Former Windermere SoCal—Now Bennion Deville Homes—Brokers Thomas Angone and Joseph R. Deville, Sued for Fraud and Deceit, Failure to Disclose
Windermere SoCal and Rancho Mirage Broker Thomas A. Angone, and Windermere SoCal Owner-Broker, Joseph R. Deville (at left, respectively); Bennion and Deville Fine Homes SoCal, Inc., dba Windermere Real Estate Southern California; dba Windermere Real Estate Coachella Valley, Sued with Individuals Mark. B. and Janice L. Gordon, Terri Lynn Munselle, Sandra Ann Deering, Coldwell Banker Residential Brokerage Company, Peter E. Theophilos and Saxony Real Estate, Inc., for Civil Code Violation, Failure to Disclose Material Facts, Breach of Fiduciary Duty, Constructive Fraud, Fraud, and Negligence, in First Amended Complaint Alleging:
“46. Prior to the close of tho Property transaction, Sellers, Sellers' Agents and DOES 1-20 became aware of the planned Clubhouse Expansion, but concealed the same from Plaintiffs with the intent to induce Plaintiffs to complete the purchase of the Property. Specifically, Plaintiffs are informed and believe and thereon allege that Sellers were personally advised of the planned Clubhouse Expansion by the developer of Andalusia at Coral Mountain (T.D. Desert Development) and/or by the common interest association that governs the Property sometime prior to the close of the Property transaction. Plaintiffs are informed and believe and thereon allege that Angone was previously employed by the developer of Andalusia at Coral Mountain (T.D. Desert Development) and was aware of the full build-out plans for said development; that he had full access to the sales office at Andalusia at Coral Mountain, as well as to information published by Andalusia at Coral Mountain on its website, Facebook page and in printed materials; that he visited the sales office at Andalusia at Coral Mountain and reviewed the Information published by Andalusia at Coral Mountain on its website and/or Facebook page and/or in printed materials; and that he was thereby made aware of the planned Clubhouse' Expansion sometime prior to the close of the Property transaction...
48. The aforementioned conduct of Sellers, Sellers' Agents and DOES 1·20 was an intentional deceit or concealment of a material fact known to Sellers, Sellers' Agents..."
DOWNLOAD A COMPLETE PDF COPY OF THE FIRST AMENDED COMPLAINT HERE
SUPERIOR COURT OF CALIFORNIA
COUNTY OF RIVERSIDE
PALM SPRINGS BRANCH
GORDON MALIC and LORRIE CHURCHILL, husband and wife,
Plaintiffs,
v.
MARK B. GORDON and JANICE L. GORDON, individually and as Trustees of THE MARK B. GORDON AND JANICE L. GORDON F AMILY TRUST DATED FEBRUARY 28, 1995; TERRI LYNN MUNSELLE, an individual; SANDRA ANN DEERING, an individual; COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY, a California corporation; THOMAS A. ANGONE, an individual; JOSEPH R. DEVILLE, an individual; BENNION & DEVILLE FINE HOMES SOCAL, INC., a California corporation, dba WINDERMERE REAL ESTATE SOCAL, dba WINDERMERE REAL ESTATE SOUTHERN CALIFORNIA, dba WINDERMERE REAL ESTATE COACHELLA VALLEY; PETER E. THEOPHILOS, an individual; SAXONY REAL ESTATE, INC., a California corporation; and DOES 1-30, inclusive, .
Defendants.
Case No. PSC1405468
Assigned for All Purposes to:
The Honorable David M. Chapman - Dept. PS2
FIRST AMENDED COMPLAINT FOR:
1. VIOLATION OF CIVIL CODE §1102 ET SEQ.;
2. FAILURE TO DISCLOSE MATERIAL FACTS;
3. BREACH OF FIDUCIARY DUTY;
4. CONSTRUCTIVE FRAUD;
5. FRAUD; and
6. NEGLIGENCE
PRELIMINARY ALLEGATIONS
1. Plaintiffs, GORDON MALIC and LORRIE CHURCHILL (collectively, "Plaintiffs" or "Buyers"), are, and at all times herein mentioned were, married individuals residing in the County of Riverside, State of California.
2. Plaintiffs are informed and believe and thereon allege that Defendants, MARK B. GORDON and JANICE L. GORDON (collectively, "Gordon" or "Sellers"), are, and at all times herein mentioned were, married individuals residing in the County of Riverside, State of California, and Trustees of THE MARK B. GORDON AND JANICE L. GORDON F AMTL Y TRUST DATED FEBRUARY 28, 1995.
3. Plaintiffs arc informed and believe and thereon allege that Defendant, TERRI LYNN MUNSELLE ("Munsclle"), is, and at all times herein mentioned was, all individual licensed as a Broker by the California Bureau of Real Estate doing business the County of Riverside, State of California.
