United States Court of Appeals

For the Eighth Circuit

___________________________

No. 15-3514

___________________________

Richard Aguilar; Melba Aguilar; Albert Carrell; Sharon Cobb; Clayton Givens;

Linda Givens; Stanley Kuhlo; Gina Mastrantonia; Phil Rosemann; Loren

Winterhof; Mary Winterhof; Lewis Vollmar; Brian Waffle; William Wantling;

Brad Werner, in a representative capacity; Eric Wittenmeyer; Jill Wittenmeyer;

Dorothy Zeigler; Clark Amos; Preston Amos; Thomas Barnes; Henry Barthel;

Julia Barthel; Northwest Properties (1973), LTD; Tom Bertani; Donna Bertani;

Kristy Bova; David Caldwell; Bonita Cobb; Casey Cook; Delores Cook; Jerry

Cronkite; Mark Cunningham; Daryll Currier; Roy Currier; Sam Currier; Thomas

Currier; Charles Davis; Charlotte Garrett; William Gaylor; Robert Givens;

Suzanne Glisson; Carol Green; Randall Harp; Aubrey Harp; Billy Harrison; Odis

Hash; Donna Hogshooter; John Holland; Audrey Holland; Donald Horner; Doris

Howard; Barbara Jordan; Gifford Jordan; David Kellogg; Mary Kellogg; Stanko

Matayo; Daren Mays; Sheila Mays; William McCalla; Carol McCarthy, in

representative capacity; Barbara O’Hanlon, in representative capacity; William

McLemore; Mark Merlotti; Cindy Merlotti; Marie Merlotti; Lorena Messenger;

Ben Miller; Bob Moore; Jim Neill; Mary O’Sullivan, individually and in a

representative capacity; Rudolf Ouwens; Ronald Pastor; William Phillips; Carol

Phillips; Buddy Quessenberry; Elaine Reed; Darren Rogers; Debbie Rogers; Betty

Rollon; Leonard Roman; David Schultz; John Shahan; Arlene Sincoski; Homer

Smith; Dorothy Smith; Gary Smith; Judith Smith; Kent Sturhahn; Arlene Stevens;

Winston Vines; Barbara Vollmar

lllllllllllllllllllll Plaintiffs - Appellants

v.

PNC Bank, N.A.

lllllllllllllllllllll Defendant - Appellee

____________

Appeal from United States District Court 

for the Eastern District of Missouri - St. Louis

____________
 Submitted: September 21, 2016

 Filed: February 7, 2017 

____________

Before RILEY, Chief Judge, MURPHY and SMITH, Circuit Judges.

____________

SMITH, Circuit Judge.

Ninety-two plaintiffs filed suit against PNC Bank, N.A. (PNC), alleging,

1

among other things, (1) violations of Missouri’s Uniform Fiduciaries Law (UFL);

(2) aiding and abetting the breach of fiduciary duties; (3) conspiracy to breach

fiduciary duties; and (4) conspiracy to violate the Racketeer Influenced and Corrupt

Organizations Act (RICO), 18 U.S.C. § 1962(d). These claims arise from the

plaintiffs’ investment in the British Lending Program (BLP)—a Ponzi scheme

operated by Martin Sigillito. The plaintiffs allege that PNC’s predecessor, Allegiant

Bank (“Allegiant”), conspired with and aided Sigillito in his scheme to defraud

investors when it served as the custodian for the self-directed individual retirement

accounts (IRAs) of those who chose to invest in the BLP at its inception. The district

court granted summary judgment to PNC, and the plaintiffs appeal. We affirm. 2

I. Background

A. Martin Sigillito and the BLP

In the late 1990s, Sigillito, an attorney located in St. Louis, Missouri, and

J. Scott Brown, an attorney in Kansas, formed the BLP. They organized the BLP as

an investment program to facilitate loans to an English law firm, Mark Gilbert Morse

The amended complaint is brought by 91 individuals who are citizens of 1

various states and one company, Northwest Properties (1973) Ltd. The plaintiffs are

not a certified class. One plaintiff, Mary O’Sullivan, brings her claims in her

individual capacity and in her representative capacity. Plaintiffs Carol McCarthy,

Barbara O’Hanlon, and Brad Werner bring their claims solely in their representative

capacities.

The Honorable Linda R. Reade, Chief Judge, United States District Court for

2

the Northern District of Iowa, sitting by designation.

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(MGM), to fund “black lung” claims brought on behalf of English coal miners. In

approximately 2000 or 2001, the BLP began marketing loans for purported

investments in real estate developments in England.

Sigillito solicited American investors for the BLP and often instructed them to

hold the loan notes in self-directed IRAs. He directed them to fund the investments

by depositing money into his Interest on Lawyers Trust Account (IOLTA). According

to the unsworn declaration of John Morse, an MGM partner, MGM “agreed . . . for

each £100 [that MGM] borrowed[,] one third (32%) would be deducted at source

representing [Sigillito’s and Brown’s] commission.” MGM agreed to “pay interest of

25% on the full £100 of the loan.” Although Morse considered “the fees and

interest . . . a huge amount,” he found the deal agreeable because MGM “needed the

money[,] and the rewards[MGM] stood to reap in the UK would outweigh the costs.”

B. Allegiant’s Role

Beginning in July of 2000, Allegiant, a Missouri trust company with banking

powers, served as the custodian for the self-directed IRAs of those who chose to

invest in the BLP. Allegiant wasthe first bank to serve asthe IRA custodian for BLP 3

loans; the majority of those loans went to fund MGM loans. “Nine of the Plaintiffs,

Richard Aguilar, David Caldwell, Donald Horner, Rudolf Ouwens, William Phillips,

Carol Phillips, Leonard Roman, Lewis Vollmar and Linda Givens, were customers

of Allegiant Bank and held self-directed individual retirement accounts (‘IRAs’) at

Allegiant Bank (‘Customer Plaintiffs’).”4

Although Allegiant acted as the custodian for these accounts, the Customer

Plaintiffs were “solely responsible for deciding how to invest the money in these

IRAs, and . . . [the Customer] Plaintiffs made all investment decisions in these IRAs

In 2004, Allegiant was acquired by National City Bank, which, in turn, was

3

acquired by PNC in 2008. 

The remainder of the plaintiffs “were not customers of PNC Bank or its

4

predecessors (‘Non-Customer Plaintiffs’).”

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maintained at Allegiant Bank’s trust department.” Each Customer Plaintiffsigned an

IRA Simplifier, which provided, in relevant part:

8.03 Representations and Responsibilities: You represent and warrant

to us that any information you have given or will give us with

respect to this Agreement is complete and accurate. Further, you

agree that any directions you give us, or action you take will be

proper under this Agreement and that we are entitled to rely upon

any such information or directions. We shall not be responsible

for losses of any kind that may result from your directions to us

or your actions or failures to act and you agree to reimburse us

for any loss we may incur as a result of such directions, actions

or failures to act.

