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Gibson v. Credit Suisse AG

United States District Court, D. Idaho

July 27, 2016

L.J. GIBSON, BEAU BLIXSETH; AMY KOENIG, VERN JENNINGS, MARK MUSHKIN, MONIQUE LAFLEUR, GRIFFEN DEVELOPMENT, LLC, JUDY LAND, CHARLES DOMINGUEZ, et al, Plaintiffs,
v.
CREDIT SUISSE AG, a Swiss corporation; CREDIT SUISSE SECURITIES USA, LLC, a Delaware limited liability company, CREDIT SUISSE FIRST BOSTON LLC, a Delaware limited liability corporation; CREDIT SUISSE AG, CAYMAN ISLAND BRANCH, an entity of unknown type; and CUSHMAN & WAKEFIELD, INC., a Delaware corporation, Defendants.

          MEMORANDUM OPINION AND ORDER RE: DEFENDANTS’ MOTIONS FOR SUMMARY JUDGMENT

          JUSTIN L. QUACKENBUSH, SENIOR UNITED STATES DISTRICT JUDGE

         I. Introduction

         BEFORE THE COURT are Cushman & Wakefield, Inc.’s (“Cushman & Wakefield”) Motion for Summary Judgment (ECF No. 737) and Credit Suisse AG, Credit Suisse Securities (USA), LLC, Credit Suisse First Boston, and Credit Suisse Cayman Island Branch’s (collectively, “Credit Suisse”) Motion for Summary Judgment (ECF No. 741). Defendants seek summary judgment and dismissal of all of Plaintiffs’ claims. Plaintiffs oppose the Motions (ECF No. 769); (ECF No. 770); (ECF No. 771), asserting there are genuine issues of material fact on all claims. Defendants filed Replies (ECF No. 781); (ECF No. 784). Oral argument on these matters was heard in Boise, Idaho, on April 12, 2016. David Lender argued on behalf of Credit Suisse and Barry Sher argued for Cushman & Wakefield. James Sabalos and Craig Fuller argued on behalf of the Plaintiffs. The court took the Motions under advisement. This Order memorializes the court’s rulings on the Motions.

         II. Factual Background

         In summary judgment proceedings, the facts are viewed in a light most favorable to the nonmoving party, in this case Plaintiffs.[1]

         A. Lake Las Vegas

         In August 2004, Credit Suisse retained Charles Reinagel of Cushman & Wakefield of California, Inc., to prepare an “as-is” market value appraisal of the Lake Las Vegas development in connection with a loan it was arranging with the Lake Las Vegas developer. See Declaration of Donald L. Morrow in Support of Cushman & Wakefield, Inc.’s Motion for Summary Judgment (“Morrow Dec.”), Ex. 51. Reinagel was the Senior Director of Valuation Service for Cushman & Wakefield of California with over 20 years of experience. Morrow Dec. Ex. 62.

         The “as-is” appraisal for Lake Las Vegas in 2004 stated the market value of the resort was $570 million. Declaration of Lockie Jo Gibson in Support of Opposition to Defendants’ Various Motions for Summary Judgment (“Gibson Dec.”), Ex. 14. Credit Suisse determined its clients to whom it would be syndicating the debt would be better served by a cash-flow analysis rather than market value of the Lake Las Vegas resort. See Morrow Dec. Ex. 15. Credit Suisse exchanged emails with Reinagel regarding an appropriate definition to use in the Lake Las Vegas appraisal. See Morrow Dec. Exs. 52- 55, 63. The ensuing discussion with Reinagel resulted in formulation of “Total Net Value.” See (ECF No. 737-2 at 3).

         Reinegal’s Total Net Value appraisal for Lake Las Vegas was issued on October 26, 2004. (ECF No. 41, Ex. A). The appraisal stated its purpose was “to assist in internal decision making purposes regarding potential financing” and was “intended for use only by the client [Credit Suisse].” (ECF No. 49, Ex. A at 2). The appraisal concluded the Total Net Value of Lake Las Vegas was $1.093 billion. (ECF No. 51-4 at 9).

