Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

TRAVELERS INDEM. CO. v. CENTLIVRE

October 22, 1993

TRAVELERS INDEMNITY COMPANY
v.
MARIANNE CENTLIVRE, et al.; TRAVELERS INDEMNITY COMPANY v. ARTEMIDE, INC., et al.



The opinion of the court was delivered by: BY THE COURT: JAMES T. GILES

 GILES, J.

 Travelers Indemnity Company ("Travelers") has brought suit to enforce indemnification agreements by which defendants agreed to reimburse Travelers for monies required to be paid by it on their behalf when defendants defaulted on their loan obligations. Defendants have refused to honor their indemnification agreements, asserting that but for Travelers' fraud they would never have entered into the underlying investment arrangements of which the Travelers indemnity agreements were a part. Defendants have also asserted various other affirmative defenses, and have filed counterclaims asserting violations of federal securities laws, and RICO and state fiduciary laws.

 The court has jurisdiction by reason of diversity of citizenship. Under the terms of the Travelers' indemnity agreement, the parties agreed that Pennsylvania law would apply in all respects to its interpretation and application.

 Travelers has moved for summary judgment claiming that judgment should be entered in its favor as a matter of law for a number of reasons, chief among them being that the indemnity agreements are valid and enforceable and that defendants, though asserting the existence of fraud by Travelers, have failed to demonstrate fraud or any other illegality by their surety relative to their own investment decisions. We agree and, for the reasons set forth below, judgment will be entered in favor of Travelers and against defendants on all causes of action asserted between the parties.

 I. FACTUAL BACKGROUND

 The undisputed facts follow. In 1985 and 1986, National Property Analysts, Inc. ("NPA") a Pennsylvania corporation with its principal place of business in Philadelphia, Pennsylvania, sponsored and syndicated a series of real estate limited partnerships known as National Community Centers, Inc. (hereinafter identified as "NCC" followed by a roman numeral). Each of these limited partnership offerings was described in a private placement memorandum ("PPM"). These consolidated lawsuits concern the NCC XI-A (Travelers v. Centlivre) and NCC XII (Travelers v. Artemide) partnerships. An investor became a limited partner in the partnership in which the investment was made by purchasing a unit or portion of a unit in the partnership. Investors could fund their investments in several different ways, should they elect not to, or were unable to, purchase outright. They could obtain financing for the investment independently or could choose, if qualified, a financing option from the PPM. The two PPM financing options presented to the defendants required the investors to sign a Promissory Note and required that the Notes be bonded by Travelers so that they could be assigned to a lender in exchange for funds to the partnership. Travelers agreed to bond the Note obligations provided the investor defendants agreed to indemnify Travelers should it have to pay the Note obligations upon their default, reimburse Travelers for all related attorneys' fees and expenses and resolve any disputes with Travelers in the Pennsylvania courts.

 Defendants admit that they signed the Notes and executed the Indemnification Agreements. They also admit that they have not made certain payments required under the Notes. See, NCC XI-A Answer PP 37, 41; NCC XII Answer PP 34, 38. After their respective defaults, LaSalle National Bank, as trustee to Credit Lyonnais, then the holder of the Notes and Bonds, advised Travelers of defendants' defaults under the Notes and made demand on Travelers to make the payments which defendants failed to make, plus interest. As required under the Bond, Travelers paid on behalf of each of the defendants. *fn1"

 Despite demand by the Travelers, the defendants have failed and continue to refuse to indemnify Travelers under the Indemnification Agreements for the payments Travelers made on their behalf. Travelers brought two suits which have been consolidated by this court for joint determination.

 II. DISCUSSION

 The Indemnification Agreements provide:

 
the investor will pay to the surety upon demand, at any time and from time to time: (i) all amounts paid by the surety under the Bond, together with interest thereon from the date of such payment by the surety at the rate of 12% per annum . . .; (ii) all costs and expenses (including attorney's fees and legal expenses) incurred by the surety in connection with any such payment under the Bond; and (iii) all costs and expenses (including reasonable attorney's fees and legal expenses) incurred by the surety in connection with the exercise ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.