Facts

In May 2007, Rick Tarnutzer lent $2.6 million to Domingo Villas Inc., which was secured, and personally guaranteed by David Tudor Chamberlain, and his former partner Walter Mitchell. The loan was secured by apartments, which Chamberlain represented were going to be converted into condominiums. The loan was not repaid, and wrongful foreclosure proceedings were instituted by Tarnutzer, based on a loan debt of $3.6 million.

Domingo filed for bankruptcy. The bankruptcy court ordered the property sold, and the proceeds were held by the court. Tarnutzer filed a cross-complaint against Chamberlain.

PLAINTIFF'S CONTENTIONS:
Chamberlain and Domingo sued Tarnutzer claiming fraud, breach of implied covenant, violation of statute, negligence/emotional distress, claiming Tarnutzer caused them to lose the property.

DEFENDANT'S CONTENTIONS:
Tarnutzer filed a cross-complaint on the note and personal guaranty.

Settlement Discussions

Chamberlain contended he was owed money by Tarnutzer, in excess of the amount due on the note because Tarnutzer refused to comply with civil case 2943. In addition, Tarnutzer didn't provide plaintiff with the payoff statement needed to refinance the property, and payoff Tarnutzer's loan.

Result

Tarnutzer was awarded $1,968,762 against David T. Chamberlain on cross-complaint on Tarnutzer's breach of personal guaranty claim. In addition, he was awarded $944,973 in prejudgment interest, $684,342 in attorney fees, and $121,367 in costs. Defense verdict on complaint and defense verdict for Domingo Villas on the cross-complaint.

Other Information

The jury awarded no damages against Domingo Villas as the borrower and determined that Domingo Villas had not breached the terms of the promissory note. Judgment was not entered until Oct. 17, 2016, after plaintiff's motions for accounting and referee. The referee was appointed 10 months after the verdict was entered and he concluded the loan balance was actually $1,378,773. The court ordered an accounting and appointed a forensic accountant as a referee ten months after the trial had been concluded, the results of which reflected almost the same exact amount Chamberlain asserted was the correct loan balance when he attempted to pay off the loan in 2011 in order to refinance the property. According to plaintiff, the referee's figure was not remotely close to the $2.1 million dollar figure initially demanded by Tarnutzer or the $3.6 million dollar debt, which defendant Tarnutzer asserted in an attempt to wrongfully foreclose. However, Luna's incorrect and misleading Financial Statements did not remotely support even the erroneous $2.1 million dollar figure initially asserted by Tarnutzer. Tarnutzer and the attorney who drafted all of the loan documents for Tarnutzer stated under oath and admitted in depositions and at trial that approximately $650,000 of the $2.1 million dollars demanded was inappropriate and not supported by the underlying loan documents. Domingo and Chamberlain filed an appeal. Motions for judgment notwithstanding the verdict and for new trial were denied. FILING DATE: June 15, 2011.

Deliberation

two days