Kutak Rock attorneys Loc Pfeiffer and Alison Feehan, with support from Craig Young, received two successive affirmances from the United States Court of Appeals for the Fourth Circuit (the “Fourth Circuit”) in favor of a bank client arising out of two related cases litigated aggressively in three separate venues.

The first affirmance from the Fourth Circuit arose out of a case filed by Kutak Rock on behalf of a national bank against a debtor on a $600,000 promissory note in the United States District Court for the Eastern District of Virginia (the “Eastern District”). The debtor sought to transfer the case to the District of Columbia and Kutak Rock successfully opposed the motion to transfer, keeping the case in Virginia. The debtor then filed a counterclaim for $1,000,000, alleging the bank committed fraud, breached its contract and violated the implied covenant of good faith when it quoted the debtor a higher “payoff figure” than the amount stated on the original foreclosure notice.

Kutak Rock attorneys successfully moved the Eastern District to dismiss the counterclaim based on the legal insufficiency of the claims. After engaging in discovery, firm lawyers filed a motion for summary judgment on behalf of the bank, which was granted by the Eastern District. The Eastern District also awarded the bank $99,094.19 in attorneys’ fees and $152,529.89 in costs—representing fees and costs that had been accumulating during prior years of collection efforts. After failing to have the Eastern District reconsider its opinion, the debtor appealed the orders of the Eastern District in two separate appeals to the Fourth Circuit. The appeals were consolidated and, after full briefing by the parties, the orders of the Eastern District granting summary judgment and awarding fees and costs were affirmed on October 22, 2013 by unpublished per curiam opinion of the Fourth Circuit (Justices Shedd, Davis and Diaz, presiding).

Following the first case, the Kutak Rock attorneys secured a second affirmance from the Fourth Circuit in a separate case filed by the debtor in the Superior Court of the District of Columbia (the “Superior Court”) seeking to enjoin a pending foreclosure of a commercial property located in the District of Columbia. Kutak Rock successfully moved the Superior Court to deny the injunction and allow the foreclosure to proceed as scheduled.

The debtor’s counsel then sought to amend the complaint in the Superior Court, adding the debtor’s husband as a party plaintiff and seeking over $9 million dollars in damages from the bank based on theories of fraud, breach of contract, violation of implied covenants of good faith and fair dealing, unjust enrichment and negligence.

Kutak Rock lawyers strategically removed the case from the Superior Court to the United States District Court for the District of Columbia and also filed a Motion to Dismiss or in the Alternative to Transfer Venue pursuant to 28 U.S.C. § 1404(a), which was granted by an order transferring the case to the United States District Court for the Eastern District of Virginia. Once the case was before the Eastern District, Kutak Rock attorneys filed a motion to dismiss, arguing the debtor’s claims were precluded by res judicata and Fed. R. Civ. P. 12(b)(6), which motion was granted by the Eastern District and debtor’s motion for reconsideration was denied. On appeal, the Fourth Circuit affirmed the order of the Eastern District by unpublished per curiam opinion issued on February 26, 2014 (Justices Shedd, Davis and Diaz, presiding).