***

8.05 Investment of Amounts in the IRA:

a. Direction of Investment—You have exclusive

responsibility for and control over the investment of

the assets of your IRA. You shall direct all

investment transactions, including earnings and the

proceeds from securities sales. Your selection of

investments, however, shall be limited to publicly

traded securities, mutual funds, money market

instruments and other investments that are

obtainable by us and that we are capable of holding

in the ordinary course of our business.

***

b. Our Investment Powers and Duties—We shall have

no discretion to direct any investment in your IRA.

We assume no responsibility for rendering

investment advice with respect to your IRA, nor will

we offer any opinion or judgment to you on matters

concerning the value orsuitability of any investment

or proposed investment for your IRA. We shall

exercise the voting rights and other shareholder

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rights with respect to securities in your IRA but only

in accordance with the instructions you give to us. 

c. Delegation of Investment Responsibility—We may,

but are not required to, permit you to delegate your

investment responsibility for your IRA to another

party acceptable to us by giving written notice of

your delegation in a format we prescribe. We shall

follow the direction of any such party who is

properly appointed and we shall be under no duty to

review or question, nor shall we be responsible for,

any of that party’s directions, actions or failures to

act.

(Emphasis added in part.) (Bold omitted.)

After deciding to invest in the BLP, each Customer Plaintiff opened a selfdirected IRA at Allegiant at Sigillito’s direction (or at the direction of one of his

associates). “Each of the Allegiant Customer Plaintiffs designated Martin Sigillito as

his or her authorized representative in connection with their self-directed IRAaccount

at Allegiant Bank” and “directed Allegiant Bank to accept direction from Sigillito on

[their] behalf.” Allegiant’s trust department maintained the self-directed IRAs.

Allegiant employees in the trust department knew that Sigillito represented the

Customer Plaintiffs and had authority to act on their behalf. 

During 2000 and 2001, Sigillito held an IOLTA and other retail banking

accounts at Allegiant. “Sigillito’s IOLTA was a demand deposit account maintained

on the retail banking side of Allegiant with his other business accounts.” “Sigillito

owed fiduciary dutiesto persons whose money was deposited into [his] IOLTA . . . .”

The funds held in a Missouri IOLTA account may contain a variety of funds,

including individual client funds, multiple client funds, and attorney’s fees. In the 5

In 2001, Missouri Supreme Court Rule 4–1.15 stated, in relevant part: 5

(a) A lawyer shall hold property of clients or third persons that is

in a lawyer’s possession in connection with a representation separate

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from the lawyer’s own property. Funds shall be kept in a separate

account maintained in the state where the lawyer’s office is situated, or

elsewhere with the consent of the client or third person. Other property

shall be identified as such and appropriately safeguarded. Complete

records of such account funds and other property shall be kept by the

lawyer and shall be preserved for a period of five years after termination

of the representation.

(b) Upon receiving funds or other property in which a client or

third person has an interest, a lawyer shall promptly notify the client or

third person. Except as stated in this Rule or otherwise permitted by law

or by agreement with the client, a lawyer shall promptly deliver to the

client or third person any funds or other property that the client or third

person is entitled to receive and, upon request by the client or third

person, shall promptly render a full accounting regarding such property.

(c) When in the course of representation a lawyer is in possession

of property in which both the lawyer and another person claim interests,

the lawyer shall keep the property separate until there is an accounting

and severance of their interests. If a dispute arises concerning their

respective interests, the lawyer shall keep the portion in dispute separate

until the dispute is resolved.

(d) Except as provided in paragraph (e), a lawyer or law firmshall

establish and maintain one or more interest-bearing insured depository

accounts into which shall be deposited all funds of clients or third

persons that are nominal in amount or are expected to be held for a short

period of time . . . . 

In 2001, the commentary to Rule 4–1.15 explained that

[l]awyers often receive funds fromthird partiesfrom which the lawyer’s

fee will be paid. If there is risk that the client may divert the funds

without paying the fee, the lawyer is not required to remit the portion

from which the fee is to be paid. However, a lawyer may not hold funds

to coerce a client into accepting the lawyer’s contention. The disputed

portion of the funds should be kept in trust and the lawyer should

suggest means for prompt resolution of the dispute, such as arbitration.

The undisputed portion of the funds shall be promptly distributed.

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present case, it is undisputed that

[i]n 2001, Allegiant Bank’s understanding of the nature and function of

IOLTA accounts was that an IOLTA account is an interest on lawyer’s

trust account and that funds in an IOLTA account can be funds for an

individual client, multiple clients, and could include funds that belong

to the lawyer, themselves, and that essentially, IOLTA accounts were

accounts which were used to facilitate the operation of a law practice.

(Emphases added.)

Allegiant’s retail and trust departments operated separately and used separate

computer systems. Employees in the trust department lacked routine access to bank

accounts in the retail department, including IOLTAs. Allegiant had no system to

compare transactions between the two departments. But, upon proper request,

employees in the trust department could review retail banking activities.

1. The Womack Transaction

On September 26, 2001, Sigillito informed Allegiant that his client, Betty

Womack, wanted to liquidate her self-directed IRA. The only asset in Womack’s IRA

was an unmatured BLP loan note with a face value of $56,715.19. Womack had

6

previously designated Sigillito as her authorized representative to conduct

transactions on her account. On September 28, 2001, Allegiant’s trust department

received a check from Sigillito drawn on his IOLTA and dated September 27, 2001.

7

The check was in the amount of $56,715.19. It included the notation “Womack” in

the memo line. Allegiant’s trust department understood from Sigillito’s prior

(Emphases added.)

Specifically, the note was an MGM loan note. MGM loans were the loans

6

made to fund “black lung” litigation in England. 

The envelope that the check was delivered in had a handwritten note stating

7

that Robin Fitzgibbons, an Allegiant trust officer, received the check on September

28, 2001. 

-7-
communication that this check was for the purchase of Womack’s unmatured BLP

loan note. The record does not reflect the source of the IOLTA funds that Sigillito

used to fund the purchase. On October 9, 2001, Allegiant’s trust department credited

Womack’s IRA with $56,715.19. On October 19, 2001, Allegiant’s trust department

disbursed the same amount by wire transfer to Womack at her request. 

2. Allegiant’s Resignation as Custodian

In September 2001, Allegiant was in the process of acquiring Southside Bank

(“Southside”). Matthew Finn, Southside’s head of trust operations, began attending

Allegiant trust committee meetings during this time. On September 28, 2001,

Southside merged with Allegiant, and Finn became Allegiant’s chief investment

officer.

