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Independent Trust Corp. v. Fidelity National Title Insurance Company of New York

March 30, 2007

INDEPENDENT TRUST CORPORATION, PLAINTIFF,
v.
FIDELITY NATIONAL TITLE INSURANCE COMPANY OF NEW YORK, A NEW YORK CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Judge Rebecca R. Pallmeyer

MEMORANDUM OPINION AND ORDER

Until 2000, Plaintiff Independent Trust Corporation ("Plaintiff"), an Illinois corporation, served as a trustee for nearly 20,000 trust accounts primarily consisting of individual retirement accounts, which were valued at over $1 billion. (Compl. ¶ 12.)*fn1 In order to invest and manage these trust accounts, Plaintiff entered into an escrow agreement with Intercounty Title Company of Illinois ("Old Intercounty") in 1990. (Id. ¶ 20.) In 2000, Defendant Fidelity National Title Insurance Company of New York ("Defendant"), a New York corporation, took control of the escrow account where Old Intercounty was storing Plaintiff's funds. (Id. ¶ 19.) This suit arises out of the alleged misappropriation by Fidelity of $68 million in escrow funds that Plaintiff deposited with Old Intercounty before the Illinois Commissioner of Banks and Real Estate ("the Commissioner") placed Plaintiff in receivership for the purpose of liquidation in April 2000 after the discovery of the $68 million loss.

Plaintiff's receiver, PricewaterhouseCoopers LLP ("PWC"), brings this action on behalf of Plaintiff and for the benefit of the almost 20,000 account holders that Plaintiff claims have borne the loss of the misappropriated escrow funds. (Id. ¶¶ 114, 128.) Plaintiff sues Defendant for breach of contract (Count I), breach of fiduciary duty (Count II), fraud (Count III), fraudulent concealment (Count IV), violation of the Illinois Consumer Fraud and Deceptive Business Practice Act (Count V), conversion (Count VI), violation of the Illinois Title Insurance Act (Count VII), fraudulent transfers pursuant to 740 ILCS 160/5(a)(1) of the Illinois Uniform Fraudulent Transfer Act ("IUFTA") (Count VIII), fraudulent transfers pursuant to 740 ILCS 160/6 of the IUFTA (Count IX), fraudulent transfers pursuant to 740 ILCS 160/5(a)(2) of the IUFTA (Count X), and unjust enrichment (Count XI). Defendant has moved to dismiss Plaintiff's complaint on the bases that Counts II through XI are barred by the statute of limitations, and that Plaintiff has failed to state claims for breach of contract, breach of fiduciary duty, fraudulent concealment, fraud, conversion, violation of the Illinois Title Insurance Act, or fraudulent transfers under the IUFTA. For the reasons set forth below, Defendant's motion to dismiss is denied in part and granted in part.

BACKGROUND

The following facts, drawn from the complaint, are accepted as true for the purpose of this motion to dismiss. Shawnee Trail Conservancy v. U.S. Dep't of Agric., 222 F.3d 383, 385 (7th Cir. 2000).

1. The Parties & Their Relationships With Relevant Entities

Jack Hargrove ("Hargrove") was Plaintiff's owner and the Chairman of Plaintiff's board. (Compl. ¶ 14.) Laurence Capriotti ("Capriotti") was one of Plaintiff's directors. (Id.) In this action, Plaintiff claims that Hargrove and Capriotti caused it to transfer tens of millions of dollars in trust holder funds to other entities they controlled-Old Intercounty and Old Intercounty's parent company, ITI Enterprises, Inc. ("ITI")-pursuant to an escrow arrangement. Plaintiff alleges that Hargrove, Capriotti, and Old Intercounty/ITI*fn2 then converted millions of dollars of Plaintiff's escrow funds to their own use. (Id. ¶ 1.)As a result of the fact that $68 million in Plaintiff's escrow funds could not be accounted for, on April 14, 2000, the Illinois Commissioner of Banks and Real Estate ("the Commissioner") took control of Plaintiff and appointed PWC as its receiver for the purpose of liquidating Plaintiff;*fn3 as receiver, PWC was authorized to take all measures to "protect, preserve, collect and recover" Plaintiff's assets, property, debts, and claims, and to prosecute or defend suits relating to Plaintiff's affairs, assets, or debts. (Id. ¶ 13.)

