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WO 

NOT FOR PUBLICATION 

IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF ARIZONA 

First Charter Financial Corporation,

Plaintiff, 

v. 

Pandey Hotel Corporation, 

Defendant. 

No. CV-15-02361-PHX-DJH

ORDER 

 First Charter Financial (“FCF”) and Victor Weintraub (“Weintraub”) (collectively, 

“Plaintiffs”)1

 allege that, pursuant to the terms of two contractual agreements (“the 

Agreements”) with Pandey Hotel Corporation (“Pandey” or “Defendant”), Pandey agreed 

to pay FCF a commission fee of 1% of the amount of any financing obtained with Plaintiffs’ 

assistance. (Doc. 1-2 at 6). Plaintiffs allege that Pandey withheld payments to Plaintiffs. 

(Doc. 1). Pandey acknowledges its failure to pay, but argues that its actions were justified. 

(Doc. 116). Based on these allegations, Plaintiffs filed nine claims for relief in their First 

Amended Complaint (“FAC”) including: breach of contract, breach of the duty of good 

faith and fair dealing, unjust enrichment, negligence, negligent misrepresentation, 

declaratory relief, and injunctive relief.2

 (Doc. 30 at 7-14). 

 

1

 Although Weintraub is technically a third-party Defendant, this order will refer to 

Weintraub and FCF collectively as “Plaintiffs.” 

2

 Claims alleged against Defendant First American Title Insurance Company (“FATCO”) were dismissed on October 24, 2016. (Doc. 47). 
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 Pandey filed Counterclaims against FCF and a Third-Party Complaint against 

Weintraub. (Doc. 84). Pandey alleges that, pursuant to the Agreements, Plaintiffs were 

party to Pandey’s confidential and proprietary business information. (Doc. 84 at 11). 

Allegedly, Weintraub disclosed improper communications that included proprietary 

business information, information to lenders on how to negotiate against Pandey’s 

interests, disparaging remarks about Pandey, and interference with Pandey’s attempts to 

obtain alternative lending arrangements. (Id. at 12-13). Pandey alleges that the 

communications were made by Weintraub while the Agreements were in effect and that 

his conduct was intentional, malicious, and outrageous, causing Pandey to suffer 

reputational and economic harm. 

 Plaintiffs sought judgment on the pleadings on three of Pandey’s counterclaims 

(Doc. 107). The Court found that fact issues precluded judgment on Pandey’s Count One 

claim of breach of fiduciary duty. (Doc. 145). The Court found in Plaintiffs’ favor and 

ordered Pandey’s Count Two, alleging breach of statutory duty, dismissed. (Id.). As for 

Pandey’s Count Three, tortious interference claim, the Court found that a claim for relief 

for tortious interference with Pandey’s relationship with lender Thorofare plausible. 

Pandey moved for partial summary judgment on whether an agency relationship between 

it and Plaintiffs existed, arguing that if it did, then all of Plaintiffs’ claims should be 

dismissed. (Doc. 116). The Court found that an agency relationship existed but found an 

issue of fact on when that relationship began and ended. (Doc. 145 at 11-18). 

The parties proceeded to a bench trial on their remaining claims on March 26 and 

27, 2019. Three witnesses testified, Plaintiff, Victor Weintraub; John Anderson, Pandey’s 

Chief Executive Officer; and John Searby, Pandey’s Chief Finance Officer. Thereafter, 

the parties submitted their Proposed Findings of Fact and Conclusions of Law on April 1, 

2019 (Docs. 199 and 200). The Court now issues its findings and conclusions. 

I. FINDINGS OF FACT3

1. FCF is an Arizona licensed commercial mortgage banker. (Doc. 174 at 3-4). 

 

3

 The Findings of Fact include the evidence and testimony presented at trial, and the parties’ fact stipulations throughout the course of this case. 
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2. Weintraub is the sole shareholder of FCF and serves as its officer and 

director. (Id.). 

3. Pandey is a Delaware corporation that acquires, owns, and operates hotels in 

the United States and requires mortgage financing in connection with its business 

operations. (Id.). 

4. John Andrews (“Andrews”) is Pandey’s Chief Executive Officer. (Id.). 

5. John Searby (“Searby”) is Pandey’s Chief Financial Officer. (Id.). 

6. Societe General (“So-Gen”) is a financial lender and Bill Lewiki is Vice 

President of So-Gen. (Unofficial Court Transcript (“UT”) from Mar. 27, 2019 (hereinafter 

“UT 3/27/19”) at 29, and Tr. Exh. 112). 

7. Thorofare Capital is a financial lender. Bill Lanting is/was an Originator 

(Exh. 44) and Brendan Miller is/was Chief Investment Officer of Thorofare. (Tr. Exh. 53). 

8. Andrews and Weintraub met at a conference in October 2014. (UT 3/26/19; 

and Tr. Exh. 126). 

9. Thereafter, Weintraub and Anderson discussed engaging FCF to seek 

mortgage financing for Pandey. (UT 3/26/19 at 19; Doc. 145 at 2). 

10. FCF/Weintraub and Pandey first discussed the possibility of FCF brokering 

mortgage financing for Pandey in December 2014. (Doc 174 at 4; Tr. Exh. 136). 

11. Plaintiffs sought and received Pandey’s 2012 – 2013 financial statements, its 

financial and property records including 12-month property trailing statements, prior tax 

returns, a list of its properties, its parent company financial and operating information, and 

information on several hotel properties it owned or were evaluating to acquire. (UT 

3/26/19 at 20, 31, 33; UT 3/27/19 at 31, 83-84; and Tr. Exhs. 11, 12, 126 & 136). 

