# U ni te d S ta te s Co ur t of A pp ea ls For the Eig hth Circu it

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No. 1 5- 39 65

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Ph il Ro se m an n; Ju di th Sm it h; Su zan ne Gli ss on ; Cl ark Am os ; Od is Hash ; M ark Bern st ei n; Mari e Me rlo tt i; Ro be rt Gi ve ns ; Pr es to n Am os ; Cl ay to n Gi ve ns ; J il l W it te nm y er; Mary O’ Su ll iv an , in di vi du al ly and as Tru st ee o f th e Tho m as E. O’ Su ll iv an Rev oc ab le Liv in g Tru st an d Nei l J . O’ Su ll iv an Trus t an d Ex ecu to r of Neil J. O’Sul li va n Es ta te ; Do nn a Hog sh oo te r; Th om as Cu rri er; Ru do lf Ou wen s; Barb ara O’Hanl on , as s uc ces so r co -tr us te e o f th e Ang el en e Bl oc k R ev oc ab le Trus t

an d a s t ru st ee o f th e Bar

ba ra J . O’ Han lo n Li vi ng Trus t; Ro y Cu rri er; Ric ha rd Agu il ar; Bil ly H arri so n; Sh ei la Mays; El ai ne Reed ; Ci nd y Merl ot ti ; Bu dd y Que ss en be rry ; Do ro th y

Sm it h; Arle ne Sin co sk i; Jer ry Cro nk it e; Nort hwe st Pro pe rti es (19 73 ), LTD; Mar jori e Ber ns te in ; St an le y

Kuh lo ; Lewi s B ern st ei n; Brad W ern er, t ru st ee o f th e JH Wern er Re vo cab le Trus t; Tom Bert an i; Dary ll Cu rri er; Ji m

Neil l; Lore na Mes se ng er; Hom er Sm it h; Henr y Bart he l; Cas ey

Co ok ; Mar k M erl ot ti ; Do nn a Ber ta ni ; J oh n Ho ll ; Gar y Sm it h; Ch arl es Davi s; Sta nk o Mat ay o; Caro l M cCa rth y , as s uc ces so r co -tr us te e o f th e Ang el en e Bl oc k Rev oc ab le Trus t & co -tr us te e o f th e Car ol A. McCar th y Liv in g Tru st ; Del or es Co ok ; Will ia m

McLem or e; W an da Lave nd er; Caro l Gre en ; Lewi s Vo ll m ar; Daren Mays; Wil li am

W an tl in g; Ben Mi ll er; Kent Stu rh ah n; Sh aro n C ob b; Giffo rd Jo rd an ; M ark Cu nn in gh am ; Bo ni ta Co bb ; M el ba Agu il ar; Tho m as Barn es ; Dor ot hy Ziegl er; Leon ard Ro m an ; J oh n S ha ha n; Bo b M oo re; Ju li a Bar th el ;

Aud rey Hol l; Barb ara J or da n; Eric Wit te nm y er

ll ll ll ll ll ll ll ll ll ll l Pla in ti

ff s - Ap pe ll an ts

v.

St . Lou is Ban k

ll ll ll ll ll ll ll ll ll ll l Defe nd

an t - Ap pe ll ee

__ __ __ __ __ __App eal fro m Uni te d S ta te s Di st ric t Co ur t fo r th e Eas te rn Dis tri ct of M is so ur i - St . Lou is

__ __ __ __ __ __
Su bm it te d: Decem

be r 14 , 20 16 Fil ed : M ay

24 , 20 17

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Befo re WOL LMAN, SMITH, an d B ENTON, Ci rcu it Ju dg es

. 1

__ __ __ __ __ __

SMI TH, Circ ui t J ud ge

.

Thi s cas e co nt in ue s to ch ro ni cl e th e le ga l con se qu en ces flo win g from Mar ti n Si gi ll it o’s Po nz i sc he m e kn own as th e Bri ti sh Len di ng Pro gr am (BLP). Se e, e.g

. , Agu il ar v. PNC Ban k, N.A.
, 85 3 F.3d 39 0 (8t h Cir. 20 17 ); Uni te d St at es v. Si gi ll it o , 75 9 F.3 d 91 3 (8 th Ci r. 20 14 ). Si gi ll it o m ai nt ai ne d co m m erci al acco un ts at de fen da nt
St

. Lou is Ban k du rin g th e Po nz i sc he m e’s li fe. In th is cas e, th e pl ai nt iff s, se ek in g to

reco up lo ss es du e to th e BL P
, su ed St

. Lou is Ban k, al le gi ng (1 ) vi ol at io ns of
Mi ss ou ri’s Uni fo rm Fi du ci ari es Law (UFL); (2 ) ai di ng an d ab et ti ng th e br each of
Si gi ll it o’s fid uc ia ry du ti es ; (3) con sp ira cy to br each Si gi ll it o’s fid uc ia ry du ti es ; an d (4 ) co ns pi racy to vi ol at e th e Rac ke te er In flu en ced an d Co r ru pt Org an iz at io ns Act (RIC O), 18 U.S.C. § 19 62 (d ). The di st ric t co ur t gr an te d su m m ary jud g men t to St

. 2

Lou is Ban k, an d t he pl ai nt iff s ap pe al . W e aff

irm.

The Hon or ab le Lav en sk i R. Sm it h be cam e Ch ie f Ju dg e of th e Uni te d S t a te s 1 Co ur t o f App eal s fo r th e Eig ht h C irc ui t o n M arch 11 , 20 17

.
The Hon or ab le Lin da R. Rea de

, Uni te d St at es Dis tri ct Ju dg e fo r th e Nor th ern 2 Dis tri ct of I owa , si tt in g b y de si gn at io n.

-2

-I. Bac kg ro un d
A. Mar ti n S ig il li to an d t he BLP
Si gi ll it o, an at to rn ey lo cat ed in S t. Lou is

, Mi ss ou ri, an d J. Sco tt Bro wn, an
at to rn ey in Kan sa s, fo rm ed th e BLP in th e la te 19 90 s. The y fo rm ed th e BLP to se rv e

as “ an in ve st m en t pr og ram to faci li ta te lo an s to an Eng li sh la w fir m

. . . to fu nd ‘bla ck
lu ng ’ cl ai m s br ou gh t on be ha lf o f Eng li sh co al m in ers

. In ap pr ox im at el y 20 00 or 20 01
, th e BLP be ga n m ark et in g lo an s fo r pu rp or te d in ve st men t s i n real es ta te
de ve lo pm en ts in Eng la nd .” Agu il ar , 85 3 F.3 d at 39 5. Si gi ll it o op erat ed th e BLP fro m 19 99 to 20 10

. Dur in g th e Po nz i sc he m e, Si gi ll it o di rect ed in ve st or s to de po si t m on ey fo r BLP lo an s in to hi s In te res t on Lawy ers Trus t A c c o u n t ( I O LTA). Bu t in st ead of

se nd in g th e fu nd s to Eng la nd fo r in ve st m en t, Si gi ll it o frau du le nt ly dr ew th e fu nd s ou t
of hi s IOLTA acco un t for di st rib ut io n to hi m se lf an d ot he rs

. In 20 12
, “ Si gi ll it o was

co nv ic te d of m

ul ti pl e co un ts of wire frau d, m ai l frau d, co ns pi racy to co m m it wire an d

m ai l frau d, an d m on ey la un de rin g be cau se of hi s in vo lv em en t in ” th e B LP Po nz i

sc he m e. Si

gi ll it o , 75 9 F .3d at 9 20

.

