Featured Chrome Extensions:

Casey IRACs are produced by an AI that analyzes the opinion’s content to construct its analysis. While we strive for accuracy, the output may not be flawless. For a complete and precise understanding, please refer to the linked opinions above.

Keywords

contracttortdefendantattorneyverdictfiduciarymalpracticefiduciary dutybreach of fiduciary dutypiracy
contracttortdefendantdamagestrialverdictpiracy

Related Cases

Fassihi v. Sommers, Schwartz, Silver, Schwartz & Tyler, P.C., 107 Mich.App. 509, 309 N.W.2d 645
View Case »
Ryan v. Butera, Beausang, Cohen & Brennan, 193 F.3d 210
View Case »
Herrmann v. Summer Plaza Corp., 201 Conn. 263, 513 A.2d 1211
View Case »
Hunydee v. U.S., 355 F.2d 183, 17 A.F.T.R.2d 262, 66-1 USTC P 9137
View Case »
Kamilewicz v. Bank of Boston Corp., 92 F.3d 506
View Case »
Justia Law Link
LexisNexis Link
Westlaw Link
CourtListener Link
Oyez Link

Lane v. Chowning, 610 F.2d 1385

Facts

In June 1968, Harlan Lane and Donald P. Couch purchased a controlling interest in the Union National Bank, with Lane serving as Chairman and CEO. Lane arranged for a questionable loan to Wheel-Air, Inc., which led to his removal from the bank's board after the board determined he had committed criminal acts. Lane claimed that the defendants conspired to keep him unaware of the loan's illegality, which he argued led to his financial ruin and constituted malpractice and breach of fiduciary duty.

Lane bases his claims for damages on the theory that the defendants participated in a conspiracy of silence which kept him from discovering the illegality of the loan, and thus fraudulently induced him to follow through with the illegal activities.

Issue

Did the defendants owe a fiduciary duty to Harlan Lane, and did their actions constitute tortious interference with his business advantage or a civil conspiracy?

Amidst all of these allegations there are basically three discernable legal questions before us. First of all, we must consider whether any of the defendants owed a duty to Harlan Lane as Chairman of the Board and Chief Executive Officer of the bank. Second, we must examine the nature of the tort of interference with prospective business advantage and determine whether or not the prima facie case was established at trial. Finally, we are presented with the question of whether or not a civil conspiracy existed.

Rule

The fiduciary duty of bank officers and directors is owed to the depositors and shareholders, not to the Chairman or CEO. Malicious interference with contractual rights requires proof of a valid relationship, knowledge of that relationship, intentional interference, and resultant damage.

It is well established under Arkansas law that 'malicious and wilful interference with contractual rights and relationships of another has been recognized as an actionable tort.'

Analysis

The court found that the defendants were acting within their rights and duties to remove Lane due to his criminal actions. It concluded that Lane's position as CEO did not create a fiduciary duty owed to him by the bank's directors or attorneys. Furthermore, the court determined that Lane failed to establish the elements necessary for a claim of tortious interference or civil conspiracy, as the defendants' actions were justified and lawful.

We therefore cannot conclude that, in doing so, they intentionally interfered with Lane's contractual relations or his business expectancies. And although we are aware that Mr. Lane suffered financial setbacks following the actions of the defendants, we are convinced that the tort of interference with prospective business advantage was never intended to provide recovery in circumstances such as these, where the defendants were obligated to act to the detriment of Mr. Lane.

Conclusion

The court affirmed the directed verdicts in favor of the defendants, concluding that Lane did not prove any of his allegations against them.

Therefore we affirm the decision of the district court.

Who won?

Defendants prevailed because the court found that they acted within their legal rights and duties, and Lane failed to establish any breach of duty or tortious interference.

The court affirmed the directed verdicts in favor of the defendants, concluding that Lane failed to prove his allegations.

You must be