12. During 2014 and 2015, Plaintiffs and Defendant discussed mortgage 

financing for various hotel properties including: Valley River Inn, Eugene, Oregon; 

Holiday Inn, Lafayette, Indiana; Sheraton Four-Points, Lafayette, Indiana; Baymont Inn, 

Las Vegas, Nevada; Dolce-Atlanta Peachtree, Peachtree, Georgia; and Radisson, Aurora, 

Colorado. (Tr. Exh. 13, 36, 37 and 38). 
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13. Pandey sought to acquire two properties, the Holiday Inn, Lafayette and the 

Sheraton Four-Points, Lafayette, owned by a single owner who required the properties be 

purchased together. (UT 3/27/19 at 79, 147). 

14. Pandey required $21 million in loans to acquire the two Lafayette properties 

and decided to use its Baymont Inn Las Vegas property as collateral because it was without 

a mortgage. (Id.). 

15. Plaintiffs were informed by Pandey of the necessity to secure a $21 million 

loan to acquire the Holiday Inn and Sheraton Four-Points. (Id. at 13, 79, 148, and Tr. Exh. 

36). 

16. Plaintiffs assured Pandey that it could acquire the $21 million required. (Id.). 

17. Plaintiffs and Pandey entered into two contracts, the Holiday Inn 

Lafayette/So-Gen Agreement (Tr. Exh. 3), and the Sheraton Four-Points 

Lafayette/Thorofare Agreement (Tr. Exh. 17) (collectively, “the Agreements”). 

18. The Agreements provide that Pandey hired Plaintiff as a “Mortgage Broker 

and financial consultant to assist [Pandey] in obtaining new financing” to acquire each 

hotel property. (Id.). The Agreements state that “[Pandey] agrees to pay [FCF] a fee of 

1.00% of the face or stated amount of any financing placed by, through or with the 

assistance of FCF.” (Id.). 

19. The Agreements “can be canceled by either party on 30 days written notice” 

and do not preclude Pandey from seeking financing from or through other sources. (UT at 

3/27/19 at 74; Tr. Exhs. 13 and 17). 

20. The April 9, 2015 Holiday Inn/So-Gen Agreement conveyed a loan offer of 

$12 million for the Holiday Inn property. (Tr. Exh. 3). 

21. The April 17, 2015 Sheraton Four-Points/Thorofare Agreement conveyed a 

loan offer of $9 million collateralized by the Sheraton Four-Points and Baymont Inn, Las 

Vegas. (Tr. Exhs. 17 and 22). 

22. John Andrews signed the Agreements on behalf of Pandey in May of 2015 

and sent the Agreements to Weintraub on May 28, 2015. (Tr. Exh. 48). 
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23. Plaintiffs secured a $12 million loan from So-Gen and the loan closed on or 

about October 2, 2015. (Id.). 

24. Plaintiffs entered into “sub-servicing” agreements with So-Gen to work for 

and provide services to So-Gen and its successors in exchange for certain fees in 

connection with So-Gen’s loan to Pandey. (UT 3/27/19 at 42-44; Tr. Exh. 112 and 113). 

The sub-servicing fees were to be paid by Pandey, through the lender, to Plaintiffs. 

Plaintiffs did not disclose its sub-servicing fee arrangement to Pandey. (UT 3/27/19 at 139 

and 150). 

25. As part of Thorofare’s $9 million loan offer, Andrews negotiated and 

received a $1 million loan advance to fund expenses and deposits associated with the 

Lafayette property transactions. (UT 3/26/19 at 56; Tr. Exh. 42). 

26. Weintraub did not negotiate the $1 million loan with Thorofare; however, he 

did receive a $10,000 commission because he was “broker of record” and provided thirdparty reports. (Id.; Tr. Exhs. 39 and 138). 

27. On May 28, 2015 Weintraub, while acting as Pandey’s broker, e-mailed 

Lanting/Thorofare about Pandey stating, among other things, “with these kinds of 

properties you were dealing with the real estate equivalent of the junk bond market.” He 

also stated, “Bill, these guys are weird.” (UT 3/27/19 at 8; Tr. Exh. 40). 

28. On June 3, 2015, Lanting informed Weintraub that Thorofare approved the 

$1 million loan. (Tr. Exh. 110). Shortly thereafter, Lanting left Thorofare. (Tr. Exh. 51). 

 29. On June 22, 2015, Brendan Miller of Thorofare exchanged emails with 

Weintraub stating concerns about the value of the Sheraton Four-Points property and stated 

that the loan offer may be reduced. (Exh. 23 at 52-54). Weintraub’s response reminded 

Miller that, as part of Thorofare’s $9 million loan offer, Pandey was required to pay all 

fees for the $9 million when it acquired the $1 million advance. (Tr. Exh. 23). 

30. Thorofare reduced the $9 million loan offer stating concerns over the 

property appraisals. (Tr. Exh. 54). 

31. Pandey was required to pay Thorofare fees associated with the $1 million 
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advance although the $9 million loan was rescinded, costing Pandey an estimated $85,000. 

(UT 3/27/19 at 160; Tr. Exh. 22). 

32. When the Thorofare loan fell through, Pandey immediately sought out other 

lenders to complete the acquisition of the Lafayette properties because the seller would not 

extend the closing deadline. (UT 3/27/19 at 91-92). 

33. Plaintiffs obtained a loan proposal from Columbia Pacific Advisors for $6 

million, which was later reduced to $4.6 million for the Sheraton Four-Points Property. 

(Id. at 17-19; Tr. Exh. 26 and 27). The reduced amount was insufficient for Pandey’s 

needs. (Id.). Pandey later obtained a loan for the Four-Points property for $6 million from 

the Levine Group. (Id. at 21). 

34. Plaintiffs submitted to Pandey an invoice for the CPA loan (Tr. Exh. 32) and 

the Levine Loan (Tr. Exh. 33). 

35. Plaintiffs cancelled its Sheraton Four-Points commission Agreement with 

Pandey via email on September 28, 2015, triggering the 30-day notice. (Tr. Exh. 17). 

36. Plaintiffs submitted invoices to Pandey for commission fees totaling 

$120,000 for the So-Gen loan (Tr. Exh. 4), and $60,000 for the Levine Group loan (Tr. 