Hargrove and Capriotti also owned ITI. (Id. ¶ 15.) Beginning in 1994, ITI owned Old Intercounty,*fn4 a corporation that issued title insurance policies and provided real estate closing services, including escrow services. (Id.) Capriotti was President of Old Intercounty and Hargrove served as its Secretary. (Id.)

In 1995, another corporation, New Intercounty, began operating to provide real estate closing services, including escrow services, "primarily with respect to title policies underwritten by" yet another similarly-named entity, Intercounty National Title Insurance Company ("Intercounty National"). (Id. ¶ 17.) Intercounty National was authorized to act as a title insurance underwriter in Illinois. (Id.) From 1995 to April 26, 2000, whenever New Intercounty purportedly provided escrow services to residential and commercial real estate customers, the services were actually provided by Old Intercounty/ITI under a service agreement between New Intercounty and ITI. (Id.)

Defendant, a New York corporation, underwrites title insurance and reinsures title insurance underwritten by other companies. (Id. ¶ 18.) Pursuant to a reinsurance agreement between Defendant and Intercounty National, from 1995 to 2000, Intercounty National served as Defendant's agent in Chicago, Illinois, and Defendant served as a reinsurer for title insurance policies underwritten by Intercounty National. (Id.) "Among other things, [Defendant] reinsured [Intercounty National] against loss in its title policies in excess of [Intercounty National's] primary retention." (Id.) According to Plaintiff, as a result of New Intercounty's relationship with Intercounty National whereby New Intercounty provided escrow services with respect to title policies underwritten by Intercounty National, Defendant was obligated to insure Intercounty National against the loss of any escrow funds deposited with New Intercounty. (Id.)

For reasons described in greater detail below, on April 26, 2000, Defendant took control of the escrow accounts that Old Intercounty/ITI had previously managed. (Id. ¶ 19.) Old Intercounty/ITI, New Intercounty, and Intercounty National granted Defendant "the authority to control, monitor and oversee all aspects and functions of Intercounty's Escrow Account." (Id.) As a result of Defendant's informing the Illinois Department of Financial Institutions ("DFI") of a shortfall in the Old Intercounty/ITI escrow account and its intention to cancel its reinsurance agreement with Intercounty National, on June 26, 2000, the DFI appointed Defendant trustee of Intercounty National "with the authority to assure the proper disbursement and distribution of all escrowed funds held by [Intercounty National] or its agents." (Id.)

2. Old Intercounty/ITI's Service as Escrow Agent to Plaintiff and New Intercounty/Intercounty National

In December 1990, Hargrove and Capriotti caused Plaintiff to enter into an escrow agreement with Old Intercounty, the purpose of which was "to serve as an investment vehicle for the daily cash investment and management of" Plaintiff's retirement plan accounts and other trust accounts. (Id. ¶ 20.) Under the agreement, Plaintiff promised to deposit funds with Old Intercounty, and Old Intercounty promised to hold Plaintiff's funds in an interest-bearing account. (Id.) The agreement further stated that Plaintiff could deposit and had sole authority to withdraw funds on a daily basis and from time to time upon its sole order to Old Intercounty; withdrawals of funds were to be executed by Plaintiff's written direction to Old Intercounty or over the telephone. (Id.) Funds withdrawn from the escrow account were to be transferred to another particular account belonging to Plaintiff at Northern Trust Bank. (Id.) Although this escrow agreement was between Plaintiff and Old Intercounty, Plaintiff alleges that Plaintiff's escrow account was in fact managed by both Old Intercounty and ITI, and that Plaintiff received statements and communications concerning its escrow funds from both Old Intercounty and ITI. (Id. ¶ 21.) Plaintiff therefore alleges that it would "sanction a fraud and promote an injustice to observe the fiction of separate corporate existences for Old Intercounty and ITI" and that "ITI had the same obligations to [Plaintiff] pursuant to the escrow agreement as did Old Intercounty." (Id. ¶ 88.) Plaintiff alleges that it fully performed its obligations under the escrow agreement. (Id. ¶ 89.)

Initially, when Plaintiff transferred trust holder funds to Old Intercounty/ITI pursuant to the escrow agreement, the funds were deposited into a particular escrow account with LaSalle National Bank in the name of "Intercounty Title Company" ("2728 LaSalle Account"); the account was controlled by Old Intercounty/ITI. (Id. ¶ 22.) Based on the history of Plaintiff's deposits, withdrawals, and interest earnings for this account, Plaintiff claims that by the end of 1994, the balance of funds on deposit with Old Intercounty/ITI should have been over $33 million. (Id.)