B. St . Lou is Ban k’s Rol e Fro m 20 06 to 20 10
, Si gi ll it o was a co m m erci al cu st om er a t S t

. Lo ui s Ban k.
S i g i l l i to ’s acco un ts at St

. Lou is Ban k in cl ud ed (1 ) th e Mar ti n T. Si gi ll it o &
Ass oc ia te s, Ltd . b us in es s acco un t (“ Bu si ne ss Acco un t” ); (2 ) th e Ma rti n T. Si gi ll it o & Ass oc ia te s, Ltd

. bu si ne ss ch eck in g acco un t (“ Ch e ck in g Acco un t” ); an d (3 ) th e Mar ti n T. Si gi ll it o Att or ne y At Law IOLTA. In ad di ti on , Si gi ll it o ha d li ne s of cred it

at St

. Lou is Ban k (“ 43 16 Loa n” an d “ 43 82 Loa n” (co ll ect iv el y , “ MTSA Loa ns ”)) an d
a Cer ti fic at e o f Dep os it Acco un t Re gi st ry Serv ic e (CDARS ).

Exc ep t fo r pl ai nt iff Ph il Ro se m an n’ s m on ey , Si gi ll it o de po si te d m os t of th e BLP in ve st or s’ fu nd s in to th e IOLTA an d im m ed ia te ly tra ns ferr ed th em in to an ot he r

a c c o un t. In ve st or s au th or iz ed Si gi ll it o to m an ag e th ei r in ve st m en ts fo r th e m. Ro se m an n si gn ed fo ur ha nd writ te n au th or iz at io ns di rect in g St

. Lou is Ban k to fo ll ow in st ru ct io ns fro m

Sig il li to on sp eci fic tra ns act io ns

.

-3

-Pri m ari ly, two St

. Lo u i s Ban k em pl oyees in te ract ed wit h Si gi ll it o du rin g th e rel ev an t tim e p eri od : Cr ai g Hi ng le an d Ju li e Ohl m s. Hing le se rv ed as a co m m erci al
lo an of fic er at St

. Lou is Ban k fro m 20 05 un ti l 20 12

. Prev io us ly, Hin gl e wor ke d as a lo an o f f i c e r at All eg ia nt Ban k an d kn ew Si gi ll it o as a tru st cu st om er. W hi le at
All eg ia nt Ban k, Hin gl e se t up a co m m erci al li ne of c r e d i t fo r Si gi ll it o an d hi red
Si gi ll it o to crea te a tru st fo r Hin gl e’s ch il dr en

. Dur in g hi s em pl oym en t wit h St

. Lou is

Ban k, Hin gl e he lp ed to se cu re an d se rv ic e li ne s of cred it fo r Si gi ll it o an d Ro se m an n. Hin gl e was ge ne ral ly aware of th e BLP an d kn ew th at Si gi li lt o was in vo lv ed wit h it

.

Ohl m s was th e Ass is ta nt Vice Pres id en t of Treas ur y Man ag em en t at St

. Lou is

Ban k fro m 20 06 to 20 10

. Sh e wor ke d wit h Si gi ll it o an d El i z a be th St ajdu ha r, hi s

ex ecu ti ve as si st an t, on va rio us fin an ci al tra ns act io ns , su ch as wire tra ns fers

, tra ns fers
be twee n a c co un ts , an d ch eck cas hi ng

. St ajdu ha r was res po ns ib le fo r reco nc il in g Si gi ll it o’s IOLTA an d re vi ewin g m on th ly acc ou nt st at em en ts . S ta jdu ha r freq ue nt ly

co nt act ed Ohl m s to tra ns fer m on ey

. At so m e po in t, St ajdu ha r be ga n st eal in g m on ey

ou t of Si gi ll it o’s acco un ts by writ in g ch eck s pa y ab le to “ Eli zab et h P e r i g e n,” he r maid en na m e. Si gi ll it o di sc ov ered St ajdu ha r’s de fal cat io n an d as ke d Ohl m s to t e l l
h i m if an y ch eck s pa y ab le to “ Eli zab et h Peri ge n” were cas he d. Ohl m s cal le d
Si gi ll it o’s of

fic e, sp ok e to St ajdu ha r, an d as ke d he r to te ll Si gi ll it o th at th es e ch eck s

were be in g cas he d. Ohl m s di d no t kn ow th at St ajdu ha r wa s Peri ge n. St ajdu ha r ne ve r

ex pl ai ne d an y th in g ab ou t th e BLP to Ohl m s an d “ di d no t wan t [Oh lm s] to kn ow wha t

was g o i n g on .” Not hi ng in St ajdu ha r’s “ co nv ers at io n wit h [Oh lm s] su gg es te d th at [Oh lm s] kn ew th at [St ajdu ha r] or so m eb od y was st eal in g— jus t th at Si gi ll it o wan te d

to kn ow wh en th es e ch eck s wer e cas he d.”

The on ly di sc us si on s th at St ajdu ha r an d Si gi ll it o ha d wit h Ohl m s “ co nc ern ed
is su es wit h t he acco un ts , and at n o t im e d id th e d is cu ss io ns co nc ern [] the BLP.” At

no ti m e di d St ajdu ha r or Si gi ll it o pr ov id e St

. Lou is Ban k wit h an y fee de du ct io n

au th or it ie s, lo an ag reem en ts , sp read sh eet s, reco nc il ia ti on of the IO L T A
, or ot he r BLP

tra ns act io n reco rd s, no r di d t h e y pr ov id e do cu m en ta ti on sh owi ng whe re in ve st or s

-4

-t h o u g h t th ei r m on ey was go in g or th e in te nt be hi nd de po si ts

. St ajdu ha r “ ne ve r

ex pl ai ne d t o a n yo n e a t [St

. Lou is ] Ban k wha t was go in g on wit h th e BLP
bo rro wers

. . . , an d no on e ex p l a i n e d t he se to [St

. Lou is ] Ban k whe n ch eck s were is su ed wit h va rio us na m es in th e m em o li ne s.” Neit he r S t a jd u h ar no r Si gi ll it o in fo rm ed St

. Lou is Ban k th at Si gi ll it o was on ly en ga ge d in wor k fo r th e BLP, as
op po se d to ot he r types of le ga l wor k. And th ey ne ve r sp ok e w i t h St

. Lou is Ban k
ab ou t ho w BLP inv es tm en ts were di st rib ut ed

. In May 20 10
, St ajdu ha r be li ev ed th at
Si gi ll it o was de frau di ng hi s in ve st or s; ho wev er, sh e ne ve r in fo rm ed St

. Lou is Ban k.

Si gi ll it o en ga ge d in nu mer ou s tra ns ac t i o n s at St

. Lou is Ban k, be gi nn in g in
20 06

. The m os t rel ev an t tra ns act io ns oc cu rred in 20 08
, 20 09
, an d 20 10
, as th or ough ly
de ta il ed in th e di st ric t co ur t’s or de r. Se e Ros ema nn v. St

. Lo ui s Ban k

, No. 14 -CV-9 83

- LRR, Doc . 15 2 a t 8 –1 5 (E.D. Mo . Nov . 17 , 20 15 ).

C. Pro ced

ur al His to ry Si xt y -ei gh t pl ai nt iff

s fil ed su it ag ai ns t St

. Lou is Ban k, al le gi ng (1 ) vi ol at io n of
Mi ss ou ri’s UFL (“ Co un t I”); (2 ) ai di ng an d ab et ti ng br each of fid uc ia ry du ty (“ Co un t II”) ; (3 ) co ns pi racy to br each fid uc ia ry du ty (“ Co un t III” ); an d (4 ) co ns pi racy to
vi ol at e RICO (“ Co un t IV”). St

. Lou is B a n k m ov ed fo r su m m ary jud gm en t on al l
cl ai m s, an d th e pl ai nt iff

s m ov ed for pa rti al su m

m ary jud gm en t on Co un t I. In a 60

- pa ge op in io n, th e di st ric t co ur t gr an te d St

. Lou is Ban k’s m ot io n fo r su m m ary jud gm en t on al l cl ai m s an d de ni ed th e p l a i n t iff s’ m ot io n fo r pa rti al su m m ary jud gm en t o n C ou nt I.