Exh. 33). 

37. Searby instructed Pandey to hold off on paying Plaintiffs in order to first 

reconcile Plaintiffs’ billing invoices with work performed. (UT 3/27/19 at 144; Tr. Exhs. 

8 and 10). 

38. Pandey declined to pay Plaintiffs the $120,000 commission for the So-Gen 

loan, and requested Plaintiffs remit a $24,500 wire deposit it claims was sent to Plaintiffs 

in error. (Tr. Exh. 138). The wire deposit was sent to Plaintiffs on October 2. 2015. (Id.). 

39. Plaintiffs refused to remit the $24,500, stating that amount was a commission 

for obtaining the financing for the Baymont Inn and Suites. (Id.). 

 40. The disputed $120,000 commission for the Holiday Inn loan is held by the 

Court pending case resolution. (Docs. 47 & 52). An additional $23,000 is held by the 

Court for the “Sheraton Holdback” from the Sheraton-Four Points property. (Id.; Tr. 
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Exh. 9). The parties did not discuss the Sheraton Holdback amount at trial. 

II. CONCLUSIONS OF LAW 

A. Post-Trial Motions 

The Court must first address Defendant’s Rule 52 motions because they directly 

affect the parties claims. At the close of Plaintiffs’ case, Defendant moved pursuant to 

Fed.R.Civ.P. 52(c) that the Court find the agency relationship started on February 6, 2015 

and ran through October 2, 2015. Plaintiffs disagree, arguing that there was no contractual 

duty or agency relationship until the engagement letters were signed and returned by 

Defendant in May 2015. The Court found that, based on the evidence and testimony so 

far, FCF and Weintraub were acting as Pandey’s agent as of February 6, 2015. (UT 3/27/19 

at 55). However, the Court permitted the parties to submit post-trial briefing on this issue. 

Rule 52(c) provides in part that “[i]f a party has been fully heard on an issue during 

a nonjury trial and the court finds against the party on that issue, the court may enter 

judgment against the party on a claim or defense [. . . ] The court may, however, decline to 

render any judgment until the close of the evidence. A judgment on partial findings must 

be supported by findings of fact and conclusions of law as required by Rule 52(a).” 

1. Timing of the Agency Relationship 

The Court previously found that an agency relationship existed between Plaintiffs 

and Pandey. (Doc. 145 at 17).4

 The only fact issue left for trial was when the agency 

relationship between Plaintiffs and Defendant began and ended. 

Plaintiffs argue that, because the Agreements were not signed by Andrews until May 

28, 2015, the Court cannot find that an agency relationship existed before that date. The 

Court disagrees. The testimony and evidence show that Plaintiffs began acting as Pandey’s 

commercial mortgage broker in January 2015, when he sought and received Pandey’s 

financial and property information and used that information to develop presentation 

materials and to make lender presentations on Pandey’s behalf. Weintraub prepared and 

delivered the first engagement letter dated January 29, 2015. (Tr. Exh. 104). The letter 

 

4

 Plaintiffs’ alleged as much in Count Five of their FAC. (Doc. 30 at 11). 
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was accompanied by Plaintiffs’ lender presentation that incorporated Pandey’s property 

and financial information. (UT 3/27/19 at 5). Though there is evidence that Plaintiffs were 

acting as Pandey’s agent in January, the first written confirmation of this relationship 

occurred on February 6, 2015. (Tr. Exh. 36). Therein, Weintraub explains to Andrews the 

lender contacts that have been made by Plaintiffs on its behalf on the Valley River Inn, 

Holiday Inn, Four Points and Quail Hollow properties. (Id.). Thus, Plaintiffs’ agency 

relationship with Pandey began no later than February 6, 2015. 

Weintraub testified that Pandey was still his client as of June 22, 2015. (UT 3/27/19 

at 17). Thereafter, Plaintiffs continued to hold themselves out as working on behalf of 

Pandey as evidenced by email communications to prospective lenders, and Pandey 

personnel. (See Tr. Exhs. 114, 115, 117). The record further reflects that, after the 

Thorofare loan fell through, Plaintiffs continued to solicit other lenders for Pandey. (UT 

3/27/19 at 16-17). Ultimately, the loans closed on October 1 and 2, 2015. Thus, Pandey 

argues that this would be the end date of the agency relationship and the Court agrees. (UT 

at 52). Therefore, the Court finds that the agency relationship began no later than February 

6, 2015 and ended on October 2, 2015. 

2. Commission on the Levine Group Loan – Sheraton Four Points 

At close of trial, Defendant also moved pursuant to Rule 52 that Plaintiffs were not 

entitled to a commission or other compensation on the Levine Group Loan. Plaintiffs did 

not object. Plaintiffs sent Pandey an invoice for a $60,000 commission on a $6,000,000 

loan from the Levine Group for the Sheraton Four-Points Hotel. (Tr. Exh. 33). The Court 

held that the evidence and testimony supported a preponderance of the evidence finding 

that Plaintiffs were not entitled to such commission or other compensation because the 

Levine loan was not placed by or through Plaintiffs. 

In Count Two, Plaintiffs allege that it obtained a $4.6 million loan from Columbia 

Pacific Advisors (“C-PAC”) and pursuant to the Sheraton/Baymont agreement, Pandey 

agreed to pay Plaintiffs a 1% commission. (FAC at 6). Plaintiffs allege that on the eve of 

closing that loan, Pandey refused to close and instead, used another lender. (Id.). In Count 
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Three, Plaintiffs allege that Pandey’s “failure and refusal to pay [Plaintiffs] for the fee 

earned in connection with the financing of the Sheraton by C-PAC and/or its failure and 

refusal to pay [FCF] for the fee earned in connection with the financing” was a breach of 

the implied contractual duty of good faith and fair dealing. Plaintiffs have also alleged a 

claim of unjust enrichment (Count Four) and a claim of breach of principal’s duty of good 

faith to its agent (Count Five) as it relates to the C-PAC loan offer. 

