Tara Woods Ltd. Partnership v. Fannie Mae

265 F.R.D. 561, 2010 U.S. Dist. LEXIS 38392, 2010 WL 1258051
CourtDistrict Court, D. Colorado
DecidedMarch 25, 2010
DocketCivil Action No. 09-cv-00832-MSK-MEH
StatusPublished
Cited by1 cases

This text of 265 F.R.D. 561 (Tara Woods Ltd. Partnership v. Fannie Mae) is published on Counsel Stack Legal Research, covering District Court, D. Colorado primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Tara Woods Ltd. Partnership v. Fannie Mae, 265 F.R.D. 561, 2010 U.S. Dist. LEXIS 38392, 2010 WL 1258051 (D. Colo. 2010).

Opinion

ORDER ON MOTION TO COMPEL

MICHAEL E. HEGARTY, United States Magistrate Judge.

Pending before the Court is Plaintiffs Motion for an Order Compelling Discovery [filed December 23, 2009; docket # 69 ]. The matter is briefed and has been referred to this Court for disposition. Oral argument would not materially assist the Court in adjudicating the motion. For the reasons that follow, the Court grants in part and denies in part the Motion to Compel.

I. Background

Plaintiff Tara Woods Limited Partnership (“Tara Woods”) initiated this action in Colorado state court1 alleging the following2: Tara Woods is a Minnesota Limited Partnership with its principal place of business in the State of Colorado. Tara Woods Corporation is a Minnesota corporation and is the general partner of Tara Woods Limited Partnership. Andrew Grossman (“Grossman”) is the principal and majority owner of Tara Woods Corporation.

The property that is the basis of this lawsuit was known as Stone Creek Village, located on East Girard Avenue in the City and County of Denver, Colorado. On May 7, 1999, Tara Woods borrowed $19,600,000.00 from EF & A and executed and delivered a Multifamily Note (“Note”), Multifamily Deed of Trust and Assignment of Rents and Security Agreement (“Deed”), a Replacement Reserve and Security Agreement (“Repair Escrow”) and other agreements prepared and required by EF & A as a condition of making the loan on the Stone Creek property. The loan was to mature on June 1, 2009.

Pursuant to the terms of the Note, Tara Woods was obligated to pay $131,454.04 each month to the Lender and, in addition, to pay, on a graduated scale, $9,475.00 per month from July 1999 to $12,362.75 through July 2008 for an escrow reserve to pay for repairs and replacements. The escrow accounts were established to pay taxes and insurance. Tara Woods was also required to enter into a “Completion/Repair and Security Agreement.” This agreement obligated Tara Woods to deposit $45,600.00 with Fannie Mae [564]*564to be held in escrow for payment of certain repairs required as a condition of the loan. The repairs were required to be made by May 6, 2000. Tara Woods alleges that it completed the items listed in the Completion/Repair and Security Agreement by May 6, 2000, and requested the return of the balance held in this escrow account; however, the funds were not returned.

Grossman was also the owner of Heather Apartments doing business in Oklahoma as Vintage Lakes Apartments, which was an apartment complex in City of the Village within Oklahoma City, Oklahoma. On October 5, 1999, Grossman, as the owner of Heather Apartments, executed a Multifamily Note (the “Note”) in favor of EF & A Funding, LLC for the amount of $7,300,600 to purchase Vintage Lake Apartments in Oklahoma City, Oklahoma. Grossman personally guaranteed all amounts owed on the Note. Also, on May 30, 2001, Northwest, an entity owned by Grossman, entered into a MultiFamily Note (the “Note”) and Multifamily Mortgage, Assignment of Rents and Security Agreement in favor of EF & A Funding, LLC. The Note was secured by property known as Springbrook Apartments (“Spring-brook”) in Oklahoma City, Oklahoma. The loan was assigned to Fannie Mae.

