Nathan Lippe’s accusations against Stone Bank are astonishing.
The Omaha (Boone County) farmer says the Mountain View bank lured him into an improper government-backed loan, that his loan officer then pressured him for tens of thousands of dollars in personal loans that would never be repaid, and that the bank foreclosed when he blew the whistle.
But you knew all that because Whispers reported it in May.
In response, Stone Bank and two executives named as defendants pulled out their big guns: They have asked U.S. District Judge Timothy Brooks of Fayetteville to sanction Lippe and his attorneys for “pursuing frivolous and baseless allegations and claims.”
According to Stone Bank, represented by Ryan J. Caststeel and Gregory M. Hopkins of Hopkins Caststeel PLC in Little Rock, Lippe agreed that his loan was valid when he entered a consent judgment in the foreclosure and paid the balance back in December 2020.
Having agreed that the Farm Service Agency loan was valid, their argument goes, Lippe can’t now claim that the loan — or the judgment approved by a Boone County circuit judge — was unlawful.
“This is a textbook case of a frivolous lawsuit,” Caststeel told Whispers, and he said the motion for Rule 11 sanctions was the first he had filed in his 13-year legal career.
Lloyd W. “Tré” Kitchens III of The Brad Hendricks Law Firm in Little Rock, one of Lippe’s attorneys, shrugged off the motion for sanctions, which are typically used to punish the most egregious abuses of the court process. (For instance, Rule 11 sanctions were issued last month by a federal judge in Michigan against the “Kraken” lawyers who filed an evidence-free lawsuit challenging that state’s presidential election results.)
“I’ve been practicing 21 years … and I’ve never had a Rule 11 motion,” Kitchens said. He predicted that the motion for sanctions would fail.
Lippe, Kitchens said, agreed to repay Stone Bank “because he borrowed the money. He was never trying to get something for nothing.”
But the consent decree in the foreclosure does not strip Lippe of his right to a civil cause of action for wrongful acts, Kitchens said. He also predicted that Lippe’s case would help determine whether any other Stone Bank customers were similarly taken advantage of.
“We’re going to find out. How ‘bout that?” Kitchens said.
Lippe’s other lawyers, both subjects of the motion for sanctions, are Robert A. Ginnaven III of Jasper and Grant Ragland of Harrison.
About That Loan Officer
Caststeel and Hopkins do not represent defendant James Johnson, who was Lippe’s loan officer at Stone Bank. (Johnson’s employment with Stone Bank ended in August 2019, according to his LinkedIn profile; Lippe’s complaint says Johnson was fired. His LinkedIn profile says he is currently employed by former Gov. Mike Huckabee’s Ozark Mountain Media.)
In his response, filed by William A. Waddell Jr. of the Friday Eldredge & Clark firm in Little Rock, Johnson “admits that he borrowed money from Lippe on a personal basis,” and he confirmed that a series of text messages included as exhibits in Lippe’s complaint were genuine. But he “denies the number and amount of those loans” and Lippe’s characterization of the loans as “a game of ‘pay to play’” with the intention of stealing the money.
Waddell told Whispers that he couldn’t quantify the loans his client received from Lippe. Lippe’s complaint indicated that it was at least $50,000, but Waddell said he doesn’t think even the plaintiffs have determined a total.
“There’s so much wrong with the facts alleged in the complaint,” Waddell said, that he didn’t have time to enumerate it all.
Johnson has not joined Stone Bank, President Nick Roach and his wife, Ashley Roach, the bank’s compliance officer, in the motion for sanctions against Lippe and his attorneys.
A case management hearing is scheduled for Sept. 15, but the defense is trying to have that delayed. Stay tuned.
(Update, Sept. 13: The case management hearing has been canceled, but the parties plan to reschedule it.)