Illinois District Court Orders New Trial Based on Erroneous Jury Instructions and Reduces FDIC’s Damages Award Against Title Insurance Company
After a series of post-trial motions, the U.S. District Court for the Northern District of Illinois granted defendant-title insurance company’s motion for a new trial limited to a particular damages issue, and denied the FDIC’s motion to vacate the jury’s $1,450,000 damages award and enter judgment in the amount of $3,790,695.
The FDIC’s claims against the title company arise out of the company’s role as “escrow agent for four allegedly fraudulent ‘flip’ real estate transactions” in which it allegedly defrauded a bank into loaning more money to property buyers than it needed to. Due to its role in the scheme, the FDIC brought claims against the title company for breach of contract, breach of fiduciary duty, negligence, and negligent misrepresentation. At trial, the jury found the title company liable as to all four properties on all four causes of action, but also found the bank to be contributorily negligent, which resulted in a 50% reduction in damages to the FDIC—$1,450,000 total damages.
On its motion for a new trial, the defendant sought to reverse or vacate the jury’s verdict—finding the title company’s conduct was willful and wanton—because the jury instruction was improper. The court agreed because the jury was instructed that willful and wanton conduct included both intentional and reckless conduct, which in affect negated the contributory negligence reduction. Having found plain error in the jury instruction, the court ordered a new trial limited to the damages issue of whether the title company’s conduct was intentionally willful and wanton.
On a separate motion, the FDIC requested that the Court vacate the jury’s $1,450,000 damages award and instead enter judgment in the amount of $3,790,695. The court denied this motion because the “jury had sufficient evidence to award damages less than the sum of the deficiency judgments” and it is not the court’s place to “second-guess the jury’s damages figure.” As a result, the court held that it was proper for the FDIC’s total damages figure to be reduced.