In Finn’s unsworn declaration, much of which he has since recanted, he states 8

that he “attended a meeting in early October 2001 where Martin Sigillito explained

the particulars of the investments he was promoting called the [BLP].” After hearing

Sigillito’s presentation, Finn concluded “[f]rom[his] prior experience running a trust

department, the high interest rates, lending to a foreign law firm, and investment in

foreign real estate development were red flags.” 

Shortly after the meeting with Sigillito, Finn contacted MGM and set up a

meeting with MGM partners John Mark and John Morse. At that meeting on

approximately October 4, 2001, Mark and Morse “described how they borrowed

money from the Statesto fund litigation having something to do with coal miners and

In a subsequent deposition, Finn recanted large portions of his declaration. 8

Finn also submitted a sworn affidavit that rejects the plaintiffs’ interpretation of his

declaration. Before the district court, PNC urged the court to disregard Finn’s

unsworn declaration because ofthe circumstances under which the plaintiffs obtained

it. The court, however, “consider[ed] the declaration in determining whether a

genuine issue of material fact exists with respect to PNC Bank’s manifestation of an

agreement to participate.” We, like the district court, will consider Finn’s unsworn

declaration and afford the plaintiffs the benefit of it. 

-8-
the British government. They stated that their claims were going well but said they

were not in a position to repay the loans at that time.”9 They also told Finn “that 32%

of the loans were taken as fees and that this was paid to Mr. Sigillito and his

associates directly from the loan funds.” Finn thought “that fees of 32% of the loan

amountseemed outrageous.” Having reviewed the loan agreements, Finn “knew that

up-front fees were not disclosed in the loan agreements.” Finn considered the

information about the fees to be “another red flag in a series of red flags.” Morse

recalls Finn stating “that he was concerned about various aspects which had come to

his attention about the loans, [the] fact that they were loans out of the jurisdiction, the

high interest rates, and he also questioned [MGM’s] ability to repay the loans.”

According to Morse, Finn “indicated that he thought the loans did not comply with

regulatory requirements.” At the meeting’s conclusion, Mark and Morse agreed to an

“urgent meeting” at Allegiant’s headquarters. 

The next day, October 5, 2001, the MGM partners met with Richard Markow,

president of Allegiant’s trust department, Finn, and Sigillito to “discuss[] the bank’s

concerns about these investments.” During that meeting, a “gentleman from Arthur

Anderson was concerned about compliance[,] and [Morse] recall[ed] a mention of

regulatory authorities having to be informed.” At the meeting’s conclusion, Morse

found it “clear . . . that Allegiant Bank would not be lending [MGM] any further

money” and that Allegiant “would not support anything going further in respect of

the current loans. There was concern expressed about the legality of the loans in

general as they appeared to be loans of Trust monies out of the jurisdiction and

breaching the mandatory limit of a one[-]year term.” Morse noted that Sigillito

disagreed with this assessment. According to Morse, Allegiant explained “that the

Bank could not be involved in loans that could be in breach of various laws or

regulations.”

Ultimately, MGM did repay all amounts borrowed from the Customer 9

Plaintiffs, along with the interest and fees. But, at the time of the October 4, 2001

meeting, MGM had not yet repaid the loans. 

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“Following the meeting, [Allegiant] looked into Martin Sigillito’s accounts at

Allegiant Bank and discovered checks deposited into the accounts showing payment

of up-front fees with names on the IRAs at the bank.” According to Finn, “the activity

in Martin Sigillito’s accounts showed that he used investor money deposited into his

[IOLTA] to pay interest and principal on some of the loans.”

Finn found the Womack transaction “suspicious” because of the “means by

which the Womack loan was repaid.” Finn “knew that the borrowers had not paid 10

[Womack] back because the lawyersfromEngland told [him] that they had not repaid

any of the loans.” Sigillito’s use of investor money from Sigillito’s account “to pay

other investors confirmed [Finn’s]suspicionsthat[Allegiant] did not want to custody

these loans.” 

Finn recommended to ArthurWeiss, Allegiant’s Executive Vice President, that

Allegiant no longer act as a custodian for self-directed IRAs containing BLP

investments. According to Finn, they were “inappropriate investments to be held in

an IRA” because they were “highly illiquid, . . . not marketable through any of the

accepted channels of investments, [and] they had high fees.” The account agreements

included a provision that permitted Allegiant to resign as custodian with or without

cause; it stated: “Either party may terminate this Agreement at any time by giving

written notice to the other. We can resign as Custodian at any time effective 30 days

after we mail written notice of our resignation to you.”

On October 26, 2001, Allegiant informed Sigillito that it would be resigning

asthe IRA custodian. Thereafter, “Sigillito and his associatesrequested that Allegiant

not communicate the resignation decision directly to the account owners, but rather,

allow Sigillito’s team to do it.” Sigillito and his associates asked that Allegiant

The plaintiffs point out that despite having received Sigillito’s check fromthe

10

Womack loan on September 28, 2001, Allegiant Bank did not credit Womack’s

account until October 9, 2001, after the meeting with MGM.

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“simply advise account owners that Millennium Trust would be the new custodian,

rather than offer account owners an opportunity to name another custodian.”

On November 13, 2001, Allegiant sent a letter to the Customer Plaintiffs,

informing them of its resignation as IRA custodian, effective December 14, 2001. It

said:

It is Allegiant Bank’s understanding that arrangements have been made

to transfer custodianship of [the] self-directed IRA[s] to Millennium

Trust Company, LLC. Please note that it is important that you act

promptly to complete the transfer . . . to another financial organization

of your choice. If the transfer of your IRA is not completed by

December 14, 2001, it may result in the distribution of assets as

permitted by your IRA Agreement, which could have adverse tax

consequences to you.

Each of the Customer Plaintiffs either elected to have his or her account

transferred to Millennium Trust Company, LLC, or relied upon Sigillito and his

associates to transfer his or her IRA. “None of [the] . . . Customer Plaintiffs received

any advice from Allegiant Bank in making the decision to transfer their IRA from

Allegiant to Millennium.”

3. End of the BLP

The BLP continued for more than eight years after Allegiant resigned as

custodian in 2001. Between 2001 and 2010, a series of other financial institutions

served as custodian for BLP loans held in self-directed IRA accounts and maintained

Sigillito’s business accounts and IOLTA. While no evidence exists that the BLP was

fraudulent from its inception, as the district court noted, “it is undisputed that [by

2010] the BLP ‘operated as a classic Ponzi scheme, in which payments on existing

loans were paid with money from new loans.’”

