the current motion.
2) Citizens’ motion to exclude any evidence of communications
between it and the FDIC about whether MCNB’s actions were
improper
This motion is GRANTED. MCNB states that it has no intent of offering
this evidence unless necessary for impeachment purposes. If MCNB
should find that introduction of this evidence becomes appropriate and
necessary, it should approach the bench for permission to do so.
3) Citizens’ motion to exclude evidence of other transactions
between Citizens National and MCNB
This motion is DEFERRED until after oral argument is heard at the
pretrial conference.
4) Citizens’ motion to exclude any evidence that Citizens was
required to mitigate damages in any way other than by buying
mortgage-backed securities
This motion is DEFERRED until after oral argument is heard at the
pretrial conference
5) Citizens’ motion to exclude Dr. Mullineaux’s Second Rebuttal
Report
This motion is DEFERRED until after oral argument is heard at the
pretrial conference.

2

III.

Citizens’ motion to update damages through the trial date (DE 98)

This motion is GRANTED. Citizens moves for permission to use a chart and
supporting materials at trial that update its damages calculation to reflect the
Federal Reserve System’s recent increase in the interest rate applicable to required
and excess reserve balances. The new calculation reduces Citizens’ damages claim.
Accordingly, MCNB will not be prejudiced by the recalculation.
In its pretrial memorandum, Citizens’ requests that it be permitted to
recalculate its damages to reflect an extension of the term on the American Pride
Loan. The Court will hear argument on this issue at the pretrial conference.

Dated February 17, 2016.

3