On October 5, 1995, Old Intercounty/ITI opened another escrow account at LaSalle National bank in the name of "Intercounty Title Company" ("7427 LaSalle Account"). (Id. ¶ 23.) Some New Intercounty and Intercounty National officers signed the documents necessary to open this account, but only Old Intercounty/ITI employees had check signing authority or otherwise controlled the 7427 LaSalle Account. (Id.) Between 1995 and 2000, Plaintiff deposited $29,700,000 in trust holder funds with Old Intercounty/ITI, and Old Intercounty/ITI deposited at least some of those funds in the 7427 LaSalle Account. (Id. ¶ 25.) During the same time period, funds that Old Intercounty/ITI managed for New Intercounty/Intercounty National pursuant to the service agreement between those parties were also being deposited in the 7427 LaSalle Account. (Id. ¶ 24.) Plaintiff therefore claims that between 1995 and 2000, New Intercounty/Intercounty National escrow funds were commingled with escrow funds that Old Intercounty/ITI was contractually bound to hold for Plaintiff and its account holders. (Id. ¶ 25.)

According to Plaintiff, sometime in late 1996 or early 1997, Plaintiff and regulators from the Illinois Office of Banks and Real Estate ("OBRE") pressured Old Intercounty/ITI to set up an escrow account at LaSalle Bank that would be limited to holding Plaintiff's trust holder funds. ("LaSalle Segregated Account"). (Id. ¶ 26.) Old Intercounty/ITI represented to Plaintiff and OBRE that it had complied with this direction and had placed Plaintiff's funds, which Plaintiff alleges should have exceeded $54 million by 1997, into the LaSalle Segregated Account. (Id.) In reality, however, Old Intercounty/ITI never transferred any significant amount of Plaintiff's escrow funds into the LaSalle Segregated Account, and instead continued to keep virtually all of Plaintiff's escrow funds commingled with New Intercounty/Intercounty National funds. (Id.) Old Intercounty/ITI alone controlled the LaSalle Segregated Account; in fact, Plaintiff had no authority to withdraw funds from or verify the balance of any account controlled by Old Intercounty/ITI, segregated or unsegregated. (Id.)

In June 1998, Old Intercounty/ITI stopped keeping any balance in the 2728 LaSalle Account; as of June 30, 1998 the balance in that account was $0 and the account never again carried a positive balance. (Id. ¶ 27.) But, on June 30, 1998, the balance in the 7427 LaSalle Account was $39,030,779.02. (Id.) Thus, Plaintiff alleges, by June 1998 and continuing thereafter, Old Intercounty/ITI had transferred all of Plaintiff's remaining escrow funds into the 7427 LaSalle Account in which New Intercounty/Intercounty National funds were also kept. (Id.)

In the fall of 1999, Old Intercounty/ITI closed its accounts at LaSalle Bank and transferred escrow funds to an escrow account at Harris Bank (the "6152 Harris Bank Account") that was in the name of "Intercounty Title Company," and was set up and controlled by Old Intercounty/ITI. (Id. ¶ 28.) Just before the 7427 LaSalle Account was closed, it contained a balance of $32,726,799.47.

(Id.) By September 30, 1999, the balance in that account shrunk to $1,321,667.59, and the account had no balance after that September. (Id.) Meanwhile, as of September 30, 1999, the 6152 Harris Account had a balance of $29,956,800.29. (Id.) Thus, Plaintiff alleges, as of the Fall of 1999, all of Plaintiff's remaining escrow funds and those of New Intercounty/Intercounty National had been moved in the 6152 Harris Account. (Id.)

According to Plaintiff, by the end of 1999, the balance Plaintiff had on deposit with Old Intercounty/ITI should have exceeded $67 million, (id. ¶ 26), and by January of 2000 Old Intercounty/ITI should have been holding more than $68 million of Plaintiff's funds in escrow and "tens of millions of dollars of New Intercounty/Intercounty National escrow funds." (Id. ¶ 29.) This was not the case, however. At the end of February 2000, the Old Intercounty/ITI escrow account-the 6152 Harris Bank Account-contained just over $20 million and Old Intercounty/ITI had closed the LaSalle Segregated Account. (Id.)

