Opinion ID: 2629946
Heading Depth: 1
Heading Rank: 4

Heading: Meima's Testimony

Text: [¶ 15] Meima testified that he expressed his need for someone to finance the purchase of a home when he met Broemmel in 2001. Broemmel replied that he was in the process of selling a building in Denver, [8] and was indeed seeking investment opportunities.... Meima reportedly offered Broemmel a twenty percent net profit interest in the Baltic properties (with Meima bearing all of the marketing expenses) as compensation [9] for financing the Torrington house purchase, and Broemmel said sure, I will do that. During the next month or so, Meima remained in frequent contact with Broemmel in that regard and personally met with Broemmel three to five times. [¶ 16] Meima had considered several other financing options (a co-signer, optioning or pledging other property, or a loan through an acquaintance at a financial institution), but ultimately concluded that Broemmel was so agreeable that there was no necessity in bringing in four or five competing offers. Meima also claimed that he was unknown in Wyoming and his credit had been destroyed in the divorce, so he was not a good lending prospect in the eyes of institutions. Besides, according to Meima, there were escape clauses in the contract [to purchase the house in Torrington] and it was a long closing at [the seller's] request; so there was plenty of time to put something in place; and, again, I could find any number of reasons to back out of the deal and recover the $5,000 earnest money. [¶ 17] Meima had negotiated, or was negotiating, a sale of the Baltic properties to David Kubich, a timber land and sawmill owner, whereby Mr. Kubich would purchase the properties for $120,000.00 and grant Meima an option to repurchase the properties by November 15, 2002, for $140,000.00 (ten percent simple interest with no other conditions or complications, according to Meima). Meima testified that he needed to end the endless arguments with his ex-wife about the value of the properties, and to clear title and obtain new title insurance to the properties particularly with respect to the mineral rights, and ... a sale to a third individual was the cleanest way to take care of that and to satisfy any and all residual claims from my ex-wife on the property. Meima's ex-wife had signed purchase option agreements up to a value of $3.8 million and knew the potential [value] was there. [¶ 18] Meima wanted to tie in the Kubich option with the Torrington house purchase. He essentially wanted to provide Broemmel a purchase option (by assigning Mr. Kubich's minimal cost position in the Baltic properties to Broemmel) so that Broemmel would have collateral or security for his role in financing Meima's purchase of the Torrington house. Broemmel would also be reimbursed for the house purchase out of Meima's eighty percent share of the profits from the Baltic properties, but it was never the agreement that Broemmel would be reimbursed for the cost of exercising the Kubich option (the two also did not discuss or agree on rent or any other payments with respect to the house purchase). Meima had Broemmel sign a disclosure statement that Meima's ex-wife would never find out about this because Meima did not want her reinvolved in a California divorce. You can come back 20 years later and make some sort of claim on some sort of pretext. I was tired of that. [¶ 19] Meima had discussed the value of the Baltic properties with Broemmel in detail and told Broemmel the properties were worth $2.5 million. Broemmel went to California in April 2001, to confirm personally the value of the Baltic properties (at least to the extent of the $140,000.00 cost of exercising the Kubich option). At that time, the above-referenced April 29, 2001, addendum to the Torrington house purchase contract was executed, in which all financial contingencies were removed from the house purchase contract and Broemmel's financial statement was submitted to the house's seller. According to Meima, Broemmel had by then agreed to finance the Torrington house purchase, and Meima proceeded with the Kubich transaction. [10] Meima would not have participated in the transaction if Broemmel had not signed the addendum to the Torrington house purchase contract because there was no compelling necessity to sell the Baltic properties to Mr. Kubich unless Broemmel financed the Torrington house purchase and participated in the profit-splitting arrangement on the Baltic properties. Broemmel also subsequently agreed in writing to exercise the Kubich option; he bought a 20 percent net profit interest in the property by exercising the Kubich option. [¶ 20] The documents for the June 2001 closing on the Torrington house were sent to Broemmel and there was no indication that anything was amiss. Upon receiving the documents, Broemmel refused to proceed with the transaction because