Kansas City Art Institute Sues Calif. Couple for $5 Million Unfulfilled Pledge

PHOTO: Lawrence and Kristina Dodge

An Orange County, Calif., couple is fighting to appeal a lawsuit filed by the Kansas City Art Institute seeking $4 million they pledged to donate before the collapse of their business.

"They were so rude and obnoxious, it doesn't seem right to me," said Kristina Dodge, 51.

Dodge and her husband Lawrence Dodge, 73, of Dana Point, Calif., the founder of bank and insurance firm American Sterling Corp., had agreed to donate the money to the private art college before the financial collapse took away their businesses and left them unable to afford a lawyer to fight the case, they say.

The Dodges' donation was to support the Kansas City Art Institute's new $7 million 34,000-square-foot building, a total pledge of $5 million to be distributed from 2005 until 2013. The Dodges fulfilled the pledge for the first three years, giving $1 million.

But the Federal Deposit Insurance Corp. seized the bank and sold its assets in April 2009. The California Insurance Commissioner later said the bank was "undercapitalized and has almost no liquid assets," the Kansas City Star reported.

Anne Canfield, Kansas City Art Institute's vice president for communications, told ABC News the college's board of trustees authorized the lawsuit by unanimous vote last year, "after nearly four years of discussion with the Dodges."

The college says the Dodges were informed of this action in a letter dated Aug. 11, 2011, "giving them every opportunity to respond."

Kristina Dodge told ABC News the school cut off communication "in a nasty manner."

"In fact, I would like to get my million dollars back from them," she said.

After the bank was seized, Dodge was banned from banking, for breaching his fiduciary duty by signing off on "false" reports describing the bank's risk, said the Treasury Department's Office of Thrift Supervision, later replaced by the Office of the Comptroller of the Currency. The office levied a $2.5 million civil penalty, which he later appealed and was reduced to $1 million. Dodge is also appealing that.

During the Dodges' professional struggles, the Kansas City Art Institute came knocking for the remaining $4 million. The college filed a lawsuit on July 28, 2011 to get the remainder of the money, alleging among other things breach of written contract and unjust enrichment from favorable publicity and having a building named after them.

The couple counters that they never asked for the building, the Lawrence and Kristina Dodge Painting Building, to be named after them.

Dodge says his only source of income now is from Social Security benefits. His wife, Kristina, 51, provides care for their children. The couple has a 13-year old daughter and triplets, who are two years old.

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