Kelley v. BMO Harris Bank N.A., as successor to M&I Marshall and IIsley Bank

Background

Douglas A. Kelley, in his capacity as Trustee of the BMO Litigation Trust, and BMO Harris Bank N.A., as successor to M&I Marshall and Ilsley Bank, filed cross-motions for judgment as a matter of law under Federal Rule of Civil Procedure 50. Judgment as a matter of law allows the court to resolve an issue when a party has been heard at trial and no reasonable jury could legally find for that party on the issue.

BMO Harris sought judgment on all four of the Trustee’s claims, arguing that the trial evidence could not support a verdict for the Trustee. The court concluded that a reasonable jury had a legally sufficient evidentiary basis to find for the Trustee on all four claims. It therefore denied the relevant portions of BMO Harris’s motions and stated that the factual issues would be submitted to the jury, subject to later consideration of legal issues raised by the motions.

Rulings on defenses

The parties also filed cross-motions concerning BMO Harris’s thirty affirmative defenses. An affirmative defense is a legal or factual reason offered to defeat or limit a claim even if the claim’s allegations are otherwise established.

The court granted the Trustee’s motion for judgment as a matter of law on thirteen defenses: in pari delicto; standing; failure to state a claim; contractual limitation on liability; claim and issue preclusion; failure to mitigate; failure to plead fraud with particularity; federal preemption; impossibility; setoff; lack of statutory or contractual authority; claims already dismissed; and additional defenses.

The court denied both parties’ motions as to six defenses involving factual issues that would be submitted to the jury: lack of proximate cause; lack of damages; unavailability of penalties, attorneys’ fees, and costs; good faith; speculative damages; and no imputation.

The court also denied both parties’ motions as to seven equitable defenses: unclean hands, laches, equitable estoppel, waiver, acquiescence, unjust enrichment, and judicial estoppel. The court stated that it would reserve ruling on the applicability of any properly raised equitable defenses until after the jury returned its verdict. Equitable defenses are defenses decided by the court rather than the jury.

UCC preemption and contractual limitations

The parties cross-moved concerning BMO Harris’s defense that Articles 3 and 4A of Minnesota’s Uniform Commercial Code preempted the Trustee’s claims. The court held that the Trustee’s claims were not preempted and granted the Trustee’s motion as to that defense.

The parties also cross-moved concerning BMO Harris’s contractual limitations-period defense. The court interpreted a 2008 Depository Agreement and a 2006 Wire Transfer Agreement and held that the claims did not concern the types of transactions covered by those agreements’ limitations provisions. The court therefore granted the Trustee’s motion as to that defense.

Finally, the court denied both parties’ motions concerning BMO Harris’s statute-of-limitations defense and consent-or-ratification defense. The court found that a reasonable jury could find for BMO Harris on those defenses and submitted the related factual issues to the jury, subject to later consideration of the legal issues.

Disposition

The court ordered that BMO Harris’s motions for judgment as a matter of law were denied. It ordered that Kelley’s motion was granted in part and denied in part, as explained in the order. The order did not resolve the factual issues submitted to the jury.