Opinion ID: 2758262
Heading Depth: 3
Heading Rank: 3

Heading: The Putative Class

Text: Plaintiffs allege that the lenders issued at least 134 loan commitments through the issuing entities over the course of nearly nine years. The putative class, according to plaintiffs, thus includes at least 100 borrowers—consisting of both individuals and corporate entities spanning across fifteen different states—who paid advance fees to defendants. The contracted value of each class member’s loan commitment ranged from $500,000 to $80 million. Based on plaintiffs’ estimates, the lenders committed to fund at least $760 million in loans, but only closed on one loan for a Florida condominium worth $265,000. The circumstances of the three entities currently serving as the class representatives for the putative class are typical of those of other potential class members.
4 We refer to Broad and Cassel, Gaché, and Romano collectively as “Broad.” -13- CGC Holding is a Colorado limited liability company, which developed an eighteen-hole golf course and related community facilities during 2009. After losing one of its primary investors, CGC Holding sought funding from FCMF and FCH. CGC Holding signed a commitment letter with FCMF pursuant to which FCMF agreed to lend $34 million to CGC Holding subject to certain terms. To comply with the terms, CGC Holding paid FCH at least $182,500 in inspection fees, administrative fees, and legal fees. CGC Holding did not receive the loan. The lenders maintain that CGC Holding’s loan commitment was contingent upon its collateral property commanding a valuation of $43 million, of which it fell short.
Harlem Algonquin was a special-purpose entity operating out of Illinois that was created to purchase and develop a commercial property. A mortgage broker introduced Harlem Algonquin to CFC, and CFC ultimately issued a loan commitment for $3.57 million to facilitate the purchase in June 2010. The parties continued to negotiate, and Harlem Algonquin eventually paid $42,688 in fees to CFC. According to the defendants, Harlem Algonquin failed to supply or untimely delivered the necessary paperwork to complete its application. For this reason, Harlem Algonquin never received a loan from the lenders. Harlem Algonquin has since been involuntarily dissolved by the state of Illinois.
-14- James T. Medick wanted to purchase his former home in San Clemente, California from his ex-wife. For this purpose, Medick was put in touch with FCMF, which eventually committed to loan Medick $4 million. To secure the necessary funding, he paid $95,950 to FCH in three payments during the first three months of 2010. The terms of his commitment contract required that the existing mortgages and encumbrances on the former home be up to date. Since two mortgages and property taxes on the home were in arrears, CFC terminated his application.