II. Dis cu ss io n The pl ai nt iff

s ap pe al th e di st ric t co ur t’s gr an t of su m m ary jud gm en t to
St . Lou is Ban k on al l clai m s and th e di st ric t cou rt’s den ia l o f su m m ary jud gm en t t o th em on Co un t I (UF L cla im ).

-5

-“ W e rev ie w de no vo a di st ric t c o u r t ’s gr an t or de ni al of su m m ary jud gm en t.” Agu il ar , 85 3 F.3 d at 40 1 (q uo ti ng Myer s v. Lu ts en Mou nt ai ns Co rp ., 58 7
F.3 d 8 91 , 89 2 (8 th Cir . 20 09 )).

A. Co un t I— UFL Cla im
The pl ai nt iff

s arg ue th at th e di st ric t co ur t erre d in gr an ti ng su m m ary jud gm en t

to St

. Lou is Ban k on Co un t I fo r vi ol at io ns of th e UFL. The y co nt en d th at th e

un di sp ut ed ev id en ce es ta bl i s h e s th at (1 ) Si gi ll it o was a fid uc ia ry of th e IOLTA; (2 ) Si gi ll it o br each ed hi s fid uc ia ry d ut y ; an d (3 ) St

. Lou is Ban k (a) ha d act ua l
kn owl ed ge of Si gi ll it o’s br each

, (b ) act ed in ba d fai th

, or (c) kn ew th at Si gi ll it o

rece iv ed a be ne fit fro m

th e b reac h o f hi s fi du ci ary du ty.

W e rece nt ly se t fo rth th e st at e of th e la w reg ard in g Mi ss ou ri’s UFL in Agu il ar

. Se e 85 3 F .3d at 4 05 –0 6. As in Agu il ar , th e UFL pr ov is io n a t i ss ue pro vi de s:

If a ch eck or ot he r bi ll of ex ch an ge is dr awn by a fid uc ia r y a s su ch , o r in th e na m e of hi s pr i n c i p a l b y a fid uc ia ry em po wered to dr aw su ch in st ru m en t in th e na m e of hi s pr in ci pa l, th e pa y ee is no t bo un d to in qu ire whe th er th e fid uc ia ry is co m m it ti ng a b r e a c h of hi s ob li ga ti on as fid uc ia ry in dr awin g or de li ve rin g th e in st ru m en t, an d is no t ch arg eab le wit h no ti ce th at th e fid uc ia ry is co m m it ti ng a br each of hi s ob li ga ti on as fid uc ia ry un le ss he ta kes th e in st ru men t wit h ac tu al kn ow le dg e of su ch br ea ch or wi th kn ow le dg e of s u c h fa ct s th at th is ac ti on in ta ki ng th e in st ru men t amo un ts to ba d fa it h

. If, ho wev er, su ch in st ru m en t is pa ya bl e to a pe r s o n a l c r e d it or of th e fi du ci ar y an d de li ver ed to th e cr ed it or in
pa ymen t of or as se cu ri ty f o r a p er so na l de bt of th e fi du ci ar y to th e

ac tu al kn ow le dg e of th e cr ed it or , or is dr aw n an d de li ver ed in an y tr an sa ct io n kn ow n by th e pa yee to be fo r th e pe rs on al be ne fi t of th e fi du ci ar y , th e cred it or or ot he r pa y ee is li ab le to t h e p r in ci pa l if th e fid uc ia ry in fact co m

m it s a br each of hi s o b l i g a t io n as fid uc ia ry in dr awin g o r de li ve rin g t he in st ru m en t.

Mo . Ann . Sta t. § 46 9.2 70 (em ph as es ad de d)

.

-6

-Co nt rary to th e pl ai nt iff s’ co nt en ti on , § 46 9.2 70 is no t a st ric t-l ia bi li ty st at ut e. Agu il ar , 85 3 F.3 d at 40 9. Und er th e fir st se nt en ce of § 46 9.2 70
, a ba nk is no t “ li ab le
fo r a fid uc ia ry ’s b reac h of du ty ab se nt ei th er (1 ) act ua l k n o w l e dg e of th e br each or (2 ) kn owl ed ge of su f

f i ci en t fact s to co ns ti tu te ba d fai th .” Id

. at 40 6 (q uo ta ti on s

om it te d) . Und er t he sec on d s en te nc e o f § 4 69 .27 0,

a pa y ee is li ab le to th e pr in ci pa l fo r a fid uc ia ry ’s br each if ei th er: (1 ) th e ch eck is pa y ab le to a pe rs on al cred it or of th e fid uc ia ry an d de li ve red to th e cred it or to pa y or se cu re th e fid uc ia ry ’s p ers on al de bt to t he act ua l kn owl ed ge of th e cred it or , or (2 ) th e ch eck is dr awn an d de li ve red in an y tra ns act io n kn ow n by th e pa yee to be fo r th e pe rs on al be n e fit of th e fid uc ia ry

.

Id . a t 40 9 (q uo ti ng Ch ou te au Aut o Mar t, In c

. v

. Fir st Ban k of Mo. , 5 5 S.W .3d 35 8,
36 0 (Mo

. 20 01 ) (en ba nc )). Thu s, in or de r to ho ld th e ba nk li ab le

, § 46 9.2 70 req ui res
pr oo f th at th e Ban k ha ve “ act ua l kn owl ed ge th at it was ap pl yi n g th e pr oc eed s to a d e b t o w ed th e Ban k,” DeLa Ros a v. Far mer s St at e Ban k S/

B
, 47 4 S.W .3d 24 0, 24 5 (Mo

. Ct

. App

. 20 15 ), or “ m us t kn ow th at [th e fid uc ia ry ] is us in g th e fid uc ia ry fu nd s fo r [h is ] pe rs on al be ne fit ,” Agu il ar , 85 3 F.3 d at 40 9 (al te rat io ns in or ig in al ) (q uo ti ng Ch ou te au , 55 S.W .3d at 36 0– 61 ). On th is reco rd

, th e pl ai nt iff s fai l to es ta bl is h ei th er
act ua l k no wled ge or b ad fai th

.

1. Actu al Kn ow le dg e The pl ai nt iff

s arg ue th at nu m ero us e-m ai ls be twe e n S i gi ll it o an d Hin gl e an d
Ohl m s pr ov e Hin gl e ’s a nd Ohl m s’s kn owl ed ge th at Si gi ll it o was m is ap pr op ria ti ng fid uc ia ry fu nd s in th e IOLTA to pa y of f hi s li ne of cred it at St

. Lou i s B a n k

. Fo r Hin gl e an d Ohl m s to ha ve act ua l kn owl ed ge of Si gi ll it o’s br each of h i s f i d uc ia ry du ty, th ey m

us t ha ve ha d an “ aware ne ss th at , at th e m om en t, t h e f i du ci ary was de frau di ng th e pr in ci pa l.” Agu il ar , 85 3 F.3 d at 40 7 (q uo ta ti on s om it te d)

. The y m us t
ha ve po ss es se d “ ex pr es s fact ua l in fo rm at io n” th at Si gi ll it o was us in g th e fid uc ia ry fu nd s “ fo r pr iv at e pu rp os es in vi ol at io n of th e fid uc ia ry rel at io ns hi p.” Id

. (q uo ta ti on s

-7

-om it te d) . St. Lo ui s B an k c an no t b e fo un d t o ha ve “ act ua l kn owl ed ge of a bre ach of

tru st m erel y be cau se at so m e st ag e of th e ha nd li ng of th e fid uc ia ry acco un t it co ul d, by in sp ect io n of pu bl ic reco rd s or by pi eci ng to ge th er al l th e fact s kn own by di ffer en t

em pl oyees of th e ba nk

, be co m e aware of a br each of tru st .” Id

. (q uo ta ti on s om it te d)

.

