United States District Court, D. Idaho
L.J. GIBSON, BEAU BLIXSETH; AMY KOENIG, VERN JENNINGS, MARK MUSHKIN, MONIQUE LAFLEUR, GRIFFEN DEVELOPMENT, LLC, JUDY LAND, CHARLES DOMINGUEZ, et al, Plaintiffs,
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
L. QUACKENBUSH, SENIOR UNITED STATES DISTRICT JUDGE
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
summary judgment proceedings, the facts are viewed in a light
most favorable to the nonmoving party, in this case
Lake Las Vegas
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.
“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
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).
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.
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).
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.
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.
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
Ginn sur Mer
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.
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.
Resort Loans and Amenities
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.
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.
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.
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.
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).
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).
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).
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.
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
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.
Summary Judgment Standard
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).
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.).
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
Cushman & Wakefield’s “Wrong Party”
& 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).
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).
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).
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
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.
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.
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).
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
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.
Defendants’ Lack of Causation Argument
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.
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).
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). 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).
& 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).
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.
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.
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.
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 ...