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Smith v. First Century Bank

July 25, 2006

BOYD SMITH, NANCY SMITH, JOEY SMITH, JEFFREY SMITH, JILL SMITH, BESSIE HACKNEY, WILLIAM GRAY, PEGGY GRAY, GREGORY HOUSTON, ERNEST J. NICELY, AND PATRICIA NICELY, PLAINTIFFS
v.
FIRST CENTURY BANK, CONNIE DYER, SHERI LAWSON, AND DELORIS GRAVES, DEFENDANTS AND FIRST CENTURY BANK, COUNTER-PLAINTIFF
v.
BOYD SMITH, NANCY SMITH, JOEY SMITH, JEFFREY SMITH, ) ERNEST NICELY AND PATRICIA NICELY, COUNTER-DEFENDANTS



MEMORANDUM AND ORDER

This action was filed as the result of allegedly fraudulent activity by defendant First Century Bank (FCB) and four of its current or former employees, defendants Connie Dyer, Sheri Lawson, Karen Williams, and Deloris Graves.*fn1 Very generally, plaintiffs allege that these defendants, without permission, used plaintiffs' identities and/or financial information to issue loans, obtain credit, transfer funds, transfer property interests, and undertook other financial transactions during the period from January 1, 1998, to the present. This action seeks compensatory, punitive and statutory damages, as well as injunctive and equitable relief, pursuant to federal and state law as follows:

1. Violation of the Racketeer Influenced and Corrupt Organizations Act (civil RICO), 18 U.S.C. §§ 1961, et seq. (Count I);

2. Violation of the federal Consumer Credit Protection Act, 15 U.S.C. § 1681s-2 (Count II);

3. Violation of federal statutes and regulations for protection of confidentiality of consumer information (Count III);

4. Violation of the Tennessee Identity Theft Deterrence Act of 1999, T.C.A. §§ 47-18-2101, et seq. (Count IV);

5. Violation of the Tennessee Consumer Protection Act (TCPA), Tennessee Code Annotated §§ 47-18-101, et seq. (Count V);

6. Violation of the Tennessee Financial Records Privacy Act, Tennessee Code Annotated §§ 45-10-101, et seq. (Count VI);

7. Breach of fiduciary duty (Count VII);

8. Conversion (Count VIII); and

9. Negligence (Count IX).*fn2

This matter is presently set for argument on all pending motions on July 31, 2006. As the record reflects, all of these motions were previously set for argument on May 1, 2006,*fn3 and again on June 6, 2006.*fn4 As the parties are aware, the first scheduled hearing was continued because of its conflict with the trial of a criminal case, and the second hearing was continued because of an accident involving the undersigned the evening before that hearing. Nevertheless, in preparing for these previous two hearings, the court has now had ample opportunity to consider the outstanding briefs filed by counsel of record with respect to all of the pending motions. As a result of that review, the court is now prepared to adjudicate some of those pending motions so that the time spent during argument next week can be used to address the more problematic issues.

I. Motions to Amend

Among the pending motions are the motion to amend the complaint filed by all of the Smiths, Bessie Hackney, William and Peggy Gray, and Gregory Houston [Doc. 63], as supplemented [Doc. 128], as well as the motion to amend/revise the complaint filed by Ernest and Patricia Nicely [Doc. 126]. The issues raised by plaintiffs' motions to amend have been fully briefed by all the parties [see Docs. 64, 76, 78, 80, 127, 134, 135, 140, and 143]. After carefully reviewing all of these briefs, the court is of the opinion that plaintiffs' motions must be granted. Nevertheless, the court will make a couple of observations before doing so.

First, as a general proposition, Fed. R. Civ. P. 15(a) requires a court to grant leave "freely" to parties seeking to amend pleadings. Furthermore, as a general proposition, this court is mindful that the Sixth Circuit frowns on the denial of this type of motion. In fact, this court has been reversed on at least two occasions in reported decisions for refusing to allow an amendment. See Int'l. Bhd. of Teamsters, Local 519, v. U.P.S., 335 F.3d 497, 504-05 (6th Cir. 2003) (case remanded to district court, inter alia, to consider other grounds for denying Local 519's motion to amend its complaint, such as undue delay or undue prejudice to UPS); Black v. Ryder/P.I.E. Nationwide, Inc., 930 F.2d 505, 509-10 (6th Cir. 1991) (holding, inter alia, that district court should have allowed amendment, even though the case was four years old, even though plaintiff had already amended, even though the proposed amendment was two months before a non-jury ...


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