Edelman v. Belco Title & Escrow, LLC

Federal 7th Circuit Court
Civil Court
Citation
Case Number: 
No. 13-2363
Decision Date: 
April 25, 2014
Federal District: 
S.D. Ill.
Holding: 
Affirmed
Dist. Ct. did not err in granting motion for summary judgment by defendant-title insurance company/escrowee in action alleging that defendant violated fiduciary duty owed to plaintiffs-lenders in real estate transaction by failing to inform plaintiffs that they were not going to receive first priority mortgage that had been promised to them by third-party/real estate developer in loan agreement between plaintiffs and third-party. Defendant owed plaintiffs duty only to comply with terms of escrow agreement calling for disbursement of closing costs and did not have any principal-agent relationship with plaintiffs with respect to loan agreement where: (1) defendant was not party to said loan agreement; (2) plaintiffs had disbursed loan proceeds to third-party before defendant had become involved in instant transaction; and (3) loan proceeds were never placed in escrow with defendant. Ct. also rejected plaintiffs’ contention that defendant had duty to ask plaintiffs whether they still wanted to proceed with loan transaction even if plaintiffs would only receive junior mortgage on real estate used to secure said loan.