Sport & Wheat, CPA, PA v. ServisFirst Bank, Inc. — court filings

Case summary

Sport & Wheat, CPA, PA, a small accounting firm, brought this class action in the U.S. District Court for the Northern District of Florida, Pensacola Division, Case No. 3:20cv5425-TKW-HTC, against ServisFirst Bank, Inc., Synovus, The First, Truist and John Doe lenders. It alleged that the lenders did not pay it the agent fees, totalling $4,526, that it says it was due under the Paycheck Protection Program and its implementing regulation for helping borrowers obtain loans. The order of August 17, 2020 dismissed the amended complaint's four counts, holding that the lenders had no legal obligation to pay an agent fee where neither the firm nor the borrowers executed SBA Form 159 or had agreements with the lenders. On September 4, 2020 the court denied leave to amend as futile and dismissed the case with prejudice.

Case at a glance

What did the court decide?

That the central issue of first impression, whether the plaintiff and others like it are entitled to any portion of the fees the federal government paid to lenders under the Paycheck Protection Program, has the short answer no, and it dismissed all four counts of the amended complaint.

Why were the claims dismissed?

Because it was undisputed that neither the plaintiff nor the borrowers executed Form 159 or had agreements with the defendants about payment, so the defendants had no legal obligation under the CARES Act or the interim final rule to pay an agent fee, and because the benefit the plaintiff conferred on the lenders was indirect and incidental, which does not satisfy the first element of unjust enrichment or contract implied in law.

How does the order describe the wider litigation?

As apparently the first of at least 50 cases then pending around the country raising the same issue, noting that the Judicial Panel on Multidistrict Litigation had denied a motion to transfer those cases into a single MDL proceeding, In re Paycheck Protection Program (PPP) Agent Fees Litigation, MDL No. 2950, on August 5, 2020.

Summary written from the documents on this page; every sentence is sourced.