         Credit Suisse arranged a first and second lien loan for the Lake Las Vegas developer, memorialized in credit agreements dated November 1, 2004. Declaration of David J. Lender in Support of Defendants Credit Suisse Securities (USA), LLC, Credit Suisse First Boston, and Credit Suisse Cayman Island Branch’s Motion for Summary Judgment (“Lender Dec.”), Ex. 11, Ex. 12. The combined loan amount was $560 million. See Lender Dec. Ex. 11 at 2, Ex. 12 at 2. The loans allowed the stockholders to make a one-time distribution from the loan proceeds. See Lender Dec. Ex. 11 at § 2.5, Ex.12 at § 2.5. The developers took a $500 million dividend, a large portion of which went to buy out the Bass brothers’ interest. See Gibson Dec. Ex. 12, Ex. 13. Repayment of the loan hinged on the sale of lots. Lender Dec. Ex. 21 at 35. None of the Plaintiffs were parties or participated in this loan. See Lender Dec. Ex. 11, Ex. 12. Some of the Lake Las Vegas Plaintiffs purchased lots before and some after the Credit Suisse loan to the developer. See Lender Ex. 1.

         After Lake Las Vegas sales fell short, Credit Suisse and the developers executed an amended loan credit facility on May 4, 2005. See Lender Dec. Ex. 44. Credit Suisse subsequently entered twelve more amendments, waivers, and forbearances with the Lake Las Vegas developer. See Lender Dec. Exs. 44-56. On July 17, 2008, Lake Las Vegas entered bankruptcy. See Lender Dec. Ex. 73. Credit Suisse currently has a non-controlling interest in an entity which indirectly owns a portion of the remaining collateral at Lake Las Vegas. See (ECF No. 671-5 at 79-80).

         B. Yellowstone Club

         On August 11, 2005, Dean Paauw of Cushman & Wakefield of Colorado, Inc., issued a Total Net Value appraisal of Yellowstone Club in Montana. (ECF No. 49, Ex. B). Paauw had over 19 years of experience as an appraiser. (ECF No. 737-4 at 2). Credit Suisse sent the Total Net Value appraisal definition to Paauw to use in his appraisal. Morrow Dec. Ex. 64; (ECF No. 737-4 at 2-3). Paauw reviewed the definition and found it acceptable. (ECF No. 737-4 at 2-4). Paauw’s Total Net Value appraised valued Yellowstone Club at $1.165 billion. Lender Dec. Ex. 13 at 10.

         On September 30, 2005, Credit Suisse and the Yellowstone Club developers closed on a first-lien credit facility loan for $375 million. Lender Dec. Ex. 13. The loan allowed the members of the resort to distribute up to $209 million of the loan proceeds “for purposes unrelated to the Yellowstone Development.” Lender Dec. Ex. 13 at 41. Repayment of the loan was to come through sale of lots at Yellowstone Club. See Lender Dec. Ex. 22 at 26-27, Ex. 23 at 26-28. The Yellowstone Club entered bankruptcy in 2008. See In re Yellowstone Mountain Club, LLC, No. 08-61570-11. Adv. No. 09-00014 (D. Mont.). On July 22, 2016, the Ninth Circuit held, inter alia, the conduct of Credit Suisse and the other lenders to the Yellowstone Club was not comparable to the unlawful conduct of Timothy Blixseth, founder of the Yellowstone Club. See In re Yellowstone Mountain Club, LLC, No. 14-35395 (9th Cir. July 22, 2016) (unpublished). All of Yellowstone Club was sold to entities wherein Credit Suisse has no ownership interest. See (ECF No. 741-2 at 7). None of the Plaintiffs herein were parties to the Yellowstone loan. See Lender Dec. Ex. 13.

