Justia Banking Opinion Summaries

Cadlerocks Centennial Drive, LLC entered into a loan secured by a mortgage on its property. Daniel Cadle executed a personal guaranty on the loan. The original lender subsequently assigned the mortgage and related documents to Wells Fargo Bank as trustee for registered holders ("Trust"). ORIX Capital Markets, LLC was the special servicer of the Trust and began servicing the loan. Cadlerocks later defaulted on its loan, after which the Trust commenced foreclosure proceedings. ORIX then filed this lawsuit against Cadlerocks and Cadle, alleging breaches of the various agreements related to the loan. Among those documents was an indemnity agreement, under which Cadle and Cadlerocks agreed to indemnify the original lender and its assignees for liabilities "sought from or asserted against" the indemnitees connected with the presence of hazardous material on or around the property. ORIX conducted environmental tests on the property, and the district court held that ORIX was entitled to recover the majority of the costs associated with the environmental testing under the indemnity agreement. The First Circuit Court of Appeals reversed the part of the district court's order awarding costs associated with environmental testing, holding that the cost of the tests that ORIX conducted fell outside the scope of the indemnity agreement. Remanded. View "ORIX Capital Markets, LLC v. Cadlerocks Centennial Drive, LLC" on Justia Law