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January 29, 1991

RESOLUTION TRUST CORPORATION, as Receiver for Peoples Savings and Loan Association, F.A., Plaintiff and Counterdefendant,
ANGELO RUGGIERO, et al., Defendants and Counterplaintiffs

The opinion of the court was delivered by: SHADUR


 Resolution Trust Corporation ("RTC"), as receiver for now-defunct Peoples Savings and Loan Association, F.A. ("Peoples Savings"), *fn1" sues Angelo Ruggiero ("Ruggiero") and a number of other defendants in a mortgage foreclosure action that includes a personal claim against Ruggiero for breach of contract on a $ 200,000 promissory note (the "Note"). Because RTC has Ruggiero dead to rights on the Note, Ruggiero and his related defendants (collectively "Ruggiero Defendants") have resorted to claimed Affirmative Defenses ("ADs") in an effort to avoid liability. *fn2"

 Any such claim of duress must be viewed with considerable skepticism -- Ruggiero, who is himself a lawyer and who originally served as defendants' lawyer in this lawsuit, never said a word about any such asserted duress all through the time that he filed the initial ADs and Counterclaim in this action. *fn3" Whether characterized as some sort of hypnotic effect or as a lesser overbearing of Ruggiero's free will, the now-asserted economic duress must have been powerful medicine indeed to have persisted so that Ruggiero was unable even to talk about it until some 20 months later, when the second set of ADs was filed. To be quite blunt, the entire matter creates the strongly suspicious inference that Ruggiero (or the lawyer who has supplanted him as defense counsel here) is now asserting whatever seems necessary to escape from what Ruggiero himself did at the loan closing. *fn4"

 But be that as it may, any such doubts (however serious or well-taken) as to Ruggiero's credibility should not be permitted to control on a motion such as RTC's, directed as it is to defendants' pleadings. Ruggiero's statements in that respect are to be taken at face value on RTC's motion to strike. And here is what AD para. 14 says:

Each demanded change to the loan documents made on December 30, 1988, was acquiesced to by Angelo Ruggiero because:
a. It would have been impossible to obtain a $ 200,000 loan from a different source prior to the end of calendar year 1988; and
b. Angelo Ruggiero and Gina Ruggiero were faced with the imminent loss of the property had he not initialled the changes as demanded by Mr. Schnure.

 It has not been conclusively resolved in the few decided cases on the issue (1) whether a defense of economic duress negates the requisite contract-formative intent, so that neither 12 U.S.C. ยง 1823(e)("Section 1823(e)") nor the doctrine initially articulated in D'Oench, Duhme & Co. v. FDIC, 315 U.S. 447, 62 S. Ct. 676, 86 L. Ed. 956 (1942) can ever come into play to begin with (see, e.g., this Court's opinion in FDIC v. Linn, 671 F. Supp. 547, 556-57 (N.D. Ill. 1987); cf. FDIC v. Morley, 867 F.2d 1381, 1385 n. 5 (11th Cir. 1989)) or (2) whether duress -- like other defenses based on matters outside of the operative documents -- is rendered ineffective as a potential defense in the face of RTC's special holder-in-due-course status (see Oliver v. RTC, 747 F. Supp. 1351, 1353, 1356 (E.D. Mo. 1990), which seems to suggest that result -- though the opinion goes on ( id. at 1356) to discuss duress as a potential defense and to negate its existence on the facts in the case). In that respect this opinion will adhere to the view earlier expressed by this Court in Linn.5

 Even on that assumption, what Ruggiero sets out here does not satisfy the standard of legal duress. That concept is not a generalized proposition that somehow "necessitous men are not free men." Instead the party raising it as a defense to a suit on a note must show that the other party's demand was somehow unlawful, as explained in Alexander v. Standard Oil Co., 97 Ill. App. 3d 809, 814-15, 423 N.E.2d 578, 582, 53 Ill. Dec. 194 (5th Dist. 1981) (citations omitted):

Economic duress is present where one is induced by a wrongful act of another to make a contract under circumstances which deprive him of the exercise of free will, and a contract executed under duress is voidable. To establish duress, one must demonstrate that the threat has left the individual "bereft of the quality of mind essential to the making of a contract."

 As Higgins v. Brunswick Corp., 76 Ill. App. 3d 273, 278, 395 N.E.2d 81, 85, 32 Ill. Dec. 134 (1st Dist. 1979) (citations omitted) has put it after expressing the same "wrongful act" concept:

Duress does not exist merely where consent to an agreement is secured because of hard bargaining positions or the presence of financial circumstances. In cases where agreements have been invalidated because of duress, the conduct of the party obtaining ...

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