M&I Bank announced that it has dropped seven lawsuits brought last month against Arizona real estate appraisers. The suits, filed in January, were intended to recover some of its massive Arizona loan losses, according to a Feb. 17 story in The (Milwaukee, Wis.) Journal Sentinel.
The bank would not say why it was dropping the suits, but Appraisal Institute member Jay Josephs, owner of Josephs Appraisal Group, a large Phoenix appraisal company sued by M&I, told the Journal Sentinel that his company was told by his insurance carrier that the M&I suits would have trouble making it through court because of the statute of limitations. Arizona’s statute of limitations gives plaintiffs just two years to file claims alleging negligent misrepresentation, according to the Journal Sentinel.
However, Rachel Dollar, a California lawyer specializing in mortgage fraud representing M&I on the suits, told the Journal Sentinel, "Statute of limitations analysis is legally and factually complex … in many cases, claims do not accrue, and thus the limitations period does not begin to run until years after the conduct underlying the claims has occurred. Attorneys review potential statute of limitations issues prior to filing lawsuits."
Josephs said that "the bank made a filing without even reviewing the appraisals," adding that even though M&I was suing him, they still contacted him for appraisals.
The lawsuits noted that recent reviews and investigation reveal the market value listed in the appraisals – some of which were from as late as 2007 – was inflated. The lawsuits charged the appraisers showed a "reckless disregard for the truth" in estimating the value of properties that were used as collateral for bank loans. M&I sought $6 million in damages, the Journal Sentinel reported.