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Bank sues over unpaid loan
11/24/2008 10:00 AM
Home Federal Savings and Loan Association has filed a suit against Abstracts and Titles, alleging it breached an escrow agreement.
Home Federal owns a promissory note made by PDI of Illinois dated April 8, 2005, for $175,200, according to a complaint filed Nov. 18 in Madison County Circuit Court.
The note is secured by a real estate mortgage and is a loan to PDI to pay for construction costs for improvements on the property, the suit states.
In April 2005, Home Federal entered into a Construction Loan Disbursement Agreement with PDI and Abstracts and Titles to assure that the proceeds of the loan were disbursed to pay for construction costs, Home Federal claims.
Home Federal deposited money with Abstracts and Titles that was to be disbursed according to the agreement at various times between April 8, 2005, and Oct. 27, 2005, according to the complaint.
However, Abstracts and Titles breached the agreement when it disbursed proceeds of the loan without first inspecting to determine work had been completed and materials were in place, according to the complaint.
It also breached the agreement by disbursing proceeds of the loan without first obtaining certification that the labor and materials had been furnished for the property and by disbursing proceeds of the loan with first requiring PDI to deposit funds or lien waivers equal to the difference between the remaining balance of the load and the cost to complete the work, the suit states.
In addition, Abstracts and Titles breached its agreement when it disbursed proceeds of the loan without first obtaining satisfactory assurance that the improvements on the premises had reached the stage of completion represented by the contractor and when it made a final disbursement of loan proceeds without first obtaining satisfactory evidence that the improvements had been completed, Home Federal claims.
In the eight-count suit, Home Federal is seeking a judgment in excess of $400,000, plus prejudgment interest, costs and other relief the court deems just.
Home Federal will be represented by David L. Antognoli and Ryan J. Mahoney of Goldenberg, Heller, Antognoli and Rowland in Edwardsville.
Madison County Circuit Court case number: 08-L-1098.
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