“The BLP began to crumble when [Phil] Rosemann filed suit against [Derek]

Smith for repayment of [a BLP] loan.” United States v. Sigillito, 759 F.3d 913, 921

(8th Cir. 2014), cert. denied, 135 S. Ct. 1019 (2015). Smith was a real estate investor

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in the United Kingdom. Id. at 920. Sigillito had persuaded Rosemann “to loan a

significant amount to the BLP; however, Rosemann sought acceleration of the loan

after the BLP made late payments to him.” Id. at 921. To satisfy Rosemann’s

demands, Sigillito continued marketing the BLP and misrepresented the safety of the

BLP and Smith’s liabilities. Id. When Rosemann filed suit against Smith, Smith

responded that he never received any of Rosemann’s money. Id. Rosemann sought

an explanation from Sigillito. Id. “During thistime, Sigillito’s secretary . . . contacted

the Federal Bureau of Investigation (FBI) about the BLP. The FBI then initiated a

criminal investigation, which led to Sigillito’s arrest and indictment.” Id. In 2012, a

jury convicted Sigillito of multiple counts of wire fraud, mail fraud, conspiracy to

commit wire fraud, and money laundering. Id. at 920. On appeal, we affirmed

Sigillito’s conviction and sentence. Id.

4. Procedural History

After Sigillito’s conviction in 2012, 92 plaintiffs filed suit against PNC as

successor to Allegiant. In their amended complaint, the plaintiffs alleged, among

other things, (1) violation of Missouri’s UFL due to actual knowledge (“Count I”); 11

(2) violation of Missouri’s UFL under Missouri Revised Statute § 469.270 (“Count

II”); (3) violation of Missouri’s UFL due to bad faith (“Count III”); (4) aiding and

abetting breach of fiduciary duty (“Count V”); (5) conspiracy to breach fiduciary

duties (“Count VII”); and (6) conspiracy to violate RICO, 18 U.S.C. § 1962(d)

(“Count IX”). PNC moved for summary judgment on these claims, and the plaintiffs

moved for partial summary judgment on the UFL claims set forth in Counts I–III. 

The district court granted summary judgment in PNC’s favor on all the claims

and denied the plaintiffs’ motion on the UFL claims. The court noted that the

plaintiffs did not put forth evidence of when the BLP became fraudulent and stated

that “Sigillito’s criminal activity at some point in time cannot be the basis for finding

another party liable merely because it interacted with Sigillito during what may have

The district court granted PNC’s motion to dismiss the plaintiffs’ claims for

11

aiding and abetting fraud (“Count IV”); breach of fiduciary duty (“Count VI”); and

negligence (“Count VIII”). 

-12-
been the early stages of his criminal scheme.” The court concluded that the plaintiffs

failed to identify evidence that

PNC Bank agreed to participate in a RICO enterprise; PNC Bank and

Sigillito had a “meeting of the minds” regarding an unlawful act; PNC

Bank knowingly or substantially assisted Sigillito in breaching a

fiduciary duty; or PNC Bank acted in bad faith or with actual knowledge

that Sigillito misappropriated fiduciary funds out of his IOLTA.

Additionally, the court found that the plaintiffs failed to “put forth sufficient evidence

for the court to determine what underlying breach of fiduciary duty Sigillito allegedly

committed during the relevant period.”

II. Discussion

On appeal, the plaintiffs argue that the district court improperly granted PNC’s

motion for summary judgment on Counts V, VII, and IX because genuine issues of

material fact exist. They also argue that the district court erroneously granted

summary judgment on CountsI–III (the UFL claims) to PNC and denied their motion

for partialsummary judgment on those claims because the undisputed facts show that

Sigillito was a fiduciary who breached his fiduciary duties with Allegiant’s actual

knowledge of the breach. They contend that the undisputed facts show that Allegiant

acted in bad faith by not investigating its suspicions about Sigillito’s conduct. 

“We review de novo a district court’s grant or denial of summary judgment.”

Myers v. Lutsen Mountains Corp., 587 F.3d 891, 892 (8th Cir. 2009).

A. Common-law Claims and RICO Claim

The plaintiffs argue that “[t]he record is replete with evidence” supporting

Count V (aiding and abetting breach of fiduciary duty); Count VII (conspiracy to

breach fiduciary duty); and Count IX (RICO). According to the plaintiffs, their

evidence “is at least controverted and creates an issue of fact for the jury.” 

The plaintiffs do not set forth the elements of their common-law claims or the

RICO claim, nor do they discuss any caselaw relevant to these claims. Instead, they

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dispute the district court’s review of the facts, identifying 16 pieces of evidence that

purportedly generate genuine issues of material fact on these claims. 

Even if we overlook the plaintiffs’ failure to cite any legal authorities in

support of their RICO and common-law claims, those claims still fail. To prove a

12

RICO violation, a plaintiff must produce evidence 

(1) that an enterprise existed;[ ] (2) that the enterprise affected interstate 13

or foreign commerce; (3) that the defendant associated with the

enterprise; (4) that the defendant participated, directly or indirectly, in

the conduct of the affairs of the enterprise; and (5) that the defendant

participated in the enterprise through a pattern of racketeering activity

by committing at least two racketeering (predicate) acts. 

United States v.Darden, 70 F.3d 1507, 1518 (8thCir. 1995). Racketeering (predicate)

acts include money laundering, mail fraud, and wire fraud. See RJR Nabisco, Inc. v.

European Cmty., 136 S. Ct. 2090, 2105 (2016). 

PNC argues that the plaintiffs did not properly present their RICO and 12

common-law claims to this court because they failed to cite any legal authorities to

support these claims. Federal Rule of Appellate Procedure 28(a)(8)(A) requires an

appellant’s brief to contain “appellant’s contentions and the reasons for them, with

citations to” legal authorities and the record. “[We] regularly decline to consider

cursory orsummary argumentsthat are unsupported by citations to legal authorities.”

United States v. Stuckey, 255 F.3d 528, 531 (8th Cir. 2001). 

To prove that a RICO enterprise existed, a plaintiff 13

must offer proof of (1) a common or shared purpose that animates the

individuals associated with it, (2) a formal or informal organization of

the participants in which they function as a unit, including some

continuity of both structure and personnel, and (3) an ascertainable

structure distinct from that inherent in the conduct of a pattern of

racketeering activity. 

United States v. Henley, 766 F.3d 893, 906 (8th Cir. 2014) (citing United States v.

Kragness, 830 F.2d 842, 855 (8th Cir. 1987)). 

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“To establish the charge of conspiracy to violate the RICO statute . . . , [a party]

must prove, in addition to elements one, two, and three described immediately above,

that the defendant ‘objectively manifested an agreement to participate . . . in the

affairs of [the] enterprise.’” Darden, 70 F.3d at 1518 (second alteration and second

ellipsis in original) (quoting United States v. Bennett, 44 F.3d 1364, 1374 (8th Cir.