Hav in g rev ie wed th e rec or d, we ag ree wit h th e di st ric t co ur t th at “ no th in g in
th e e-m ai ls [o ffer ed by th e pl ai nt iff s] ev id en ces an y un de rs ta nd in g wit h res pe ct to th e f i d uc ia ry st at us of th e fu nd s be in g di sc us se d or an y po ss ib le m is ap pr op ria ti o n o f
Pl ai n t i f f s ’ fu nd s.” The se e-m ai ls an d ot he r reco rd ev id en ce sh ow Si gi ll it o m ov in g la rg e su m s of m on ey be twee n hi s IOLTA, Bu si ne ss Acco un t, an d MTSA Loa ns

. Bu t,

as th e d is tri ct co ur t reco gn iz ed , n on e of th is “ ev id en ce sh ow[ s] t ha t St . Lo ui s B an k
ha d a du ty to in ve st ig at e th es e tra ns act io ns , or th at St

. Lou is Ban k’s e mp lo y ees sh ou ld ha ve be en on no ti ce t ha t Si gi ll it o was m is us in g fu nd s [f ro m th e IOLTA] .”

The m ul ti pl e-s ou rce na tu re of th e IOLTA pr ecl ud ed St

. Lou is Ban k an d it s

em pl oyees fro m kn owi ng wh e t h e r tra ns act io ns in th e acco un t in vo lv ed fid uc ia ry fu nd s. As we reco gn iz ed in Agu il ar , “ [t]he fu nd s he ld in a Mi ss ou ri IOLTA

. . . m ay

co nt ai n a va rie ty of fu nd s, in cl ud in g in di vi du al cl i e nt fu nd s, m ul ti pl e cl ie nt fu nd s,

an d at to rn ey’s fe es .” 85 3 F.3 d at 39 7 (em ph as is ad de d)

. In th e pr es en t cas e, St

. Lou is

3

Th e 20 06 an d 20 07 ve rs io ns of th e Mi ss ou ri Su pr em e Co ur t Ru le s are th e 3

sa m e a s t h a t se t fo rth in Agu il ar , 85 3 F.3 d at 39 7 n.5

. The 20 08
, 20 09
, an d 20 10

ve rs io ns pr ov id e th at “ [a] la w y er sh al l de po si t in to a cl ie nt tru st acco un t le ga l fees

an d ex pe ns es th at ha ve be en pa id in ad va nc e, to be wit hd rawn by th e la wy er on ly as fees are earn ed or ex pe ns es in cu rred .” Mo

. Su p. Ct

. R. 4- 1.1 5( e) (2 00 8, 20 09
, 20 10 );

se e al so Mo . S up . C t. R. 4- 1.1 5 cm t. 3 (2 00 8, 20 09 , 2 01 0) (“ Lawy ers of te n rece iv e fu nd s f r om whi ch th e la wy er’s fee wil l be pa id . Th e la wy er is no t req ui red to rem it
to th e cl ie nt fu nd s th at th e la wy er reas on ab ly be li ev es rep res en t fees owe d. Howev er,

a la wy er m ay no t ho ld fu nd s to co erce a cl ie nt in to acce pt in g th e la wy er’s co nt en ti on

. The di sp ut ed po rti on of th e fu nd s m us t be ke pt in a tru st acco un t, a n d t h e l a w yer sh ou ld su gg es t m ean s fo r pr om pt res ol ut io n o f th e di sp ut e, su ch as arb it rat io n. The

un di sp ut ed po rti on of t he fun ds sh al l b e p ro m pt ly dis tri bu te d.” ).

-8

-Ban k of

fere d un re bu tt ed ex pe rt t e s t im on y fro m cert ifi ed pu bl ic acco un ta nt Jo se ph Hop ki ns th at an IOLTA in cl ud es “ [r]etai ne r f e e s pa id to la wy ers by cl ie nt s whi ch
be co m e at to rn ey s’ fees as le ga l wor k is pe rfo rm ed ”; “ [j] ud gm en ts or se tt le m en ts pa id
th at wil l be sp li t be twee n th e la wy er an d cl ie nt at a la te r da te ”; “ [p ]ay m en ts fro m th ird

pa rti es fo r ot he r act iv it y

su ch as i nv es tm en ts to be m ad e b y th e la wy er o n be ha lf of
th e cl ie nt wher eb y

th e la wy er wi ll earn a fee” ; and “ [r]eim bu rs em en t b y

cli en ts an d

no n- cl ie nt s for exp en se s in cu rred by th e la wy er.” Hop ki ns id en ti fie d as a “ co m m on

sc en ari o” an IOLTA “ ho ld [in g] fu nd s pa id by th e cl ie nt up fro nt as an ad va nc e on fees an d ex pe ns es be fo re th e wor k is do ne an d pr io r to th e cl ie nt ’s ap p r ov al of
bi ll in g.” Co ns is te nt wit h Agu il ar , Hop ki ns ex pl ai ne d t ha t fu nd s i n a n IOLTA “ m ay b e o wed to th e be ne fic ia rie s of th e tru st , th e at to rn ey in vo lv ed an d un rel at ed t h i r d

pa rti es .”

The pl ai nt iff

s arg ue th at Hop ki ns ’s c on cl us or y st at em en t th at “ [t]he f u n ds in
th e acco u n t m ay be owe d to

. . . th e at to rn ey in vo lv ed ” ig no res th e fact th at cl ie nt
fu nd s in an IOLTA t ha t a r e p a i d as an ad va nc e on fees rem ai n cl ie nt pr op ert y un ti l
th e fees are earn ed ; on ce th os e fees are earn ed

, th e la wy er m us t rem ov e hi s fees fro m th e IOLTA. In hi s rep or t, Hop ki ns di d reco gn iz e th at “ [o ]nce th e la wy er earn s th e fees

an d bi ll s t he cli en t, an d u po n th e cl ie nt ’s ap pr ov al of th e la wy er’s bil li ng , th e fu nd s

a r e n o l o n ge r pr op ert y of th e cl ie nt an d sh ou ld be rem ov ed fro m th e la wy er’s [IOLTA] .” The pl ai nt iff

s ha ve no t pr ov id ed ev id en ce th at an y fu nd s th at Si gi ll it o

re mov ed fr o m t h e IOLTA were no t pr op erl y earn ed fees or fu nd s th at he was
ot he rwis e au th or iz ed to rem ov e.