         C. Tamarack

         On April 17, 2006, Paauw issued a Total Net Value appraisal for Tamarack, a development north of Boise, Idaho. (ECF No. 49, Ex. C). The Total Net Value appraisal of Tamarack was $824 million. Lender Dec. Ex. 14 at 11. On May 19, 2006, Credit Suisse entered a $250 million senior loan credit facility with the Tamarack developer. See Lender Dec. Ex. 14. None of the Plaintiffs were parties to this loan. See Lender Dec. Ex. 14. The loan did not allow for the developers to take a dividend. See Lender Dec. Ex. 14 at 58-59. The loan was to be repaid through the sale of lots at Tamarack. See Lender Dec. Ex. 22 at 26-27, Ex. 23 at 26-28. Credit Suisse entered a first waiver and amendment to the credit agreement on July 9, 2007. See Lender Dec. Ex. 57. Credit Suisse entered three additional waivers, amendments, and forbearances. See Lender Dec. Exs. 58-60. A group of creditors, which did not include Credit Suisse, forced Tamarack into involuntary bankruptcy on December 11, 2009. See Lender Dec. Ex. 77. The bankruptcy was later dismissed on Credit Suisse’s motion. See Lender Dec. Ex. 78. Credit Suisse foreclosed on the collateral at Tamarack. See Lender Dec. Ex. 79. Credit Suisse holds a non-controlling equity interest in the entity which indirectly owns Tamarack. See (ECF No. 671-5 at 79-80).

         D. Ginn sur Mer

         On April 28, 2006, Scott Tonneson of Cushman & Wakefield of Georgia, Inc., issued a Total Net Value appraisal for Ginn sur Mer, a development in the Bahama Islands. (ECF No. 49, Ex. D). Tonneson had over 12 years of experience as an appraiser. (ECF No. 737-5 at 2). Credit Suisse sent Tonneson the Total Net Value appraisal definition to use in the appraisal. (ECF No. 737-5 at 2-3). Tonneson reviewed the definition and found it acceptable. (ECF No. 737-5 at 2-3). The Total Net Value appraisal of Ginn sur Mer was $1.5 billion. Lender Dec. Ex. 15 at 11.

         On June 8, 2006, Credit Suisse and the developers at Ginn sur Mer entered senior first and second lien loan credit facilities for $675 million. See Lender Dec. Ex. 15, Ex. 16. The loans allowed a distribution from the loan proceeds of $333, 125, 000 to the stockholders. Lender Dec. Ex. 15 at 60, Ex. 16 at 48. On April 30, 2007, Credit Suisse entered a waiver and amendment to the Ginn sur Mer loan. Lender Dec. Ex. 61. Credit Suisse entered ten more amendments, waivers, and forbearances, with the Ginn sur Mer developers. See Lender Dec. Exs. 62-71. On August 14, 2008, Credit Suisse declared default and acceleration against Ginn sur Mer on the first lien loan. See Lender Dec. Ex. 80. The same day, the successor administrative and collateral agent declared default and acceleration on the second lien loan. See Lender Dec. Ex. 81. Credit Suisse currently has a non-controlling equity interest in the entity which indirectly owns Ginn sur Mer. See (ECF No. 671-5 at 79-80). None of the Plaintiffs were parties to the loans. See Lender Dec. Ex. 15, Ex. 16.

         E. Resort Loans and Amenities

         Prior to issuing loans at any of the four resorts, Credit Suisse received financial projections from the developers, all of which projected sufficient cash flow to service the loans. See Lender Dec. Ex. 17 at 13-17, 20, 28, and 31 (Lake Las Vegas), Ex. 19 at 4, 11-13, 27-28, and 31-32 (Ginn sur Mer), Ex. 25 at 10, 21-22 (Tamarack), and Ex. 26 at 7, 20-24, and 27-28 (Yellowstone Club). Credit Suisse did its own analysis of the projected cash flow and concluded the developers would be able to repay the loans. See Lender Dec. Ex. 27, Ex. 28 at 22-23, Ex. 29 at 34-35, Ex. 8 at 4, 7-8, 11, 17, and 20. After funding the loans to each of the four resorts’ developers, Credit Suisse sold interests in the loans to non-bank investors. Lender Dec. Exs. 30-33. Credit Suisse retained and later purchased interests in the loans for itself. Lender Dec. Exs. 30-33.

