Williams v. Chisick CA3

BACKGROUND

The following facts are derived from the parties’ stipulation of admitted facts and the trial court’s detailed written ruling. Mark and Raymond were licensed real estate brokers. They were managing members of S360, an entity they formed to buy a residential subdivision known as Villa Terrassa. They planned to fund construction at Villa Terrassa through private investors as no bank loans were available to them and they needed a quick turn-around on loans. The going interest rate for that type of funding was 12 percent. Arthur was a retired electrician who was in his late 80’s in 2009. Christopher, Arthur’s grandson, worked as a construction manager for Mark and Raymond’s various companies from 2009 to 2017. Jermaine Clarke worked for S360 as a licensed real estate broker. Christopher introduced Arthur to Mark and Raymond in 2009. Jermaine gave Arthur a tour of Villa Terrassa and talked to him about making loans to S360. Raymond and Jermaine discussed with Arthur the business plan for Villa Terrassa and the proposed terms of investment. Arthur made his first loan to S360 in June 2009. He loaned $500,000 for a “cash- out refinance” on Villa Terrassa. We will refer to that…