Opinion ID: 504653
Heading Depth: 2
Heading Rank: 1

Heading: Bank v. HRA Action

Text: 4 In June, 1983 the Bank sued to foreclose on the project and HRA counterclaimed alleging, inter alia, conspiracy and fraud surrounding the demise of the project. That first suit, which we will call Bank v. HRA, was settled, and as part of the court sponsored and supervised settlement, the terms were kept secret. FAB requested that the terms of the agreement be made public. The district court refused, but this court overturned the ruling and required that the terms of the agreement between the Bank and HRA be made public. Bank of Am. Nat'l Trust and Sav. Ass'n v. Hotel Rittenhouse Assocs., 800 F.2d 339 (3d Cir.1986). When the agreement became public, nearly two years after it was entered into, FAB learned that the Bank had agreed to fund an escrow from which HRA would pay its contractors. In return, HRA promised to indemnify the Bank against contractors' claims. According to this secret agreement, whatever HRA did not pay to the contractor and subcontractors would revert to Jack Wolgin personally. Wolgin also would receive a $1 million bonus for obtaining releases from all subcontractors. 2 FAB contends that during an arbitration arising out of a separate action (the FAB v. Bank case discussed below), HRA made claims that have been proved false by the unsealing of the secret agreement in the Bank v. HRA litigation. Specifically, FAB argues that: (1) HRA pled poverty when in reality a fund existed to pay contractors and that fund has been earning interest; and (2) it is clear from the secret agreement that HRA (contrary to its assertions in arbitration) had never incurred substantial interest claims to the Bank so that its claim against FAB in arbitration to recoup delay damages that HRA allegedly owed the Bank was fraudulent. 5 On February 17, 1982, five days after it received access to the secret agreement between the Bank and HRA, FAB moved to intervene in the Bank v. HRA case in order to claim an equitable right to interest that had been accruing on the escrow fund set aside for the benefit of contractors and subcontractors (including FAB). FAB estimates that the accrued interest exceeds $120,000. FAB particularly desires to intervene in this action because the escrow, upon which FAB wishes to obtain interest, was established pursuant to a negotiated agreement supervised by the court in this case, and the district court retained jurisdiction for all purposes connected with the agreement to settle any disputes arising out of the agreement. The district court denied the motion to intervene as untimely and FAB appeals that denial.