712 F.3d 917
6th Cir.2013Background
- El Camino, two computer-equipment leasing companies, alleged Huntington aided Cyberco’s fraud that harmed them.
- Cyberco purportedly leased nonexistent equipment via shell entities and diverted funds back to Cyberco.
- Huntington accepted deposits and payments from Cyberco and its associates under a banking relationship that later showed red flags.
- White, Huntington’s examiners, suspected irregularities and shared concerns with risk officers; no actual knowledge of fraud was proven.
- Bankruptcy proceedings later found Huntington did not act in good faith in accepting certain Teleservices payments, but that finding is not dispositive of knowledge in this case.
- District court granted summary judgment for Huntington on aiding and abetting claims and on the conversion claim; appellate review affirms.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether actual knowledge is required for aiding and abetting liability | El Camino argues circumstantial proof suffices | Huntington contends only actual knowledge meets standard | Actual knowledge required; circumstantial proof insufficient to establish jury question. |
| Whether Huntington had actual knowledge of Cyberco’s fraud | El Camino contends Huntington knew or should have known of fraud | Huntington had suspicions but no actual knowledge | No genuine issue of material fact shows actual knowledge; summary judgment upheld. |
| Whether Huntington had actual knowledge for conversion claim under Mich. Comp. Laws § 600.2919a | El Camino asserts Huntington knew funds were stolen/converted | Huntington lacked knowledge that funds were converted | Same: no evidence of actual knowledge; district court affirmed on conversion. |
Key Cases Cited
- Aetna Cas. & Sur. Co. v. Leahey Constr. Co., Inc., 219 F.3d 519 (6th Cir. 2000) (actual knowledge required for aiding/abetting claims under Restatement §876(b))
- Echelon Homes L.L.C. v. Carter Lumber Co., 694 N.W.2d 544 (Mich. 2005) (Michigan requires actual knowledge for aiding/abetting statutory claims)
- Angelotta v. Am. Broad. Corp., 820 F.2d 806 (6th Cir. 1987) (survey of knowledge standard for aiding/abetting concepts)
- In re Teleservices Grp., Inc., 456 B.R. 318 (Bankr. W.D. Mich. 2011) (bankruptcy findings on good faith not binding on knowledge standard here)
- United States v. Montgomery, 980 F.2d 388 (6th Cir. 1992) (check-kite context cited on knowledge-related issues)