FDIC Files Malpractice Lawsuit Against Icard Merrill. Law Firm Will Defend Against FDIC Complaint.

Dec. 29, 2011 - PRLog -- Against an all too familiar but unfortunate backdrop of falling real estate prices and a defaulted development loan, the Federal Deposit Insurance Corporation (FDIC), acting as receiver for yet another failed bank, has sued a prominent Sarasota-based law firm to try to recoup funds from a foreclosed loan.  In a complaint filed in the United States District Court in Tampa, the FDIC, acting as receiver for the now defunct First Priority Bank, has sued the law firm of Icard, Merrill, Cullis, Timm, Furen & Ginsburg, P.A., icardmerrill.com and shareholder Robert E. Messick for legal malpractice and breach of fiduciary duty in connection with a loan made by the insolvent bank to the failed River Meadows real estate project.  First Priority Bank was closed and put into receivership by the FDIC in August 2008.

“The claims of the FDIC against our firm are baseless and yet another example of similar misplaced actions that have become commonplace as a result of the larger economic downturn,” said Mike Furen, Chairman of the Board of Icard Merrill. “Our firm will vigorously defend these claims because we are not responsible for loan losses suffered by First Priority Bank or the FDIC. Our role was limited to the preparation of the documents for a loan transaction that was agreed to by the bank and its borrower before our firm first became involved, and we were not involved in the underwriting or loan approval process. Law firms are not responsible for loans that fail due to a downturn in the economy.”

River Meadows was a real estate development project in Manatee County.  The proposed development involved multiple phases, and the $5.3 million loan by First Priority to River Meadows was made in connection with the first phase of the project.  As contemplated in the bank’s credit approval, the loan was fully secured by first mortgages on the three parcels involved in phase one, along with guarantees from the principals of River Meadows, and was backed by an independent appraisal obtained by the bank showing a value for the collateral in excess of 8 million dollars .  

The FDIC complaint alleges that First Priority’s decision to make the loan to River Meadows was based on a purported option contract associated with a parcel slated for a potential second phase of the development.  Furen added that “The FDIC complaint erroneously alleges that Mr. Messick failed to advise the bank that this parcel was subject to a right of first refusal only, and not an option.”

“Icard Merrill stands firmly behind the actions of Mr. Messick in acting for the firm in this matter. Contrary to the FDIC’s allegations, the loan by First Priority for phase one of the River Meadows project was not predicated on an option to purchase additional land that could have been part of a potential phase two of the project.  Moreover, Mr. Messick advised the bank that this phase two parcel was subject to a right of first refusal, not an option.  Finally, Mr. Mesick’s simultaneous representation of both the bank and the borrower, River Meadows, was undertaken with the full knowledge and consent of all involved. He performed his duties with respect to this loan transaction within the pertinent ethical standards of the legal profession.”

About Icard Merrill
Founded in 1953, Icard, Merrill is among the largest law firms in the region. With additional offices in Lakewood Ranch and Punta Gorda, Icard Merrill is a full-service law firm with nearly 60 years of legal expertise in business transactions and disputes, private and public sector construction projects, personal injury, real estate, land use, family law, probate, tax and estate planning.  The firm has a strong commitment to the communities of southwest Florida through its patronage of the arts, civic involvement and significant contributions of pro bono legal services to the indigent.

For more information about Icard Merrill, call (941) 366-8100 or visit icardmerrill.com.

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