15th RMA Partners v. Rosamond Properties, et al.
Published: Jan. 18, 2001 | Result Date: Nov. 3, 2000 | Filing Date: Jan. 1, 1900 |Case number: 768433 Arbitration – $0
Facts
Cross-complainant and cross-defendants were joint venturers in a real estate development project in Lancaster.
The project obtained two loans from the Bank f San Diego, a construction loan for building the project and a
collateral loan to provide collateral for an offsite improvement bond.
Accounting work done on the project books and records seemed to indicate that the bank loans had been paid
off. Subsequent revenues were therefore used to pay down lines of credit extended by cross-defendants to give
the project a badly needed source of working cash. In reality, the collateral loan had not been paid off,
ultimately triggering a collection action by 15th RMA Partners, which resulted in settlement payments by both
cross-complainants and cross-defendants, each of whom guaranteed the collateral loan.
Cross-complainants alleged that cross-defendants knew or should have known that the collateral loan was not
paid off, and should not have repaid itself before a third party creditor.
Cross-defendants maintained that they believed in good faith that the collateral loan was paid off - only after
the 15th RMA lawsuit began did they realize that the loan needed to be paid off.
Regardless, cross-defendants argued that the paying down of the lines of credit was not only allowable, but
was necessary to maintain the only source of working capital to the project.
Damages
The cross-complainant claimed over $190,000 in economic damages due to cross-defendantsÆ alleged fraud and negligent misrepresentation, which included over $140,000 in attorneyÆs fees incurred in defending the 15th RMA action.
Result
Cross-complainant's claims were denied in their entirety. Cross-defendant's indemnity and contribution in the amount of approximately $120,000 were denied as well.
Other Information
Cross-defendantÆs claim for indemnity and contribution in the amount of approximately $120,000 were denied. Cross-complainantÆs claims were denied in their entirety.
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