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Ragle v. Monticello Banking Co.

United States District Court, Sixth Circuit

September 5, 2013

ROBERT RAGLE, ET AL., Plaintiffs,


JOSEPH H. McKINLEY, Jr., District Judge.

This matter is before the Court on Defendants Monticello Banking Company ("Monticello") and Richard Owens' (acting in his official capacity for Monticello) Motion for Summary Judgment [DN 37] and Monticello's Motion to Strike Expert Testimony [DN 23]. Fully briefed, these matters are ripe for decision.


Plaintiffs, Robert Ragle and Laura Ragle, initially filed this action in Russell Circuit Court on July 2, 2007 against Defendant Monticello Bank. This claim arises out of alleged mishandling of Plaintiffs' account held by Monticello. Specifically, Plaintiffs believe Monticello wrongfully dishonored checks and improperly charged overdraft fees. In 2011 Plaintiffs amended their complaint in state court and added Richard Owens, in his official capacity as Director and President of Monticello Banking, alleging that he and Monticello violated several federal banking regulations. These added allegations against Defendant Owens arose out of a construction loan Plaintiffs obtained from Monticello. Plaintiffs believe that Owens received "certain benefits that he was not due" because of his position at both Monticello Banking and president of the construction company the Plaintiffs hired. (Resp. to Mot. for Summ. J., DN 41, at 1).

Monticello and Owens, in his official capacity at Monticello, filed a summary judgment motion and Monticello filed a motion to strike expert testimony.


Before the Court may grant a motion for summary judgment, it must find that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(a). The moving party bears the initial burden of specifying the basis for its motion and identifying that portion of the record that demonstrates the absence of a genuine issue of material fact. Celotex Corp. v. Catrett , 477 U.S. 317, 322 (1986). Once the moving party satisfies this burden, the non-moving party thereafter must produce specific facts demonstrating a genuine issue of fact for trial. Anderson v. Liberty Lobby, Inc. , 477 U.S. 242, 247-48 (1986).

Although the Court must review the evidence in the light most favorable to the nonmoving party, the non-moving party must do more than merely show that there is some "metaphysical doubt as to the material facts." Matsushita Elec. Indus. Co., Ltd. v. Zenith Radio Corp. , 475 U.S. 574, 586 (1986). Instead, the Federal Rules of Civil Procedure require the nonmoving party to present specific facts showing that a genuine factual issue exists by "citing to particular parts of materials in the record" or by "showing that the materials cited do not establish the absence... of a genuine dispute[.]" Fed.R.Civ.P. 56(c)(1). "The mere existence of a scintilla of evidence in support of the [non-moving party's] position will be insufficient; there must be evidence on which the jury could reasonably find for the [non-moving party]." Anderson , 477 U.S. at 252. It is against this standard the Court reviews the following facts.


Defendant moves for summary judgment on all of Plaintiffs' claims, including violations of Regulation O, the Unfair and Deceptive Acts and Practices Act, Regulation AA, Real Estate Settlement Practices Act, and for wrongful dishonor of checks. Defendants argue that each claim fails for one of four reasons: "(1) the law does not permit a private right of action for the claims alleged; (3) Plaintiffs did not file their claims within the appropriate statute of limitations time period; (3) the undisputed facts require the claim's dismissal; and (4) Plaintiffs have not presented any evidence of damage." (Def. Monticello Banking Co.'s and Richard Owens' Mem. in Supp. of Mot. for Summ. J., DN 37-1, at 1, hereinafter "Mot. for Summ. J."). Plaintiffs primarily argue that their complaint and their answer to an interrogatory supply a sufficient basis to overcome summary judgment.

A. Regulation O [Second Am. Compl., DN 1-1, p. 13 ¶ 11]

Plaintiffs claim Defendants violated Regulation O, 12 C.F.R. § 215 (2013), which deals with the extension of credit by a regulated bank to an individual officer, director, principal or shareholder, or to a business owned by one of those insiders. 12 C.F.R. § 215.1. Defendants argue that Regulation O does not provide a private cause of action, and even if Plaintiffs could bring a cause of action under this regulation, they have failed to allege any facts that would show an extension of credit to an insider.

In response to Defendants' claim that no private right of action exists under 12 C.F.R. § 215, Plaintiffs cite two cases, De La Fuente II v. F.D.I.C. , 332 F.3d 1208 (9th Cir. 2003) and In re Seidman , 37 F.3d 911 (3d Cir. 1994), to show that Defendants are liable under Regulation O. De La Fuente deals with the judicial review by the Ninth Circuit for the removal of a director of bank by the Board of the Federal Deposit Insurance Corporation (FDIC). Id. at 1214. Seidman involves the removal of the director of a bank under 12 U.S.C. 1818(e), which vests power to do so only by the "appropriate Federal banking agency." 12 U.S.C. 1818(e)(1) (2012). Plaintiffs fail to demonstrate how De La Fuente or Seidman provide authority to hold that a private cause of action exists under Regulation O. Plaintiffs only respond by noting the three elements for the removal of a bank officer[1] and by stating, "Owens, the payee outside of the closing statement, was a contractor of the Plaintiffs and a Director of the Defendant, Monticello Banking Company." (Resp. to Mot. for Summ. J., Dn 41, at 3). Instead of supporting Plaintiffs' argument, De La Fuente assists the Defendants' proposition that no private right of action exists under Regulation O as the case involves actions taken by the FDIC and not by a private party. In addition, the civil penalty section of 12 C.F.R. § 215 leaves enforcement of the regulation with the Board of Governors of the Federal Reserve. 12 U.S.C. § 504(e)(2) (2012), which indicates that Regulation O only permits administrative remedies. Therefore, Plaintiffs do not have a cognizable claim under Regulation O and Defendants' motion for summary judgment as to a claim arising under Regulation O is GRANTED.

B. Unfair and Deceptive Act and Practices Act [Third Am. Compl., DN 1-1, p. 31-32 ¶ 2] and Regulation AA [Third ...

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