At trial, Weintraub testified that C-PAC issued a term sheet proposing a $6 million 

loan for the Sheraton Four-Points on August 25, 2015. (Tr. Exh. 26). However, on 

September 3, 2015, C-PAC reduced the loan offer to $4.6 million. (Tr. Exh. 27). Andrews 

testified that Weintraub was told that Pandey required a $6 million loan for the Sheraton 

property and therefore it could not accept the reduced C-PAC offer. (UT 3/27/19 at 90). 

Thus, because the Sheraton property owner had a set closing deadline, Andrews contacted 

his brother-in-law to aid Pandey in securing an immediate loan from the Levine Group. 

(Id. at 91-92). Indeed, Weintraub reluctantly testified that he did not source the Levine 

Group loan. (Id. at 21-23). Plaintiffs’ counsel also conceded the facts on which the Court 

relied. 

Accordingly, Plaintiffs are not entitled to the $60,000 commission or any damages 

relating to the Sheraton Four-Points loan. Moreover, in Count Six, Plaintiffs sought a 

$23,000 fee from FATCO for loan proceeds from the Sheraton Four-Points loan, called the 

“Sheraton Holdback” amount. (Doc. 30 at 11-12). These funds were held by FATCO and 

were later submitted to the Court with the $120,000 commission from the So-Gen Loan, 

for a total of $143,000. Although the parties did not present testimony about the $23,000 

holdback, there are exhibits in evidence that demonstrate that the $23,000 was held back 

from being paid to Plaintiffs because there was a dispute over whether Plaintiffs were 

entitled to those funds. The Sheraton Holdback was submitted to the Court pending the 

outcome of this litigation. Moreover, FATCO is no longer a party to this lawsuit. As 

FATCO is no longer a Defendant in this matter, Plaintiffs cannot seek damages against 

FATCO. Further, Plaintiffs have not established that they are entitled to the $23,000 
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commission. 

Therefore, judgment is entered against Plaintiffs and for Defendants on Count Two 

of Plaintiffs’ FAC. The Court also enters judgment for Defendants on Plaintiffs’ Counts 

Three, Four and Five as it relates to the C-PAC offer and the Levine Group loan. Plaintiffs 

cannot collect damages against FATCO on Count Six, as FATCO is no longer a party to 

the lawsuit. 

B. Plaintiffs’ Breach of Contract (Count One), Breach of Implied 

Contractual Duty of Good Faith and Fair Dealing (Count Three), Unjust 

Enrichment (Count Four), and Breach of Principal’s Duty of Good Faith 

to Agent (Count Five) claims5

1. Legal Standards 

To succeed on a breach of contract claim, a party must prove the existence of a 

contract between the parties, a breach of contract terms, and resulting damages. See 

Coleman v. Watts, 87 F.Supp.2d 944, 955 (D. Ariz. 1998) (citing Clark v. Compania 

Ganadera de Cananea, S.A., 95 Ariz. 90, 387 P.2d 235, 237 (1963). The duty of good faith 

and fair dealing is implied in every contract. Rawlings v. Apodaca, 726 P.2d 565, 569 

(Ariz. 1986). “The essence of that duty is that neither party will act to impair the right of 

the other to receive the benefits which flow from their agreement or contractual 

relationship.” Id. “The duty arises by operation of law but exists by virtue of a contractual 

relationship.” Wells Fargo Bank v. Ariz. Laborers, Teamsters and Cement Masons Local 

No. 395 Pension Trust Fund, 38 P.3d 12, 28 (Ariz. 2002) (citing Rawlings, 726 P.2d at 

569–70). “A party may breach the implied covenant even in the absence of a breach of an 

express provision of the contract by denying the other party the reasonably expected 

benefits of the agreement.” Nolan v. Starlight Pines Homeowners Ass’n, 167 P.3d 1277, 

1287 (Ariz. Ct. App. 2007) (citing Wells Fargo Bank, 38 P.3d at 29–30). “Whether a party 

has breached the covenant of good faith and fair dealing is a question of fact.” Maleki v. 

 

5

 Plaintiffs produced no evidence or testimony in support of its Count Seven negligent 

misrepresentation claim that Pandey supplied false information regarding its financial 

backing and liquidity. The Court enters judgment for Pandey on that claim. 
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Desert Palms Prof’l Props., L.L.C., 214 P.3d 415, 421 (Ariz. Ct. App. 2009) (citing Wells 

Fargo Bank, 38 P.3d at 31). “The relevant inquiry always will focus on the contract itself, 

to determine what the parties did agree to.” Wagenseller v. Scottsdale Mem’l Hosp., 710 

P.2d 1025, 1040 (1985), superseded in other respects by A.R.S. § 23–1501. Arizona courts 

follow the Restatement (Second) of Contracts § 205 (1981), which describes the duty of 

good faith and fair dealing in contract: 

[B]ad faith may be overt or may consist of inaction, and fair dealing may 

require more than honesty. A complete catalogue of types of bad faith is 

impossible, but the following types are among those which have been 

recognized in judicial decisions: evasion of the spirit of the bargain, lack of 

diligence and slacking off, willful rendering of imperfect performance, abuse 

of a power to specify terms, and interference with or failure to cooperate in 

the other party’s performance. 

Airfreight Exp. Ltd. v. Evergreen Air Ctr., Inc., 158 P.3d 232, 241 (Ariz. Ct. App. 2007). 

 An agent may be liable for harm to the interests of a principal and may not be 

entitled to compensation for conduct which breaches the duty of loyalty if that conduct is 

a willful and deliberate breach of his contract of services. Johnson v. Pacific Lighting Land 

Co. 817 F.2d 601, 607 (9th Cir. 1987) (citations omitted). “If an agent makes a secret and 

unlawful profit[,] . . . [i]t is clear that he must disgorge the entire secret profit, either under 

a theory of damages or as a constructive trustee for his principal. Id.; See also Edwards v. 

