Pacific Bay Service Corporation, et al. and ACM Investor Services, Inc., et al. v. Wayne Bloomquist / 80472 c/w 78466.
Published: Jan. 23, 1999 | Result Date: Oct. 23, 1998 | Filing Date: Jan. 1, 1900 |Case number: 80472 c/w 78466. Bench Verdict – $0
Judge
Court
Napa Superior
Attorneys
Plaintiff
Defendant
Robert T. Dolan
(Gaglione, Dolan & Kaplan)
Experts
Plaintiff
Arlen Mills
(technical)
William Savidge
(technical)
John M. Hamilton
(Hamilton Law Offices)
(technical)
Defendant
Brooke Grega
(technical)
Facts
The plaintiffs were two "mortgage" lenders who agreed in November 1992 to loan the combined sum of $1,525,000 to the owner/borrower/developer of a custom built single family residence in Oakville overlooking the Napa Valley. The subject property was under construction and nearly complete at the time of the loan, with the exception of approximately $200,000 in remaining work to be completed, including the construction of the swimming pool. The property was in foreclosure. The defendant prepared an appraisal of the property concluding the fair market value in its "as is" condition as of July 1992 to be $2.6 million and projected fair market value of $3.3, million if completed. In July 1993, the borrower defaulted on the loan ($325,000) secured by a second trust deed, and in September 1993 defaulted on the loan ($1.2 million) secured by the first trust deed. The property had been listed for sale at the time of the default but did not sell, and the borrower declared bankruptcy in October 1993. The lender of the second loan was unable to foreclosure until August 1994 and then lost the property to the foreclosure by the first lender in January 1995. The property was eventually sold for $1 million in November 1995. The plaintiffs brought this action against the defendant based on negligence, negligent misrepresentation and breach of contract theories of recovery.
Damages
The plaintiffs sought approximately $1.5 million in damages for the losses stemming from the failure to repay the loans and the interest on said loans. In addition, they sought post-foreclosure expenses for maintaining the property until sold.
Other Information
The verdict was reached approximately two years and 10 months after the case was filed. The court found that it was not beyond reason that in mid-1992, a buyer would have paid $2.6 million for the subject property. A settlement conference was held on Oct. 3, 1997, before Judge Fretz, did not resolve the matter. EXPERT TESTIMONY. Plaintiffs' expert, John Hamilton, testified that the fair market in the "as-is condition for July 1992 was actually $1.6 million. Furthermore, the plaintiffs' expert testified that if the property had been completed, it would not have been worth $3.3 million, but $2.2 million. The defendant's appraisal expert, Brooke Grega, appraised the subject property prior to the litigation for the 1993-1994 bankruptcy and concluded that the defendant's 1992 appraised value was reasonable considering the condition of the property at the time the appraisal report was prepared. The defendant's appraisal expert also testified regarding the decline in value in high-end custom residential homes in Napa Valley for the years after the defendant's appraisal was prepared. In addition, the defendant presented testimony from the real estate listing agent for the subject property who had listed it at $2.8 million during the summer of 1992 in its nearly completed state. The defendant contended that the opinion of the real estate agent who was extremely experienced in the sale of high-end custom residential homes in Napa Valley further supported the appraised value of the defendant.
Length
19 days (Bench Trial)
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