Banks v. Kale
3:13-cv-01336
S.D. Ill.Jul 14, 2014Background
- Banks sues Kale and Preston Humphrey, alleging eight claims arising from Kale's representation in Banks's criminal case and a purported third-party payment on a CJA form.
- Kale was associated with Humphrey, Siegler & Kale, LLC, the predecessor to Preston Humphrey, at the time Banks was represented.
- Banks pleaded guilty in US v. Banks and is imprisoned; the court-appointed Kale to represent him.
- Banks alleges a third-party payment related to Kale's representation based on a CJA 20 form response; the complaint seeks damages for various state-law claims.
- Preston Humphrey moved to dismiss for lack of direct representation, untimeliness, lack of injury allegations, and seeks attorney’s fees; the court granted dismissal of the complaint as to Humphrey.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Banks states a plausible claim against Humphrey for breach of fiduciary duty | Banks claims Humphrey is liable due to fiduciary duties arising from Kale's representation and third-party payment. | No direct fiduciary duty by Humphrey to Banks; the appointment was to Kale, not Humphrey. | Dismissed; no damages shown and no plausible fiduciary duty by Humphrey. |
| Whether Banks states a claim of constructive fraud against Humphrey | Banks asserts constructive fraud through Humphrey's involvement with Kale. | Banks fails to allege Humphrey knew of fraud or accepted fruits of any fraud. | Dismissed; lack of knowledge and receipt of benefits. |
| Whether Banks states fraudulent misrepresentation or concealment claims against Humphrey | Banks alleges false statements or concealment by Humphrey. | Failure to plead false statements, intent, reliance, or damages with particularity. | Dismissed; heightened pleading and lack of specific allegations. |
| Whether sanctions or attorney’s fees are warranted against Banks | Court declines to award fees but warns of potential sanctions for frivolous filings. |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (U.S. 2007) (reiterates plausibility standard under Rule 8(a)(2))
- Ashcroft v. Iqbal, 556 U.S. 662 (U.S. 2009) (requires facial plausibility, not mere possibility)
- Concentra Health Servs., 496 F.3d 773 (7th Cir. 2007) (applies heightened pleading standard in fraud cases)
- Airborne Beepers & Video, Inc. v. AT&T Mobility LLC, 499 F.3d 663 (7th Cir. 2007) (notice pleading requirement maintained; not all details needed)
- Joyce v. Morgan Stanley & Co., Inc., 538 F.3d 797 (7th Cir. 2008) (definition of constructive fraud elements in Illinois law)
- Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012) (fraud pleading with particularity; who/what/when/where/how)
- Dloogatch v. Brincat, 920 N.E.2d 1161 (Ill. 2009) (Il. fraud pleading standards for misrepresentation)
- LaSalle Bank Lake View v. Seguban, 937 F. Supp. 1309 (N.D. Ill. 1996) (elements of breach of fiduciary duty under Illinois law)
- Alyeska Pipeline Serv. Co. v. Wilderness Soc’y, 421 U.S. 240 (U.S. 1975) (inherent power to sanction for bad faith conduct)