ST. LOUIS (CN) — Attorneys for UMB Bank attempted to revive the bank’s RICO case in the Eighth Circuit on Wednesday morning against the heirs of artist Thomas Hart Benton, a well-known Missouri painter.
UMB Bank attorney Todd Ruskamp, of Shook, Hardy & Bacon in Kansas City, Missouri, told the three-judge panel that the consequences of the ruling are significant to the banking industry, which relies on the credibility of its members.
“What I mean by that, is that certainly the district court's ruling could be read or interpreted reasonably to suggest that a RICO enterprise may manufacture false evidence, publicize that false evidence on a national basis about a financial institution, knowing all along that the information that it's publicizing is false,” Ruskamp said during the 30-minute hearing. “Those are the allegations in the complaint.”
In 2021, UMB sued Jessie Benton and her three children, Anthony Gude, Daria Lyman, and Cybele McCormick, for violations of the Racketeer Influenced and Corrupt Organizations Act in the Western District of Missouri.
UMB served as Hart Benton’s testamentary trust, but it claims that in 2014 the defendants began conspiring to remove UMB as trustee by making a series of false accusations in public and in the court. Their actions forced UMB to resign as trustee.
Andrew Schermerhorn, who represented the Benton heirs, pushed back on that notion.
“UMB Bank, I don't suspect, nor any other bank, will ever part with its money simply because some client alleges in a lawsuit that their rights as a trustee had been violated,” said Schermerhorn, of the Klamann Law Firm in Kansas City. “It's just simply untrue that UMB Bank, in the natural course of events, parts with its money each time it’s sued.”
The case was dismissed on June 29, 2022, prompting the appeal.
Ruskamp argued that the lower court improperly construed the bank fraud statute as part of its RICO analysis and that the court analysis of RICO continuity was flawed.
“The bank fraud statute is within the definition of racketeering activity under the RICO act,” Ruskamp said.
Ruskamp said the Benton heirs knowingly made false statements about UMB’s activities to the media, including self-dealing and that over 100 pieces of artwork were missing.
Ruskamp was questioned on whether the trust activities in a bank were completely different than the commercial or personal loan departments.
“I do not have a case, your honor, that says trust account activities of a national bank are included within the bank fraud statute, but likewise, there's no case that suggests that they aren’t,” Ruskamp answered.
Schermerhorn opened his argument by stating that UMB's case falls short of a RICO claim, while noting two pending related cases in state court between the parties.
“The dispute between the defendants and the bank is an ordinary civil dispute that is presently pending in Missouri state court,” Schermerhorn said. “That's where it belongs.”
Schermerhorn also attacked the bank’s continuity claim regarding the alleged conspiracy.
“All that’s left are the communications made to the media over the course of one weekend in December, and then the filing of the petition … that is too short of a period to constitute the continuity factor under RICO,” Schermerhorn said.
Ruskamp disputed that argument during his rebuttal.
“This notion that lawyers and parties can knowingly publicize and lie about claims that they're making and go into court and file claims against it, is not ordinary litigation,” Ruskamp said.
Judges James B. Loken, a George H. W. Bush appointee, Roger L. Wollman, a Ronald Reagan appointee, and Duane Benton, a George W. Bush appointee, heard the arguments and took the case under advisement.
Hart Benton was born in Neosho, Missouri, on April 15, 1889, and died in Kansas City, Missouri, on Jan. 19, 1975. A painter, muralist and printmaker, he was at the forefront of the Regionalist art movement and painted a 40-foot mural at the Missouri State Capitol.Follow @@joeharris_stl
Subscribe to Closing Arguments
Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.