Dean vs. CB&T: Decision on hold

-A A +A

Supreme Court won’t rule before February

By Lisa King

That long-awaited decision from the Kentucky Supreme Court in a high-profile case involving a lawyer and his bank won’t be forthcoming for at least two more months because scheduling procedures, court officials say.

Oral arguments took place in June in the suit that Shelbyville Attorney Mark Dean in 2009 brought against Commonwealth Bank & Trust for not noticing that his secretary was embezzling million of dollars from him.

The Supreme Court publishes its decisions monthly, with December’s announcement coming Thursday. A decision had been expected in October. Supreme Court officials say the next decision day won’t be until Feb. 20 because the court typically does not publish decisions in January.

Dean filed suit in January 2009, accusing the bank of a violation of a Kentucky Uniform Commercial Code, as well as aiding and abetting fraud and illegal activity and breach of duty of ordinary care following his discovery that his secretary, Jody Wills, was writing counter checks and cashing them at CB&T.

That suit was dismissed in 2010 by Shelby County Circuit Judge Charles Hickman in a summary judgment, a decision upheld in 2011 by the Kentucky Court of Appeals, with the court writing that Dean should have been aware of Wills’ activities.

Dean then petitioned the Supreme Court and last year was granted a discretionary review, which is the authority of the court to decide if a case merits being heard.

He said he regards the absence of a decision as a hopeful sign in his favor.

“It’s a big case Whichever way they go, it’s probably going to change law on some front,” he said. “There are two competing areas of the law in direct conflict, and they’ve got to try to figure out who is going to prevail. If they go one way, it’s going to affect every bank customer’s rights in the state of Kentucky and if they go the other way, it would affect the banks big time.”

John McGarvey, a Louisville attorney representing Commonwealth Bank, acknowledged the delay in a decision that had been expected months ago.

“I took a look at the court’s minutes from December and noticed that there were several cases with docket numbers that were before ours,” he said.

McGarvey, who has also served as special justice on the Kentucky Supreme Court from 2008-10, said, “Their [supreme court] options would be to sustain what the court of appeals did, or to return it [case] to the trial court for a further hearing on some issue that they decided needed to be more fully explored. I don’t recall any questions [during oral arguments] as to whether or not there was an unresolved issue of material fact, which would be a reason to send it back to the trial court.”

In 2008, Dean learned that his secretary, Jody Wills, who had been with him since he opened his office in 1998, had diverted more than $800,000 from his clients’ escrow accounts, thefts that had been occurring from 2003 to 2005.

Wills wrote herself duplicate payroll checks and paid her credit card bills and mortgage payments on her home with funds stolen from the accounts. To cover up those thefts, she floated checks among numerous banks that involved more than $2.6 million.

Dean maintains that the case could have far-reaching implications.

“Somebody’s wanting to change something, and they’re just making sure that’s what they want to do,” he said.

During oral arguments before Supreme Court justices in June, attorney Larry Zielke argued that Dean had no way of knowing that Wills was stealing money from him because her embezzlement scheme was so elaborate.

Wills had pleaded guilty and had received probation for the theft of $720,000 from Dean’s escrow account. She was jailed by Hickman at the beginning at 2012 for falling behind on her restitution schedule of $600 per week to Dean, but she was paroled in March, and her restitution significantly reduced.

The suit says the bank knew or should have known that Wills was engaged in suspicious activity, was negligent in not advising him of the check-cashing scheme and failed to contact Dean about very large amounts of money and the repeated use of counter checks.

But McGarvey told justices he did not think the bank was negligent toward Dean because not only was Wills an authorized signer on the account, but that Dean did not ever contact the bank to inform them was that any of the checks had been paid improperly.