4. Plaintiffs are informed and believe and thereon allege that Defendant, SANDRA ANN DEERING ("Deering"), is, and at all times herein mentioned was, an individual licensed as a Broker by the California Bureau of Real Estate doing business the County of Riverside, State of California.
5. Plaintiffs are informed and believe and thereon allege that Defendant, COLDWELL BANKER RESIDENTIAL BROKERAGE COMPANY ("Coldwell"), is, and at all times herein mentioned was, a corporation organized and existing under the laws of the State of California, doing business in the County of Riverside, State of California. Plaintiffs are further informed and believe and thereon' allege that Deering was the broker of record for Coldwell at all times herein mentioned, and that Coldwell was the employer of Munselle at all times herein mentioned. Munselle, Deering Coldwell and DOES 21·30 are collectively referred to as "Buyers' Agents."
6. Plaintiffs arc informed and believe and. thereon allege that Defendant, THOMAS A. ANGONE ("Angone"), is, and at all times herein mentioned was, an individual licensed as a Broker by the California Bureau of Real Estate doing business the County of Riverside, State of California.
7. Plaintiffs arc informed and believe and thereon allege that Defendant, JOSEPH R. DEVILLE ("Deville"), is, and at all times herein mentioned was, an individual licensed as a. Broker by the California Bureau of Real Estate doing business the County of Riverside, State of California.
8. Plaintiffs are informed and believe and thereon allege that Defendant, BENNION & DEVILLE FINE HOMES SOCAL, INC. ("Windermere"), is, and at all times herein mentioned was, a corporation organized and existing under the laws of the State of California, doing business in the County of Riverside, State of California as WINDERMERE REAL ESTATE SOCAL, WINDERMERE REAL ESTATE SOUTHERN CALIFORNIA, and WINDERMERE REAL ESTATE COACHELLA VALLEY. Plaintiffs are further informed and believe and thereon allege that Deville was the broker of record for Windermere at all times herein mentioned, and that Windermere was the employer of Angone at all times herein mentioned prior to the closing of the transaction that is the subject of this action.
9. Plaintiffs are informed and believe and thereon allege that Defendant, PETER E. THEOPHILOS ("Theophilos"), is, and at all times herein mentioned was, all individual licensed as a Broker by the California Bureau of Real Estate doing business the County of Riverside, State of California.
10. Plaintiffs are informed and believe and thereon allege that Defendant, SAXONY REAL EST ATE, INC. ("Saxony"), is, and at all times herein mentioned was, a corporation organized and existing under the laws of tile State of California, doing business in the County of Riverside, State of California. Plaintiffs are further informed and believe and thereon allege that Theophilos was the broker of record for Saxony at all tim.es herein mentioned, and that Saxony was the employer of Angone sometime prior to and at the time of the closing of the transaction that is the subject of this action. Angone, Deville, Windermere, Theophilos, Saxony and DOES 1-20 are collectively referred to as "Sellers' Agents."
11. The true names and capacities, whether individual, associate, corporate or otherwise, of DOES 1 through 30, inclusive, are unknown to Plaintiffs, who therefore sue said defendants by such fictitious names pursuant to Code of Civil Procedure §474. Plaintiffs are informed and believe and thereon allege that each said defendant herein designated as a DOE is responsible in some manner for the events and happenings herein referred, or as hereinafter alleged. Plaintiffs will seek leave to amend this Complaint when the true names and capacities of each said defendant have been ascertained.
12. The named Defendants and DOE defendants (hereinafter collectively referred to as "Defendants"), and each of them, were at all times herein mentioned, the agents, servants, employees, joint venturers, and/or co-conspirators of each of the other Co-Defendants, and at all times herein mentioned were acting in the course and scope of said agency, employment or service, and in furtherance of a joint venture and/or conspiracy.
CHARGING ALLEGATIONS
13. Plaintiffs, as Buyers, and Gordon, as Sellers, entered into that certain Residential Purchase Agreement and. Joint Escrow Instructions dated August 3, 2013 ("RPA"), a true and correct copy of which is attached hereto as Exhibit "A" and by this reference incorporated herein, for the purchase and sale of that certain real property located within the common interest development known as Andalusia at Coral Mountain consisting of a single family residence located at 81455 Andalusia, La Quinta, California (the "Property"). The Property transaction closed with payment by Buyers to Sellers of the purchase price of $2,067,500 ("Purchase Price") and the transfer of the Property to Buyers via that certain Grant Deed recorded with the Riverside County Recorders Office as DOC # 2013-0459353 on September 23, 2013.
14. Plaintiffs are informed and believe and thereon allege that Sellers were represented in the Property transaction by Sellers' Agents (Angone, Deville, Windermere, Theophilos and Saxony) and DOES 1-20; and that Buyers were represented in the Property transaction by Buyers' Agents (Munselle, Deering and Coldwell) and DOES 21-30.
