Lawyers at DBMS successfully litigate a wide variety of civil cases and argue appeals in some of the most challenging jurisdictions in the country.

Appellate Professional Liability

DBMS Obtains Dismissal Order in Favor of Law Firm Client in Federal RICO Case

02/15/2021
Client:

Law Firm

Outcome:

Dismissal Upheld on Appeal

Synopsis:

DBMS obtained a dismissal order in favor of its law firm client in a federal civil RICO case involving more than $15 million in alleged damages. The plaintiffs were commercial real estate developers who purchased three hotel properties from a regional bank using funds borrowed from the same bank. When the hotels failed to perform as expected, the bank foreclosed on the loans and seized the properties. Faced with their own lawsuit filed by disgruntled investors, the plaintiffs filed cross-claims against the bank, the bank’s officers and the bank’s attorneys, including DBMS’ client, who performed closing services in connection with the transactions at issue. The plaintiffs alleged a far-reaching fraud scheme whereby the bank, with the help of its lawyers, utilized falsely inflated appraisals to dupe plaintiffs and other borrowers into purchasing properties at exorbitant prices.

The District Court for the Northern District of Illinois ultimately granted DBMS’ motion to dismiss the claims against DBMS’ client. The court determined plaintiffs’ various state law claims against the law firm were barred by an Illinois statute of repose, which applies to lawsuits arising from the provision of legal services. With respect to the federal RICO claims, the court agreed with DBMS’ argument that the firm did nothing more than provide routine legal services for the bank, which the court found insufficient to support a RICO violation.

After briefing and oral argument, the Seventh Circuit Court of Appeals affirmed the dismissal in all respects. The Seventh Circuit’s opinion and order marked not only an end to the litigation against DBMS’ client, but also important favorable precedent for lawyers and other professionals facing RICO liability in this jurisdiction.