A federal jury has awarded $2.7 million in damages to First South Bank of Columbia and Spartanburg after a federal civil trial lasting almost two weeks.
The verdict against Fifth Third Bank, headquartered in Cincinnati, consisted of $2.38 million in actual damages and $396,000 in punitive damages, according to public records of the jury’s finding.
A complaint in the lawsuit, originally filed in 2010, asserted that officials from First Charter Bank – now owned by Fifth Third Bank – went to the Spartanburg offices of First South in 2006 to solicit First South’s participation in a loan to refinance a large planned residential subdivision in North Carolina.
First South officials agreed to loan $4 million of a purported $11 million total loan, which was supposed to be secured and paid off in an orderly “commercially reasonable manner,” according to the lawsuit.
However, Fifth Third Bank committed “gross mismanagement and fraud” by numerous acts, including giving First South a “sham opinion letter” representing that the loan was closed properly, the court documents said.
In all, First South claimed it had suffered more than $4 million in damages, according to the lawsuit. However, in recent years, some of the money had been paid back through the sale of the property.
During the trial, Fifth Third officials denied the allegations and raised other defenses as to why their bank did not owe First South any money.
In awarding punitive damages, the jury found that Fifth Third had committed civil fraud, according to the jury verdict papers.
Columbia attorney Robert Goings, who represented First South with attorney Joel Collins, also of Columbia, said he and Collins will be asking Judge Mary Lewis to award triple damages and attorneys’ fees – which, if awarded, could bring the total judgment to $7 million.
Fifth Third, whose bank holding company is the nation’s 22nd largest, has some $123 billion in assets, more than 1,200 offices and around 21,000 employees.
First South Bank has about $400 million in assets, close to 70 employees and offices in five areas around South Carolina, including its Spartanburg headquarters, Greenville, Columbia and Bluffton-Hilton Head.
Fifth Third was represented by Ohio attorneys Alan Statman and Brian Giles, as well as Frank Gibbes of Spartanburg.