A Florida bank claims a California title company is responsible for the bank's decision to issue an unsecured loan on an Alton property.

Shamrock Bank of Florida filed a lawsuit against First American Title Insurance Company Dec. 19 in Madison County Circuit Court.

According to the complaint, Great River Enterprises purchased a house in the 10 block of Danforth Road in January 2007. The sale agreement allegedly contained a reverter clause which provided for the termination of Great River's interest in the property in December 2011 unless certain conditions were met. One of those conditions, according to the contract, accelerated the reversion if the property was wasted, neglected or damaged.

In December 2007 Great River obtained a $1.3-million revolving line of credit against the property from Meridian Bank, according to the lawsuit. Shamrock Bank says it then bought shares of the Great River mortgage with First American Title issuing an insurance policy for $1.3 million naming Meridian bank as the insured.

However, in October 2008,the Illinois Department of Financial-Professional-Regulation Division of Banking closed Meridian Bank with FDIC named as the receiver. In August 2009, Shamrock Bank says it submitted a claim letter to First American noting the loan is likely to be in default and the title to the property is subject to a reverter clause.

A month later Shamrock Bank says it declared the mortgage in default and in November 2009, it was assigned the right to the title and insurance policy for the property. But by December 2009, the reverter clause was allegedly triggered because Great River failed to pay property taxes and HOA dues, resulting in liens against the home. Great River also allegedly caused damage to the property by failing to maintain the boilers.

Shamrock Bank says in October 2011 any interest it had in the Alton house was taken away by a Madison County court, a decision that was upheld by the Fifth District a year later.

Because of the title company's alleged failure to find the reverter clause in the previous trustee's deed and disclose it on the title commitment, Shamrock Bank accuses First American Title of negligence and breach of contract. Shamrock Bank asks for at least $2.7 million in damages plus interest and court costs.

Attorney Christopher W. Byron of Edwardsville represents Shamrock Bank.
Madison County Circuit Court Case No. 12-L-2053

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