Fu r th erm or e, ot he r un di sp ut ed ev id en ce sh ows th at St

. Lou is Ban k’s

un de rs ta nd in g of th e IOLTA—ev en if m is ta ke n— was th at an IOLTA m ay co ns is t of

m on ey be lo ng in g to th e la wy er. Se e Agu il ar , 85 3 F.3 d at 40 7 (“ Neit he r pa rty di sp ut es th at ‘[i]n 20 01
, All eg ia nt Ban k’s un de rs ta nd in g of th e na tu re an d fu nc ti on of IOLTA

-9

-acco un ts was th at

. . . an IOLTA acco un t can b e fu nd s fo r an in di vi du al cl ie nt ,

m ul ti p l e cl ie nt s, an d co ul d in cl ud e fu nd s th at be lo ng to th e la wy er, th em se lv es .’ ” (el li ps is an d alt erat io n in or ig in al )). Fo r ex am pl e, Kim be rli Pal m er, Exe cu ti ve Vice
Pres id en t an d C hi ef Op erat io ns Offic er o f St . Lou is Ban k, d ecl ared th at

un li ke a typic al tru st acco un t in whi ch th e Ban k m ig ht kn ow th e id en ti ty of sp eci fic be ne fic ia rie s, an IOLTA Acco un t can co nt ai n fu nd s of

m ul ti pl e a n d e v er-c ha ng in g be ne fic ia rie s, as well as th ird pa rty fu nd s

an d fees earn ed by th e at to rn ey

. The B a n k d i d no t ha ve Si gi ll it o’s de ta il ed reco rd s co nc ern in g IOLTA fu nd s, an d di d no t kn ow whe th er a gi ve n t ran sa ct io n was au th or iz ed or n ot

.

The un di sp ut ed ev id en ce als o sh ows th at St

. Lou is Ban k’s em pl oyees lack ed act ua l
kn owl ed ge of Si gi ll it o’s br each of fid uc ia ry du ty. The ev id en ce sh ows th at Hin gl e di d

no t kn ow whe th er m on ey in Si gi ll it o’s IOLTA acco un t was rece iv ed fro m in ve st or s, la w cl ie nt s, or ot he rs , an d ha d no way of kn owi ng th e so ur ce of th e fu nd s. Lik ewis e, Ohl m s ha d no un de rs ta nd in g of Si gi ll it o’s la w pr act ic e an d la ck ed kn owl ed ge of th e
pa rti es in vo lv ed in th e va rio us tra ns act io ns , reas on s fo r th e tra ns fers

, or whe th er th e

m on ey be lo ng ed to Si gi ll it o. And St ajdu ha r, Si gi ll it o ’s as si st an t, te st ifi ed th at (1 )
S t. Lou is Ban k was gi ve n no in fo rm at io n co nc ern in g th e BLP; (2 ) St ajdu ha r an d
Si gi ll it o wou ld co nt act Ohl m s to ha nd le tra ns act io ns , bu t St ajdu ha r ne ve r ex pl ai ne d why th ey were m ad e or whe th er the y pe rta in ed to th e BLP; (3 ) St ajdu ha r ne ve r sa w

an y do cu m en ts ab ou t th e BLP tha t were se nt to St

. Lou is Ban k; (4 ) St ajdu ha r ne ve r
ga ve St . Lo ui s Ban k an y br eak do wn of th e pr oc es s, lo an ag reem en ts , s pr ead sh eet s,

or in st ru ct io ns sh o win g ho w in ve st or s’ m on ey was be in g us ed ; an d (5 ) St ajdu ha r

ne ve r sa w an y th i n g i n d ic at in g th at St

. Lou is Ban k ha d kn owl ed ge of wha t was ha pp en in g wi th th e BLP.

As a res ul t, we ho ld th at th e pl ai nt iff s ha ve fai le d to sh ow th at St

. Lou is Ban k
ha d a ct ua l k no wled ge th at Sig il li to m is ap pr op ria te d fi du ci ary fu nd s.

-1 0-2. Bad Fai th
The pl ai nt iff

s arg ue th at th ey pr ov ed t h a t S t

. Lo ui s Ban k act ed in ba d fai th
whe n it “ co ve red up ” “ two m at eri al ov erd raft s in th e IOLTA.” The fir st ov erd raft

o c c u r r e d on Apr il 20
, 20 09
, whe n th e IOLTA was ov erd rawn in th e am ou nt o f $249 ,03 2.4 6. Si gi ll it o ad dr es se d th e de fic ie nc y by di rect in g St

. Lou is Ban k to tr an sf er $2 88 ,20 0.2 5 fro m th e Bu si ne ss Acco un t in to th e IOLTA, th ereb y res o l v in g th e

ov erd raft

. The se co nd ov erd raft oc cu rred on May 20
, 20 09
, whe n Si gi ll it o w i r e d $1 41 ,00 0 fro m th e IOLTA to th e B r i t i s h A merica n Gro up

. Thi s wire crea te d an

ov erd raft in th e IOLTA of $ 14 3,8 39 .12

. Als o on May 20
, 20 09
, Hin gl e si gn ed th e ch eck di sb ur si ng $1 50 ,00 0 fr om th e 4 38 2 Lo an wit h c he ck no . 34 24

.

The pl ai nt iff

s arg ue th at “ Si gi ll it o’s $2 49 ,03 2 an d $1 43 ,83 9 ov erd raft [s ] of hi s IOLTA pu t St

. Lou is Ban k on no ti ce th at Si gi ll it o was m is ap pr op ria ti ng cl ie nt fu nd s. St

. Lou is Ban k ev en ad va nc ed fu nd s fro m it s li n e o f cred it to co ve r th e ov erd raft .”
The y as se rt th at “ [a] ch eck on a cl ie nt acco un t th at i s di sh on or ed fo r in su ffi ci en t
fu nd s is of

te n ev id en ce th at a la wye r ha s im pr op erl y co m

m in gl ed cl ie nt fu nd s, in
vi ol at io n of hi s or he r fid uc ia ry du ti es .” (Qu ot in g Ler ne r v. Fl e e t Ban k, N.A.
, 45 9
F.3 d 27 3, 28 0 (2 d Ci r. 20 06 ).) The y m ai nt ai n th at “ IOLTA ov erd raft s are ‘ind ic at iv e of tru st wit hd rawal s fo r no nt ru st pu rp os es .’ ” (Qu ot in g Ler ne r , 45 9 F .3d at 2 88 .)

“ The te st of ba d fai th is ‘w he th er it is co m m erci al ly un

jus ti fia bl e fo r th e pe rs on acce pt in g a ne go ti ab le in st ru m en t to di sr eg ard an d refu se to le arn fact s read il y av ai la bl e. W he re ci r c u m st an ces su gg es ti ve of th e fid uc ia ry ’s br e a c h be co m e su ffi ci en tl y ob vi ou s it is “ ba d fai th ” to

rem ai n pa ss iv e.’” [ W

at so n Co at in gs , In c. v. Am. Exp re ss Tr av el Rela te d Se rv s., In c ., 43 6 F.3 d 10 36
, 10 41 (8 th Ci r. 20 06 )] (q uo ti ng Tr en to n [ Tr

. Co

. v. W

. Su r. Co

. ], 59 9 S.W .2d [4 81 ,] 49 2 [(M o. 19 80 (en ba nc )]). Fo r

a ba nk to act in ba d fai th

, “ [t]he fact s an d ci rcu m st an c e s must be so

co ge nt an d ob vi ou s th at to rem ai n pa ss iv e wou ld am ou nt to a de li be rat e de si re to ev ad e kn owl ed ge be cau se of a be li ef or fear th at in qu iry wou ld di sc lo se a de fect in th e tra ns a c t i o n.” Hen dr en [ v. Far mer s St at e Ban k, S.B. ], 27 2 S.W .3d [3 45 ,] 35 0 [(Mo

. Ct

. App

. 20 08 )] (q uo ti ng Gen

. In s.

-1 1-Co . of Am. [ v. Co mmerc e Ban k o f S t. Ch ar le s ], 50 5 S .W .2d [45 4,] 45 8 [(M o. Ct . App . 19 74 )]).

Agu il ar , 85 3 F .3d at 4 08 (fi fth alt erat io n i n o rig in al ).

