Banking and Financial Services Group obtains summary judgment for banking client facing breach of fiduciary duty and conspiracy claims

Jun 10, 2013 | News

After 2.5-years of litigation, the Burns White Banking and Financial Services Litigation secured summary judgment in the Court of Common Pleas in Chester County, Pa. for a banking client facing claims of breach of implied covenant of good faith and fair dealing, fraud in the inducement, aiding and abetting breach of fiduciary duty and civil conspiracy. Plaintiff, a commercial customer of the bank, entered into two construction loan agreements in excess of $25 million with his business partner, who was also sued in the case. The partners defaulted on the loans and our client proceeded to renegotiate them, with the defendant business partner eventually purchasing the notes from the bank. Plaintiff alleged that the bank owed him a duty to renegotiate the loans in good faith, that he was treated unfairly by the bank and that his business partner was given preferential treatment because of his longstanding relationship with our client.

Led by Managing Member of the Philadelphia office Jeffrey S. Adler, Co-Chair of the Banking and Financial Services Litigation Group Lyle D. Washowich and Senior Paralegal Gene E. Kline, Burns White argued that our client pursued repayment of the loans through actions permitted under the loan agreements and never acted unlawfully. The Court agreed, dismissing all claims against our client and stating, “Plaintiff failed to sufficiently allege an unlawful act committed by [the bank] or a lawful act committed by unlawful means for an unlawful purpose.” The court order, which can be downloaded here, sets a legal precedent on these issues and similar claims.

Note: The results obtained in a particular case are, of course, always heavily dependent on the facts and the law specific to that case.