Jackson Jambalaya

For a collection of all posts on Evans case, see sidebar on right side of page.

Matters continue to grow testy between Mississippi Valley Title Insurance Company and several of the banks victimized (allegedly) by Chris and Charles Evans (See synopsis at bottom of page for a recap of the case.). Derek Henderson, Trustee for the Bankruptcy Court, filed a complaint against the banks, Mississippi Valley Title, and MVT's parent, Old Republic seeking to settle the questions of which parties had valid liens and who was entitled to recovery. Copy of complaint

Merchants & Farmers (M&F) filed its answer on April 16 and included a crossclaim against the insurance companies. M&F stated "As to parcels 3A, 4C, 4E and 9A, the grantor under each of the Bankʼs deeds of trust was not the title owner at the time Bankʼs liens were granted. MVT and ORNT insured Bankʼs lien as a first lien on each....

Bank is entitled to a judgment against MVT and ORNT, jointly and severally, compelling immediate performance of their payment obligations under the title policies and immediate full payment of Bankʼs claims, plus all interest, attorney fees and expenses incurred by Bank..." M&F's answer M&F is represented by Jeff Rawlings of Ridgeland.

First Security Bank did likewise, answering the complaint and included a crossclaim against MVT. The bank called Charles Evans an "agent of the title insurance companies" and that he never intended to record the deeds for the properties that were the subject of the loans granted. FSB argues "the Title Insurance Companies knew or should have known that there was reason to suspect the validity of title work performed by Charles Evans.." FSB issued approximately $1.7 million in loans to Chris Evans and claims the "title insurance companies are responsible" for the actions of Charles Evans. Copy of answer

FSB is represented by Kristina Johnson of Watkins Ludlam in Jackson. Mrs. Johnson and Mr. Rawlings have been aggressive in defending their clients' interest during this saga. Her other clients filed similar responses as well. Holmes County Bank, State Bank. Bankplus files a similar response and claimed MVT and Old Republic "breached the terms of the title insurance policy by their failure to satisfy the Bank's claims under the title insurance policies by their failure to cure the title defects and/or their failure to pay the bank's claims in full." Bankfirst did likewise. However, Mississippi Valley Title filed a motion this week asking the Court give it until June 1, 2010 to answer all actions filed by the above banks. M&F immediately opposed the request. (Note, there has been a proposed resolution by the Trustee and MVT but due to its length, it will be addressed in the next few days).

What has been interesting is the evolution of the Evans case from a fraud case filed in Madison County Chancery Court in September against a attorney and businessman to a major scrum between one of the largest corporations in American and many banks in Mississippi. Although the filings are complex reading at times, the banks claim they were defrauded by the Evans brothers due to the issuance of phony title certificates by Charles Evans and granting loans to Chris Evans that were thought to be secured. As Charles was an approved attorney for MVT, the banks are seeking payment on their insurance claims and argue Mississippi Valley Title is responsible since Charles Evans was its approved attorney. MVT has only paid four claims and is the subject of other actions by other banks seeking enforcement of their insurance policies. Considering the average loan was $620,000, the potential losses are substantial for either Mississippi Valley Title or the banks.

On a final note, there is some interesting reading in this exhibit filed between Kristina Johnson and Mississippi Valley Title's lawyers. The first letter is written by Bill Brabec of Adams & Reese to Mrs. Johnson. He points out her clients filed insurance claims with his client, MVT. Brabec notes her filings in the Evans bankruptcy on behalf of her clients and demands she withdraw all her motion in federal court. Just to make sure she gets the message, he close with this statement: "Please understand that the actions taken by your clients in the bankruptcy proceedings may seriously affect their rights under the policies".

Ms. Johnson replied in a letter to Mr. Brabec that his client had not paid any claims even though sixty days had passed since they were submitted to MVT and it was rather interesting the insurance company was treated them as covered under the policy yet had not paid any money.
She then accuses Mr. Brabec of trying to "jump" his clients ahead of hers in the bankruptcy case and states the bank has a right to recover against Chris Evans if the policies pay less than the loans issued. There are more letters and if you are a legal or finance geek, you will find them worth reading. Copy of letters


Synopsis of Evans case (This feature will be included with future posts on Evans case): Charles Evans, Jr. was an attorney approved by Mississippi Valley Title Insurance Company to provide title certificates to MVT and lenders showing a borrower had clear title to property. MVT filed a lawsuit in September accusing his brother of using over 30 LLC's to obtain fraudulent loans from over 30 banks in Mississippi. Chris Evans would allegedly use one company to purchase a large tract of prime commercial real estate in Madison and Desoto Counties. Another company owned by Evans would obtain a commercial real estate mortgage on a smaller section of the tract yet that borrowing company never obtained a deed showing ownership of the land from the other company. Thus the smaller tract was actually non-existed as the larger tract was never actually subdivided. Charles would allegedly provide a title certificate however showing the borrowing company owned the land even though it didn't. Over 80 loans for nearly $50 million were issued by Mississippi banks to companies owned by Chris Evans for lands those companies either did not own. MVT testified federal authorities are currently investigating the case. Chris Evans filed Chapter 7 bankruptcy on October 26, which stopped the Mississippi Valley Title's lawsuit against him as federal bankruptcy law stays most state civil court proceedings once a bankruptcy petition is filed. Mississippi Valley Title testified 65 title insurance claims for approximately $41 million have been filed by banks affected by the Evans case. MVT has only paid four claims according to court documents. Several banks have filed suit against MVT seeking payment of claims. Judge Neal Olack ruled all properties will be sold and the proceeds divided up among the creditors as determined by the Court.