15. Plaintiffs are informed and believe and thereon allege that Deville and DOES 1-5 had direct supervision and control of Angone at all times herein mentioned prior to the closing of the transaction that is the subject of this action; that Theophilos and DOES 6·10 had direct supervision and control of Angone at all times herein mentioned sometime prior to and at the time of the closing of the transaction that is the subject of this action; and that Deering and DOES 21- 25 had direct supervision and control of Munselle at all times herein mentioned.
16. After the closing of the Property transaction and taking possession of the Property, Buyers observed grading and other site preparation work being performed behind the Property adjacent to the existing clubhouse at Andalusia at Coral Mountain. At no time prior to the closing of the Property transaction was such grading and site improvement work visibly apparent to Buyers.
17. Upon further investigation and inquiry by Buyers after closing of the Property transaction, Buyers discovered plans for a clubhouse expansion at Andalusia at Coral Mountain to consist of 10,000 square feet of member space along with 5,500 square feet of outdoor terraces, encompassing a new golf pro shop, cart barn, spa, men's and women’s lounges and locker rooms, a board room, and a bar and grill with outdoor seating (the "Clubhouse Expansion"). The site for the Clubhouse Expansion is located in close proximity to the Property.
18. At no time prior to the closing of the Property transaction were Buyers aware of the planned Clubhouse Expansion. At no time were Buyers ever informed of the Clubhouse Expansion by either of the Sellers, Sellers' Agents or Buyers' Agents.
19. Plaintiffs are informed and believe and thereon allege that Sellers, Angone, Munselle, DOES 11-20 and DOES 26·40 knew of the Clubhouse Expansion and failed to disclose the same to Buyers; and that Deville, Theophilos, Deering, DOES 1-10 and DOES 21·25 knew of the Clubhouse Expansion and knew of the failure of Angone, Munselle, DOES 11-20 and DOES 26-40, as applicable, to disclose the same to Buyers.
20. Plaintiffs are informed and believe and thereon allege that Sellers, Sellers' Agents and Buyers' Agents knew that these facts were unknown to Buyers and were not within the diligent attention and observation of Buyers prior to the closing of the Property transaction.
21. Construction of the Clubhouse Expansion has caused, and is expected to continue to cause, noise and loss of privacy at the Property. Once the Clubhouse Expansion is completed, it is expected to impair the view from the rear of Property, and the improvements and use of the new facilities are expected to cause noise and loss of privacy at the Property. The Clubhouse Expansion is a fact that materially affects the value and desirability of the Property, especially as to Plaintiffs, as Plaintiffs would not have paid the Purchase Price and/or would have selected another residence within Andalusia at Coral Mountain further away from the Clubhouse Expansion site had they been informed about the planned Clubhouse Expansion prior to the closing of the Property transaction.
22. Plaintiffs ate entitled to an award of attorney fees against Sellers as the prevailing party in this action pursuant to the terms of the RPA.
FIRST CAUSE OF ACTION
(For Viola.tion of Civil Code §1102 et seq. - Against Sellers)
23. Plaintiffs reallege and incorporate herein by reference each and every allegation contained in paragraphs 1 through 22 of this Complaint as though fully set forth at length herein.
24. Prior to the close of the Property transaction, Sellers willfully or negligently failed to indicate on the Real Estate Transfer Disclosure Statement ("TDS") provided to Plaintiffs pursuant to Civil Code § 1102 et seq., a true and correct copy of which is attached hereto as Exhibit "B" and by this reference incorporated herein, that neighborhood noise problems or other nuisances should be expected from the Clubhouse Expansion (item Cll on the TDS) or the addition to the common area improvements related to the Clubhouse Expansion (item C14 on the IDS), all in breach of Sellers' statutory duties under Civil Code §1102 et seq.
25. As a result of Sellers' breach of their statutory duties under Civil Code §1102 et seq., Plaintiffs completed the purchase of the Property and have been damaged in the sum equal to the difference between the purchase price paid by Buyers for the Property and the actual value of the Property, taking into consideration the loss of view, loss of privacy and noise resulting from the construction of the Clubhouse Expansion and use of the new facilities, all to be proven at the time of trial but believed to be in excess of $350,000.
SECOND CAUSE OF ACTION
(For Failure to Disclose Material Facts - Against Sellers, Sellers' Agents, Buyers' Agents and DOES 1-30)
26. Plaintiffs reallege and incorporate herein by reference each and every allegation contained in paragraphs 1 through 22 of this Complaint as though fully set forth at length herein.
27. Sellers, Sellers' Agents, Buyers' Agents and DOES 1-30 became aware of the planned Clubhouse Expansion prior to the close of the Property transaction and had a duty to disclose the same to Plaintiffs or otherwise ensure that Plaintiffs were informed of the planned Clubhouse Expansion prior to the close of the Property transaction.
