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. Just an aside, but regardless of the outcome, I 'm proud of Judge William Hughes. He was the original magistrate on the Home place issue. He ruled for Home Place, and was primaried by Brainard for it. Their tool Poindexter failed to unseat Hughes, who won support for his honesty and courage throughout the county, and he was reelected Judge of Hamilton County's Superior Court. You can still stand for something and survive. Thanks, Judge Hughes!

  2. CCHP's real accomplishment is the 2015 law signed by Gov Pence that basically outlaws any annexation that is forced where a 65% majority of landowners in the affected area disagree. Regardless of whether HP wins or loses, the citizens of Indiana will not have another fiasco like this. The law Gov Pence signed is a direct result of this malgovernance.

  3. I gave tempparry guardship to a friend of my granddaughter in 2012. I went to prison. I had custody. My daughter went to prison to. We are out. My daughter gave me custody but can get her back. She was not order to give me custody . but now we want granddaughter back from friend. She's 14 now. What rights do we have

  4. This sure is not what most who value good governance consider the Rule of Law to entail: "In a letter dated March 2, which Brizzi forwarded to IBJ, the commission dismissed the grievance “on grounds that there is not reasonable cause to believe that you are guilty of misconduct.”" Yet two month later reasonable cause does exist? (Or is the commission forging ahead, the need for reasonable belief be damned? -- A seeming violation of the Rules of Profession Ethics on the part of the commission) Could the rule of law theory cause one to believe that an explanation is in order? Could it be that Hoosier attorneys live under Imperial Law (which is also a t-word that rhymes with infamy) in which the Platonic guardians can do no wrong and never owe the plebeian class any explanation for their powerful actions. (Might makes it right?) Could this be a case of politics directing the commission, as celebrated IU Mauer Professor (the late) Patrick Baude warned was happening 20 years ago in his controversial (whisteblowing) ethics lecture on a quite similar topic: http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1498&context=ilj

  5. I have a case presently pending cert review before the SCOTUS that reveals just how Indiana regulates the bar. I have been denied licensure for life for holding the wrong views and questioning the grand inquisitors as to their duties as to state and federal constitutional due process. True story: https://www.scribd.com/doc/299040839/2016Petitionforcert-to-SCOTUS Shorter, Amici brief serving to frame issue as misuse of govt licensure: https://www.scribd.com/doc/312841269/Thomas-More-Society-Amicus-Brown-v-Ind-Bd-of-Law-Examiners

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