The Seventh Circuit today upheld a Rule 54(b) judgment in favor of a supervising appraiser whose apprentice knowingly issued false real estate appraisals.  The appraisals facilitated a scam in which the fraudster-in-chief pocketed loan proceeds far in excess of the purchase price for the realty.  The plaintiffs, who borrowed the money in hopes of repaying the loans with rent from the properties, sued the supervisor (and others).  The district court held, under Indiana law, that appraisers don’t owe a duty of accuracy to borrowers (only lenders).  The court also found no evidence that the supervisor committed fraud — that she knew about the falsity of the appraisals on which she signed off.  The Seventh Circuit affirmed in an opinion that indulges a judicial penchant for raconteurship at the expense of clarity.  Decatur Ventures, LLC v. Daniel, No. 06-3441 (7th Cir. May 4, 2007).

Barry Barnett

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