         Plaintiffs assert most of the amenities at Lake Las Vegas closed down as a result of the bankruptcy and only some have returned. See Gibson Dec. at ¶¶ 63-65. Golf memberships were rejected. See Lender Dec. Ex. 94. Plaintiffs assert other memberships have been rejected and no new replacement memberships offered. See Gibson Dec. at ¶¶ 63-64.

         No amenities at Yellowstone Club were ever closed during the bankruptcy and the Yellowstone Club amenities have been improved and continue to exist today. See Lender Dec. Ex. 96 at 4-19, 21-22, 25-38, and 41-47. After the bankruptcy, the Yellowstone Club assumed club member agreements for the members who paid for those memberships. See Lender Dec. Ex. 84 at 34-35, Ex. 96 at 41, 42-48, 51-52, Ex. 97.

         No amenities were ever built at Ginn sur Mer with the exception of a substantially completed but non-operating golf course. Lender Dec. Ex. 97 at 4 and 7.

         F. Plaintiffs’ Properties

         Plaintiff Vern Jennings purchased property at Lake Las Vegas in 2002. (ECF No. 644 at ¶86). Plaintiff Mark Mushkin purchased property at Lake Las Vegas prior to the 2004 Credit Suisse loan and also purchased property adjacent to one of the golf courses at Lake Las Vegas after the Credit Suisse loan was announced. (ECF No. 644 at ¶87).

         Plaintiff Amy Koenig purchased property at Tamarack in January 2004 and May 2004. (ECF No. 644 at ¶85). Plaintiff Judy Land purchased five properties at Tamarack between 2004 and October 25, 2005. (ECF No. 644 at ¶90).

         Plaintiff Monique Lafleur purchased two properties at Tamarack in December 2004. (ECF No. 644 at ¶88). Lafleur, along with her brother, formed Griffen Development LLC to purchase additional properties at Tamarack in 2005 and 2006. (ECF No. 644 at ¶¶88-89).

         Plaintiff L.J. Gibson purchased a lot at Tamarack on September 9, 2005. (ECF No. 644 at ¶83). She purchased two lots at Lake Las Vegas in May 2005 and early 2006. (ECF No. 644 at ¶83). Gibson also purchased property at Ginn sur Mer on January 1, 2007. (ECF No. 644 at ¶83). Gibson is the wife of James Sabalos, one of Plaintiffs’ attorneys.

         Plaintiff Charles Dominguez purchased land at Tamarack in November 2006. (ECF No. 644 at ¶91). Plaintiff Beau Blixseth purchased property at Yellowstone Club in 2008. (ECF No. 644 at ¶84).

         The 60 Second-Tier Plaintiffs purchased properties at each of the four Master Planned Communities. See (ECF No. 644 at ¶92). The pending Motions apply to all Plaintiffs. The Plaintiffs have been placed into tiers for trial convenience only. See, e.g., (ECF No. 583). All Plaintiffs are included in Defendants’ Motions for Summary Judgment.

         III. Legal Analysis

         A. Summary Judgment Standard

         The purpose of summary judgment is to avoid unnecessary trials when there is no dispute as to the material facts before the court. Northwest Motorcycle Ass'n v. U.S. Dept. of Agriculture, 18 F.3d 1468, 1471 (9th Cir. 1994). The moving party is entitled to summary judgment when, viewing the evidence and the inferences arising therefrom in the light most favorable to the nonmoving party, there are no genuine issues of material fact in dispute. Fed.R.Civ.P. 56; Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986). While the moving party does not have to disprove matters on which the opponent will bear the burden of proof at trial, they nonetheless bear the burden of producing evidence that negates an essential element of the opposing party’s claim and the ultimate burden of persuading the court no genuine issue of material fact exists. Nissan Fire & Marine Ins. Co. v. Fritz Companies, 210 F.3d 1099, 1102 (9th Cir. 2000). When the nonmoving party has the burden of proof at trial, the moving party need only point out there is an absence of evidence to support the nonmoving party’s case. Devereaux v. Abbey, 263 F.3d 1070, 1076 (9th Cir. 2001).