Hauff, 140 Ariz. 373, 682 P.2d 1 (Ariz. Ct. App. 1984). An agent may not even be entitled 

to compensation for services performed properly for which no compensation is 

apportioned. Johnson, 817 F.2d at 607. 

 2. Analysis 

In Count One, Plaintiffs claim that Pandey agreed to have Plaintiffs act as a 

mortgage broker and financial consultant to help Pandey find financing for the Holiday 

Inn, Lafayette property. (Doc. 30 at 7-8). Plaintiffs allege that Pandey agreed to pay it a 

commission fee of 1% of any loan secured on Pandey’s behalf. Plaintiffs further allege it 

secured a $12 million loan that Pandey accepted, however, Pandey withheld payment of 

Plaintiffs’ 1% commission fee. In Count Four, Plaintiffs claim that Pandey was unjustly 
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enriched by Plaintiffs’ assistance in acquiring the loan. In Count Five, Plaintiffs allege that 

Pandey, as its principal, owed a duty of good faith to Plaintiffs and by failing to pay its 

commission, breached that duty. Plaintiff also seeks a declaration of rights between the 

parties in Count Eight. (Doc. 30). 

There is no dispute that the Holiday Inn Agreement was signed by Andrews and 

delivered to Weintraub on May 28, 2015. (Tr. Exh. 48). The Agreement states “you agree 

to pay [FCF] a fee of 1.00% of the face or stated amount of any financing placed by, 

through or with the assistance of FCF. Commission will be earned and payable when a 

loan is recorded against a property and/or funded.” (Id.). The agreement letter conveyed 

a lending offer from So-Gen for $12 million for the Holiday Inn. (Id.). Pandey’s 

acceptance of the So-Gen loan triggered Plaintiffs’ 1% commission fee of $120,000 which 

it refused to pay. Pandey does not allege that Plaintiffs did not earn the So-Gen loan 

commission. Rather, Pandey produced evidence that they believe relieve it from paying 

the commission as a matter of law. 

3. Pandey’s Affirmative Defense - So-Gen sub-serving fee 

Pandey pleaded an affirmative defense that Plaintiffs’ breaches of the Agreements 

relieve it, as a matter of law, from any payment obligation to Plaintiffs. (Doc 84 at 9). 

Pandey further asserts that it “possesses a right to set-off for commissions collected by FCF 

which were unearned.” (Id.). Pandey asserts that Plaintiffs collected $24,500 and 

additional unearned commissions. (Id.). Pandey alleges that Weintraub, while acting as 

its agent, was acting against its financial interests in arranging the So-Gen loans. 

At trial, Andrews acknowledged accepting the $12 million So-Gen loan and 

withholding Plaintiffs’ commission fee in order to first reconcile all of the fees demanded 

by Weintraub on work performed on the loans. (UT 3/27/19 at 97-99). Andrews testified 

that he believed Weintraub had taken money not earned and that he instructed the escrow 

officer to hold back $120,000 from Plaintiffs. (Id. at 131-132; Tr. Exh. 10). Pandey’s 

lawyer informed the escrow officer that there was “a dispute as to whether all or part was 

earned.” (Id.). 
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The evidence shows that, on February 18, 2015, Weintraub sent an email to Peter 

Lewicki, Vice President of So-Gen, instructing him to insert specific language into the loan 

documents to permit Plaintiffs to receive a sub-servicing fee. (UT 3/27/19 at 29, 38; Tr. 

Exh. 112). Pandey was not included on the email. Plaintiffs’ requested language states: 

“In addition, Borrower acknowledges that Lender may from time to time 

enter into an agreement under which Lender provides compensation to a 

broker, mortgage banker, advisor, correspondent or finder (which may be 

affiliated with Lender) who brought about the issuance of this Application or 

the consideration of or making of the Proposed Loan[.]”. 

(Exh. 112). So-Gen inserted the language in its proposed financing terms. (Tr. Exh. 113 

at FC002256). As a result, Pandey was bound to pay Plaintiffs a five-basis-point 

commission as a sub-servicing fee through the lender. Consequently, Plaintiffs received a 

monthly .05% servicing fee on the $12 million Holiday Inn loan and on the $2.95 million 

Baymont Inn loan. (Id. at 32-35). Pandey unknowingly paid those fees to Plaintiffs. 

Weintraub testified that, in securing the So-Gen loan, he was also acting as a subservicer on behalf of Wells Fargo (servicer for the trust) or “point of contact with the 

borrower.” (UT 3/27/19 at 35). Weintraub did not disclose to Pandey that Plaintiff was 

negotiating this additional fee for itself. (Id. at 41-43). The evidence thus shows that 

Weintraub was acting as a dual-agent. 

Weintraub was evasive in testifying about whether he disclosed to Pandey that 

Plaintiffs would receive a sub-servicing fee from the lender to be paid by Pandey. First, 

Weintraub agreed that the So-Gen application letter did not disclose that FCF would seek 

a five-basis point commission for sub-servicing. (Id. at 42-3). Weintraub also agreed that 

neither of the Agreement letters disclosed to Pandey that FCF would be receiving a fivebasis-point commission from the lender. (Id.). Rather, he testified that a sub-servicing fee 

is an “industry standard” and that receipt of sub-servicing fees are common knowledge and 

here, “it was common knowledge between myself, him [Andrews] and everybody else in 

the industry . . . [and] you can’t change common knowledge.” (Id.). Weintraub then 
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testified that he spoke with Andrews about the sub-servicing fee arrangement, which 

Andrews unequivocally denied. (Id. at 44). Andrews testified that, had he known about 

Plaintiffs’ sub-servicing fee, he would have negotiated with Weintraub for a reduced 

commission “because he would be making money on the side . . . from our deal.” (Id. at 

70). The Court finds Andrew’s testimony credible. 

