Strohbach

I. INTRODUCTION

A lot of bad real estate loans were made in 2007. This is the story of one of them. As the evidence at trial would later show, this really was a “liar loan,” and this action–sans the chief liar – was brought to sort it out. Two Tustin investors, Robert and Lisa Strohbach, decided to make a loan of $1.98 million to real estate developer Steven Zanderholm to fund the infrastructure necessary for a housing project in Bisbee, Arizona called the Sierra Cobre Estates. Unfortunately for the Strohbachs, Zanderholm was, as his CPA’s attorney would later put it, “overleveraged and underexperienced.” Zanderholm needed the money from the Strohbachs for things other than the Sierra Cobre project–though he didn’t tell the Strohbachs–and so, under the false pretense the money would be used for infrastructure construction at Sierra Cobre, he borrowed money from the Strohbachs, used it elsewhere than Sierra Cobre, and never paid the Strohbachs. Zanderholm would be sued in at least two other cases by the Strohbachs, but this appeal does not involve him–at least not directly.1 Rather, the Strohbachs sued Zanderholm’s CPA, the late Jeffrey Ross2 and his subchapter S company,…