3. Discovery & Investigation of Escrow Fund Shortfall

In early 2000, the OBRE and Plaintiff learned that Plaintiff's $68 million in escrow funds were missing from the LaSalle Segregated Account. (Id. ¶ 30.)*fn5 The OBRE and Plaintiff tried to locate these funds, but Hargrove, Capriotti, and Old Intercounty/ITI refused to explain what had happened to the missing funds, how much of the funds remained, or where the remaining funds were. (Id.)*fn6 Plaintiff alleges that Hargrove, Capriotti, and Old Intercounty/ITI defrauded Plaintiff by converting tens of millions in Plaintiff's escrow funds to their own use. (Id. ¶ 1.) Plaintiff claims that this "fraud" became apparent to Plaintiff in early 2000, and alleges that it and its regulators were unable to locate Plaintiff's funds and believed that all of the $68 million Plaintiff had transferred pursuant to the escrow arrangement had disappeared. (Id. ¶ 1.) The discovery that these funds were missing "threw" Plaintiff into receivership in 2000. (Id.) Plaintiff alleges that it was not until "much later" that Plaintiff and PWC learned that over $20 million of its allegedly misappropriated funds were placed in Defendant's control as a result of Defendant's obtaining control of the escrow accounts that Old Intercounty/ITI previously managed. (Id. ¶ 2.)

On March 9, 2000, New Intercounty informed Defendant that there was a possible shortage in the escrow account that Old Intercounty/ITI managed for New Intercounty and required that Defendant immediately investigate the matter. (Id. ¶ 31.) New Intercounty initially estimated for Defendant that the escrow shortfall was in the $8 to $10 million range; this caused Defendant great concern because, according to Plaintiff, as a result of Defendant's relationship as a reinsurer to Intercounty National, Defendant was ultimately responsible for any loss or misappropriation of Intercounty National's escrow funds in instances when New Intercounty had served as escrow agent even though the funds were in fact managed by Old Intercounty/ITI. (Id.) It is Defendant's actions in the aftermath of this discovery that Plaintiff claims are unlawful in this lawsuit. (Id. ¶ 32.)

Upon learning of a possible shortfall on March 9, 2000, Defendant assembled a team of auditors to investigate; the auditors traveled to New Intercounty's offices on March 13, 2000 and stayed there until March 17, 2000. (Id. ¶ 33.) On April 3, 2000, one of the auditors informed Defendant that he had found a "massive shortage" in the escrow account; in an April 20, 2000 report, the audit team estimated the shortage at over $55 million. (Id. ¶ 34.) By this date, Defendant had also learned-though it is unclear from whom-that the 6152 Harris Bank Account was supposed to hold at least some of Plaintiff's funds in addition to those of New Intercounty/Intercounty National. (Id.) More specifically, Defendant learned that there was a transfer of at least $9.2 million of Plaintiff's funds into the Old Intercounty/ITI escrow account in April of 1999. (Id.)

In early May of 2000, Defendant hired Deloitte & Touche ("Deloitte") to investigate "potential inappropriate activity" related to the Old Intercounty/ITI escrow account. (Id. ¶ 35.) Deloitte had access to records of Old Intercounty, ITI, New Intercounty, and Intercounty National, including an electronic database that purportedly contained the records of all transactions in the escrow accounts belonging to Old Intercounty and New Intercounty from 1988 to April 2000. (Id. ¶¶ 35-36.) In a June 19, 2000 preliminary report, Deloitte confirmed that Old Intercounty had used the 7427 LaSalle Account as its "master escrow account" from November 1995 to the Fall of 1999, and had used the Old Intercounty/ITI escrow account-the 6152 Harris Bank Account-as its "master escrow account"since 1999. (Id. ¶ 35.) Deloitte also confirmed for Defendant that in April 1999, $9.2 of Plaintiff's funds may have been inappropriately transferred. (Id.) According to Plaintiff, Defendant has admitted that it was from this report that it learned that "massive escrow shortages were caused by theft over a long period of time." (Id.)