28. Sellers, Sellers' Agents, Buyers' Agents and DOES 1-30 knew that these facts were unknown to Plaintiffs and were not within the diligent attention and observation of Plainti.ffs prior to the closing of the Property transaction.
29. Sellers, Sellers' Agents, Buyers' Agents and DOES 1-30 failed to disclose the planned Clubhouse Expansion to Plaintiffs or otherwise ensure that Plaintiffs were informed of the planned Clubhouse Expansion prior to the close of the Property transaction.
30. The Clubhouse Expansion is a fact that materially affects the value and desirability of the Property, especially as to Plaintiffs.
31. As a result of the breach of duty by Sellers, Sellers' Agents, Buyers' Agents and DOES 1-30 to disclose the planned Clubhouse Expansion or otherwise ensure that Plaintiffs were informed of the planned Clubhouse Expansion prior to the close of the Property transaction, Plaintiffs completed the purchase of the Property and have been damaged in the sum equal to the difference between the purchase price paid by Buyers for the Property and the actual value of the Property, taking into consideration the loss of view, loss of privacy and noise resulting from the construction of the Clubhouse Expansion and use of the new facilities, all to be proven at the time of trial but believed to be in excess of $350,000.
32. Sellers are jointly and severally liable to Plaintiffs should it be found that Sellers' Agents or DOES 1·20 knew about tile planned Clubhouse Expansion and failed to disclose the same to Plaintiffs prior to the close of the Property Transaction, even if Sellers had no actual knowledge of the planned Clubhouse Expansion.
THIRD CAUSE OF ACTION
(For Breach of Fiduciary Duty - Against Buyers' Agents and DOES 21-30)
33. Plaintiffs reallege and incorporate herein by reference each and every allegation contained ill paragraphs 1 through 22 of this Complaint as though fully set forth at length herein.
34. As Plaintiff's agents, Buyers' Agents and DOES 21·30 owed to Plaintiffs a fiduciary duty to make the fullest disclosure of all material facts that might affect Plaintiffs' decision to purchase the Property.
35. Plaintiffs are informed and believe and thereon allege that Buyers' Agents and DOES 21·30 became aware of the planned Clubhouse Expansion or otherwise should have exercised reasonable diligence to discover the planned Clubhouse Expansion prior to the close of the Property transaction.
36. Buyers' Agents and DOES 21·30 breached their fiduciary duty to make the fullest disclosure of all material facts that might affect Plaintiffs' decision to purchase the Property by failing to exercise reasonable diligence to discover the planned Clubhouse Expansion and disclosing the same to Plaintiffs.
37. As a result of the breach of fiduciary duty by Buyers' Agents and DOES 11-20 to make the fullest disclosure of all material facts that might affect Plaintiffs' decision to purchase the Property, Plaintiffs completed the purchase of the Property and have been damaged ill the sum equal to the difference between the purchase price paid by Buyers for the Property and the actual value of the Property, taking into consideration the loss of view, loss of privacy and noise resulting from the construction of the Clubhouse Expansion and use of the new facilities, all to be proven at the time of trial but believed to be in excess of $350,000.
FOURTH CAUSE OF ACTION
(For Constructive Fraud - Against Buyers' Agents and DOES 2l-30)
38. Plaintiffs reallege and incorporate herein by reference: each and every allegation contained in paragraphs 1 through 22 of this Complaint as though fully set forth at length herein.
39. Plaintiffs reposed absolute trust and confidence in the integrity and fidelity of Buyers' Agents and DOES 21·30 in their representation of Buyers in the Property transaction and reasonably relied on Buyers' Agents and DOES 21·30 in such capacity. A confidential and fiduciary relationship thus existed at all times herein, mentioned between Plaintiffs, Buyers' Agents and DOES 21-30.
40. As Plaintiffs agents, Buyers' Agents and DOES 21·30 owed to Plaintiffs a fiduciary duty to make the fullest disclosure of all material facts that might affect Plaintiffs' decision to purchase the Property.
1. Plaintiffs are informed and believe and thereon allege that Buyers' Agents and DOES 21·30 became aware of the planned Clubhouse Expansion prior to the close of the Property transaction, but failed. to disclose the same to Plaintiffs with the intent to induce Plaintiffs to complete the purchase of the Property. Specifically, Plaintiffs arc informed and believe and thereon allege that Buyers' Agents and DOES 21·30 had visited the sales offIce and/or restaurant at Andalusia at Coral Mountain sometime prior to the close of the Property transaction and viewed digital renderings of the planned Clubhouse Expansion. and/or a scaled model of the planned Clubhouse Expansion; and/or that Buyers' Agents and DOES 21·30 learned of the planned. Clubhouse Expansion sometime prior to the close of the Property transaction through certain media sources, including, without limitation, information posted on the website and/or Facebook page of Andalusia at Coral Mountain and/or news articles regarding the planned Clubhouse Expansion published in The Desert Sun and/or other news outlets.
