Dou v. TD Bank N.A.

Background

Plaintiffs are Chinese investors who allege that TD Bank, N.A. improperly released their investment funds from escrow, allowing the funds to be misappropriated. Each plaintiff invested $550,000 in a Chicago-based real-estate development partnership. The partnership was initially called Intercontinental Tower/Chicago, L.P. and was later reconfigured as Carillon Tower/Chicago, L.P.

TD was the project’s escrow holder under a 2014 agreement. Plaintiffs allege that TD and the partnership later entered a 2015 escrow agreement. TD contends that the 2015 agreement is forged because the partnership allegedly obtained TD representative Stephen Schaaf’s signature on a standalone page and then attached it to the agreement. Schaaf died in October 2023 and apparently was never deposed.

Issues

The central dispute concerns the “Holdback Trigger,” the conditions governing when TD could release the investors’ funds. In an earlier ruling in this case, the court held that the 2015 version could reasonably be read to require TD to receive both written instructions from the partnership and written evidence that the project plan had been submitted to Chicago authorities. The court declined to revisit that interpretation.

The evidence showed that only the 2015 agreement included the written-evidence condition. TD argued that it was entitled to summary judgment because it complied with the written-instruction condition and should not be held to the additional condition if the 2015 agreement was forged.

TD also argued that it complied with the 2014 agreement. The court found that TD had identified one email requesting release of $900,000 but that the record contained no later written requests. The 2014 agreement permitted releases only in amounts designated in a signed written request certifying that the Holdback Trigger had been satisfied. The court therefore concluded that TD had shown, at most, authorization to release $900,000, not the approximately $45 million it released.

TD further argued that the wording “executed as of,” rather than “effective as of,” prevented the 2015 agreement from applying to funds released during the roughly two months before Schaaf signed its signature page. The court rejected TD’s argument that this wording could not legally make the agreement retroactive.

Ruling

The court denied Plaintiffs’ and TD’s cross-motions for summary judgment. Summary judgment is available only when there is no genuine dispute about a fact that could affect the result. The court held that factual disputes remained about whether the 2015 agreement was authentic and whether TD or Schaaf departed from ordinary procedures, negotiated the agreement orally, failed to keep records, or overlooked errors in the document. Those questions involve credibility and weighing evidence, which are matters for a jury rather than the judge.

The court also denied Plaintiffs’ motion to strike portions of TD’s declarations without prejudice. The court stated that the declarations’ lack of firsthand knowledge could reduce their weight, even if the declarations were ultimately admissible.

The court directed Plaintiffs to file any motion for class certification within 14 days of publication of the opinion. It also directed the clerk to close the motions at ECF Numbers 103, 108, 127, and 129. The opinion did not resolve the remaining claims on the merits; it allowed the factual disputes to proceed beyond summary judgment.