         Once the moving party has carried its burden, the opponent must do more than simply show there is some metaphysical doubt as to the material facts. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586 (1986). Rather, the opposing party must come forward with specific facts showing there is a genuine issue for trial. (Id.).

         Although a summary judgment motion is to be granted with caution, it is not a disfavored remedy: “Summary judgment procedure is properly regarded not as a disfavored procedural shortcut, but rather as an integral part of the Federal Rules as a whole, which are designed to secure the just, speedy and inexpensive determination of every action.” Celotex Corp. v. Catrett, 477 U.S. 317, 327 (1986)(citations and quotations omitted).

         B. Cushman & Wakefield’s “Wrong Party” Defense

         Cushman & Wakefield argues all claims against it should be dismissed because its subsidiaries issued the appraisals for the Credit Suisse loans and Cushman & Wakefield did not have any involvement in the creation of Total Net Value. (ECF No. 737-1 at 5-7).

         “It is a general principle of corporate law deeply ingrained in our economic and legal systems that a parent corporation (so-called because of control through ownership of another corporation’s stock) is not liable for the acts of its subsidiaries.” U.S. v. Bestfoods, 524 U.S. 51, 61 (1998) (internal quotation marks and citations omitted). Plaintiffs do not dispute this authority. Instead, Plaintiffs argue Cushman & Wakefield waived an improper party defense through its conduct in the six years of litigating this matter. (ECF No. 771 at 8).

         In its Motion to Dismiss the Second Amended Complaint filed on March 29, 2010, Cushman & Wakefield asserted Plaintiffs failed to sue the correct entity because the appraisals were prepared by its subsidiaries. See (ECF No. 48-1 at 31-32). Because the court did not dismiss all claims against Cushman & Wakefield, and Cushman & Wakefield did not object, appeal, or move to reconsider the Order on the Motion to Dismiss, Plaintiffs argue the defense is waived. (ECF No. 771 at 11). However, neither Magistrate Judge Bush or District Judge Lodge addressed the “wrong party” argument in the Report and Recommendation or Order on the Report. See (ECF No. 106); (ECF No. 126). Further, even if the court previously rejected the argument in a Motion to Dismiss, a party may re-raise similar arguments in a Motion for Summary Judgment because the two types of motions are distinct in posture. See Language Line Services, Inc. v. Language Services Associates, Inc., 944 F.Supp.2d 775, 780 (N.D. Cal. 2013).

         Additionally, Plaintiffs mischaracterize the “wrong party” defense. A defendant is required to “affirmatively state any avoidance or affirmative defense” including those in the enumerated list contained within the rule. See Fed.R.Civ.P. 8(c)(1). Mandatory joinder is governed by Fed.R.Civ.P. 19 and failure to join a necessary party may be raised in a motion to dismiss. See Fed.R.Civ.P. 12(b)(7).

         Contrary to Plaintiffs’ assertion, Cushman & Wakefield has not argued Plaintiffs failed to join a necessary party, but instead argued the appraisals were performed by legally distinct subsidiaries, making Cushman & Wakefield “the wrong party” named in this lawsuit as it did none of the alleged wrongful acts. See (ECF No. 737-1 at 15). In essence, Cushman & Wakefield is arguing Plaintiffs fail to state a claim for relief against it.

         Some defenses are waived if a party fails to raise it in its answer or in a motion to dismiss. See Fed.R.Civ.P. 12(h)(1). Other defenses, including failure to state a claim upon which relief can be granted and failure to join a necessary party may be raised at any time up to and including at trial. Fed.R.Civ.P. 12(h)(2)(C). As stated above, Cushman & Wakefield raised the “wrong party” defense in the Motion to Dismiss the Second Amended Complaint. See (ECF No. 48-1 at 31-32). Additionally, Cushman & Wakefield’s Answer to the Fifth Amended Complaint asserts failure to state a claim as a defense. See (ECF No. 652 at 6). The Answer does not contain a defense specifically stating Cushman & Wakefield is the “wrong party” because subsidiaries performed the appraisals, however the twelfth affirmative defense asserts Cushman & Wakefield’s “acts and conduct were privileged, justified, and/or excused” because “subsidiaries and/or affiliates performed appraisals pursuant to certain contracts and agreements that set forth the terms and conditions under which the appraisals were to be performed.” (ECF No. 652 at 10). For all of the above reasons, Cushman & Wakefield has not waived its “wrong party” defense.