Plaintiffs suggest that, by executing the Summary of Proposed Financing Terms for 

the Holiday Inn, Pandey waived any claim against FCF for receiving sub-servicing fees. 

(Doc. 199 at 21). The Court disagrees. Plaintiffs, as Pandey’s mortgage broker, owed it a 

fiduciary duty. Plaintiffs’ conduct in negotiating with lenders against their client’s 

financial interest is a breach of that fiduciary duty. See Rhoads v. Harvey Publications, 

Inc., 145 Ariz. 142, 700 P.2d 840, 847 (Ariz. Ct. App. 1985); see also Georges v. Accutira 

Mortage, Inc., 2008 WL 2079125 at *4 (E.D. Mo. May 15, 2008) (mortgage broker had a 

fiduciary relationship with a borrower); Guth v. Allied Home Mortgage Capital Corp., 

2008 WL 2635521, at *1 (Ohio. Ct. App. July 7, 2008) (“Mortgage brokers have fiduciary 

duties to their clients.”). Plaintiffs’ communication with Pandey’s prospective lender was 

done without Pandey’s knowledge. Moreover, Plaintiffs had extensive knowledge about 

Pandey’s financial circumstances. Indeed, Weintraub repeatedly characterized Pandey as 

not being financially sound or financially sophisticated. Moreover, Weintraub’s email to 

another lender, Thorofare, on May 28 stated “if he [John Serby] asks why the broker point 

is included tell him that it is company policy that when points are collected that all parties 

points are collected[.]” (Tr. Exh. 40). This establishes that Plaintiffs were secretly selfdealing in complete disregard of its principal’s financial interests. 

Plaintiffs’ contention that Pandey should have known that a sub-servicing fee would 

attach to any loan is also irrelevant. Here, Plaintiffs were acting as Pandey’s agent and had 

details about its financial circumstances. Surely, Pandey would not expect its agent would 

negotiate against its financial interest, especially since Pandey agreed to compensate 

Plaintiff for his role in finding lenders. What is more, Weintraub went to great lengths to 

testify that Pandey had insufficient funds, which makes his conduct all the more 
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concerning. 

Therefore, although Pandey benefitted from the So-Gen loans, the Court finds that 

Plaintiffs’ breach of its duty of loyalty and fiduciary duty to Pandey requires that the 

$120,000 commission be forfeited.6

 See Johnson, 817 F.2d at 607 (“If an agent makes a 

secret and unlawful profit[,] he must disgorge the entire secret profit, either under a theory 

of damages or as a constructive trustee for his principal.”). Pandey also produced evidence 

of a $24,500 payment to Plaintiff for the So-Gen Baymont Inn loan. (Tr. Exhs. 34 & 138). 

Therefore, Plaintiffs must disgorge $24,500 to Pandey. See Hirsch v. Ariz. Corp. Comm’n, 

237 Ariz., 456, 466 (Ariz. Ct. App. 2015) (a court may order disgorgement to prevent a 

wrong doer from enriching himself by his wrongs). Consequently, Plaintiffs’ Counts One, 

Three, Four and Five fail. 

C. Pandey’s Counterclaim - Breach of Fiduciary Duty (Count One) 

The parties’ Agreement for the Sheraton Four-Points and Baymont Inn properties 

conveyed a loan offer from Thorofare of $9 million. (Tr. Exhs. 17 & 22). The loan was to 

be collateralized by the two properties. (Id.). Plaintiffs negotiated that loan with Bill 

Lanting, a loan originator for Thorofare. Pandey negotiated with Lanting a $1 million 

advance on the $9 million loan and agreed to pay fees and costs associated therewith. (Exh. 

41). Although Pandey negotiated the loan, Plaintiffs received a $10,000 commission on 

the loan. (UT 3/27/19 at 132). 

In its counterclaim, Pandey alleges that, while acting as its agent, Weintraub 

engaged in written communications with Landing that disclosed its confidential 

information, disparaged Pandey, and interfered with its attempt to acquire financing from 

Thorofare. (Id. at 12-13). While the $9 million loan offer was pending, Weintraub emailed 

Lanting on May 28, 2015 the following: 

You are going to get a call from John Serby. He is going to be crying about 

that they are getting a $1,000,000 but they can only use $5000,000 [sic] of 

it and that only for a deposit with the seller. I do not know what is going on 

 

6

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there but I suspect that they are talking to another lender for the Radisson but 

they do not have any cash for deposits. They are short close to $2,000,000 

to close the LaFayette purchase so they have to do the Radisson or 

something else. Be firm and do not give them any extra out of the 

$1,000,000. If Serby complains about the cost of paying interest on 

$5000,000 [sic] that he cannot use tell him that the cost is only around 

$3,000 for the four weeks and that you did not change any points and that is 

much less than one point. If he asks why the broker point is included tell 

him that it is company policy that when points are collected that all parties 

points are collected. 

Bill these guys are weird. I do not think that Charles Pandey understands 

how the capital markets work. . . With these kinds of properties you are 

dealing in the real estate equivalent of the junk bond market[.] 

(Tr. Exh. 40) (emphasis added). 

Weintraub then forwarded Lanting a May 27, 2015 email from Searby, which 

included a break-down of how Pandey would allocate its costs and fees on the $1 million 

loan: 

Bill . . . I will NOT agree to a $10,000 broker commission. I still do not have 

the signed Engagement Letters. They are trying to stiff me. If you are going 

to pay fees for them you do it directly, They already paid the fee to So-Gen 

and to Thorofair. . . If you give them funds directly they will use the money 

to line up another lender for the Raddison. Bill, please call me. 

(Id.) (emphasis added). 

