Shea et al v. Peoples National Bank, et al.

Filing 100

MEMORANDUM AND ORDER IT IS HEREBY ORDERED that the motions for summary udgment of defendants Peoples National Bank and Thomas Carley, II, and Carleys alternative motion to dismiss, are DENIED. [Docs. 65, 66]. Signed by District Judge Charles A. Shaw on 1/10/13. (JWJ)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION

ROBERT O. SHEA, JR., et al.,
Plaintiffs,
v.
PEOPLES NATIONAL BANK, et al.,
Defendants.

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No. 4:11-CV-1415 CAS

MEMORANDUM AND ORDER
This case was originally filed in state court by plaintiffs Robert O. Shea, Jr. and Linda J.
Shea, and asserts state law claims of fraudulent misrepresentation, negligent misrepresentation and
breach of fiduciary duty. The case was removed to federal court by defendants Peoples National
Bank and Thomas Carley, II, on the basis of diversity of citizenship. The case is now before the
Court on separate motions for summary judgment filed by each defendant. The motions are fully
briefed and ready for decision. For the following reasons, both motions will be denied.
Background
Plaintiffs’ claims arise out of a $500,000 short-term loan they made to a developer, Richard
Heyl, and his limited liability corporation, JFOV, LLC, in September 2007. The loan was intended
to provide interim funding to facilitate the completion of two luxury oceanfront villas on the island
of St. John, U. S. Virgin Islands, pending Heyl and JFOV’s expected receipt of permanent financing
from a bank. Heyl and JFOV were ultimately unable to obtain the permanent financing and could
not repay the plaintiffs any of the loan amount. Heyl filed for personal bankruptcy, and JFOV and
its members were sued by JFOV’s first mortgage holder in the Superior Court of the Virgin Islands.

The Sheas were also named as defendants in the Virgin Islands action, because they hold a second
mortgage lien on JFOV’s real property.
At the time plaintiffs made the loan in 2007, defendant Carley was a Vice President and
commercial loan officer with defendant Peoples National Bank (“PNB”), where plaintiffs had placed
most of their personal and commercial bank accounts in 2004. Carley had been the plaintiffs’ banker
since 2004 and had a close relationship with them, meeting with them on almost a weekly basis.
Plaintiffs allege that Carley introduced them to Heyl, urged them to make the $500,000 loan, and told
them that JFOV had already been approved for a permanent loan from which plaintiffs’ loan would
be repaid. In fact, Heyl and JFOV had only received a conditional letter of intent from the proposed
lender.
Legal Standards
The standards applicable to summary judgment motions are well settled. Pursuant to Federal
Rule of Civil Procedure 56(c), a court may grant a motion for summary judgment if all of the
information before the court shows “there is no genuine issue of material fact and the moving party
is entitled to judgment as a matter of law.” See Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986).
The initial burden is placed on the moving party. City of Mt. Pleasant, Iowa v. Associated
Elec. Co-op., Inc., 838 F.2d 268, 273 (8th Cir. 1988) (the moving party has the burden of clearly
establishing the non-existence of any genuine issue of fact that is material to a judgment in its favor).
Once this burden is discharged, if the record does in fact bear out that no genuine dispute exists, the
burden then shifts to the non-moving party who must set forth affirmative evidence and specific facts
showing there is a genuine dispute on that issue. Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249
(1986). In determining whether the moving party has met its burden, all evidence and inferences are

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to be viewed in the light most favorable to the non-moving party. Johnson v. Enron Corp., 906 F.2d
1234, 1237 (8th Cir. 1990).
Discussion
Carley and PNB move for summary judgment, and Carley moves in the alternative to dismiss
plaintiffs’ complaint, asserting that there are no genuine issues of material fact to preclude entry of
judgment in their favor as a matter of law on all of plaintiffs’ claims. The Court disagrees, finding
that issues remain including but not limited to (1) whether defendant Carley negligently or
intentionally made false representations to the plaintiffs that JFOV had already been approved for
a permanent loan from which plaintiffs’ loan would be repaid; (2) whether Carley had a fiduciary
relationship with the Sheas and, if so, whether he breached a fiduciary duty owed to them; and (3)
whether Carley’s actions occurred in the course and scope of his employment with PNB.
Accordingly,
IT IS HEREBY ORDERED that the motions for summary judgment of defendants Peoples
National Bank and Thomas Carley, II, and Carley’s alternative motion to dismiss, are DENIED.
[Docs. 65, 66]

CHARLES A. SHAW
UNITED STATES DISTRICT JUDGE

Dated this

10th

day of January, 2013.

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