Resolution Trust Corp. v. Midwest Federal Savings Bank

I

This case involves two separate appeals. In No. 91-56300, the Resolution Trust Corporation, as receiver for Midwest Federal Savings Bank of Minot, appeals the district court’s reformation of a loan agreement between Midwest Federal Savings Bank, the lender, and Orangegate Investors, a limited partnership, and several named individuals, collectively the borrowers. In No. 92-55350, the borrowers appeal the district court’s denial of their requests for attorneys’ fees. We have jurisdiction to hear these matters pursuant to 28 U.S.C. § 1291 (1988), and we affirm the district court in both.

II

FACTS

A. History of the Loan

In 1984, Orangegate Investors, a California limited partnership (“Orangegate”), purchased an office building in Garden Grove, California (the “Property”). By early 1985, Orangegate was required to refinance the original underlying loans on the Property as they had become due and payable by their own terms. Orangegate sought an $8 million permanent loan to refinance a $6.5 million debt on the Property.

Orangegate entered into negotiations with Midwest Financial Services Mortgage Corp. (“MFS”), a wholly-owned subsidiary of Midwest Federal Savings Bank of Minot…