A Boone County farmer and his lawyers failed to comply with a discovery order in his federal lawsuit against Stone Bank and therefore must pay the bank’s attorneys fees incurred as a result of their failure.
But U.S. District Judge Timothy Brooks of Fayetteville was not nearly as hard on Nathan Lippe of Omaha and his lawyers as Stone Bank’s attorney, Ryan J. Caststeel of Little Rock, had hoped he would be.
Lippe, as Whispers reported last summer, claimed 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. He is represented by Lloyd W. “Tré” Kitchens III of Little Rock, M. Grant Ragland of Fayetteville and Robert A. Ginnaven III of Harrison.
Caststeel, of the Hopkins Caststeel firm, had asked Brooks in August to issue rare Rule 11 sanctions against Lippe and his lawyers for “pursuing frivolous and baseless allegations and claims.” And in December, while the motion for Rule 11 sanctions was pending, Caststeel asked for separate sanctions for the plaintiffs’ failure to turn over documents in a timely manner.
In addition to attorneys fees, Caststeel had asked that the court hold Lippe in contempt, take him into custody and dismiss all claims against Stone Bank.
Last month, Brooks finally dealt with three pending motions. He spent four pages explaining that Lippe could not sue Stone Bank and two of its former employees for money laundering, theft and deception because he had not made those accusations in an earlier lawsuit over the same set of facts that he dismissed back in 2020.
While Brooks did dismiss part of Lippe’s complaint, he did not agree that Lippe’s claims were frivolous or baseless. “[A]s the length of the Court’s analysis above suggests, the application of claim preclusion law to these facts is not as clear cut as Stone Bank suggests. While the Court agrees those claims are barred, Lippe had a reasonable legal basis to argue otherwise.”
The motion for Rule 11 sanctions was denied. And the only sanction he ordered for the failure to comply with the discovery order was attorneys fees. Caststeel submitted an accounting of costs associated with the discovery dispute totaling $4,500.
So what is left of Lippe’s lawsuit?
His claims of criminal behavior by Stone Bank, former loan officer James Johnson and former bank president Marvin Satterfield were thrown out because he never made those accusations in the lawsuit he dismissed when he entered into a consent agreement in which he paid back the loan. Other defendants were also dismissed by the plaintiff.
But two other counts are still pending, one for conversion of money that Lippe claims was rightfully his and one for negligent hiring and supervision of Johnson, who has acknowledged that he did borrow from Lippe “on a personal basis.”
Since we last reported on Lippe’s claims, Caststeel has joined William A. Waddell Jr. of the Friday Eldredge & Clark firm in Little Rock in representing Johnson, who has not worked for Stone Bank since 2019.
Attempts to reach Caststeel, Kitchens and Waddell were unsuccessful before press time.