Court Sides With Early Sullivan Client After $1M Loan Scheme

In a major bench trial victory, a Court found in favor of Early Sulivan client Cashera Plaza which, in hopes to build a car wash and auto repair center, entered into a $1.13 million construction loan with defendant lender Bian Liao Living Trust. Corporate Asset and Science was appointed as the lender’s fund control agent in the promissory note, with the loan broker named as the trustee of that entity.

After receiving only $140k of the $1.13 million towards entitlement efforts, it was discovered that the fund control agent schemed against Cashera, absconding the rest of the money. The lender then foreclosed without giving proper notice to the client, using an incorrect address and claiming the full loan amount of $1.13 million was due plus interest.

Early Sullivan sued the lender, the fund control agent, and others for breach of contract and fraud, moving to set aside the foreclosure and cancel the foreclosure documents. At Early Sullivan’s request, the Court bifurcated the equitable claims and tried them first. Ultimately, the Court found in Cashera’s favor on the equitable claims of set aside and cancellation of instructions, holding that the fund control agent was the agent of the lender and that fund control and the lender both engaged in fraud and acted with malicious intent by sending the foreclosure notices to a known bad address.

The Early Sullivan team will now try the fraud claims before a jury, bound by the Court’s findings on agency and that the defendants engaged in fraud and acted with malice, leaving the amount of compensatory and punitive damages as the only issues for the jury to decide. The Early Sullivan team was led by Scott Gizer.