         Plaintiffs seek leave to name the three Cushman & Wakefield subsidiaries as parties to this case in the event the court finds Cushman & Wakefield did not waive its “wrong party” defense. (ECF No. 771 at 9). While Cushman & Wakefield brought the existence and names of the subsidiaries to Plaintiffs’ attention in March 2010, Plaintiffs did not file a motion to amend and add those subsidiaries as parties at any time prior to the instant Motions for Summary Judgment. Because more than 21 days have passed since filing of the Fifth Amended Complaint, Plaintiffs must obtain leave of the court to add parties. See Fed.R.Civ.P. 15(a). Plaintiffs’ “request” contained within its response to the summary judgment motions does not constitute a motion for leave to amend. Additionally, Plaintiffs failed to explain why amendment should be granted so late in these proceedings or why they did not move to add the subsidiaries during the prolonged procedural history of this matter. See Forman v. Davis, 371 U.S. 178, 182 (1962) (grounds for denying leave to amend includes undue delay and futility of amendment).

         Adding the three Cushman & Wakefield subsidiaries would extend alleged liability to the entities who actually conducted the appraisals. To resolve Defendants’ Motions for Summary Judgment, the court must determine, inter alia, whether FIRREA and USPAP provide a basis for Plaintiffs’ claims, and whether there is a genuine issue of fact as to the appraisals causing Plaintiffs’ losses. Based on the court’s rulings on those issues, adding the subsidiaries is both untimely and futile. The request to add the three Cushman & Wakefield subsidiaries is Denied.

         Plaintiffs assert Cushman & Wakefield is a proper party to this action based on its alleged involvement independent of the subsidiaries in the creation and use of Total Net Value. (ECF No. 771 at 9). Because there are allegations directly involving Cushman & Wakefield, the “wrong party” defense does not necessitate Cushman & Wakefield’s outright dismissal from this matter.

         C. Defendants’ Lack of Causation Argument

         Defendants argue Plaintiffs cannot establish the Cushman & Wakefield appraisals or Credit Suisse loans caused Plaintiffs’ alleged damages. See (ECF No. 741-1 at 13-18); (ECF No. 737-1 at 21-24). Defendants contend the nationwide market recession caused the failure of the loans and resorts. (ECF No. 741-1 at 14); (ECF No. 737-1 at 19-20). They assert Plaintiffs cannot prove the loans, rather than the recession, caused the Plaintiffs’ loss in value of their lots and that Credit Suisse is legally responsible therefor by reason of its loans to the developers.

         Plaintiffs contend causation is an inherently factual issue and there is a genuine issue of fact as to what caused Plaintiffs’ damages. (ECF No. 771 at 15); (ECF No. 769 at 11). Plaintiffs assert the Defendants’ conduct was a substantial factor in causing Plaintiffs’ losses. (ECF No. 769 at 15); (ECF No. 771 at 12).

         Causation is comprised of two components- actual cause and proximate cause (legal cause). See Newberry v. Martens, 127 P.3d 187, 191 (Idaho 2005); Gentry v. Douglas Hereford Ranch, Inc., 962 P.2d 1205, 132-33 (Mont. 1998); Goodrich & Pennington Mortg. Fund, Inc. v. J.R. Woolard, Inc., 101 P.3d 792, 797 (Nev. 2004); (ECF No. 741-7 at 3-4).[2] Proximate cause is usually a question of fact and requires a direct and continuous sequence from the defendant’s actions leading to the plaintiff’s injury without any intervening cause. See, e.g., McDonald v. Florida Dept. of Transp., 655 So.2d 1164, 1168 (Fla. Dist. Ct. App. 1995). Showing a certain act is possibly the cause of injury is insufficient under Florida law because the claimant must meet the “more likely than not standard of causation.” Murphy v. Sarasota Ostrich Farm/Ranch, Inc., 875 So.2d 767, 769 (Fla. Dist. Ct. App. 2004).