42. Buyers' Agents and DOES 21-30 breached their fiduciary duty to make the fullest disclosure of all material facts that might affect Plaintiffs' decision to purchase the Property by failing to disclose the planned Clubhouse Expansion to Plaintiff.
43. As a result of the constructive fraud of Buyers' Agents and DOES 21-30 in failing to make the fullest disclosure of all material facts thst might affect Plaintiffs' decision to purchase the Property, Plaintiffs completed the purchase of the Property and have been damaged in. the sum equal to the difference between the purchase price paid by Buyers for the Property and the actual value of the Property, taking into consideration the loss of view, loss of privacy and noise resulting from the construction of the Clubhouse Expansion and use of the new facilities, all to be proven at the time of trial but believed to be in excess of $350,000.
44. The aforementioned conduct of Buyers' Agents and DOES 21·30 was an intentional misrepresentation deceit or concealment of a material fact known to Buyers' Agents and DOES 21·30, with the Intention on the part of Buyers' Agents and DOES 21·30 of thereby depriving Plaintiffs of all material facts that might affect Plaintiffs' decision to purchase the Property, and was despicable conduct that subjected Plaintiffs to a cruel and unjust hardship in conscious disregard of the Plaintiffs' rights, so as to justify an award of exemplary and punitive damages.
FIFTH CAUSE OF ACTION
(For Deceit - Against Sellers, Sellers' Agents and DOES 1-20)
45. Plaintiffs reallege and incorporate herein by reference each and every allegation contained in paragraphs 1 through 22 of this Complaint as though fully set forth at length herein.
46. Prior to the close of tho Property transaction, Sellers, Sellers' Agents and DOES 1-20 became aware of the planned Clubhouse Expansion, but concealed the same from Plaintiffs with the intent to induce Plaintiffs to complete the purchase of the Property. Specifically, Plaintiffs are informed and believe and thereon allege that Sellers were personally advised of the planned Clubhouse Expansion by the developer of Andalusia a.t Coral Mountain (T.D. Desert Development) and/or by the common interest association that governs the Property sometime prior to the close of the Property transaction. Plaintiffs are informed and believe and thereon allege that Angone was previously employed by the developer of Andalusia at Coral Mountain (T.D. Desert Development) and was aware of the full build-out plans for said development; that he had full access to the sales office at Andalusia at Coral Mountain, as well as to information published by Andalusia at Coral Mountain on its website, Facebook page and in printed materials; that he visited the sales office at Andalusia at Coral Mountain and reviewed the Information published by Andalusia at Coral Mountain on its website and/or Facebook page and/or in printed materials; and that he was thereby made aware of the planned Clubhouse' Expansion sometime prior to the close of the Property transaction. Plaintiffs are informed and believe and thereon allege that Sellers, Sellers' Agents and DOES 1-20 had visited the sales office and/or restaurant at Andalusia at Coral Mountain sometime prior to the close of the Property transaction and viewed digital renderings of the planned Clubhouse Expansion and/or a scaled model of the planned Clubhouse Expansion; and/or that Sellers, Sellers' Agents and DOES 1-20 learned of the planned Clubhouse Expansion sometime prior to the close of the Property transaction through certain media sources, including, without limitation, information posted on the website and/or Facebook page of Andalusia at Coral Mountain and/or news articles regarding the planned Clubhouse Expansion published in The Desert Sun and/or other news outlets.
47. As a result of the deceit of Sellers. Sellers' Agents and DOES 1·20 in failing to disclose and concealing from Plaintiffs the planned Clubhouse Expansion, Plaintiffs completed the purchase of the Properly and have been damaged in the sum equal to the difference between the purchase price paid by Buyers for the Property and the actual value of the Property, taking into consideration the loss of view, loss of privacy and noise resulting from the construction of the Clubhouse Expansion and use of the new facilities, all to be proven at the time of trial but believed to be in excess of $350,000.
48. The aforementioned conduct of Sellers, Sellers' Agents and DOES 1·20 was an intentional deceit or concealment of a material fact known to Sellers, Sellers' Agents and DOES 1-20, with the intention on the part of Sellers, Sellers' Agents and DOES 1-20 of thereby depriving Plaintiffs of all material facts that might affect Plaintiffs' decision to purchase the Property, and was despicable conduct that subjected Plaintiffs to a cruel and unjust hardship in conscious disregard of the Plaintiffs' rights, so as to justify an award of exemplary and punitive damages.
49. Sellers are jointly and severally liable to Plaintiffs should it be found that Sellers' Agents or DOES 1-20 knew about the planned Clubhouse Expansion and concealed the same from Buyers prior to the close of the Property Transaction, even if Sellers had no actual knowledge of the planned Clubhouse Expansion.
