Bank Of The West v. The Valley National Bank Of Arizona

41 F.3d 471 BANK OF THE WEST, a California Banking Corporation, Plaintiff-Appellee-Cross-Appellant, v. The VALLEY NATIONAL BANK OF ARIZONA, an Arizona Banking Corporation, Defendant-Appellant-Cross-Appellee. Nos. 92-16278, 92-16382. United States Court of Appeals, Ninth Circuit. Argued and Submitted Dec. 13, 1993. Decided Nov. 23, 1994. Michael D. Torpey, Orrick, Herrington & Sutcliffe, San Francisco, CA, for defendant-appellant-cross-appellee. Kenneth K. Kennedy, Kennedy & Schisler, San Jose, CA, for plaintiff-appellee-cross-appellant. Appeal from the United States District Court for the Northern District of California. Before: POOLE, BEEZER and KLEINFELD, Circuit Judges. KLEINFELD, Circuit Judge: 1 Two banks loaned $11 million dollars pursuant to a loan participation agreement between them. The participating bank relied more heavily on the lead bank than the participation agreement allowed. After the debtor failed, a flood of lawsuits cost the lead bank millions of dollars. The lead bank sued the participating bank to recover one-half the litigation expenses. The participating bank counterclaimed, alleging that the lead bank fraudulently induced it to advance money by…