Fort v. Suntrust Bank (In re International Payment Group, Inc.
- Summarized by Robert Stenzhorn , Virginia Legal Aid Society, Inc.
- 6 years 7 months ago
- Case Type:
- Business
- Case Status:
- Affirmed
- Citation:
- No. 16-2001: UNITED STATES COURT OF APPEALS FOR THE FOURTH CIRCUIT (4th Circuit, May 30,2018) Not Published
- Tag(s):
-
- Ruling:
- Affirmed by unpublished per curiam opinion. "... the Trustee has failed to demonstrate a genuine dispute of material fact on the issue of whether SunTrust owed IPG [the debtor] any non-contractual duties, the judgment of the district court is AFFIRMED."
- Procedural context:
- Debtor International Payment Group, Inc. (“IPG”) filed bankruptcy under Chapter 7 of the United States Bankruptcy Code. 11 U.S.C. ch. 7. IPG’s Trustee in bankruptcy, John Fort (“the Trustee”), brought an adversary proceeding against SunTrust Bank (“SunTrust”) on behalf of the IPG bankruptcy estate. The Trustee sought damages for negligence, gross negligence, and breach of fiduciary duty by SunTrust {under State law] . After the bankruptcy court issued proposed findings of fact and conclusions of law, the district court granted summary judgment to SunTrust, and the Trustee appealed.
- Facts:
- The jurisdiction of the district court was proper under the "related to" provisions of the Code (i.e. "Stern" claim). SunTrust had provided certain contractual services that were essential to the Debtor's foreign currency business. When claims of internal fraud by a key officer of the Debtor arose, Suntrust unilaterally terminated its services allegedly causing damages to the company. SunTrust and the Debtor were parties to a contract for services and not, as argued by the Trustee, in a fiduciary relationship under state law. The contract terms also specifically excluded the bank's role as fiduciary and any liability arising from the asserted claims. The defalcations by the debtor's key officer caused the collapse of the company and subsequent bankruptcy liquidation. The summary judgment granted by the district court was appealed by the Trustee on behalf of the Estate to the Court of Appeals for the Fourth Circuit. A key point is that South Carolina law specifically established the role of bank and customer as one of "debtor-creditor" and not one of fiduciary. Further, the written contract between the parties established the obligations of the parties and specifically excluded any role or obligation as fiduciary.
- Judge(s):
- Before DUNCAN and AGEE, Circuit Judges, and Leonie M. BRINKEMA, United States District Judge for the Eastern District of Virginia, sitting by designation.
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