In Buf fe ts

, In c. v. Lei sc ho w , we co nc lu de d th at a ba nk ’s to le rat io n of a se ve re
pr act ic e of ov erd raft s or si gn ifi can t ev id en ce of ch eck ki ti ng am ou nt s to ba d fai th (as

op po se d to actu al kn owl ed ge ) un de r th e Uni fo rm Fi du ci ari es Act on ly whe n th e ba nk 4

kn ow s e i t he r a de si gn at ed fid uc ia ry acco un t or a se gr eg at ed acco un t co nt ai ns th e
pr in ci pa l’s fu nd s. 7 32 F.3d 88 9, 9 00 –0 1 (8 th Cir . 20 13 ).W e ex pl ai ne d:

W he re fu nd s are he ld in a fid uc ia ry acco un t an d th e ba nk is th us aware th at th ey do no t be lo ng to th e fid uc ia ry , t h e n a t u r e of th e acco un t

ne ces sa ril y pu ts th e ba nk on no ti ce of fid uc ia r y o b l i ga ti on s. So it fo ll ows th at th e fid uc ia ry ’s su sp ic io us ba nk in g p r a ct ic es al on e can in di cat e a vi ol at io n of th os e ob li ga ti on s an d th e ba nk ’s ba d fai th

. W he re fu nd s are he ld in th e fid uc ia ry ’s pe rs on al acc o un t, by co nt ras t,

ov erd raft s an d ch eck ki ti ng do no t ne ces sa ril y im pl ic at e a fiduc iary du ty. The ba nk m ay be un aware th at an y fu nd s are he ld su bjec t to a fid uc ia ry ob l i g a t i o n

. Even if th e ba nk kn ow s th at fi du ci ar y ob li ga ti on s ap

pl y to

so me fu nd

s in th e ac co un t, ov er dr af ts an d ch eck ki ti ng may no t in vo lv e th os e sp eci

fi c fu nd s, so th e ba nk may no t be ac ti ng in ba d fa it h in
pr oc es si ng

an y p ar ti cu la r t ra ns ac ti on

.

Giv en th is di st in ct io n,

. . . a ba nk ’s to le rat io n of “ a se ve re pr act ic e of ov erd raft s or si gn ifi can t ev id en ce of ch eck ki ti ng ” by it se lf am ou nt s to ba d fai th on ly in th e co nt ex t of ei th er a de si gn at ed fid uc ia ry acco un t

or a s e g reg at ed acco un t th at th e ba nk kn ows co nt ai ns th e pr in ci pa l’s fu nd s.

“ The UFL is th e Mi ss ou ri c od ifi cat io n o f th e Uni fo rm Fid uc ia rie s Act

. . . .” 4 Agu il ar , 85 3 F.3 d at 40 5 (q uo ta ti on s om it te d)

. Buf fe ts in vo lv ed Mi nn es ot a’s Uni fo rm Fi du ci ari es Act. 7 32 F.3d at 8 98

.
-1 2-Id

. (s eco nd em ph as is ad de d) (q uo ti ng McCa rt ne y v. Rich fi el d Ban k & Tr

. Co

. , Nos

. CX– 00 –1 46 6, C1 –0 0– 14 67
, 20 01 W L 43 61 54
, at *4 (Mi nn

. Ct

. App

. May 1, 20 01 )).

Here, th e IOLTA is a fid uc ia ry acco un t. Bu t as Hop ki ns ’s un reb ut te d ex pe rt

te st im on y sh ows , an IOLTA is a “ de m an d de po si t” acco un t, di ffer en t fro m a typic al

tru st acco un t. A tru st acco un t at a ba nk is “ an acco un t whe reb y th e tru st de pa rtment
of a ba nk

. . . is th e tru st ee of th e acco un t an d ha s pr im ary fid uc ia ry res po ns ib il it y to

an in di vi du al or li m it ed gr ou p of ind iv id ua ls

. . . who are th e be ne fic ia rie s of su ch a
tru st .” Fu nd s in an IOLTA, ho wev er, “ m ay be owe d to th e be ne fic ia rie s of th e tru st , th e at to rn ey in vo lv ed an d un rel at ed th ird pa r t i e s .” Hop ki ns st at ed th at “ th e act iv it y in th e IOLTA co m

po rt s wit h th e act iv it y y ou wou ld an ti ci pa te se ei ng wit h an
at to rn ey .” Fi na ll y , Hop ki ns st at ed th at th ere was no act iv it y in or pa tt ern s th at le d hi m
to be li ev e th at St

. Lou is Ban k, “ act in g in a co m m erci al ly reas on ab le ba nk in g m an ne r, sh ou ld ha ve kn own ” th at Sig il li to was m is ap pr op ria ti ng cli en t fu nd s.

Bec au se an IOLTA is no t a typic al tru st acco un t an d m ay in vo lv e a va rie ty of
fu nd s— so m e of w hi ch are at to rn ey ’s fees th at th e at to rn ey wit hd raws whe n

earn e d

— e v en if St

. Lou is Ban k kn ew th at Si gi ll it o ha d fid uc ia ry ob li ga ti on s as to
“s o me f u n ds in th e acco un t, ov erd raft s an d ch eck ki ti ng m ay no t in vo lv e th os e
sp eci fic fu nd s, so th e ba nk m ay no t be act in g in ba d fai th in pr oc es si ng an y pa rti cu la r
tra ns act io n.” Buf

fe ts , 73 2 F .3d at 9 01

.

And , t he un di sp ut ed fact s s ho w St. Lo ui s B an k’s be li ef th at “ un li ke a typic al

tru st acco un t in whi ch th e Ban k m ig ht kn ow th e id en ti ty of sp eci fic be ne fic ia rie s, an IOLTA Acco un t can co nt ai n fu nd s of m ul ti pl e an d ev er-c ha ng in g be ne fic ia rie s, as well as t hi rd pa rty fun ds an d fe es earn ed by the att or ne y .”

Fina lly

, in unc ont

ro ve rt ed te st im on y , Pal m er ex pl ai ne d th at th e ov erd raft s were

cau se d by Si gi ll it o’s m is ta ke s in vo lv in g tra ns fers to or fro m th e wro ng acco un ts , or th e ti m in g of th e tra ns fers . B ot h ov erd raft s were co r r e c t ed by t ran sf ers us in g fu nd s

-1 3-al read y av ai la bl e pr io r to th e ov er d r a fts

. And Hin gl e st at ed th at th e in crea se to th e

M TS A Lo an s was di sc us se d wit h Si gi ll it o on Mar ch 27
, 20 09
, well be fo re th e Apr il 20 ov erd raft

, an d it was au th or iz ed on May 18
, pr io r to th e Ma y 20 ov erd raft

.

Acco rd in gl y , we co nc lu de th at th e pl ai nt iff s ha ve fai le d to pr ov e th at St

. Lou is

Ban k a ct ed in ba d fa it h.

3. Pers on al Bene fi t The pl ai nt iff

s al so arg ue th at St. Lo ui s B an k i s l ia bl e u nd er t he UFL be cau se it kn ew th at Si gi ll it o was “ us in g th e fid uc ia ry fu nd s fo r [h i s ] p e rs on al be ne fit .”
Ch ou te au , 55 S.W .3d at 3 60 –6 1. Be fo re t he di st ric t co ur t, t he pl ai nt iff s ar gu ed th at
Si gi ll it o hel d per so na l deb ts at St

. Lou is Ban k in th e fo rm of th e 43 16 Loa n and th e 43 82 Loa n (MTSA li ne s- of -cre di t lo an s) an d

, t h e r e fo re, St

. Lou is Ban k is st ric tl y li ab le fo r pa y m en ts on th es e lo an s. The pl ai nt iff s no te d th at Si gi ll it o was a pe rs on al

gu aran to r of th e 43 16 Loa n an d th e 43 82 Loa n an d arg ue d th at “ [a]s gu a r a n t o r of
th es e lo an s, t he de bt owed to St. Lo ui s B an k was a pe rs on al de bt of S ig il li to .”

