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CONFIDENTIAL

Aug. 28, 1999

Banking
Breach of Contract
Promissory Estoppel

Confidential

Settlement –  $50,000

Judge

Victor L. Miceli

Court

Riverside Superior


Attorneys

Plaintiff

Holly Metzler Walker


Defendant

Charles E. Koller


Facts

In June 1990, defendants executed a promissory note in the amount of $80,000, to First Trust Bank. The note was secured by a second trust deed on property owned by defendants. At the time of the loan, the defendants owned other asssets including six gas service stations, a paint and body shop and approximately 15 parcels of real property in Palm Desert. The defendants made payments on the Note through September 1994. Thereafter, they made no further payments. The principal amount owing was approximately $69,262. In March 1995, the state superintendent of bank for California closed First Trust Bank. The Federal Deposit Insurance Corporation (FDIC) was appointed as receiver of the bank. In June 1995, the holder of the first trust deed completed a trusteeÆs sale which extinguished plaintiffÆs lien. After the FDIC was unable to settle the claim, in August 1996, the FDIC assigned all its rights, title and interest in the note to plaintiff, a Delaware limited partnership. The plaintiff then brought suit against defendants for breach of contract.

Settlement Discussions

The defendants made an offer $5,000 to settle, plaintiff countered with $70,000 because investigation revealed that defendants still owned 15 parcels of real property in the name of a limited partnership family trust. Eventually, the parties settled for $50,000.

Damages

The plaintiff claimed damages of about $69,262 and accrued interest of $32,153.

Other Information

The settlement was reached nine months after the lawsuit was filed.


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