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Miller v. McCloud

United States District Court, D. Colorado

February 10, 2016

DANIEL J. MILLER, TERANCE M. MAHER, MAHER FINANCIAL SERVICES PPST, DAVID MICHAUD, BURRIS A. BRUCE, WAYNE LARSON, Maurice A. Larson GST Trust, HUGH THOMAS, JR. IRA 4949, GARY L. PETERSEN, MARLAYNE C. MILLER, DAVID O’BANNON, DORIS T. REA, Executor of Estate Claudia Rea Browers, BRUCE LAMBERT REVOCABLE LIVING TRUST, DANIEL M. LAVIK, 4 D’S INVESTMENT CLUB, CHESTERFIELD MORTGAGE INVESTORS, INC., ESTATE OF CHARLES R. ST. JOHN, St. John Fee Family LLC, ESTATE OF HARRY A. KIEHL, ROGER C. CLINE, PETER VERMEULEN, Vermeulen Family LLC, JOSEPHINE S. VERMEULEN, Trustee J.S. Vermeulen Living Trust, JOSEPHINE S. VERMEULEN, Trustee GST Exempt Family Trust of A. Vermeulen, WOLSDORF LIVING TRUST, DAVID ROOK, JAMES G. BENNETT, DORIS M. STROM, JAMES ROSE, RON IBSEN, and WAYNE D. PORTER, Plaintiffs,
v.
HAROLD S. MCCLOUD, THOMAS J. POWER, and CORELOGIC COMMERCIAL REAL ESTATE SERVICES, INC., Defendants.

GRANTING DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT

WILLIAM J. MARTÍNEZ UNITED STATES DISTRICT JUDGE

Plaintiffs bring this action against Defendants Harold S. McCloud (“McCloud”), Thomas J. Power (“Power”) and CoreLogic Commercial Real Estate Services, Inc. (“CoreLogic”) (collectively, “Defendants”). (ECF No. 36.) Before the Court are McCloud’s Motion for Summary Judgment (ECF No. 88) and CoreLogic’s Motion for Summary Judgment (ECF No. 90). For the reasons set forth below, both motions are granted.

I. BACKGROUND

The following relevant facts are undisputed, unless otherwise noted. Defendants McCloud and Power are licensed Colorado appraisers. (ECF No. 88-1 ¶ 5.) In August, 2006, Plaintiff Chesterfield Mortgage Investors, Inc. (“CMI”) hired McCloud and Power to appraise a property located in Adams County, Colorado at 1300 & 1400 W. 62ndAvenue and 6155 Lipan Street (the “Property”).[1] (Id. ¶¶ 1, 33; ECF No. 90 ¶ 7.) Plaintiffs provide evidence that Power was an employee of First American Commercial Real Estate Services (now CoreLogic) at the time he performed the August 2006 Appraisal (the “Appraisal”). (ECF No. 94 ¶ 18; ECF No. 94-2 at 4; ECF No. 94-3 at 4.) CoreLogic neither admits nor explicitly denies that Power was its employee at that time. (ECF No. 90 ¶ 66.)

At the time of the Appraisal, the Property was owned by MJR One, LLC. (ECF No. 88-1 ¶¶ 1, 53, 64.) The Property was located over a former landfill and housed a building containing a disco and cabaret. (Id. ¶¶ 6, 9.) In December 2003, CMI initially loaned $2, 500, 000 to MJR One, LLC, and MJR Two, LLC (collectively, the “Borrowers”), secured by the Property. (Id. ¶ 7.) Except for eight of the Plaintiffs, all other Plaintiffs bought participatory interests in the 2003 loan. (ECF No. 90 ¶¶ 2, 26; ECF No. 96 ¶ 47.)

In 2006, the Appraisal was conducted and provided a retrospective valuation that the Property was worth $5, 350, 000 “as is” as of December 9, 2005. (ECF No. 88-16 at 3.) The Appraisal also contained the following language:

The appraisers have made no investigation into the presence or absence of . . . hazardous materials in the subject property. The reader should be aware that no consideration has been given to the impact, if any, on the valuation of the subject property if any of these materials should be present. . . . The site was a former land fill that has undergone remediation. We make no representations regarding the landfill or presence or absence of hazardous materials on this property.

(ECF No. 90 ¶ 54.)

