Commercial Banking, Collections, and Bankruptcy

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.

Ct. of Appeals dismissed for lack of jurisdiction creditor’s appeal of Dist. Ct.’s order finding that creditor had not been assigned right to pursue state court claim for fraudulent transfer of debtor’s asset and that said claim belonged to bankruptcy estate, where Ct. of Appeals found that no final judgment or appealable order had been entered by Dist. Ct. Record showed that Dist. Ct. order contemplated future hearing to determine creditor’s security interest in transferred asset, and instant appeal was filed prior to said hearing. As such, Ct. distinguished between resolution of “discrete dispute,” which is appealable, from resolution of “discrete issue,” which is not appealable, and found that Dist. Ct.’s order was more properly classified as discrete issue that would not be appealable until creditor’s actual interest in asset had been determined.

Dist. Ct. did not err in dismissing for failure to state cause of action plaintiff’s complaint alleging that defendants violated False Entry Statute by falsifying official bank reports in order to cover up unauthorized transfers made from plaintiff’s bank accounts in defendants’ bank. Record showed that plaintiff had previously been convicted of check fraud arising from plaintiff’s $500,000 check that was deposited into one of his accounts at defendants’ bank, where said check lacked sufficient funds, and while plaintiff alleged that defendants transferred certain funds without his authorization which resulted in his prosecution on check fraud count, plaintiff failed to allege that he detrimentally relied upon said reports or that alleged unauthorized transfer was caused by any false bank reports, especially where said reports were generated only after money transfers had taken place. Ct. further found that any claim that defendants’ action caused plaintiff to be prosecuted for check fraud were without merit, since plaintiff had been prosecuted for his own conduct in writing $500,000 check from account that he knew did not contain such funds. Ct. further found that plaintiff filed frivolous appeal that required future award of sanctions.

Dist. Ct. did not err in reversing Bankruptcy Ct. order that denied, in instant Chapter 7 proceeding, debtor’s claimed exemption to rare 1830 Book of Mormon that was valued at $10,000. Plain language of Illinois personal property exemption statute (735 ILCS 5/12-1001(A)) grants to debtor ability to exempt bible from bankruptcy estate, and said statute did not contain any dollar limit as to value of said bible. Fact that debtor had other copies of Book of Mormon that had only negligible value, or that debtor expressed possibility that valuable bibles might not be covered by exemption, did not require different result. Ct. rejected Bankruptcy Ct.’s belief that intent of exemption was only to protect bible of ordinary value so as to not deprive debtor of worship aid.