Tuesday, February 7, 2012

FDIC v. CoreLogic -- Court Rules on eAppraiseIT's Motions to Dismiss and Strike FDIC's 1st Amended Complaint

Judge Carter ruled yesterday on eAppraiseIT's motions attacking the FDIC's First Amended Complaint in the lawsuit filed by the FDIC against CoreLogic/eAppraiseIT and their various affiliates on May 9, 2011. 

eAppraiseIT's Motion to Dismiss Count I -- Breach of Contract Relating to Appraisals Delivered Prior to Signing of Formal Written ContractThe first of these motions was eAppraiseIT's motion to dismiss Count 1 of the FDIC's current First Amended Complaint.  In that count, the FDIC alleged a breach of contract pertaining to appraisals delivered by eAppraiseIT prior to the execution of eAppraiseIT's later, very detailed written contract with WaMu.  The formal written contract was not signed until November 2006.  The FDIC is trying hard to plead a separate breach of contract with regard to those early appraisals because there is no potential limitation of eAppraiseIT's liability for them since they pre-dated the detailed written contract containing those limitations.  The problem for the FDIC is that there apparently never was any kind of a written contract between eAppraiseIT and WaMu pertaining to appraisal work in that early period before the parties signed the November 2006 contract -- quite incredible, but that's the way a lot of appraisal management was handled in that period.  Thus, the FDIC is struggling to hobble together some kind of breach of contract story based on a blend of factual scraps.  It is also trying to make it sound like a written contract existed during that time -- because the FDIC can't say the contract was oral without running up against statute of limitations problems.  The result is that the FDIC pleaded a very vague breach of contract claim in Count 1 without the required specifics.  [Remainder of post deleted.  Questions about FDIC/AMC matters should be directed to peter@liability.com.]