 Plaintiffs’ communications breached the fiduciary duty it owed to Pandey. See 

Haymes v. Rogers, 70 Ariz. 408, 411 222 P.2d 789, 790 (1950) (citations omitted) (“agent’s 

duty is that “of the most perfect and scrupulous good faith”). Weintraub’s statements show 

a lack of loyalty to Pandey, disclose confidential financial information to its prospective 

lender, and demean Pandey. Plaintiffs’ conduct undermined the purposes of the parties’ 

Agreement. Pandey has met its burden of proof as to Count One of its counterclaims and 

the Court will enter judgment accordingly. 

D. Pandey’s Counterclaim –Defamation (Count Four) 

Defendant next alleges that the emails from Weintraub to Thorofare were 
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defamatory. Under Arizona law, one asserting a claim for defamation must show: (1) the 

defendant made a false statement; (2) that the statement was published or communicated 

to someone other than the plaintiff, and (3) the statement tends to harm the plaintiff’s 

reputation. Godbehere v. Phx. Newspapers, Inc., 162 Ariz. 335, 341, 783 P.2d 781, 787 

(1989). “To be defamatory, a publication must be false and must bring the defamed person 

into disrepute, contempt, or ridicule, or must impeach plaintiff's honesty, integrity, virtue, 

or reputation.” Id. Truth is a defense to defamation. Id. 

The Court finds, beyond the preponderance of evidence, that Weintraub made 

defamatory statements that ridiculed and impeached Pandey’s honesty, integrity and 

reputation. The Court finds the following statements defamatory: 

“[Pandey] does not have any cash for deposits”; 

“[Pandey is ] short close to $2,000,000 to close the Lafayette purchase”; 

“If you give [Pandey ] funds directly [Pandey] will use the money to line up 

another lender”; 

“Bill these guys are weird”; 

“I do not think that Charles Pandey understands how the capital markets work”; 

“[w]ith these kinds of properties you are dealing in the real estate equivalent of the 

junk bond market”; 

“[Pandey] is trying to stiff me”; and, 

“If you give them funds directly they will use the money to line up another lender 

for the Raddison.” 

These statements were published to Lanting while he was arranging Pandey’s $9 

million loan. The statements were made without Pandey’s knowledge. The email 

communications include statements purported to be fact about Pandey’s financial 

circumstances and alleged Pandey’s dishonest business practices. Without question, 

Plaintiffs’ statements ridiculed Pandey and tended to damage Pandey’s reputation with 

Thorofare. 

Weintraub did not attempt to defend his statements as fact, and his attempts to 
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explain them are without merit. Indeed, Weintraub admitted that “these guys are weird” 

referred to “Pandey as a group.” (UT 3/27/19 at 8). He testified that his description of 

“junk bond market” was a “term of art used in the industry” and he disagreed that it was 

meant as a pejorative term. (Id.). This testimony is undermined by his May 28, 2015 email 

to Andrews stating “[i]t is like you are dealing in the Junk Bond Market and wanting prime 

rates.” (Tr. Exh. 142). The Court finds Weintraub’s conduct self-serving and defamatory. 

Accordingly, the Court enters judgment for Defendants on their defamation claim. 

E. Pandey’s Counterclaim - Tortious Interference (Count Three)

 Pandey alleges that the Weintraub communications “negligently, intentionally, 

and/or recklessly interfered with Pandey’s existing and prospective business expectancies,” 

and further that they “have and will interfere with the business expectancies of Pandey and 

have and will cause losses to Pandey.” (Doc. 84 at 15). Plaintiffs argue that Pandey failed 

to establish a claim for tortious interference with business relations because it did not allege 

or prove that FCF and Weintraub interfered with an existing contract as required to 

successfully plead a claim. 

1. Legal Standards 

 To assert a claim for tortious interference with business relations, the complaint 

must allege “the existence of a valid contractual relationship or business expectancy; the 

interferer’s knowledge of the relationship or expectancy; intentional interference inducing 

or causing a breach or termination of the relationship or expectancy; and resultant damage 

to the party whose relationship or expectancy has been disrupted.” Miller v. Hehlen, 209 

Ariz. 462, 471 (Ariz. Ct. App. 2005), quoting Wallace v. Casa Grande Union High Sch. 

Dist. No. 82 Bd. of Governors, 184 Ariz. 419, 427 (Ariz. Ct. App. 1995). “Accordingly, a 

cause of action for tortious interference accrues when the plaintiff knew or reasonably 

should have known of the intentional interference with the plaintiff’s business expectancy, 

resulting in its termination; and the plaintiff realized he or she was damaged by that 

termination.” Dube v. Likins, 216 Ariz. 406, 411–12 (Ariz. Ct. App. 2007). A tortious 

interference claim must allege facts showing the expectancy “constitute[d] more than a 
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mere ‘hope.’” Hamilton v. Yavapai Cnty. Coll. Dist., 2018 WL 1784692, at *14 (D. Ariz. 

Apr. 13, 2018) citing Marmis v. Solot Co., 117 Ariz. 499, 502 (Ariz. Ct. App. 1977). 

However, “[i]t is not necessary that it be absolutely certain that contracts would have been 

made were it not for the interference.” See Marmis v. Solot Co., 117 Ariz. 499, 573 P.2d 

899 (Ariz. Ct. App. 1977) (citing 45 Am.Jur.2d Interferences § 12). 

Furthermore, corporate officers, managers, or directors may be held personally 

liable for a corporation’s torts where they have “participated [in the tort] or have knowledge 

amounting to acquiescence or be guilty of negligence in the management or supervision of 

the corporate affairs causing or contributing to the injury.” Marlyn Nutraceuticals, Inc. v. 

Improvita Health Prod., 663 F. Supp. 2d 841, 847 (D. Ariz. 2009), quoting Bischofshausen, 

145 Ariz. at 210; see Dawson v. Withycombe, 216 Ariz. 84, 101 (Ariz. Ct. App. 2007) (“a 

director cannot be liable without some kind of personal participation in the tort or at least 

acquiescence by knowledge of the tort combined with a failure to act.”). 