After receiving the appraisal, CMI included it in a 2006 Offering Circular that it provided to the other Plaintiffs. (ECF No. 88-1 ¶ 40.) The Borrowers refinanced their original loan with CMI in 2006. (ECF No. 90 ¶ 12.) The refinanced loan (“Loan #2282”) was in the amount of $3, 100, 000 and secured by the Property. (Id. ¶ 13.) All of the Plaintiffs in this case bought participatory interests in Loan #2282. (Id. ¶¶ 2, 26, 29.) CMI also obtained participatory interests in the loan. (Id. ¶ 38.)

In 2007, the Borrowers were in default under the terms of Loan #2282. (ECF No. 88 ¶ 43.) CMI initiated foreclosure proceedings against the Property and ultimately purchased the Property at the Public Trustee’s sale for $4, 000, 000. (ECF No. 95 ¶¶ 38, 40.) Because CMI’s lien against the Lipan Street parcel was a second deed of trust, the holder of the first lien, Brooke Banbury, took title to the parcel and ultimately sold it for $300, 000. (ECF No. 88-1 ¶¶ 64-65.) On February 8, 2012, CMI sold the remaining portion of the Property to a third party for $1, 399, 000. (Id. ¶ 66.)

Defendants McCloud and Power are from Colorado. (ECF No. 95 ¶ 1.) CoreLogic is incorporated in Florida while its principal place of business is in California. (Id. ¶ 2.) CMI was an asset-based lender based in Seattle, Washington. (Id. ¶ 3.) The other individual Plaintiffs “are in large part, Washington residents.” (Id. ¶ 4.)

On April 22, 2013, Plaintiff Daniel J. Miller commenced a lawsuit in King County Superior Court in Washington against McCloud, Power, and their respective wives. (ECF No. 1-1 at 1, 7-8.) The defendants in that suit removed the action to the United States District Court for the Western District of Washington, on the basis of diversity jurisdiction. (Id. at 1-2.) On June 24, 2013, the remaining Plaintiffs joined the suit by filing an amended complaint. (ECF No. 1-27 at 19.) On February 24, 2014, the Western District of Washington found that, on the record, it lacked personal jurisdiction over the defendants in that action. (ECF No. 1-24 at 1.) The court permitted Plaintiffs to conduct jurisdiction-related discovery; however, Plaintiffs elected not to pursue that option. (ECF No. 1.) Instead, Plaintiffs consented to transfer the action to this District. (Id.)

On July 11, 2014, Plaintiffs filed a Second Amended Complaint against Defendants McCloud, Power, and Corelogic. (ECF No. 36.) That complaint brings claims against Defendants for negligence, negligent misrepresentation, constructive fraud, a violation of the Washington Consumer Protection Act, and a violation of the Washington Securities Act. (Id. at 10-12.) On June 26, 2015, McCloud and Corelogic filed the instant motions for summary judgment. (ECF No. 88; ECF No. 90.) Each motion moves for summary judgment as to all claims against Defendants. Plaintiffs filed a Response to both of the motions. (ECF No. 95.) McCloud and Corelogic then filed replies to the Response. (ECF No. 96; ECF No. 98.) Power joins both McCloud’s and CoreLogic’s motions for summary judgment and their replies to the extent that they are not inconsistent with his position in the case.[2] (ECF No. 89; ECF No. 91; ECF No. 97; ECF No. 99.) As such, the relief granted to McCloud and CoreLogic will also be granted as to Power.

II. LEGAL STANDARD

Summary judgment is appropriate only if there is no genuine issue of material fact and the moving party is entitled to judgment as a matter of law. Fed.R.Civ.P. 56(c); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986); Henderson v. Inter-Chem Coal Co., Inc., 41 F.3d 567, 569 (10th Cir. 1994). Whether there is a genuine dispute as to a material fact depends upon whether the evidence presents a sufficient disagreement to require submission to a jury or, conversely, is so one-sided that one party must prevail as a matter of law. Anderson v. Liberty Lobby, 477 U.S. 242, 248-49 (1986); Stone v. Autoliv ASP, Inc., 210 F.3d 1132 (10th Cir. 2000); Carey v. U.S. Postal Serv., 812 F.2d 621, 623 (10th Cir. 1987).

A fact is “material” if it pertains to an element of a claim or defense; a factual dispute is “genuine” if the evidence is so contradictory that if the matter went to trial, a reasonable party could return a verdict for either party. Anderson, 477 U.S. at 248. The Court must resolve factual ambiguities against the moving party, thus ...


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