Monday, May 30, 2011

Judges hear Elevation Chandler land dispute

The feud over who owns Elevation Chandler was fought by lawyers who appeared before a three-judge panel at the Arizona Court of Appeals on Wednesday. Attorney Bob Lord argued for investor Tom Peltier of BT Capital, who insists he won the property with a bid of $1,000,001 at a trustee sale on June 15, 2009.

A series of errors occurred before and during that sale, prompting TD Service Co., which held the sale, to refuse to accept Peltier's payment.

Later that year, Peltier sued in Maricopa County Superior Court, where Judge Bethany Hicks dismissed his lawsuit.

"Inadequacy in the sales price, coupled with irregularities in the sales process, may justify setting aside a foreclosure sale as a matter of equity," she said at the time.

Another trustee sale was held July 1, 2010, when Elevation Chandler's lender, California-based Point Center Financial, took possession.

Peltier appealed his loss of Elevation Chandler, a 10.5-acre parcel near Loops 101 and 202, south of Chandler Fashion Center. It contains a partly built hotel.

Lawyers on Wednesday argued state statutes, case law and common sense.

Lord told the appellate judges that Hicks had erred by saying the million-dollar bid was too low, referring to an earlier appraisal setting the value at $36 million.

Lord maintained the property is worth less than $2.7 million and that the buyer may even need to tear down the concrete and steel skeleton.

"The trial court determined the bid price was inadequate, but (Hicks) can't if there's no determination of value," the attorney said.

At the trustee sale in 2009, bidding had started at $1 million. Steve Vadas, the auctioneer with TD Service, was supposed to continue the bidding until Point Center could weigh in with a credit bid of $25 million. However, after Peltier bid $1,000,001, Vadas called his office and was told Peltier could have it.

The next day, TD Service refused to accept Peltier's money, and Peltier refused to take back his $10,000 down payment. TD Service declared the sale invalid.

Joseph Cotterman, who appeared Wednesday for Point Center Financial, described the 2009 auction as a failed sale.

"It blocks a party from coming back after the sale and undoing it," he said.

"What happened on the day of the failed sale were invalidating mistakes. . . . We were denied the opportunity to make the last bid."

Judge John Gemmill last week said Point Center could have had its own agent at the sale. Cotterman replied that regardless of that, TD Service "blew it."

Complicating matters is that Vadas, the auctioneer from TD Service, actually held two trustee sales for Elevation Chandler on June 15, 2009. Arguments have centered on the second sale that day, in which Peltier participated.

But the auctioneer had already "cried" the sale earlier than its scheduled time, and Cotterman said Point Center got Elevation Chandler then.

However, Peltier showed up a few hours later, after the scheduled time, and asked about the Elevation Chandler foreclosure. When he was told the sale had been held, Peltier insisted he be allowed to bid. So Vadas cried the sale again; it was at that sale that Peltier says he won the property.

The auctioneer "sold it twice in one day, and the first sale should have been conclusive," Cotterman said.

Gemmill said, "If the trustee (TD Service) decides there are problems with the sale, the trustee has the power to say, 'There are too many problems; I'm invalidating the sale.' "

Cotterman replied, "Not only does it have the power, it has the obligation to do it over and do it right."

In 2010, after Hicks ruled in favor of Point Center Financial, a trustee sale was held July 1, at which Point Center took back the property. Cotterman said if BT Capital were serious, it would have tried to stop that sale.

"No pre-sale injunction gives us title," Cotterman said.

Representing TD Service was Roger Cohen, who mentioned the two sales on June 15, 2009, and said the auctioneer had called the second sale to accommodate Peltier.

"If the first sale was invalid, why wasn't the second sale invalid?" Cohen asked.

Judge Patrick Irvine told Cohen on Wednesday, "If your client hadn't done the second sale, we wouldn't be here."

The judges took the matter under advisement.

TD Service also made errors in posting notices before the 2009 sale. It posted the notice at the wrong location, and the description of the property was not accurate.

Construction stopped on Elevation Chandler in April 2006. Developer Jeff Cline filed for bankruptcy protection in April 2008. The bankruptcy case was later dismissed as a failure.

by Luci Scott The Arizona Republic May. 30, 2011 12:00 AM

Judges hear Elevation Chandler land dispute

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