ILNews

Judges rule on first impression escrow matter

Jennifer Nelson
April 28, 2011
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For the first time, the Indiana Court of Appeals addressed whether it’s possible to create an escrow absent an escrow agreement or fee.

In Meridian Title Corp., v. Pilgrim Financing, LLC, No. 45A05-1010-CC-613, the appellate court had to decide whether Meridian Title Corp., a title insurance company, negligently disbursed the net closings of proceeds from a refinancing transaction involving Pilgrim Financing. The trial court had ruled in Pilgrim’s favor on the claim.

Pilgrim sued Meridian after Meridian released proceeds of a property sale to the two property buyers instead of Pilgrim. The buyers had mortgages with Pilgrim. Meridian argued it didn’t have a relationship with Pilgrim that would serve to impose a duty of care on Meridian; Pilgrim claimed Meridian assumed a duty to it gratuitously.

Meridian argued it could not have assumed a duty in escrow as Pilgrim claimed because there wasn’t an escrow agreement or payment of an escrow fee. The Court of Appeals noted there is very little jurisprudence regarding the general standards for escrow, and cited cases from 1881 and 1921 to find that Indiana traditionally hasn’t required an escrow agreement or fee to establish an escrow. The judges also declined to adopt such a requirement.

They held there is sufficient evidence to establish that Meridian held Pilgrim’s payoff letter and partial release in escrow. The letter and partial release served as security to Meridian that Pilgrim would provide the original release of mortgage upon satisfaction of the conditions of the letter. The judges also concluded that parties to an escrow bear a duty toward one another to act with due care.

The Court of Appeals found that Meridian didn’t adequately clarify the nature of the two property buyers’ transactions to Pilgrim, so Pilgrim didn’t have all the necessary information to make an informed decision regarding Pilgrim’s rights to the proceeds.

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  1. The is an unsigned editorial masquerading as a news story. Almost everyone quoted was biased in favor of letting all illegal immigrants remain in the U.S. (Ignoring that Obama deported 3.5 million in 8 years). For some reason Obama enforcing part of the immigration laws was O.K. but Trump enforcing additional parts is terrible. I have listed to press conferences and explanations of the Homeland Security memos and I gather from them that less than 1 million will be targeted for deportation, the "dreamers" will be left alone and illegals arriving in the last two years -- especially those arriving very recently -- will be subject to deportation but after the criminals. This will not substantially affect the GDP negatively, especially as it will take place over a number of years. I personally think this is a rational approach to the illegal immigration problem. It may cause Congress to finally pass new immigration laws rationalizing the whole immigration situation.

  2. Mr. Straw, I hope you prevail in the fight. Please show us fellow American's that there is a way to fight the corrupted justice system and make them an example that you and others will not be treated unfairly. I hope you the best and good luck....

  3. @ President Snow - Nah, why try to fix something that ain't broken??? You do make an excellent point. I am sure some Mickey or Minnie Mouse will take Ruckers seat, I wonder how his retirement planning is coming along???

  4. Can someone please explain why Judge Barnes, Judge Mathias and Chief Judge Vaidik thought it was OK to re weigh the evidence blatantly knowing that by doing so was against the rules and went ahead and voted in favor of the father? I would love to ask them WHY??? I would also like to ask the three Supreme Justices why they thought it was OK too.

  5. How nice, on the day of my car accident on the way to work at the Indiana Supreme Court. Unlike the others, I did not steal any money or do ANYTHING unethical whatsoever. I am suing the Indiana Supreme Court and appealed the failure of the district court in SDIN to protect me. I am suing the federal judge because she failed to protect me and her abandonment of jurisdiction leaves her open to lawsuits because she stripped herself of immunity. I am a candidate for Indiana Supreme Court justice, and they imposed just enough sanction so that I am made ineligible. I am asking the 7th Circuit to remove all of them and appoint me as the new Chief Justice of Indiana. That's what they get for dishonoring my sacrifice and and violating the ADA in about 50 different ways.

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