Banner Bank v. Smith

── Banner Bank v. Smith ── Court: Court of Appeals for the Tenth Circuit Date: June 01, 2026 Category: General Appellate Case: 25-4030 Document: 45-1 Date Filed: 06/01/2026 Page: 1 FILED United States Court of Appeals UNITED STATES COURT OF APPEALS Tenth Circuit FOR THE TENTH CIRCUIT June 1, 2026 _________________________________ Christopher M. Wolpert Clerk of Court BANNER BANK, successor by merger of AmericanWest Bank which formerly did business in Utah as Far West Bank, Plaintiff Counterclaim Defendant - Appellant, v. No. 25-4030 (D.C. No. 2:12-CV-00763-CW) JAMES M. SMITH, a Utah resident; (D. Utah) LOREE C. SMITH, an individual, Defendants Counterclaim Plaintiffs - Appellees. _________________________________ ORDER AND JUDGMENT * _________________________________ Before TYMKOVICH, EID, and CARSON, Circuit Judges. _________________________________ Banner Bank appeals the district court’s award of attorneys’ fees after it lost a breach of contract dispute with Loree Smith. This is the Bank’s second appeal on the issue. In the first appeal we vacated the award of fees because we concluded the district court should have applied federal law in making the award, not state law. Banner Bank v. Smith, 30 F.4th 1232 (10th Cir. 2022). * This order and judgment is not binding precedent, except under the doctrines of law of the case, res judicata, and collateral estoppel. It may be cited, however, for its persuasive value consistent with Federal Rule of Appellate Procedure 32.1 and 10th Circuit Rule 32.1.  Appellate Case: 25-4030 Document: 45-1 Date Filed: 06/01/2026 Page: 2 On remand, the district court re-affirmed its finding that Banner Bank pursued claims against Ms. Smith in bad faith and awarded attorneys’ fees under the federal bad-faith exception to the American Rule. In the alternative, the court awarded attorneys’ fees as direct damages for Banner Bank’s breach of an agreement releasing Ms. Smith from certain suits. Exercising jurisdiction under 28 U.S.C. § 1291, we AFFIRM the district court’s award of attorneys’ fees. The district court adequately supported the award of fees for bad faith. I. Background A. Banner Bank I In Banner Bank I, the district court oversaw a trial concerning real-estate foreclosures in Oregon. Banner Bank sought to foreclose on 12 parcels of Oregon land that James Smith had pledged as collateral for a 2009 loan borrowed from the Bank’s predecessor in interest. Because Mr. Smith was an owner of the company that took out the 2009 loan, he personally guaranteed the loan. He also offered as collateral 12 parcels of land in Oregon. One of those parcels—Unit 7—was a developed parcel and jointly owned by Mr. Smith and his then-wife, Loree Smith, as tenants in the entirety. Ms. Smith, however, refused to sign the Deed of Trust that would pledge as collateral the jointly owned parcel and the other 11 parcels. Without recording the defective Deed of Trust, the Bank funded the loan. 2  Appellate Case: 25-4030 Document: 45-1 Date Filed: 06/01/2026 Page: 3 In 2010, Mr. Smith and the Bank’s predecessor entered into a Release Agreement that “RELEASE[D] and FOREVER DISCHARGE[D