Margaret Steinke v. Francis Mintz, et al.
Published: Apr. 29, 2000 | Result Date: Mar. 14, 2000 | Filing Date: Jan. 1, 1900 |Case number: 802607 Bench Decision – $0
Judge
Court
Orange Superior
Attorneys
Plaintiff
Defendant
Experts
Plaintiff
John C. Garrett
(technical)
George L. Rogers
(technical)
Defendant
David Jasso
(technical)
Facts
Defendant Francis Mintz represented plaintiff Margaret Steinke until late February or early March 1995. The plaintiff was the holder of a $700,000 Note secured by a Second Trust Deed on an office building in downtown Los Angeles.
Between 1990 and 1994, Kerrigan Lynch of California Inc., owner of the building, was habitually delinquent or altogether missed payments to Steinke. Mintz assisted plaintiff in the transfer of security on the Note from a Second Trust Deed on the building to a Third Trust Deed on the home of Philip Lynch (a principal of Kerrigan Lynch) and Brigitta Laaff. The property was a 3.97 acre estate in Montecito with a main house and two guest houses, appraised for between $2.8 million and $3 million in 1994.
The estate had encumbrances of First and Second Trust Deeds securing notes totaling $1.4 million. Mintz arranged for payment of $150,000 to Steinke upon close of escrow to reduce the principal balance of the Note from $700,000 to $550,000. To ensure timely payment on the Note, Mintz required that Lynch deposit a total of $200,000 in two trust accounts, $50,000 as a penalty for a default on any note secured by the Lynch Estate and $150,000 as further security to make payments on SteinkeÆs Note if the debtor failed to pay monthly in a timely manner.
Mintz also obtained personal guarantees of payments of the Note from Lynch and Laaff in the event of a default by Kerrigan Lynch and cumulative remedies for Steinke in the event of default. Mintz received a Preliminary Title Report from the escrow company during the escrow process showing a Notice of Default on the existing First. Mintz showed the file to plaintiff and discussed it with her prior to closing. A beneficiary statement indicated that there was a delinquency of over $100,000 on the First, but the Notice of Default on the First was rescinded during escrow. Escrow closed on Dec. 27, 1994.
Thereafter, Mintz discovered that Lynch was still in default on the First Deed of Trust and so advised plaintiff. Plaintiff received the $200,000 placed in trust upon the default of debtor Kerrigan Lynch and the guarantors over the next 19 months.
Settlement Discussions
The plaintiffÆs demand, in excess of $600,000 with indication of acceptance of $400,000, was reduced to $150,000 after opening statements. The defendantÆs offer of $10,000 after opening statement, with indication of more, was rejected.
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