St

. Lou is Ban k co rrec tl y po in ts ou t th at , on ap pe al

, th e pl ai nt iff s ha ve

“ ab an do n[ ed ] th ei r a r g u men ts ab ou t th e MTSA lo an s, on ly to m ak e si m il ar cl ai m s

a b o u t r e p ay m en ts of a lo an to Ro se m an n.” Sp eci fic al ly, th e pl ai nt iff s arg ue th a t
Si gi ll it o pl ed ge d hi s co ll at eral f o r R os em an n’s $6 00 ,00 0 li ne -o f-cr ed it lo an ; th e

co ll at eral fo r th is li ne of cred it “ was th e as si gn m en t of th e CDARS acco un t of MTSA
in th e am ou nt of $3 27 ,55 6 an d th e CDARS acco un t of Mar ti n T. Si gi ll i t o i n t he

am ou nt of $2 80 ,22 4.” The y arg ue th at Si gi ll it o pe rs on al ly be ne fit te d fro m th e
rep ay m en t o f Ro se m an n’s l oa n “ by hav in g h is co ll at eral ret ur ne d t o h im .”

W e ag ree wit h St

. Lou is Ban k th at th e pl ai nt iff s ha ve fa i l e d t o pr ov id e an y l e g a l au th or it y th at rep ay m en ts of de bt s gu aran te ed by a fid uc ia ry are fo r th e fid uc ia ry ’s “ pe rs on al be ne fit .” Thi s is no t a cas e in whi ch Ro se m an n de fau lt ed on th e lo an , t he reb y res ul ti ng in hi m be in g pe rs on al ly l ia bl e fo r th e d e bt on th e gu aran to r.

-1 4-Cf

. Ent er

. Ban k & Tr

. v. Bar ne y Ash ne r Homes

, I

n c

. , 30 0 P.3 d 11 5 (Kan

. Ct

. App

. 20 13 ) (m em or an du m

op in io n) (li ab il it y

fol lo win g d efau lt on lo an ).

The pl a i n t i f

f s al so arg ue th at St . Lo ui s Ban k is li ab le fo r acce pt in g fid uc ia ry fu nd s fro m Si gi ll i t o’s IOLTA to rep ay hi s co rp or at e lo an

. The y m ai nt ai n th at
St

. Lou is Ban k be ne fit te d fro m th is rep ay m en t. Acco rd in g to th e pl ai nt iff s, “ [s ]hor tl y aft er acce pt in g di rect pa ym e n t s fo r Ro se m an n, St

. Lou is Ban k on May 19
, 20 08
,

acce pt ed a ch eck fo r $1 75 ,05 3.4 7 ‘as pa y ee a n d dr awee ba nk ’ an d ap pl ie d [th at

am ou nt ] ‘to pa y of

f th e MTSA li ne of cred it

, lo an nu m be r 43 16 00 .’ ” Bu t th es e MTSA
lo an s were no t pe rs on al de bt s of Si gi ll it o’s. St ajdu ha r te st ifi ed th at th e MTSA Loa ns

were no t lo an s to Si gi l l i t o p ers on al ly, an d sh e kn ew of no pa y m en ts on a pe rs on al
lo an or pe rs on al de bt of Si gi ll it o fro m th e IOLTA. Bo th Pal m er an d Hin gl e te st ifi ed
th at St

. Lou is Ban k ’s lo an s were m ad e to MTSA an d were no t pe rs on al lo an s to
Si gi ll it o an d were no t rep or te d on hi s pe rs on al cred it bu reau rep or t be cau se th ey were

no t pe rs o n a l l o a n s

. Pal m er te st ifi ed th at Si gi ll it o ha d no pe rs on al de bt owe d to St

. Lou i s B a n k an d th at St . Lo ui s Ban k ha d no kn owl ed ge of an y pa y m en t by Si gi ll it o of a pe rs on al de bt

. Sh e al so te st ifi ed th at al th ou gh Si gi ll it o an d hi s wife ga ve St

. Lou is Ban k Co m

m erci al Gua ran ti es on MTSA Loa ns , th ey were no t a pe rs on al
de bt of Si gi ll it o an d w e r e n o t cl as si fie d as su ch by St

. Lou is Ban k. As th e di st ric t

c o u r t st at ed

, th e ev id en ce in th e reco rd de m on st rat es th at th e 43 16 Loa n an d th e 43 82 Loa n were co m

m erci al lo an s m ad e to Mar ti n T. Si gi ll it o & Ass oc ia te s an d were

ne ve r cl as si fie d a s p ers on al lo an s.

As a res ul t, we co nc lu de th at th e pl ai nt iff s ha ve fai le d to sh ow th at St . Lo ui s Ban k kn ew th at Si gi ll it o was “ us in g th e f id uc ia ry fu nd s fo r [h is ] pe rs on al be ne fit .”
Ch ou te au , 55 S.W .3d at 3 60 –6 1.

W e ho ld th at th e di st ric t co ur t pr op erl y de ni ed su m m ary jud gm en t to th e pl ai nt iff s on t h e i r U F L cl ai m an d gr an te d su m m ary jud gm en t to St

. Lou is Ban k on th at cla im

.

-1 5-B. Co un ts II, III, a nd IV—Co mmon -la w Cl ai ms an d RIC O Cla im
The pl ai nt iff

s arg ue th at th e di st ric t co ur t erre d in gr an ti ng su m m ary jud gm en t

to St

. Lou is Ban k on th e co m m on -la w cl ai m s se t fo rth in Co un ts II an d III: ai di ng an d
ab et ti ng br each of fid uc ia ry du ty an d co ns pi racy to br each fid uc ia ry du ty. The y al so

as se rt th at th e di st ric t co ur t erre d in gr an ti ng su m m ary jud gm en t to St

. Lou is Ban k on th ei r cl ai m

th at St. Lo ui s B an k c on sp ire d wi th Sig il li to to vi ol at e RIC O.

Und er Mi ss ou ri la w, to pr ov e th at St

. Lou is Ban k aid ed an d ab et te d Si gi ll it o 5

in th e br eac h o f hi s fid uc ia ry du ty, th e pl ai nt iff s m us t es ta bl is h th at St . Lo ui s Ban k

“ kn e[ w] th at [Si gi ll it o’s] co nd uct co nst itu te [d ] a br ea ch of du ty an d g[ av e] su bs ta nt ia l

as si st an ce or en co ur ag emen t to [Si gi ll it o] so to co nd uc t hi m se lf.” Agu il ar , 85 3 F.3 d

at 40 3 (f irs t an d fo ur th alt erat io ns in or ig in al ) (q uo ti ng Bra dl ey v. Ray , 90 4 S .W .2d
30 2, 31 5 (Mo

. Ct

. App

. 19 95 )). The pl ai nt iff s m us t sh ow th at S t

. Lo ui s Ban k

“ affi rm at iv el y act [ed ] to ai d [Si gi ll it o].” Id

. (fi rs t al te rat io n in or ig in al ) (q uo ti ng Bra dl ey , 90 4 S.W .2d at 31 5)

. St

. Lou is Ban k is no t li ab le fo r a m ere “ fai lu re to ob ject

to th e to rti ou s ac t [o r it s] m ere pre se nc e at th e co m m is si on of

th e to rt.” Id . (qu ot in g Bra dl ey , 90 4 S.W .2d at 31 5)

. “ [M]ere ne ga ti ve acq ui es cen ce” is in su ffi ci en t to ho ld
St

. Lou is Ban k li a b l e; in st ead

, it m us t ha ve “ as so ci at e[d ] [it se lf] in so m e way wit h [Si gi ll it o] i n br in gi ng ab ou t th e co m m is si on of th e c rime.” Id . ( se co nd al te rat io n in

or ig in al ) (q uo ti ng Bra dl ey , 90 4 S .W .2d at 3 15 ).