2. Analysis 

Andrews testified that Pandey had a preexisting relationship with Thorofare, having 

closed a six or seven-million-dollar loan with them for the Quail Hollow resort property. 

(UT 3/27/19 at 68). He characterized Pandey’s working relationship with Thorofare as 

good but acknowledged that they could be difficult. (Id.). Pandey alleges that Weintraub’s 

offending emails resulted in lost business expectations with Thorofare and caused Pandey 

to incur additional financial damage. Plaintiffs disagree, asserting that Thorofare reduced 

the loan after conducting a property appraisal to which it was entitled. (Tr. Exh. 23). 

Plaintiffs also argue that Pandey’s economic loss is better addressed by Thorofare. (Doc. 

199 at 11).7

 

 Plaintiffs arranged the $9 million loan offer from Thorofare to Pandey to be secured 

by the Baymont and Sheraton properties. (UT 3/27/19 at 6-7; and Tr. Exhs. 17 and 22). 

Pandey itself negotiated a $1 million advance against the Baymont Las Vegas to address 

 

7

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the $500,000 required for the Lafayette purchase. (UT 3/27/19 at 159; Tr. Exhs. 39, 41, 

42,8

 44 and 47). The loan advance obligated Pandey to pay 1.85% in origination fees on 

the $9 million loan. (Id. at 159-160). On May 26, 2015, Andrews emailed instructions to 

Plaintiffs to complete the $1 million loan advance. (Tr. Exh. 40). Pandey’s receipt of the 

$1 million advance triggered a $166,500 closing fee payment to Thorofare. (UT 3/27/19 

at 88 and 160; Tr. Exh. 41 and 47). Pandey also paid Plaintiffs a $10,000 broker fee. (Id.). 

Thereafter, Weintraub engaged in the defamatory and offending emails with Lanting and, 

within several weeks, Thorofare substantially reduced its $9 million loan offer. 

Essentially, Pandey argues that, but for Weintraub’s offending emails, Thorofare 

would not have reduced its loan offer. Pandey further alleges that, because Thorofare 

reduced the loan offer, it had to repay the $1 million advance although it already paid 

$166,500 in origination fees, $15,000 in yield maintenance, and Plaintiffs’ $10,000 broker 

fee. (UT 3/27/19 at 160). Pandey estimates that it also repaid Thorofare $85,0009

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result of the failed $9 million loan transaction. (UT 3/27/19 at 161-162). Pandey argues 

that it would not have sought the $1 million loan but for Plaintiffs’ assurances that 

Thorofare would loan it $9 million. 

Pandey’s argument overlooks two critical points. First, Thorofare’s loan offer was 

“subject to, among other things, Thorofare’s due diligence and underwriting requirements 

for financing . . . the Sheraton Four-Points . . and . . the Baymont” properties. (Tr. Exh. 

22). Moreover, the loan terms expressly state that the loan amount is the “[l]esser of: (i) 

$9,000,000[;] (ii) 68% of “as-is” value as underwritten by Lender and as may be supported 

by an MAI appraisal acceptable to Lender[.]” (Id.). In a series of emails from June 26 - 

30 2015, Thorofare informed Pandey that the loan offer would be 68% of appraised value 

 

8

 Lanting emailed Weintraub that he would seek approval for the $1 million advance, 

stating, “we would only be doing this as an accommodation to get us to the larger $9 million loan transaction.” 

9

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we ended up being out significantly, about $85,000 on the origination fees.” As will be 

seen, this lack of specificity of damages does not affect the outcome of Pandey’s claim. 

See Fed.R.Civ.P. 26(a)(1)(iii). 
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because multiple broker opinions did not support a $9 million loan on the properties. (Tr. 

Exhs. 52 and 53). Andrews acknowledged that “the appraisal for the Baymont came in 

lower than expected.” (UT 3/27/19 at 88). Searby also testified that the $9 million loan 

did not close because “[t]here were probably a number of reasons, but the indication that 

we got from Thorofare was that the appraisal value could not sustain the value that they 

had been lead to believe the Four-Points should be valued at.” (UT 3/27/19 at 163). 

In addition, Lanting left Thorofare just days after receiving Weintraub’s emails. 

There is no evidence that Lanting shared the emails with others in Thorofare. (See Tr. Exh. 

52). Moreover, on July 25, Lanting emailed Andrews directly, explained his resignation 

from Thorofare and offered to find Pandey a lender to “provide the proceeds needed to 

accomplish the Sheraton Four Points acquisition[.]” (See Tr. Exh. 71). This shows that 

Thorofare’s decision to reduce its loan offer was prompted by factors other than Plaintiffs’ 

offending conduct. Rather, Thorofare appraised Pandey’s property and, consequently, 

lowered the loan offer. The terms of Thorofare’s loan offer permitted it to do so. 

Therefore, the Court finds that Pandey did not meet its burden to prove that Plaintiffs 

interfered with its business expectation with Thorofare. 

III. CONCLUSION 

IT IS HEREBY ORDERED granting judgment for Defendant and against 

Plaintiffs on Counts One, Three, Four and Five of Plaintiffs’ FAC (Doc. 30); granting 

judgment for Defendant and against Plaintiffs on Counts One and Four of Defendant’s 

counterclaims (Doc. 84) and granting judgment for Plaintiffs and against Defendants on 

Count Three of Defendant’s counterclaim (Doc. 84). 

IT IS FURTHER ORDERED that the Clerk of the Court shall remit the $143,000, 

plus any accrued interest, held in funds by the Court to Pandey. 

IT IS FURTHER ORDERED that Plaintiffs shall disgorge $24,500 in unearned 

commission fees to Defendants. 

IT IS FURTHER ORDERED that Plaintiffs shall pay Defendants $1.00 for Count 

Four of the FAC. 
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IT IS FINALLY ORDERED that the parties shall pay for their own attorney’s 

costs and fees. 

Dated this 3rd day of June, 2019. 

Honorable Diane J. Humetewa

United States District Judge