Fading Indigo: Title insurer comes after local agent in hotel spat

Fidelity National files suit alleging deed deception

The mood at Hotel Indigo surely isn't getting any rosier.

Fidelilty National Title Insurance is suing its local agent — Mt. Juliet-based 1st Trust — for failing to disclose a lien against the Union Street property and for not ensuring that $4 million was transferred into escrow.

The wrinkle? Mark Lineberry, partial owner of Hotel Indigo, is also 1st Trust's president, according to the filing.

Fidelity National, in essence, says it was set to back a $18 million loan against Hotel Indigo with the requirement that first-priority liens be disclosed and nearly $4.1 million be placed into escrow to pay off an existing Bank of America mortgage before the loan was secured. Lineberry and partner Keith Worsham — also a minority owner of Hotel Indigo's operator — signed affidavits that indeed the cash was transferred and that the BoA trust was no longer an encumberence on the lien.

Fidelity National says the money was never transferred and accuses Lineberry of "comingling" the intended escrow with Union Street Partners' money to make improvements to the hotel.

Fidelity is requesting damages related to future insurance coverage of the property without disclosing that figure.

It's just the latest in a series of court appearances for the downtown luxury building. 315 Union Street Holdings and Union Street Plaza Operations both filed for Chapter 11 protection in December. Both are also facing a lawsuit from BB&T related to the loan secured by Fidelity National.

Calls to Lineberry were not returned.

SHOCKING!!! not by Sensible Tennessean