Abuse of Discretion Damages.

Byline: Derek Hawkins

7th Circuit Court of Appeals

Case Name: Federal Deposit Insurance Corporation v. Chicago Title Insurance Company, et al.,

Case No.: 20-1572

Officials: WOOD, HAMILTON, and KIRSCH, Circuit Judges.

Focus: Abuse of Discretion Damages

This case arose from the fraudulent financing of purchases of four properties in Chicago back in 2006. The borrowers concealed their lack of equity from the lender. All defaulted, and the lending bank later went into receivership. As receiver for that bank, the FDIC brought this suit against the title insurance company that conducted the fraudulent closings and an appraisal company that aided the transactions.

The FDIC settled with the appraisal company and went to trial against the title insurance company, winning a verdict but for less than the FDIC believes was warranted. The FDIC's appeal raises three issues. The first is whether the district court erred by denying prejudgment interest to the FDIC. That issue requires us to address a somewhat Delphic statutory provision telling courts to award "appropriate" prejudgment interest in FDIC receivership cases that blend federal and state law. See 12 U.S.C. 1821(l). We conclude that the statute gave the district court authority to exercise its discretion and to...