NWLNews Exclusive! Montana’s Largest Credit Union Goes on Trial in Flathead County Today

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Kalispell, Montana – Whitefish Credit Union (WCU), Montana’s largest credit union, will have its lending practices, along with alleged criminal conduct by WCU attorney Sean Frampton laid bare this week as the Deanna McAtee trial begins on April 24 in Flathead County.

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For those unfamiliar with the Deanna McAtee case, I have included a brief overview below.

STATEMENT OF THE CASE

From 2007 through 2011, Deanna McAtee contracted with Whitefish Credit Union (“WCU”) to broker construction loans. WCU, through its legal counsel Morrison and Frampton (“MF”), filed a lawsuit in 2011 after the borrowers on one of the loans McAtee brokered for WCU defaulted. Besides asserting contractual rights against McAtee’s mortgage brokerage business, WCU and MF sued McAtee personally, accusing her of fraud in connection with the transaction. App. 4. Around the same time, MF provided information concerning its fraud allegations against McAtee to the United States Secret Service, ultimately resulting in a criminal bank fraud Indictment. App. 109-133, 135-141. The fraud allegations and criminal charges destroyed McAtee’s reputation, caused her unbearable distress, and forced her into bankruptcy. App. 5, 41-42, 45, 56.

In 2012, Doug Johnson, the representative of WCU who worked directly with McAtee on the loan brokerage arrangement, testified that McAtee followed his directions in connection with the defaulted loan, and did not commit fraud in any way. App. 12-13. Aaron Archer, WCU’s Rule 30(b)(6) designee, also confirmed that the fraud allegations against McAtee were false. App. 23-25.

Eventually, both WCU’s fraud claim and the criminal charges against McAtee were dismissed in her favor. App. 167, 173-176. McAtee filed this action in 2014. MF eventually was made to file its Answer on December 26, 2017. MF then moved for summary judgment on January 18, 2018. MF based its request for summary judgment in part on the safe-harbor provision of the Annunzio–Wylie Anti–Money Laundering Act (“Annunzio Act”), 31 U.S.C. § 5318(g)(3).

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The Annunzio Act exempts financial institutions from liability for providing law enforcement with information on a “possible violation of law or regulation.”

Over McAtee’s opposition, the District Court granted MF partial summary judgment. In its May 15, 2018 Order, the District Court held the Annunzio Act immunized MF from malicious prosecution liability for inciting McAtee’s criminal Indictment. App. 70-73. McAtee’s remaining malicious prosecution claim, based on MF/WCU’s efforts to commence and continue the civil fraud action against McAtee, continued in litigation.

On December 7, 2018, MF moved for summary judgment on McAtee’s remaining malicious prosecution claim, asserting it had the requisite probable cause to initiate and continue its civil fraud claims. Over McAtee’s opposition, the District Court granted summary judgment to MF and dismissed McAtee’s malicious prosecution action with prejudice as against MF on January 31, 2019. App. 81-89. After settling with WCU, McAtee filed her Notice of Appeal.

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On May 9, 2019, McAtee appealed the summary judgment orders relieving MF of liability for McAtee’s criminal and civil malicious prosecution claims. MF cross-appealed the District Court’s order denying summary judgment to MF based on judicial estoppel. Subsequently, the Montana Supreme Court decided Kucerav. City of Billings, 2020 MT 34, and remanded that issue back to the District Court for review in light of the intervening Kucera decision.

On October 23, 2020, the District Court granted summary judgment in favor of MF on the issue of judicial estoppel, dismissing McAtee’s malicious prosecution claim with prejudice. App.223-230. McAtee again appealed on November 19, 2020.

Read the entire Appellant’s Brief by clicking here

Keep tuned to Northwest Liberty News for updates, as we have been approved to record the trial from beginning to end.

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