In 2005, Grossman decided to market Stone Creek in Colorado for sale. On May 25, 2005, Grossman marketed Stone Creek for sale at the price of $37,000,000. Tara Woods alleges there were numerous offers to purchase Stone Creek, and the Defendants required Tara Woods to provide to them detailed information about the marketing efforts, the potential buyers and the offers to purchase Stone Creek. According to Tara Woods, it continually made required payments on the loan, maintained the escrow accounts and were not in monetary default.

In addition, Tara Woods claims an offer was made by Bert Belanger, owner of Downtown Brownstone, LLC, to purchase Vintage Lakes Apartments in Oklahoma. From May 2006 until June 26, 2006, Grossman and Be-langer negotiated an arrangement for the purchase of Vintage Lakes Apartments for the price of $13,000,000. As required by the Defendants, Grossman continually informed the Defendants of the negotiations of the sale of Vintage Lakes Apartments.

On November 30, 2006, Fannie Mae commenced foreclosure proceedings on the Stone Creek property alleging Tara Woods was in default for failing to maintain the property lien free, failing to repair and maintain the property, failing to comply with the Denver Housing Code and failing to maintain the necessary insurance. The indebtedness at the time was $17,263,575.34, and Tara Woods was continuing its efforts to sell Stone Creek. On December 28, 2006, Fannie Mae filed its Verified Motion for Order Authorizing Sale Foreclosure and Petition pursuant to Rule 120, Colo. R. Civ. P., alleging that Tara Woods was in default of the Deed for the reasons stated above.

Tara Woods disputed most of the items that Fannie Mae alleged needed to be repaired at Stone Creek. However, pursuant to the loan documents, Tara Woods claims it had paid into escrow with Fannie Mae sufficient funds to complete the repair and replacement items. While demanding these repairs, Fannie Mae allegedly refused to pay for repairs and replacement items from the escrow account to prevent liens on the property. In addition, Tara Woods alleges that Fannie Mae required it to pay an additional $355,000.00 for repair bills allegedly to prevent Fannie Mae from commencing foreclosure proceedings. In consideration for this payment, Fannie Mae agreed to refund monies from the escrow accounts. Despite paying $355,000.00 as required, Tara Woods alleges Fannie Mae continued to pursue foreclosure and refused to release the es-crowed funds for repairs it claimed were necessary.

In an alleged telephone conversation on or about November 7, 2006 between Fannie Mae employee Frank Yanez (“Yanez”) and Grossman to attempt to resolve the alleged non-monetary defaults on the three loans, Grossman offered to give to Fannie Mae the Springbrook property in consideration for allowing Vintage Lakes and Stone Creek to be sold. Tara Woods alleges Yanez stated he would not allow Grossman to “hit a home run” in selling the two properties and leave Fannie Mae with Springbrook that had very [565]*565little equity. He also allegedly stated he was not going to allow Grossman to make any profit from the sale of the properties.

At the same time that Fannie Mae was claiming a default relating to Stone Creek, on November 13, 2006, Fannie Mae notified Heather Apartments that it was in default due to liens on the Vintage Lakes Apartments. Heather Apartments attempted to work with Fannie Mae to remove the liens by again requesting that the vendors and lien holders be paid from the repair escrow. However, on December 6, 2006, Fannie Mae initiated foreclosure proceedings on Vintage Lakes Apartments claiming that Heather Apartments was in default due to the property liens. Fannie Mae claimed that the entire remaining principal and other expenses were due in the amount of $7,348,994.79.

On the same date that the Notice of Default was sent to Heather Apartments, November 13, 2006, Fannie Mae sent a Notice of Default to Northwest claiming that it had defaulted on the Note, and similarly, Fannie Mae asserted that there were several liens filed against the Springbrook Apartments property.

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Bluebook (online)
265 F.R.D. 561, 2010 U.S. Dist. LEXIS 38392, 2010 WL 1258051, Counsel Stack Legal Research, https://law.counselstack.com/opinion/tara-woods-ltd-partnership-v-fannie-mae-cod-2010.