1995)). The plaintiff need not provide “[p]roof of an express agreement.” Id. Instead,

the plaintiff “need only establish a tacit understanding between the parties, and this

may be shown wholly through the circumstantial evidence of [each defendant’s]

actions.” Id. (alteration in original) (quoting United States v. Fregoso, 60 F.3d 1314,

1325 (8th Cir. 1995)). But the plaintiff “does have to show more than ‘mere

association with conspirators, knowledge of a conspiracy, and presence during

conspiratorial discussions . . . .’” United States v. Muskovsky, 863 F.2d 1319, 1324

(7th Cir. 1988) (ellipsis in original) (quoting United States v. Percival, 756 F.2d 600,

610 (7th Cir. 1985)). The plaintiff must prove “that the defendant was aware of the

scope of the enterprise and intended to participate in it.” United States v. Stephens,

46 F.3d 587, 592 (7th Cir. 1995). 

Under Missouri law, to prove conspiracy to breach fiduciary duties, a plaintiff 14

must prove the elements of civil conspiracy, 

which are: (1) two or more persons, (2) an object to be accomplished,

(3) a meeting of the minds on the object or course of action, (4) one or

more unlawful overt acts, and (5) resulting damages. The essence of a

civil conspiracy is an unlawful act agreed upon by two or more persons.

Mackey v. Mackey, 914 S.W.2d 48, 50 (Mo. Ct. App. 1996) (citation omitted).

Regarding the third element, there must be evidence “that any two of the Defendants

involved in the alleged civil conspiracy met, negotiated, and more importantly,

achieved a meeting of the minds to carry out some unlawful purpose.” Intertel, Inc.

v. Sedgwick Claims Mgmt. Servs., Inc., 204 S.W.3d 183, 204–05 (Mo. Ct. App. 2006).

“A meeting of the minds is present if each participant acted with ‘a unity of purpose

The parties agree that Missouri law applies to the plaintiffs’ common-law

14

claims. 

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or a common design and understanding.’” Glob. Control Sys., Inc. v. Luebbert, No.

4:14-CV-657-DGK, 2016 WL 910190, at *2 (W.D. Mo. Mar. 9, 2016) (quoting Oak

Bluff Partners, Inc. v. Meyer, 3 S.W.3d 777, 781 (Mo. 1999) (en banc));see also John

Knox Vill. v. Fortis Constr. Co., LLC, 449 S.W.3d 68, 80 (Mo. Ct. App. 2014) (“Clear

and convincing circumstantial evidence established that each of the Appellants acted

with a ‘unity of purpose,’ a ‘common design and understanding,’ or ‘a meeting of the

minds’ to unlawfully benefit themselves . . . .”). 

To prove that a defendant aided and abetted, a plaintiff must show that the

15

defendant “kn[ew] that the other’s conduct constitutes a breach of duty and g[ave]

substantial assistance or encouragement to the other so to conduct himself.” Bradley

v. Ray, 904 S.W.2d 302, 315 (Mo. Ct. App. 1995) (emphases in original) (quoting

Restatement (Second) of Torts § 876(b) (Am. Law Inst. 1965)). The plaintiff must

prove that the defendant “affirmatively act[ed] to aid the primary tortfeasor; neither

failure to object to the tortious act nor defendant’s mere presence at the commission

of the tort is sufficient to charge one with responsibility.” Id. The defendant must

have “associate[d] himself in some way with the principal in bringing about the

commission of the crime, and mere negative acquiescence is not sufficient.” Id.

(quoting State v. Clark, 596 S.W.2d 747, 751 (Mo. Ct. App. 1980)). 

The plaintiffs rely primarily on Finn’s unsworn declaration to prove their

claims. In summary, that declaration showsthat (1) MGM paid Sigillito high fees(32

percent of the loan amount), which were “paid to Mr. Sigillito and his associates

directly from the loan funds”; (2) these “up-front fees were not disclosed in the loan

agreements”; (3) before her loan came due, Womack was repaid from Sigillito’s

IOLTA; (4) at the time of the Womack transaction, MGM had not repaid any of the

loans; and (5) Finn had “suspicions that [Allegiant] did not want to custody these

loans” based on “[t]he fact that investor money from Martin Sigillito’s account was

As the district court recognized, the Missouri Supreme Court has yet to decide 15

whether Missouri recognizes a cause of action for aiding and abetting a breach of

fiduciary duty. For purposes of appeal, we will assume that it does. 

-16-
used to pay other investors.” The plaintiffs also rely on Morse’s unsworn declaration,

in which he states that Finn “questioned [MGM’s] ability to repay the loans” and

“indicated that he thought the loans did not comply with regulatory requirements.”17

And, the plaintiffs cite PNC’s original answer in which it admitted that Allegiant

The plaintiffs also rely on the “Minutes of Trust Committee Meeting” taken

17

on August 14, 2001, which provide that “Markow . . . reported that the Co-Trustee

and income beneficiary under the Bosse trust has again requested consideration ofthe

purchase of first and second charges on real property in England (deeds of trust on

English real property). After discussion, [Chief Financial Officer Jeff] Schatz stated

that he would investigate the proposed investment further.” As PNC points out, the

record contains no evidence that Schatz conducted the investigation or what, if

anything, he discovered. More importantly, this court is prohibited from considering

the meeting minutes in light of the parties’ stipulation prohibiting the plaintiffs from

“refer[ring] to or introduc[ing] any evidence at trial or in dispositive motion briefing

relating to (1) any member of the Bosse family . . . .”

The plaintiffs also argue that PNC admitted certain things by failing to deny

them. In their amended complaint, the plaintiffs allege that “Allegiant’s counsel, Jan

Alonzo, after an extensive investigation, informed Hayes and Markow that Sigillito

was diverting fiduciary funds in his IOLTA account in a classic Ponzi scheme where

IOLTA paymentsto existing investors were being paid by IOLTA depositsfrom new

investors.” PNC originally responded, “PNC lacks knowledge or information

sufficient to form a belief about the truth of the allegations in this paragraph and

therefore deniesthe same.” Thereafter, in its amended answer, PNC responded, “PNC

can neither admit nor deny this allegation, because the substance of any

communications between Allegiant Bank and its lawyers is privileged. PNC denies

any remaining allegations contained in this paragraph.” The plaintiffs argue that PNC

admitted the allegation by failing to deny it. But in both its original and amended

answer, PNC also made a general denial, stating, “PNC denies each and every

allegation contained in Plaintiffs’ First Amended Complaint, including all headings

and sub-headings, that is not specifically admitted to be true in the preceding

paragraphs of this Answer and Affirmative Defenses.” Federal Rule of Civil

Procedure 8(b)(3) provides that “[a] party that intends in good faith to deny all the

allegations of a pleading . . . may do so by a general denial. A party that does not

intend to deny all the allegations must either specifically deny designated allegations

or generally deny all except those specifically admitted.” In light of this general

denial, we conclude that PNC satisfied the federal pleading rules. 

