FirstCapital Bank says they were victims of Reagor-Dykes check-kiting

FirstCapital Bank says they were victims of Reagor-Dykes check-kiting

LUBBOCK, TX (KCBD) - FirstCapital Bank of Texas filed a motion to dismiss on Tuesday, in response to VistaBank’s claim that they failed to properly return and dishonor over $6 million in checks from the Reagor-Dykes Auto Group.

VistaBank made the claim back in August that FirstCapital inflicted damages on Vista through inside information they obtained through their close relationship with Rick Dykes. Dykes is an insider of both Reagor-Dykes and FirstCapital. The documents say the inside information allowed FirstCapital to benefit from the Reagor-Dykes' check kiting scheme at Vista’s expense.

In response, FirstCapital said “the officers, directors, and employees of FirstCapital acted prudently and exactly as their fiduciary responsibilities to the shareholders, depositors and customers of FirstCapital compelled them to do. They timely and properly dishonored and returned the Reagor-Dykes checks to Vista Bank precisely as the applicable banking laws permitted.”

FirstCapital says they were a victim of “a check-kiting scheme perpetrated by Reagor-Dykes”, along with Vista Bank and hundreds of other creditors.

FirstCapital claims seven of the eight claims made by Vista Bank should be dismissed, saying:

“Seven of the eight claims are common law tort and contract-based claims. These common law claims have no application to this case as the field of law relating to the clearing of checks has been pre-empted by the Uniform Commercial Code (“UCC”) and federal regulations.”

FirstCapital also denies the claim by Vista Bank that a federal regulation requires bank to “exercise ordinary care and act in good faith in complying with the requirements of this subpart.”

FirstCapital told the court, “No matter how the claims are couched, hold that this regulation, standing alone, does not create a duty to which the obligations of ordinary care and good faith attach. In other words, there must be an independently-recognized duty in the federal regulation (i.e., the subpart) before there is an obligation to exercise ordinary care and good faith under that regulation.”

FirstCapital claims that they met the deadlines for the Reagor-Dykes checks presented by Vista Bank to FirstCapital on July 31st and August 1st totaling $6,277,808.41, “for which First Capital met the return midnight deadlines on August 1st and August 2nd, respectively, and for which Vista Bank received timely notice of dishonor on August 2nd and 3rd, respectively.”

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