Opinion ID: 653220
Heading Depth: 1
Heading Rank: 1

Heading: facts

Text: Havasu conceived of an idea to build, market and manage a time-share development at Lake Havasu, Arizona. Havasu purchased three adjacent parcels of land at Lake Havasu and began to plan the development in the early 1980's. Having no previous experience in the time-share industry, Havasu conducted feasibility studies and met with several experienced time-share marketers. Included among those marketers was Kevin Alme. Havasu learned that start-up marketing expenses for a time-share project average around $200,000. Several experienced marketing firms were willing to fund those start-up expenses in exchange for 50% of the gross sales receipts. Havasu came in contact with Gordon Pollock, a time-share furniture supplier, who also became involved in the Lake Havasu project. Pollock introduced Havasu to Patty Andretta, a mortgage broker, who in turn shopped the loan with SPFC. After a trip to Lake Havasu by Ferrante, Pollock, Andretta, and Mark Mashouri, a loan officer with SPFC, Mashouri expressed interest in the project on the part of SPFC and indicated the possibility of a tandem loan to finance both construction and receivables. SPFC was concerned that none of the primary participants in the Lake Havasu project had any experience in the time-share industry. Kevin Alme had previously sent a resume to SPFC at the direction of Harrison, one of Havasu's partners. In a conversation with Pollock, Mashouri stated that the loan would only be closed if Alme was made the marketer and a 25% partner. Pollock relayed this information to the partners who also confirmed it with Mashouri. Having no other financing alternatives, Maurer, Harrison, Ferrante and Alme signed a partnership agreement creating Havasu Condos Ltd. Havasu provided Alme with somewhere between $39,000 and $50,000 for the start-up marketing expenses. The construction loan with SPFC closed with Maurer, Harrison, Ferrante and Alme as personal guarantors. Building at Lake Havasu proceeded. Havasu became dissatisfied with Alme's marketing efforts and his spending practices. He was infrequently present at the sales office and, when confronted about his transfer of $39,000 to his office in Austin, left the project entirely. His sales efforts had not been productive. Shortly after Alme's departure, the partnership entered bankruptcy. PROCEEDINGS Havasu sued SPFC, alleging causes of action for fraud, breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary obligations, negligence, intentional infliction of emotional distress and RICO violations. Following discovery, SPFC moved for summary judgment. After conducting a hearing and reviewing the evidence, Magistrate Gonzalez recommended that summary judgment be granted on all but the breach of contract, breach of the covenant of good faith and fair dealing, breach of fiduciary duty and negligence claims. The report suggested that those claims should survive only to the extent that they were based upon the allegations concerning Alme's job and marketing efforts. Judge Rhoades adopted the recommendation of Magistrate Gonzalez. Trial on the remaining issues was held before Judge Crocker. SPFC moved for judgment on the pleadings on the breach of fiduciary duty claim, which was granted. After Havasu presented all of its evidence, SPFC made a motion for judgment as a matter of law on the remaining claims. Judge Crocker found that [t]he only thing that [SPFC] did, according to the testimony, is approve [Alme] after [Havasu] selected him, [SPFC] didn't select him, [Havasu] did. The motion was granted and final judgment was entered in SPFC's favor. The deficiency cross-claim was tried to the jury at the same time and resulted in a verdict for Havasu. Havasu filed a timely notice of appeal of the final judgment. Based upon a provision in the loan contract which allowed the prevailing party to recover reasonable attorneys' fees and costs, SPFC filed a Bill of Costs with the clerk's office requesting costs and attorneys' fees. The clerk awarded only some of SPFC's statutory costs and rejected the remainder of the request. SPFC then filed a motion to re-tax costs and attorneys' fees with the court. Finding that the action sounded primarily in tort, Judge Marilyn Huff denied the motion without oral argument. SPFC filed a timely notice of appeal.