-17-
“advised its counsel upon becoming suspicious of the activity in Sigillito’s accounts

and that counsel investigated the matter.”18

We conclude that the plaintiffs’ RICO and common-law claims fail because the

aforementioned evidence does not generate genuine issues of material fact. The

record is insufficient to establish a reasonable fact dispute as to whether Allegiant,

PNC’s predecessor, objectively manifested an agreement to participate in criminal

activity with Sigillito, had a meeting of the minds with Sigillito, or substantially

assisted or encouraged Sigillito’s conduct. First, none of the aforementioned 19

evidence demonstrates that Allegiant “objectively manifested an agreement to

participate . . . in the affairs of [the] enterprise.” Darden, 70 F.3d at 1518 (alteration

and ellipsis in original) (quoting Bennett, 44 F.3d at 1374). As the district court

explained, “[a]t most, Finn’s declaration demonstrates that [Allegiant] became

suspicious of activity related to the Womack self-directed IRA and engaged in some

level of review of the self-directed IRAs containing BLP loans.” But Allegiant’s

suspicions about Sigillito’s conduct are insufficient to prove that Allegiant “was

aware of the scope of the enterprise and intended to participate in it.” Stephens,

46 F.3d at 592. The district court correctly observed that “[i]f anything, the evidence

establishes that [Allegiant] took steps to remove itself as custodian of accounts that

In its amended answer, PNC denied the allegation. PNC argues on appeal that 18

its amended answer superseded its original answer; therefore, we should not consider

the original. Our consideration of the original answer, however, does not change the

result. 

As the district court correctly observed, the plaintiff failed to produce

19

evidence of “the criminal activity being undertaken by Sigillito or Brown during the

time Allegiant Bank served as the custodian for self-directed IRAs containing BLP

loans.” The plaintiffs have not put forth “evidence that establishes the BLP was

fraudulent from its inception.” Nonetheless, we will assume, without deciding, that

some form of racketeering activity occurred during this time for purposes of the

RICO claim. Additionally, we agree with the district court that the plaintiff failed to

“establish[] what specific breach of fiduciary duty, or other unlawful act, Sigillito

allegedly committed with respect to the[] common[-]law claims during th[e]

[relevant] time period.” Again, we will assume, without deciding, that Sigillito did

breach a fiduciary duty for purposes of the common-law claims. 

-18-
contained problematic or unsuitable investments.” Therefore, the plaintiffs’ RICO

claim fails as a matter of law. 

Second, the evidence fails to establish a “meeting of the minds” between

Allegiant and Sigillito. See Mackey, 914 S.W.2d at 50. Again, the plaintiffs’ evidence

shows only that Allegiant investigated Sigillito’s suspicious activity. Allegiant’s

investigation of Sigillito’s actions does not equate to conspiratorial conduct. Thus,

the plaintiffs’ claim of conspiracy to breach fiduciary duty fails. 

Finally, the plaintiffs have produced no evidence showing how Allegiant

substantially assisted or encouraged Sigillito’s breach of fiduciary duty. See Bradley,

904 S.W.2d at 315. Instead, the plaintiffs’ evidence shows the opposite—that

Allegiant became suspicious of Sigillito and the loans to MGM and subsequently

terminated its relationship with Sigillito. As a result, the plaintiffs’ claim of aiding

and abetting breach of fiduciary duty fails.

B. UFL Claims

The plaintiffs argue that the district court erroneously granted summary

judgment to PNC and denied summary judgment to them on Counts I–III (the UFL

claims). The plaintiffs contend that a reasonable factfinder could conclude that

(1) Sigillito was a fiduciary who had an attorney–client relationship with the IRA

customers who invested in the BLP and owed fiduciary obligations to people whose

money wasin his IOLTA at Allegiant; (2) Sigillito breached his fiduciary obligations

by receiving undisclosed fees not authorized by the loan agreements; (3) Allegiant

had actual knowledge of Sigillito’s breach of fiduciary duty when it cashed the

Womack check after learning from MGM that Sigillito was breaching his fiduciary

obligations;(4) Allegiant acted in bad faith because it was commercially unjustifiable

for Allegiant to accept the Womack check and disregard facts readily available based

on a review of Sigillito’s IOLTA; (5) PNC, as Allegiant’s successor, is strictly liable

under the UFL based on evidence that the Womack check was drawn and delivered

to Allegiant as payee in a transaction that Allegiant knew was for Sigillito’s personal

benefit; and (6) Sigillito breached his fiduciary duties to Linda Givens and Rudolf

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Ouwens in the Womack transaction when he had Allegiant transfer monies from their

accounts to Sigillito’s IOLTA. 

“The UFL ‘is the Missouri codification of the UniformFiduciaries Act,’ which

alters ‘the common law with respect to the duties of parties who deal with

fiduciaries.’” Watson Coatings, Inc. v. Am. Express Travel Related Servs., Inc., 436

F.3d 1036, 1040 (8th Cir. 2006) (footnote omitted) (quoting In re Lauer, 98 F.3d 378,

382–83 (8th Cir. 1996)). The UFL’s purpose is “to facilitate banking transactions by

relieving depository banks of their common law duty to inquire into the propriety of

fiduciary transactions.” Hendren v. Farmers State Bank, S.B., 272 S.W.3d 345, 348

(Mo. Ct. App. 2008) (quoting Bari v. Lindell Trust Co., 996 S.W.2d 655, 659

(Mo. Ct. App. 1999)). Under the UFL, a depository bank may “indulge in the

presumption that the fiduciary in withdrawing funds from the fiduciary account is

acting lawfully and in accordance with his duties.” Id. (quoting Gen. Ins. Co. of Am.

v. Commerce Bank of St. Charles, 505 S.W.2d 454, 457 (Mo. Ct. App. 1974)). 

“The bank’s obligation [is] to the trustee, to honor his check when drawn to

form”; by contrast, the bank has “no duty to the trust estate save to refrain from

participating in misappropriation of the funds.” Id. at 349 (alteration in original)

(quoting Gen. Ins. Co. of Am., 505 S.W.2d at 458). A bank’s “mere payment of the

money to or upon the check of the depositor does not constitute a participation in an

actual or intended misappropriation by the fiduciary.” Id. (quoting Gen. Ins. Co. of

Am., 505 S.W.2d at 458). But the fiduciary’s “conduct or course of dealing may bring

to the notice of the bank circumstances which would enable it to know that he is

violating his trust.” Id. (quoting Gen. Ins. Co. of Am., 505 S.W.2d at 458). “Such

circumstances do not impose upon the bank the duty or give it the right to institute

any inquiry into the conduct of its customer, in order to protect those for whom the

customer may hold the fund, but between whom and the bank there is no privity.” Id.

