Dist. Ct. did not err in granting plaintiff-bank’s motion to dismiss defendants-investors’ counterclaim (in foreclosure action) alleging that plaintiff breached contract to loan them $700,000 for purposes of making repairs to properties owned by defendants. While said money was placed in escrow and plaintiff had failed to release said money after defendants had requested said funds, defendants’ counterclaim could not proceed since parties had not entered into written escrow agreement covering said funds as required under section 1823(e) of FIRREA. Fact that written references to escrow agreement were contained in closing documents involving instant properties did not require different result. Ct. also rejected defendants’ claim that plaintiff’s failure to release said funds amounted to conversion of said funds.
Federal 7th Circuit Court
Civil Court
Financial Institutions Reform
Recovery and Enforcement Act