         Cushman & Wakefield argues there is no evidence its appraisals caused injury to Plaintiffs because: (1) Plaintiffs are not competent to testify as to whether the appraisals caused their damages; (2) the developers at each of the four resorts testified the real estate crash and resulting recession, not the appraisals or Credit Suisse loans, caused the failure of the resort; and (3) Plaintiffs’ expert, Randall Schneider does not provide any opinion of causation. (ECF No. 737-1 at 23).

         Plaintiffs’ counsel asserted his clients would not opine as to causation. See Morrow Dec. Ex. 140. The developers from three of the resorts testified in depositions they fully expected to repay the loans and blamed the failure of the resorts on failing to sell lots as projected. See Morrow Dec. Ex. 21 at 15-16, Ex. 22 at 10-13, Ex. 23 at 8-9, 10-12. The Lake Las Vegas developer explicitly disclaimed the possibility of the Credit Suisse loan contributing to the resort’s failure. See Morrow Dec. Ex. 22 at 24-25. The developers at Tamarack and Ginn sur Mer did not specifically address whether they believed the Credit Suisse loans had any role in their resort’s failure. See Morrow Dec. Ex. 21, Ex. 23. Timothy Blixseth agreed the Yellowstone Club was solvent and fully intended to repay the loan when taken, but only went so far as to say the market recession was “a factor” contributing to the Yellowstone Club’s insolvency. Morrow Dec. Ex. 25 at 16-17, 20-21.

         Schneider’s expert reports attempted to “estimat[e] any potential value loss [to Plaintiffs’ properties] from the closure of amenities” at Tamarack and Lake Las Vegas. See (ECF No. 672-3 at 54); (ECF No. 672-7 at 55). In his deposition, Schneider admitted he did not examine any properties at Yellowstone Club or Ginn sur Mer. Morrow Dec. Ex. 26 at 13. Schneider also conceded he did not attempt to determine whether the loss of amenities at Lake Las Vegas or Tamarack were related to the Credit Suisse loan. Morrow Dec. Ex. 26 at 5. Plaintiffs did not dispute Cushman & Wakefield’s arguments regarding Schneider or the Plaintiffs’ inability to opine as to causation.

         The only expert testimony on the record actually opining to causation are the reports of Credit Suisse’s retained expert, Dr. Walter Torous who opined the collapsing housing market, and not the Credit Suisse loans, caused the resorts to default and enter bankruptcy. See (ECF No. 671-5). Credit Suisse also argues its own discounted cash flow analysis using the financial projections provided by the developers showing the loans could be serviced is further proof the market collapse caused the failure of the loans. Lender Dec. Ex. 8 at 4, 7-8, 11, 17, 20; Ex. 27; Ex. 28; Ex. 29.

         Plaintiffs assert the evidence establishes five bases for causation: (1) a majority of the loan proceeds at Ginn sur Mer and at Lake Las Vegas were distributed “as apparent kickbacks” to the developers and were not used to progress the master planned communities; (2) an email from a member of Ginn sur Mer’s executive management sent the day the loan was funded stating he expected the loan to fail and the resort to become property of the lender; (3) at Tamarack, Credit Suisse “immediately began interfering with the ability of Tamarack to sell lots and assumed de facto control of the financial affairs at Tamarack;” (4) removing the discounted cash flow analysis from the projections of the developers and Cushman & Wakefield appraisals increased the loan funds available and “thus leveraged debt attached to the MPCs making the subject properties more susceptible to normal market fluctuations;” and (5) the Lake Las Vegas developer’s financial projections were allegedly controlled by Credit Suisse. (ECF No. 769 at 13); (ECF No. 771 at ...


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