28 Oct No Comments Remik Expert Matters

Facts:  The Plaintiff was an investor in real estate projects.  He was approached by a developer who sought financing for a real estate venture.  The Plaintiff, as a condition of providing financing, required collateral in the form of a letter of credit.  The developer arranged for a loan officer at a local credit union to issue a stand-by letter of credit that could be called in the event of a default by the developer.  The Plaintiff physically went to the office of the credit union, met with the loan officer, and obtained the letter of credit securing the loan.  The developer later sought financing for another project and the Plaintiff again required a stand-by letter of credit as collateral for the borrowing.  The Plaintiff again physically went to the office of the credit union, met with the same loan officer, and left with the stand-by letter of credit.   A third financing went the same way.  After the developer defaulted on the three loans, the Plaintiff called the letters of credit and the credit union refused to pay.  The credit union stated that the first stand-by letter of credit was issued by the loan officer without authority and the second and third stand-by letters of credit were issued after the loan officer had resigned his employment with the credit union.  The ex-loan officer had managed to use an office within the credit union after he resigned to meet with the Plaintiff and issue the letters of credit on credit union letterhead.

Client:  The plaintiff investor.

Subject of Expert Opinion:  Whether the credit union was negligent for allowing a former employee to use its offices to meet with the Plaintiff in connection with the perpetration of a fraud against the Plaintiff.

Outcome:  The Plaintiff’s complaint was dismissed by the court on the grounds that it was barred by the statute of limitations.