(quoting Gen. Ins. Co. of Am., 505 S.W.2d at 458).

A bank’s agreement with the depositor is that the bank “will pay according to

the checks of the [depositor], and when [the checks are] drawn in proper form the

bank is bound to presume that the trustee is in the course of lawfully performing his

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duty and to honor themaccordingly.” Id. (second alteration in original) (quoting Gen.

Ins. Co. of Am., 505 S.W.2d at 458–59). The bank does not have a duty “to inquire

whether the fiduciary properly applies funds held in trust. ‘[M]ere negligence on the

part of the depository bank is not sufficient to hold it liable to the principal if the

fiduciary in fact misappropriated the fund.’” Id. (alteration in original) (quoting

Trenton Tr. Co. v. W. Sur. Co., 599 S.W.2d 481, 490 (Mo. 1980) (en banc)). 

The UFL provision at issue in this case provides:

If a check or other bill of exchange is drawn by a fiduciary as such, or

in the name of his principal by a fiduciary empowered to draw such

instrument in the name of his principal, the payee is not bound to inquire

whether the fiduciary is committing a breach of his obligation as

fiduciary in drawing or delivering the instrument, and is not chargeable

with notice that the fiduciary is committing a breach of his obligation as

fiduciary unless he takes the instrument with actual knowledge of such

breach or with knowledge of such facts that this action in taking the

instrument amountsto bad faith. If, however, such instrument is payable

to a personal creditor of the fiduciary and delivered to the creditor in

payment of or as security for a personal debt of the fiduciary to the

actual knowledge of the creditor, or is drawn and delivered in any

transaction known by the payee to be for the personal benefit of the

fiduciary, the creditor or other payee is liable to the principal if the

fiduciary in fact commits a breach of his obligation as fiduciary in

drawing or delivering the instrument.

Mo. Ann. Stat. § 469.270 (emphases added). 

In summary, “[t]he UFL providesthat banks and others who typically deal with

fiduciaries may not be held liable for a fiduciary’s breach of duty absent either

(1) ‘actual knowledge’ of the breach or (2) knowledge ofsufficient facts to constitute

‘bad faith.’” In re Lauer, 98 F.3d at 383 (quoting Trenton, 599 S.W.2d at 491–92).20

As a threshold matter, the district court found that the plaintiffs produced no 20

evidence of a specific transaction involving the misappropriation of fiduciary funds

to support their UFL claims. As to the Womack transaction, the court found that the

plaintiffs only proved “that Sigillito wrote the check from his IOLTA to facilitate the

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1. Actual Knowledge (Count I)

Count I states that PNC, through its predecessor Allegiant, “had actual

knowledge of Sigillito’s breach of fiduciary duty and knew Sigillito was

misappropriating fiduciary funds.”

“‘Actual knowledge,’ asthe terms are used in the Law, means awareness

that, at the moment, the fiduciary was defrauding the principal.” Gen.

Ins. Co. of Am., 505 S.W.2d at 457. “It means express factual

information that the funds are being used for private purposes in

violation of the fiduciary relationship.” Id. A bank may not be found to

possess “actual knowledge” of a breach oftrust merely because “atsome

stage of the handling of the fiduciary account it could, by inspection of

public records or by piecing together all the facts known by different

employees of the bank, become aware of a breach of trust.” Id.

Hendren, 272 S.W.3d at 350.

The plaintiffs argue that PNC’s predecessor, Allegiant, had actual knowledge

that Sigillito was breaching his fiduciary duty to the plaintiffs. According to the

plaintiffs, when Allegiant cashed the Womack check, Allegiant had a present

awareness based on the information learned from MGM that Sigillito was breaching

his fiduciary obligations and defrauding his clients. The plaintiffs assert that the

following purported evidence shows that Allegiant had actual knowledge of

Sigillito’s breach: (1) Allegiant knew in 2001 that Sigillito was a fiduciary and was

the attorney and agent for its IRA customers invested in the BLP; (2) Allegiant knew

purchase of Womack’s unmatured note.” According to the court, the plaintiffs failed

to show “that trust officers at Allegiant Bank knew the source of funds in Sigillito’s

IOLTA or contacted the retail department at Allegiant Bank to inquire about the

IOLTA.” And the court pointed out that “the funds from the IOLTA were paid out to

Womack, not Sigillito.” As a result, the court found no evidence “that Sigillito

misappropriated Womack’s funds” or that “the funds used to purchase the Womack

note were misappropriated.” For purposes of this appeal, even if we assume that the

plaintiffs proved that the Womack transaction involved the misappropriation of

fiduciary funds to support their UFL claims, we nonetheless conclude that these

claims fail. 

-22-
that Sigillito owed fiduciary duties to investors who deposited their money into his

IOLTA; (3) when it cashed the Womack check, Allegiant had a present awareness

based on the information learned from MGM that Sigillito was breaching his

fiduciary obligations and defrauding his clients; (4) Allegiant learned in October

2001 that Sigillito was receiving high fees of 32 percent on the amounts invested in

the BLP by his clients; (5) Allegiant had custody of the loan agreements evidencing

the investment in the BLP and knew that the loan agreements did not disclose or

provide for payment of fees; and (6) Sigillito as an attorney and fiduciary was

self-dealing in breach of his fiduciary duties by receiving undisclosed, high fees on

the money invested in the BLP by his clients.

We conclude that no evidence exists that Allegiant processed any transaction

with actual knowledge that Sigillito was breaching his fiduciary duties. First,

Sigillito’s purchase of the Womack note in September 2001 with an IOLTA check

does not prove that Allegiant had actual knowledge that Sigillito was breaching his

fiduciary duties. The record establishes that during the time period in question,

Missouri IOLTA accounts could hold client funds and, in certain circumstances,

attorney’s fees. Neither party disputes that “[i]n 2001, Allegiant Bank’s

understanding of the nature and function of IOLTA accounts was that . . . an IOLTA

account can be funds for an individual client, multiple clients, and could include

funds that belong to the lawyer, themselves.” Furthermore, no evidence exists that

Allegiant knew for whom Sigillito was purchasing the Womack note; no evidence

existsthat AllegiantBank knew that Sigillito was the ultimate intended purchaser—as

opposed to another principal—of the loan itself. In fact, the record does not establish

what happened to the MGM note following the Womack transaction.

Second, we reject the plaintiffs’ argument that Allegiant had actual knowledge

that Sigillito was breaching his fiduciary duties by receiving high fees on the MGM

loans. As the district court pointed out, no evidence exists that the plaintiffs were

paying the undisclosed fees to Sigillito. Instead, it was the MGM borrowers that had

an agreement with Sigillito to pay the 32-percent “finder’s fee” on the loans.

