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Bank Sued by Criminal Defendants

Bank Sued by Criminal DefendantsJohnstons Vs. People’s Bank of Ozarks

February 20, 2007

By LISA D. BURDEN
WASHINGTON correspondent for MortgageDaily.com

A lawsuit has been filed against a Missouri Bank for yanking a couple’s construction financing and terminating their home equity line-of-credit. But a lawyer for the bank said it had to take the action after the wife disclosed that felony charges had been lodged against the couple for fleeing police.“I have represented banks for almost 30 years and I have never had one like this come up before.” said James Bowles, the attorney for People’s Bank of the Ozarks.

Robert and Melanie Johnston filed the lawsuit last week in federal court in Springfield, Mo.

Acting as their own attorney because they said they could not afford legal representation, the Johnstons accused the bank, their loan officer and Bowles of terminating their HELOC and construction loan in 2004 “based on [the defendant’s] personal opinion of false accusations made by Arkansas authorities.”

An Arkansas policeman attempted a traffic stop of the Johnston’s SUV in January 2004 after observing Mr. Johnston speeding and driving left of center, according to news accounts. Although the family stopped — Mrs. Johnston and their two kids were in tow — Mr. Johnston drove away after the policeman asked Mr. Johnston to step out of the car. The family abandoned the SUV after a high speed chase that spanned 112 miles, lasted for almost two hours and included the couple’s successful effort to fend off a police attempt to deploy spike strips in front of the vehicle.

Investigators later found a .22 caliber pistol and an 18-inch homemade club in the abandoned vehicle.

After a night spent hiding in the woods and the evasion of capture in spite of the police use of helicopters and scent-tracking dogs, the family found an unoccupied vacation cabin. They stayed there for several days until a SWAT team, acting on a news tip from a neighbor who kept an eye on the place because the owner lived in another state, surrounded the cabin and apprehended the family.

The Johnstons’ pleaded not guilty to charges of aggravated assault on a police officer, fleeing in a vehicle, endangering a minor and carrying a weapon. In an apparent letter to one of the newspapers chronicling the event, the Johnstons claimed they were the victims of “rogue policemen.”

Bowles said the bank found out about the accusations several weeks after the incident when Mrs. Johnston revealed the charges to the couple’s loan officer. He said the loan officer, who was in his first week of employment with the bank, alerted the bank after he found news stories chronicling the story of the family’s flight and capture.

Bowles, on the bank’s behalf, then wrote the couple and told them the bank would not be loaning the money based on a clause in the loan documents explaining that if the bank felt insecure about recouping loaned money that it could walk away from the transaction.

“We felt, very, very insecure,” he said with a laugh. “We’re not going to loan money to people who can’t pay it back,” he added.

The couple still has a mortgage with the bank.

The Johnstons have asked for $295,000 for actual claimed damages such as building site preparation, appraisals, loss of line of credit and loss of construction loan. They have also asked the court for as yet unspecified punitive damages for defamation of character and mental anguish.


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