To pr ov e th at St . Lo ui s Ban k co ns pi red wit h Si gi ll i t o t o br each hi s fid uc ia ry du ti es , th e pl ai nt iff

s “ m us t pr ov e th e el em en ts of ci vi l co ns pi racy.” Id

. at 40 2. Tho se el em en ts in cl ud e:

(1 ) two or m or e pe rs on s, (2 ) an ob ject to be acco m

pl is he d, (3 ) a m eet in g of th e m in ds on th e ob

ject or co ur se of act io n, (4 ) on e or m or e un la wfu l

ov ert act s, an d (5 ) res ul ti ng da m ag es

. The es se nc e of a ci vi l co ns pi racy is an un la wf

ul act ag reed up on by two o r m or e p ers on s.

The pa rti es ag ree t ha t M is so ur i l aw ap pl ie s t o t he co m m on -la w cla im s. 5

-1 6-Id

. at 40 2– 03 (q uo ti ng Mac key v. Mac key

, 91 4 S.W .2d 48
, 50 (Mo

. Ct

. App

. 19 96 )).

The th ird el em en t req ui res th e pl ai nt iff s to pr ov e “ th at an y two of th e Defen da nt s in vo lv ed in th e al le ge d ci vi l co ns pi racy met , ne go ti at ed

, an d m or e im po rta nt ly,
ach ie ve d a m eet in g of th e m in ds to carr y ou t so m e un l a w f ul pu rp os e.” Id

. at 40 3 (q uo ti ng In te rt e l

, In c. v. Se dg wi ck Cl ai ms Mgmt

. Se rv s., In c. , 20 4 S.W .3d 18 3,
20 4– 05 (Mo

. Ct

. App

. 20 06 )). To pr ov e th at St

. Lou is Ban k an d S i g i l li to ha d a

“ m eet in g of th e m in ds ,” th e pl a i n t i f f s mu s t sh ow th at th e pa rti es ha d “ a un it y of

pu rp os e or a co m

m on de si gn a n d u nd ers ta nd in g.” Id

. (q uo ti ng Glo b. Co nt ro l Sy s., In c. v. Lu eb be rt , No . 4 :1 4- CV-6 57 -DGK, 2 01 6 W L 9 10 19 0, at *2 (W. D. M o. Mar

. 9, 2 01 6) ).

To pr ov e th at St

. Lou is Ban k co ns pi red wit h Si gi ll it o to vi ol at e R ICO, th e pl ai nt iff s m us t no t on ly pr ov e th e el em en ts of a RICO vi ol at io n bu t al so th at St

. Lou is

Ban k “ ob jecti ve ly m an ife st ed an ag reem en t t o pa rti ci pa te

. . . in th e affa irs of [th e]

en te rp ris e.” Id

. at 40 2 (el li ps is an d al te rat io n in or ig in al ) (q uo ti ng Uni te d St at es v. Dar de n , 70 F.3 d 15 07
, 15 18 (8 th Ci r. 19 95 )). Pro vi n g t h a t S t

. Lou is Ban k m erel y

as so ci at ed wit h Si gi ll it o, kn ew ab ou t th e co ns pi racy, an d was pr es en t du rin g

co ns pi rat or ia l di sc us si on s is in su ffi ci en t to sh ow th at St

. Lou is Ban k co ns pi red wit h
Si gi ll it o to vi ol at e RICO. Id

. In st ead

, th e pl ai nt iff s m u s t pr od uc e ev id en ce th at
St

. Lou is Ban k “ was aware of th e sc op e of th e en te rp ris e an d in te nd ed to pa rti ci pa te
in it .” Id . (qu ot in g Uni te d S ta te s v. S te ph en s , 46 F.3d 58 7, 5 92 (7t h C ir. 1 99 5) ).

The pl ai nt iff

s arg ue th at St

. Lou i s Ban k’s ha nd li ng of th e ov erd raft s in th e IOLTA pr ov es th at it kn ew th at Si gi ll it o was br each in g hi s fid uc ia ry du ty. The y al so refe ren ce se ve ral e-m ai ls to pr ov e th at St

. Lou is Ban k, as pa y ee an d dr awee ba nk

,

acce pt ed m il li o n s i n f

i d uc ia ry fu nd s fo r pa y m en t of pr in ci pa l an d in te res t on Si gi ll it o’s pe rs on al li ne of cred it

. The y co nt en d th at th ey ha ve pr ov en a co m m on -la w

co ns pi racy an d co ns pi racy to vi ol at e RICO by pr od uc in g ev id en ce th at Si gi ll it o us ed
th e IOLTA to pa y

pe rs on al ex pe ns es an d l oa ns wit h S t. Lo ui s B an k.

-1 7-W e co nc lu de th at th e pl ai nt iff s’ co m m on -la w an d R I C O c l a i ms f a i l b ecau se th ei r ev id en ce do es no t crea te a n y g en ui ne is su es of m at eri al fact

. W e ha ve al read y he ld th at th e ev id en ce of ov erd raft s a n d e-m ai ls is in su ffi ci en t to pr ov e St

. Lou is

Ban k’s act ua l kn owl ed ge un de r th e UFL. Se e su pr a Part II.A.1. Fo r th e sa m e reas on s,

su ch ev id en ce is in su ffi ci en t to pr ov e th at St

. Lou is Ban k kn ew th at Si gi ll it o’s co nd uc t

co ns ti tu te d a br each of hi s fid uc ia ry du ty, ha d a m eet in g of th e m in ds wit h Si gi ll it o to
br each hi s fid uc ia ry du ty, or ob jecti ve ly m an ife st ed an a g r e e men t to pa rti ci pa te in
cri m in al activi ty w ith Si gi ll it o. Thi s reas on in g ex te nd s to th e pl ai nt iff s’ co nt en ti on th at
St

. Lou is Ban k “ kn ew th at Si gi ll it o was pr oh ib it ed fro m us in g fu nd s in hi s IOLTA

. . . to pa y hi s pe rs on al de bt s.” Eve n a s s u ming Si gi ll it o was us in g IOLTA
fu nd s to pa y pe rs on al de bt s, th e pl ai nt iff s ha ve fai le d to pr od uc e ev id en ce th at th e fu nd s were no t pr op erl y earn ed fe e s or fu nd s th at he was ot he rwis e au th or iz ed to

rem ov e fro m th e acco un t. Se e su pr a Part II.A.1. Thi s is be cau se an IOLTA is a un iq ue
tru st acco un t th at m ay in vo lv e a va rie ty of fu nd s, s om e of whi ch are at to rn ey ’s fees
th at th e at to rn ey

wit hd raws when earn ed

. Se e su pr a Part II.A.1.

As a res ul t, we ho ld th at th e di st ric t co ur t pr op erl y gr an te d su m m ary jud gm en t

to St. Lo ui s B an k o n C ou nt s II , III, an d IV.

III. Co nc lu si on Acco rd in gl y , we affi rm

th e jud gm en t o f th e d is tri ct co ur t.

__ __ __ __ __ __ __ __ __ __ __ __ __ __ __

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