Slander of Title-Unjust Enrichment

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7^th Circuit Court of Appeals

Case Name: Lourdes Guerrero v. Howard Bank

Case No.: 22-3078

Officials: Flaum, Brennan, and St. Eve, Circuit Judges.

Focus: Slander of Title-Unjust Enrichment

Upon O’Sucha’s passing, the property, held in a land trust, was intended to be evenly distributed among her four children, including Lesko. However, in 2009, Lesko influenced her mother to designate her as the sole beneficiary upon O’Sucha’s anticipated demise in 2010, and to grant her complete control over the trust. Subsequently, her siblings contested Lesko’s actions, alleging undue influence in a state court. While the case was under appeal, Lesko approached Howard Bank for a loan, offering the property as collateral. Due to Lesko’s unfavorable credit history and the ongoing state court dispute, Howard approved the loan only when Lesko transferred ownership of the property to her daughter, Amorous. Amorous then conveyed a mortgage to Howard, securing a loan of $130,000, which Howard duly recorded.

Upon remand, the Illinois court ruled in favor of the plaintiffs, declaring a constructive trust and issuing a money judgment against Lesko. Later, all interests in the property held by Amorous and Lesko were conveyed to the plaintiffs. Despite their demand, Howard refused to release the mortgage. The plaintiffs subsequently sued Howard in federal court and eventually sold the property for $700,000, using the proceeds to pay off the mortgage balance. Howard attempted to have the case dismissed, but their efforts were unsuccessful. In an amended complaint, the plaintiffs accused Howard of slander of title and unjust enrichment. The Seventh Circuit upheld the dismissal of the case, reasoning that Howard held a legitimate mortgage and did not engage in any falsehood by recording it. Therefore, Howard was not obligated to release the mortgage and did not continue to spread any falsehood, nor did they unfairly retain any benefit by not releasing the mortgage.

Affirmed.

Decided 07/19/23

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