UMB Bank v. Guerin, No. 22-3331 (8th Cir. 2024)
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In this case, UMB Bank, N.A. (UMB) filed a complaint against Jessie Benton and her children, alleging that they violated the Racketeer Influenced and Corrupt Organizations Act (RICO) by committing acts of mail, wire, and bank fraud. The dispute arose from the management of a family trust, which included works of art, real estate, and personal effects. The beneficiaries of the trust accused UMB of mismanagement and sued UMB in a separate Missouri state court case. UMB then filed this federal case, arguing that the beneficiaries and their attorney engaged in fraudulent activities to force UMB to increase trust distributions or resign as trustee.
The United States Court of Appeals for the Eighth Circuit affirmed the district court's decision to dismiss UMB's complaint for failure to state a civil RICO claim. The court agreed that UMB failed to sufficiently allege a pattern of racketeering activity. Although UMB might be able to prove that three communications to media outlets qualify as predicate acts of mail, wire, or bank fraud, these acts did not show a pattern of racketeering activity because they occurred within a few days and targeted a single victim (UMB). The court also affirmed the district court's denial of UMB's post-judgment motions for leave to amend the complaint, as the proposed amendment was both untimely and futile.
Court Description: [Loken, Author, with Wollman and Benton, Circuit Judges] Civil case - RICO. The plaintiff bank brought this action against the trust beneficiaries of Thomas Hart Benton, alleging they violated the RICO statute by committing related acts constituting mail, wire, and bank fraud. The district court dismissed the action for failure to state a civil RICO claim. Held: (1) the trust beneficiaries' act of instructing their attorney to collect the trust records held by plaintiff bank was not fraud; (2) the plaintiff bank failed to plead with the necessary particularity that any criminal activity tainted the defendants' private attorney-client communications over how to pressure the bank to be more responsive to the beneficiaries' requests, and the conduct cannot form a predicate fraud act under RICO; (3) the bank's first amended complaint alleges that defendants knowingly made false statements to the media and, if accompanied by sufficient allegations of a pattern of racketeering activity, these statements might qualify as predicate acts of mail, wire, or bank fraud; (4) the district court did not err in concluding that communications by defendants and their attorney made in the course of prosecuting a probate case cannot form the basis for RICO predicate acts, as the allegations were conclusory and unpersuasive; (5) the three acts of contacting the media (see 3 above) were insufficient to show a plausible claim of a closed-end pattern of racketeering; as to open-ended continuity, there was no apparent threat that the qualifying acts would continue into the future, and plaintiff failed to show a plausible claim of open-ended continuity; (6) the bank's failure to plausibly allege a pattern of racketeering, an element of its RICO claim against each defendant, means its entire claim fails; and (7) the district court did not err in denying plaintiff's request to file a second amended complaint, as the proposed complaint was untimely and futile.
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