4. Asset Transfers to Defendant in 2000

Plaintiff alleges that upon learning of the missing escrow funds, Defendant threatened to "shut down" New Intercounty and Intercounty National, presumably by exposing wrongdoing in connection with escrow funds, unless Hargrove, Old Intercounty, and ITI gave Defendant substantial assets. (Id. ¶ 37.) Between February 22, 2000 and March 13, 2000, Hargrove did give New Intercounty $2,033,194.86 to replace missing funds; Hargrove gave New Intercounty the bulk of this sum-$1,966,264-after March 9, 2000, the date that Defendant learned that New Intercounty/Intercounty National escrow funds were missing and began negotiating with Hargrove to avoid a shutdown of Intercounty National. (Id. ¶ 38.) According to Plaintiff, this transfer benefitted Defendant because it reduced the amount Defendant would be obligated to pay New Intercounty/Intercounty National customers whose escrow funds had been misappropriated. (Id.)

Around March 17, 2000, Hargrove provided Defendant with certain assets or pledged certain assets as security, including Hargrove's interest in the beneficial interests of certain land trusts; the value of these real estate assets at the time Hargrove pledged them to Defendant is not known. (Id. ¶¶ 39-40.) In April 2000, after Defendant learned that the escrow shortage was possibly as high as $55 million, Defendant again threatened to shut down New Intercounty and Intercounty National, and Hargrove agreed to give Defendant numerous additional personal assets and assets of ITI as security for the escrow shortages; Hargrove estimated the value of these assets as $9 to $10 million. (Id. ¶¶ 41-42.) For example, Hargrove had offered to give Defendant a 122-ft. yacht as security and, in May of 2000, this assignment was executed. (Id. ¶ 43.) On May 22, 2000, Defendant wrote a letter to Hargrove to finalize the steps to be taken to perfect Defendant's interest in the assets belonging to Hargrove and ITI that Hargrove had previously identified for Defendant. (Id. ¶ 44.) Defendant did in fact take possession of substantially all of the assets transferred or pledged by Hargrove and ITI. (Id. ¶ 45.) Plaintiff alleges that in return for these assets, Defendant agreed to allow New Intercounty and Intercounty National to stay in business, agreed to "back" New Intercounty's escrow account to the extent of the fair market value of the collateral assigned, and agreed that if it established liability against Hargrove for the missing escrow funds, the value of the collateral transferred plus the money Hargrove deposited with New Intercounty would reduce any judgment against Hargrove. (Id. ¶ 46.)

Plaintiff claims that Defendant's promises to Hargrove were of no benefit to him because Hargrove did not own and was not a director of New Intercounty or Intercounty National; because Defendant was already obligated, as the result of its reinsurance agreement with Intercounty National, to cover deficiencies in New Intercounty's escrow account; and because Hargrove already would have been entitled to credit for the amounts he paid Defendant in a subsequent suit brought against him by Defendant. (Id. ¶ 47.) Plaintiff further alleges that Defendant, similarly, did not provide ITI with any value for the asset that ITI transferred to Defendant in April 2000. (Id.) At the time all of these assets transfers were made, in the first half of 2000, Plaintiff alleges, Hargrove, Old Intercounty, and ITI were all insolvent as measured under the Illinois Uniform Fraudulent Transfers Act ("IUFTA"). (Id. ¶ 50.)

In June 2000, Old Intercounty also assigned its partnership interest in certain real estate properties to Defendant. (Id. ¶ 48.) As secretary of Old Intercounty, Hargrove executed the assignment documents. (Id.) According to Plaintiff, Defendant provided no benefit to Old Intercounty in exchange for these assignments. (Id.) Plaintiff refers to the asset transfers described above as the "Spring 2000 Asset Transfers." (Id. ¶ 49.) Plaintiff also alleges that Hargrove, Old Intercounty, ITI, and other (unidentified) persons who were debtors to Plaintiff may also have transferred other assets to Defendant. (Id. ¶ 75.)

5. Defendant Takes Control of the Old Intercounty/ITI Escrow Account

Plaintiff alleges that, in addition to acquiring assets that belonged to Hargrove, Old Intercounty, and ITI, Defendant also wanted control of Old Intercounty/ITI's escrow account, the 6152 Harris Bank Account. (Id. ¶ 51.) In order for Defendant to obtain control of the account holding the New Intercounty funds that Defendant reinsured, New Intercounty and Intercounty National, under pressure from Defendant, granted Defendant the authority to "control, monitor and oversee" all escrow accounts of New Intercounty and New Intercounty's accounting and escrow account department. (Id.)