SIXTH CAUSE OF ACTION
(For Negligence - Against Buyers' Agents and DOES 21-30)
50. Plaintiffs reallege and incorporate herein by reference each and every allegation contained in paragraphs 1 through 22 of this Complaint as though fully set forth at length herein.
51. As Plaintiff's agents, Buyers' Agents and DOES 21-30 owed to Plaintiffs a duty to exercise reasonable diligence to discover the planned Clubhouse Expansion and disclose the same to Plaintiffs.
52. Buyers' Agents and DOES 21-30 breached their duty by failing to exercise reasonable diligence to discover the planned Clubhouse Expansion and disclosing the same to Plaintiffs.
53. As a result of the breach of duty by Buyers' Agents and DOES 21-30 to discover and disclose the planned Clubhouse Expansion, Plaintiffs completed the purchase of the Property and have been damaged in the sum equal to the difference between the purchase price paid by Buyers for the Property and the actual value of the Property, taking into consideration the loss of view, loss of privacy and noise resulting from the construction of the Clubhouse Expansion and use of the new facilities, all to be proven at the time of trial but believed to be in excess of $350,000.
WHEREFORE, Plaintiffs pray judgment against Defendants as follows:
FIRST CAUSE OF ACTION
1. For compensatory damages equal to the difference between the purchase price paid by Buyers for the Property and the actual value of the Property, taking into consideration the loss of view, loss of privacy and noise resulting from the construction of the Clubhouse Expansion and use of the new facilities, in a. sum to be proven at the time of trial but believed to be in excess of$350,000; and
2. For reasonable attorney fees.
SECOND CAUSE OF ACTION
3. For compensatory damages equal to the difference between the purchase price paid by Buyers for the Property and the actual value of the Property, taking into consideration the loss of view, loss of privacy and noise resulting from the construction of the Clubhouse Expansion and use of the new facilities, in a Slim to be proven at the time of trial hut believed to be in excess of$350,000; and
4. For reasonable attorney fees.
THIRD CAUSE OF ACTION
5. For compensatory damages equal to the difference between the purchase price paid by Buyers for the Property and the actual value of the Property, taking into consideration the loss of view, loss of privacy and noise resulting from the construction of the Clubhouse Expansion and use of the new facilities, in a sum to be proven at the time of trial but believed to be in excess of $350,000.
FOURTH. CAUSE OF ACTION
6. For compensatory damages equal to the difference between the purchase price paid by Buyers for the Property and the actual value of the Property, taking into consideration the loss of view, loss of privacy and noise resulting from the construction of the Clubhouse Expansion and use of the new facilities, in a sum to be proven at the time of trial but believed to be in excess 01'$350,000; and
7. For punitive damages in an amount appropriate to punish Defendants and deter others from engaging in similar misconduct.
FIFTH CAUSE OF ACTION
8. For compensatory damages equal to the difference between the purchase price paid by Buyers for the Property and the actual value of the Property. taking into consideration the loss of view, loss of privacy and noise resulting from the construction of the Clubhouse Expansion and use of the new facilities, ill a sum to be proven at the time of trial but believed to be in excess of$350,000; and
9. For punitive damages in an amount appropriate to punish Defendants and deter others from engaging in similar misconduct.
SIXTH CAUSE OF ACTION
10. For compensatory damages equal to the difference between the purchase price paid by Buyers for the Property and the actual value of the Property, taking into consideration the loss of view, loss of privacy and noise resulting from the construction of the Clubhouse Expansion and use of the new facilities, in a sum to be proven at the time of trial but believed to be in excess of $350,000.
ALL CAUSES OF ACTION
12. For costs of suit incurred herein; and
13. For such other and further relief as the Court deems just and proper.
Dated: January 15,2014 ANDERHOLT WHITTAKER LLP
By: __________________________________
ROMAN M. WHJTTAKER
Attorney for Plaintiffs
GORDON MALIC and LORRIE
CHURCHILL
29 PALMS BAND OF MISSION INDIANS CASE...
SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF RIVERSIDE—CASE NO. RIC10006101
Federally Indicted former Windermere Coachella Valley Indian Wells Agent Peggy Shambaugh, Windermere Coachella Valley and Owner Bob Deville, Charged by Spotlight 29 Casino Owner Indian Tribe with Breach of Conract, Breach of the Implied Covenant of Good Faith and Fair Dealing; Shambaugh, Deville, Windermere Coachella and Windermere Services, Charged with Breach of Fiduciary Duty, and Professional Negligence; Windermere Coachella, Bob Deville and Windermere Services Charged with Unfair Trade Practices in $30 Million-Plus Deal—Complaint Alleges Windermere Services is an Unlicensed Entity. ASTONISHING: Read the Hard-Hitting Brief Filed in Support of the Tribe’s Claim for Restitution of $22,399,689.92!!!
