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Banking
Fraud

Weyerhaeuser Mortgage Company v. California Federal Bank; California Communities, Inc.; William L. Callendar; David J. Reed; George R. Meeker; et al.

Published: Jun. 24, 1995 | Result Date: Jun. 12, 1995 | Filing Date: Jan. 1, 1900 |

Case number: 695599 –  $31,514,000

Judge

John H. Smith Jr.

Court

Orange Superior


Attorneys

Plaintiff

Larry A. Sackey
(Law Office of Larry A. Sackey)

Herbert Hafif

Mark V. Asdourian


Defendant

Andrew R. Hunter

Robert E. Mangels


Experts

Plaintiff

Roger B. Vincent
(technical)

Defendant

George Allen Smith
(technical)

Sue Ann Dickey
(technical)

Facts

In October of 1989, Plaintiff Weyerhaeuser Mortgage Company made a $17,000,000 acquisition and development loan to Defendant California Communities, Inc., (CCI) for purposes of acquiring a residential housing development tract in Corona, Riverside County. A second loan in the amount of $7,000,000 was made by Weyerhaeuser to CCI in June, 1990 for purposes of constructing the first housing phase of the tract. During that same time, FIRREA was enacted and the real estate development market was beginning to decline. Both loans were contingent upon Weyerhaeuser's receipt of a "comfort letter" from Defendant California Federal Bank (CalFed), CCI's parent. CCI subsequently defaulted and Weyerhaeuser was the successful bidder at the June 25, 1992 trustee's sale of the Corona project.

Settlement Discussions

Plaintiff contends it demanded $12,000,000 and Defendants originally offered $500,000 with an indication of $6 million during trial which was rejected.

Damages

Plaintiff asked for $6,500,000 in compensatory damages and punitive damages "substantial enough to send the message, but not over 5 percent of the net worth which translated to $40,000,000.

Deliberation

8.5 hours

Poll

10-2 compensatory, 12-0 right to punitives, 9-3 amount

Length

3 weeks


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