his wife would divorce him.... According to Meima, his contract with the seller of the house was a specific performance contract, and Meima had everything at risk; Broemmel was basically in total control of everything I had at no cost to himself for a year and a half (the time period in which Broemmel could exercise the Kubich option on the Baltic properties). Meima was in a total loss position of everything with no place to live, [and] having lost all the cash [he] could raise at that point in timehe was compelled to try to work out whatever was necessary to get Broemmel to proceed with the Torrington house purchase. Meima worked with his realtor and the seller (who was quite traumatized) to extend the closing on the house. In order to obtain the extension, the seller required Meima to submit an additional $10,000.00 nonrefundable deposit or earnest money the next day. [11] [¶ 21] Ten to fourteen days later, Broemmel said he would come to Denver about the house and Meima ultimately met with Broemmel around July 24, 2001. Broemmel worked ... up a contract on his computer (the July 24, 2001, Terms of Lease/Purchase Agreement) and presented it to Meima. With respect to the particular terms of the contract, Meima testified as follows: (a) The terms as to rent, taxes, insurance, assessments, costs, and expenses were Broemmel's demand[s] and were not discussed. Broemmel also stated that he didn't care how long it went at $2500 a month.... (b) Broemmel wanted additional collateral and asked what Meima's Celina Flat Mine property was worth. Meima replied that it was worth $10,000.00 or more and Broemmel wrote in $70,000 as an additional lien against that. Meima did not volunteer this property, and the property was not part of his understanding of the parties' original agreement. (c) Broemmel had seen the firearms referred to in the agreement at the Denver gun show. (d) Broemmel wanted, without discussion, the additional $10,000.00 profit. (e) Broemmel wanted total control over all property, all assets, and that was, essentially, nonnegotiable. We did establish a two-year term as a reasonable time period to sell or deal on the California property, and he agreed to stand in as trustee for that time period. It was always a condition of Meima's that Broemmel be trustee [of the Northern Commercial Trust] and not owner of record. (f) The provision as to the profits from the sale of the Baltic properties went back to the original verbal discussions with an agreement ... that there would be a split of that initially of 20 percent, net, to Broemmel. [¶ 22] According to Meima, Broemmel also wanted a promissory note for his wife, and drafted the July 25, 2001, addendum to the promissory note the following day. Meima testified that, regarding the trust language contained in this addendum, he never would have begun the relationship [with Broemmel] if title was to be taken in Torrington in any other format than Northern Commercial Trust and Broemmel as a trustee. He added that Broemmel was to act as the trustee for Meima's benefit, and was to resign as trustee when the $185,817.91 was paid in full. [¶ 23] Meima claimed that he signed these written documents because he really [had] no option at this time because Broemmel controlled without any recourse against him, he controlled the California property; if Meima did not sign the agreements, Broemmel could liquidate the Torrington property and liquidate the California property, and there was, essentially, no provision for any recourse against that. Virtually none of the terms were negotiated (or had been discussed previously), there was no way to negotiate, and Meima was under duress. Yet, Meima admitted that he was able to clarify a couple of points and that he got ... some terms regarding Northern Commercial Trust into all the purchase agreements. Meima similarly testified that Broemmel drafted the July 27, 2001, power of attorney relating to the Torrington house and Meima signed it because he had no option; Broemmel controlled all the property. [¶ 24] Meima paid the monthly rent payments through March 2002, but did not pay the property taxes or insurance on the Torrington house. [12] At times, a financial backer made the rent payments directly to Broemmel on Meima's behalf. Meima felt at some point that due to financial constraints he had to market the California property and stopped paying the rent. Thereafter, the parties' relationship went rapidly down hill. [¶ 25] Following the June 2003 sale of a portion of the Baltic properties to Mr. Sinclair, Broemmel immediately demanded $142,000.00 from the sale proceeds. There was never an agreement that Broemmel was to receive these funds; it was merely paid at his request. Meima testified that Broemmel was the owner of record for the Baltic properties, subject to the July 27, 2001, power of attorney and the parties' profit-splitting agreement.