DOWNLOAD A PDF COPY OF THE FULL BRIEF HERE
UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION
United States,
Plaintiff,
v.
Gary Kovall, et al.,
Defendants.
Case No. 12cr441
BRIEF FILED IN SUPPORT OF TRIBE'S
CLAIM FOR RESTITUTION
Judge: Hon. Michael Fitzgerald
Date: February 23, 2015
Time: 1:30 p.m.
Crtrm.: 1600
TABLE OF CONTENTS
Page
I. Introduction 1
II. Factual Background 5
A. Defendants' Background 5
B. The Initial Scheme 6
C. Bardos Succeeds Diversification
Resources as Owners Representative 6
D. The Scheme to Form Cadmus 7
E. Temporary Access Road and
Parking Lot($418,160.96 + $160,101.82
(Prejudgment Interest ("PI") = $578,262.78) 11
F. The Cogeneration Oversight Scam
($410,000 + 154,208.89 (PI) = $564,208.89) 14
1. The Scheme 14
2. Manipulation of the Worth Group Estimate 17
3. The Windfall 22
G. Grossly Inflated Disking
Project ($19,413.81 + $5,865.07
(PI) = $25,278.88) 24
H. Granite Embezzlement
($300,000 + $69,304.11 (PI)
= $369,304.11) 25
I. The 47 Acre Scam
($11,695,748 + $3,274,309.57
(PI) = $14,970,057.57) 27
1. The Scheme To Develop 47 Acres 28
2. Ploy to Justify Grossly Inflated Price 30
3. Attempted Manipulation of Merrill 31
4. Heslop's Overpriced Pitch to the Tribe 34
5. Kovall' s Lies Concerning Another Purchaser 37
6. Shambaugh's Secret Commission
and Increased Purchase Price to
Cover the Commission ($804,252.00
+ $246,358.90 (PI) = $1,050,610.90) 38
J. The Fraud Scheme Continued
On Beyond That Identified in
the Plea Agreements ($266,250 +
$32,157.77 (PI) = $298,407.70 42
III. Legal Argument. 45
A. Restitution is Mandatory Under
the MVRA 45
B. The Plea Agreements and Case
Law Are Clear That the Tribe is
Entitled to Recover All Losses
Against the Defendants, Including
Those Covered by The Dismissed
Charges, Jointly and Severally 47
C. Prejudgment Interest is
Also Recoverable 48
D. The Tribe is Entitled to
Recover the Excessive Profits
And Amounts Embezzled by
Bardos As A Result of The
Scheme, One of Half of Which
Were Kick backed to His
Co-Conspirators ($1,413,824.77
+ $421,634.59 (PI) = $1,835,459.36) 49
E. The Tribe is Entitled to
Recover the Amount of Shambaugh's
Commission ($804,252.00 +
$246,358.90 (PI) = $1,050,610.90) 52
F. The Tribe is Entitled to the Property
Price Differential ($11,695,748.00 +
$3,274,309.57 = $14,970,057.57) and
Other Losses Resulting from the
47 Acre Fraud 53
G. The Tribe is Entitled to Recover
Other Expenses Incurred as a Result
of the Fraud, Including Excess Property
Taxes ($137,500 + $38,018 (PI) =
$175,518) and Excess Bank Loan
Interest ($1,756,291 + $703,193.55
(PI) = $2,459,484.55) 55
H. Heslop's Manager Fees
($29,900.00 + $8,275.41
(PI) = $38,175.41) 55
I. Under the MVRA, The
Tribe is Entitled to Recover
Its Attorneys' Fees and
Investigative and Forensic Costs 56
1. Recovery of Attorneys' Fees
($951,342.00 + $152,962.76
(PI) = $1,104,315.75) 56
2. Recovery of Accounting
($374,313.60 + $77,719.65
(PI) = $452,033.25) and
Forensic Costs ($245,484.20
+ $48,664.97 (PI) = $294,149.17) 59
J. Kickbacks Received Through
Diversification Resources
($14,379 + $5,507.96 = $19,885.96) 60
IV. Conclusion 61
TABLE OF AUTHORITIES
Page(s)
Cases
Hyde v. United States
225 U.S. 347 (1912) 48
Nimkie v. United States
2012 WL 5590111 (D. Hawai'i) *2 55
Robers v. United States
134 S. Ct. 1854 (2014) 46, 53
United States v. Amato
540 F.3d 153 (2d Cir. 2008) 56, 57, 59, 60
United States v. Battista
575 F.3d 226 (2d Cir. 2009) 50, 53, 55
United States v. Berger
473 F.3d 1080 (9th Cir. 2006) 50, 53
United States v. Boscarino
437 F.3d 634 (7th Cir. 2006) 50, 53, 55
United States v. Brewer
983 F.2d 181 (10th Cir. 1993) 48
United States v. Brock-Davis
504 F.3d 991 (9th Cir. 2007) 47, 49
United States v. Carter
217U.S. 286 (1910) 51
United States v. Crawley
533 F.3d 349 (5th Cir. 2008) 50
United States v. DeGeorge
380 F.3d 1203 (9th Cir. 2004) 57
United States v. DeRosier
501 F .3d 888 (8th Cir. 2007) 56
United States v. Gamma Tech Industries, Inc.