Specifically, Finn’s deposition provides, “During part of our conversation in the hotel

lobby, John Mark and John Morse [from MGM] explained that 32% of the loans were

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taken as fees and that this was paid to Mr. Sigillito and his associates directly from

the loan funds.” Morse’s declaration likewise confirms that MGM “agreed with

whom for each £100 we borrowed one third (32%) would be deducted at source

representing their commission and we would pay interest of 25% on the full £100 of

the loan.” In their statement of material facts, the plaintiffs stated that “MGM had

been asked to pay further arrangement fees of 32% on [MGM] loans.” 

Furthermore, the plaintiffs’ claims would fail even if the agreement between

MGM and Sigillito required the plaintiffs to pay the undisclosed fees to Sigillito on

the loans. Allegiant’s purported knowledge that these fees were not disclosed in the

loan agreement does not equate to actual knowledge that Sigillito was breaching his

fiduciary duties. As PNC points out, “Sigillito could have told his clients in any

number of ways how he was being paid”; it did not have to be in the loan agreement.

2. Bad Faith (Count III)

Count III states that PNC, through its predecessor Allegiant, violated the UFL

“because it had actual knowledge that [Sigillito] breached his fiduciary obligation.

Alternatively, Allegiant Bank’s actions were commercially unjustifiable and

amounted to bad faith by not investigating the source of the fiduciary funds.”

“The UFL does not define bad faith; however, it does define ‘good faith.’”

Watson Coatings, 436 F.3d at 1041. Under Missouri law, an act is done in “good

faith” if it is “in fact done honestly, whether it be done negligently or not.”

Mo. Ann. Stat. § 469.240(2). While a negligent act does not amount to bad faith, “it

is not entirely accurate to equate ‘bad faith’ with ‘dishonesty,’ if the latter term is

taken to denote a high degree of moral guilt, or evil motives.” Watson Coatings, 436

F.3d at 1041 (quoting Trenton, 599 S.W.2d at 492). “The test of bad faith is ‘whether

it is commercially unjustifiable for the person accepting a negotiable instrument to

disregard and refuse to learn facts readily available. Where circumstancessuggestive

of the fiduciary’s breach become sufficiently obvious it is “bad faith” to remain

passive.’” Id. (quoting Trenton, 599 S.W.2d at 492). For a bank to act in bad faith,

“[t]he facts and circumstances must be so cogent and obvious that to remain passive

would amount to a deliberate desire to evade knowledge because of a belief or fear

-24-
that inquiry would disclose a defect in the transaction.” Hendren, 272 S.W.3d at 350

(quoting Gen. Ins. Co. of Am., 505 S.W.2d at 458).

The plaintiffs argue that PNC’s predecessor, Allegiant, acted in bad faith when

it processed the Womack check. In support, the plaintiffs cite the following purported

evidence: (1) Allegiant, as payee, received the Womack check knowing that it was

drawn by Sigillito as a fiduciary on a fiduciary account; (2) Allegiant knew that

MGM was not the source of the money drawn fromthe IOLTA to repay Womack and

purchase her loan; (3) the Womack check was drawn and delivered in a transaction

that Allegiant knew was for Sigillito’s personal benefit; and (4) Allegiant had actual

knowledge that Sigillito was self-dealing in breach of his fiduciary duties. 

We conclude that the evidence fails to show that Allegiant acted in bad faith.

Sigillito’s drawing of the Womack check on his IOLTA did not put Allegiant on

notice that Sigillito was using fiduciary funds. As explained supra, this is because

during the time period in question, Missouri IOLTA accounts could hold client funds

and, in certain circumstances, attorney’s fees. Again, the plaintiffs have not disputed

that Allegiant’s understanding of an IOLTA was that it could include “funds for an

individual client, multiple clients, and could include funds that belong to the lawyer,

themselves.” Furthermore, the possibility exists that Sigillito was purchasing the

Womack note for another client and not for himself. 

3. Strict Liability (Count II)

Count II alleges that PNC, through its predecessor Allegiant, is strictly liable

under § 469.270 of the UFL due to its receipt of proceeds from Sigillito’s

misappropriation of fiduciary funds.

The plaintiffs’ assertion that PNC is strictly liable is based on the second

sentence of § 469.270, under which 

a payee is liable to the principal for a fiduciary’s breach if either: (1) the

check is payable to a personal creditor of the fiduciary and delivered to

the creditor to pay or secure the fiduciary’s personal debt to the actual

knowledge of the creditor, or (2) the check is drawn and delivered in any

-25-
transaction known by the payee to be for the personal benefit of the

fiduciary.

Chouteau Auto Mart, Inc. v. First Bank of Mo., 55 S.W.3d 358, 360 (Mo. 2001) (en

banc) (citing Mo. Ann. Stat. § 469.270). Under the second alternative of this

sentence, “the Bank must know that [the fiduciary] is using the fiduciary funds for

[his] personal benefit.” Id.

While the plaintiffs argue that this sentence provides for strict liability, we

agree with the district court that “by its very terms, the UFL requires actual

knowledge.” Section 469.270 uses the terms “actual knowledge” and “known by the

payee.” Mo. Ann. Stat. § 469.270. “Knows” under the UFL means “actual knowledge

by the payee [taker] that the transaction is for the personal benefit of the fiduciary.”

Chouteau Auto Mart, Inc., 55 S.W.3d at 361 (alteration in original). “Constructive

knowledge under the UF[L] isinsufficient to impose liability upon the payee because

the UF[L] limits liability ‘to relatively uncommon cases in which the person who

deals with the fiduciary knows all the relevant facts.’” Watson Coatings, 436 F.3d at

1042–43 (quoting Cty. of Macon v. Edgcomb, 654 N.E.2d 598, 602 (Ill. Ct. App.

1995) (reviewing Illinois’s version of the UniformFiduciaries Act, which isidentical

to Missouri’s UFL)).

We have already held that the plaintiffs have failed to present evidence that

Allegiant had actual knowledge that Sigillito was breaching his fiduciary duties. We

also agree with the district court that the plaintiffs did not present evidence that

Allegiant knew that the purchase of the Womack note was for Sigillito’s personal

benefit. As the district court observed, the plaintiffs produced no evidence that “any

bank employee looked into the IOLTA to determine the source of funds used to

purchase the Womack note or to determine for whom Sigillito was purchasing the

note, either himself or someone else.” Like the district court, we conclude that “the

fact that Sigillito could have benefitted from the [Womack] transaction does not

suffice under the UFL to demonstrate that PNC Bank knew that the purchase of

Womack’s note was for Sigillito’s personal benefit.” (Emphasis added.) 

-26-
III. Conclusion

Accordingly, we affirm the judgment of the district court. 

______________________________

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