Plaintiff alleges that Defendant soon realized that this was not enough for it to gain control of the escrow account that Old Intercounty/ITI had managed for New Intercounty since 1995; as a result, New Intercounty, under pressure from Defendant, terminated its servicing agreement with ITI on April 26, 2000. (Id. ¶ 52.) On that same day, Old Intercounty/ITI also granted Defendant the authority to "control, monitor, and oversee" all aspects of "Intercounty's escrow account"*fn7 and the escrow account and accounting functions of New Intercounty and ITI. (Id. ¶¶ 52, 90.) This grant of authority allowed Defendant to maintain, at the expense of New Intercounty and ITI, employees on-site at New Intercounty and ITI to oversee the escrow account and accounting functions of New Intercounty and ITI, and also allowed Defendant to create new accounts "to manage and control the escrow account and accounting functions performed by New Intercounty and/or ITI with respect to title insurance policies underwritten by [Intercounty National]." (Id. ¶ 52.) Thus, on April 26, 2000, Defendant took over Old Intercounty/ITI's escrow account-the 6152 Harris Bank Account-which contained some of Plaintiff's remaining escrow funds and New Intercounty/Intercounty National escrow funds. (Id. ¶ 53.) When Defendant took over the Old Intercounty/ITI escrow account, it knew that at least $9.2 million in Plaintiff's escrow funds had already been deposited into it. (Id. ¶ 90.) Plaintiff also claims that when Defendant took control of the escrow account or shortly thereafter. Defendant knew that Plaintiff had made repeated demands upon Capriotti, Old Intercounty, ITI, and Hargrove to return all such funds to Plaintiff. (Id. ¶ 122.)

According to Plaintiff, Defendant had no intention of sharing with Plaintiff the $20 million-plus in escrow funds that remained in the 6152 Harris Bank Account, and planned to convert the entirety of the account previously controlled by Old Intercounty/ITI to its own use. (Id. ¶ 53.) Defendant never notified Plaintiff, the OBRE, or the DFI that it now controlled the escrow account or that the escrow account contained Plaintiff's trustholder funds. (Id. ¶ 54.) To the extent Defendant gave any "impression," Plaintiff claims, it was only that it had taken control of a New Intercounty/Intercounty National escrow account that contained only funds that Defendant was obligated to reimburse as Intercounty National's reinsurer. (Id. ¶ 55.)*fn8

Further, Defendant did not investigate how much of Plaintiff's money was supposed to be in the 6152 Harris Bank Account. (Id.) In fact, on April 26, 2000, Defendant informed the DFI that the size and complexity of the escrow account made it "unfeasible to do a total accounting of all of its activity over a sufficient period of time," and proposed a new solution that would enable Defendant to avoid investigating how much money Plaintiff had on deposit and would require Defendant to reimburse only those persons who specifically requested return of their escrow account funds before Defendant converted the funds to its own use; Defendant proposed to the DFI that it should close the escrow account and open a new account with Harris Bank so that, as the old escrow account winded down, "it [would] be easier to trace the extent of any deficiencies and [would] provide a much more manageable point of audit for both Defendant and the DFI." (Id. ¶ 56.)*fn9

During the time that Defendant had control of New Intercounty/Intercounty National's operations and Old Intercounty/ITI's escrow account, Plaintiff alleges, Defendant used Plaintiff's escrow funds to limit the amount it would be responsible for under the reinsurance agreement by shifting as much of the loss as possible to Plaintiff and its account holders. (Id. ¶ 60.) In other words, Defendant used Plaintiff's escrow funds to reduce the claims New Intercounty/Intercounty National customers could make against Defendant, but made no effort to return any funds to Plaintiff. (Id.) The amount of the escrow account as of February 28, 2000 exceeded $20 million; as of June 23, 2000, however, the date on which New Intercounty and Intercounty National ceased operations, as described below, the amount in the account was no more than $13.5 million. (Id.)

Plaintiff refers to the amount by which Defendant reduced its reinsurance obligations while Defendant was in control of the Old Intercounty/ITI escrow account prior to June 23, 2000 as the "Initial Escrow Funds Transfers." (Id.)

6. Defendant's Actions as Trustee of New Intercounty/Intercounty National

On June 20 or 21, 2000, Defendant informed the DFI of Deloitte's preliminary findings regarding the Old Intercounty/ITI Escrow account and informed the DFI that it would be canceling its reinsurance agreement with Intercounty National as of June 23, 2000. (Id. ΒΆ 58.) In response to Defendant's notice, on June 22, 2000, the DFI issued a cease and desist order against Intercounty National ...


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