265 F.3d 917 (9th Cir. 2001) 48, 50, 53, 54
United States v. Gordon
393 F.3d 1044 (9th Cir. 2004) 45, 46, 48, 49, 53, 56, 59
United States v. Grossi
608 Fl.3d 574,581 (9th Cir. 2010) 46
United States v. Gupta
925 F. Supp. 2d 581 (S.D.N.Y. 2013) 56
United States v. Hackett
311 F .3d 989 (9th Cir. 2002) 45
United States v. Henrie
2006 WL 1050156 (9th Cir. April 19, 2006) 59, 60
United States v. Kissel
218 U.S. 601 (1910) 48
United States v. Lawrence
189 F.3d 838 (9th Cir. 1999) 47
United States v. Morgan
376 F.3d 1002 (9th Cir. 2004) 55
United States v. Nosal
2014 WL 2109948 (N.D. Cal. 2014) 57, 59
United States v. Peterson
538 F.3d 1064 (9th Cir. 2008) 45, 53, 54
United States v. Pham
2008 WL 4394755 (9th Cir. 2008) 45, 47
United States v. Robers
698 F.3d 937 (7th Cir. 2012) 53, 55
United States v. Seaman
2013 WL 5408795 (D. Mont. Aug. 14, 2013) 50
United States v. Van Cauwenberghe
827 F .2d 424 (9th Cir. 1987) 48
United States v. Weimer
2014 WL 6680892 (N.D. Iowa 2014) 49
United States v. Wong
2014 WL 2700925 (N.D. Cal. 2014) 57, 59
United States v. Yeung
672 F.3d 594 (9th Cir. 2012) 53
Statutes
United States Code Title 18 1, 45
18 United States Code section 371 1, 45
18 United States Code section 3363A 45
18 United States Code section 3363(c)(I)(A)(ii) 45
18 United States Code section 3663 50
18 United States Code section 3663(A)(a)(I) 45
18 United States Code section 3663A(b)(4) 56, 60
18 United States Code section 3664(f)(I)(A) 46
18 United States Code section 3664(h) 48
United States Code Title 26 1
26 United States Code section 7201 1
28 United States Code section 1961 49
I.
Introduction
After nearly six years of internal investigations, civil litigation, and over two years of criminal proceedings, Defendants Kovall, Heslop and Bardos pled guilty on the eve of trial. Kovall and Heslop pled to one count of conspiracy to commit bribery of an agent of an Indian Tribe, in violation of 18 U.S.C. § 371. Bardos pled to one count of tax evasion under 26 U.S.C. §7201 for failing to report income of approximately $307,399, which he earned as a result of the fraud scheme. Shambaugh has entered a pre-trial diversion agreement with the government, the terms of the agreement are unknown to the Tribe.1
Under the Mandatory Victim Restitution Act ("MVRA"), restitution is mandatory for crimes under Title 18 and those which concern fraud and deceit. Pursuant to their plea agreements, Heslop and Kovall have agreed to pay full restitution to the Tribe, which includes losses caused by the conduct to which the defendant pled as well as all relevant conduct associated with the dismissed charges. Tribe is thus entitled to recover the full amounts of its loss caused by the defendants' criminal conduct, including attorneys' and investigative fees and prejudgment interest. The defendants' crimes against the Tribe are particularly egregious because they were fiduciaries.
Bardos was able to cut a deal with the government before Kovall and Shambaugh came forward, confessed their crimes, and produced hundreds of pages of emails on the eve of trial which fully document the conspiracy and the involvement of all defendants. Since Bardos got in the door first and pled guilty to a charge under Title 26, not Title 18, and his plea agreement does not so specify, he is not required to pay the Tribe restitution. Apparently, neither is defendant Shambaugh. This is unfortunate since the emails produced prove that all four defendants knew of, and actively participated in, the scheme and that Bardos and Shambaugh shared in the spoils.
The Tribe suffered substantial losses as a result of the defendants' crimes. As a direct and proximate result of defendants' scheme, the Tribe paid Bardos excessive profits on at least six
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1The Tribe requested a copy of Shambaugh's pretrial diversion agreement from the government, which did not provide it.
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(NEXT;—RESTITUTION BRIEF CONTINUED)