Sands Harbor Marina Corp. v. USI Ins. Serv. Nat'l, Inc.

• Decision Date: 18 February 2022
• Docket Number: 09-CV-3855(GRB)
• Citation: 586 F.Supp.3d 163
• Parties: The SANDS HARBOR MARINA CORP., Sands Harbor Marina LLC, The Sands Harbor Marina Operating Corp., Sands Marina Operating LLC, Greg W. Eagle, Pine Creek Ranch, LLC, and University 1248, LLC, Plaintiffs, v. USI INSURANCE SERVICE NATIONAL, INC. f/k/a Wells Fargo Insurance Services of Oregon, Inc., EVMC Real Estate Consultants, Inc., Larry Esacove, The Estate of Aida Esacove, David P. Guilot, Anthony B. Chopra, Tisdale & Nicholson, LLP, Jeffrey A. Tisdale, Guy C. Nicholson, and Michael D. Reis, Defendants.
• Court: U.S. District Court — Eastern District of New York

586 F.Supp.3d 163

The SANDS HARBOR MARINA CORP., Sands Harbor Marina LLC, The Sands Harbor Marina Operating Corp., Sands Marina Operating LLC, Greg W. Eagle, Pine Creek Ranch, LLC, and University 1248, LLC, Plaintiffs,
v.
USI INSURANCE SERVICE NATIONAL, INC. f/k/a Wells Fargo Insurance Services of Oregon, Inc., EVMC Real Estate Consultants, Inc., Larry Esacove, The Estate of Aida Esacove, David P. Guilot, Anthony B. Chopra, Tisdale & Nicholson, LLP, Jeffrey A. Tisdale, Guy C. Nicholson, and Michael D. Reis, Defendants.

09-CV-3855(GRB)

United States District Court, E.D. New York.

Signed February 18, 2022

586 F.Supp.3d 166

Roy A. Klein, Esq., Law Offices of Roy A. Klein, Attorney for Plaintiffs, 532 Broad Hollow Road Suite 144, Melville, NY 1174.

Peter J. Biging, Esq., Goldberg Segalla LLP, Attorney for USI Insurance Service National, Inc., 665 Main Street POB 880, Buffalo, NY 14201.

Gregory J. Radomisli, Esq., Martin, Clearwater & Bell, Attorney for Tisdale & Nicholson, LLP and Jeffrey A. Tisdale, 220 East 42nd Street, New York, NY 10028.

MEMORANDUM OF DECISION & ORDER

GARY R. BROWN, United States District Judge:

"It's so easy to believe someone when they're telling you exactly what you want to hear." -Anonymous

This case arises from plaintiffs’ unsuccessful efforts to obtain hundreds of millions of dollars’ worth of non-traditional commercial real-estate financing from defaulting defendant EVMC Real Estate Consultants, Inc. ("EVMC") in an arrangement best regarded as an advance fee scheme. Presently before the Court are motions for summary judgment by USI Insurance Service National, Inc. ("USI") – EVMC's consultant and insurance broker – and Jeffrey Tisdale and Tisdale & Nicholson's (together "T&N Defendants") – EVMC's attorneys – based on the execution of two release agreements by plaintiff Greg Eagle ("Eagle") in late 2008. Because the undisputed material facts demonstrate that Eagle executed the releases, which cover these defendants, in exchange for yet more promises of financing, defendants’ motions for summary judgment are granted.

586 F.Supp.3d 167

Factual Background

The following facts, drawn from the parties’ Rule 56.1 Statements and other evidence of record in this action, are construed in the light most favorable to the non-moving party. See Ayazi v. United Fed'n of Teachers Local 2 , 487 F. App'x 680, 681 (2d Cir. 2012) ; Capobianco v. City of New York , 422 F.3d 47, 54-55 (2d Cir. 2005).

USI Insurance Service National, Inc. ("USI") was an Oregon corporation with a principal place of business in Oregon. See Pls. Rule 56.1 Statement of Undisputed Facts ("Eagle SUF"), DE 343-1 at ¶ 3. Michael Reis is an individual domiciled in the State of Oregon. Id. at ¶ 4. Reis was employed by Acordia of Oregon. T&N Defs. Rule 56.1 Statement of Undisputed Facts ("T&N SUF"), DE 344-2 at ¶ 39.¹ Tisdale & Nicholson, LLP was a limited liability partnership organized under the laws of the State of California. Eagle SUF, DE 343-1 at ¶ 5. Defendant Jeffery Tisdale was a partner in Tisdale & Nicholson and was domiciled in California. Id. Tisdale represented defendant EVMC Real Estate Consultants, Inc., a California corporation with its principal place of business in California. T&N SUF, DE 344-2 at ¶¶ 24, 34. Larry Esacove was a senior executive officer at EVMC. Id. at ¶¶ 27, 34. Aida Esacove appeared to be the principal in charge of EVMC. Eagle SUF, DE 343-1 at ¶ 7A; USI SUF, DE 345-1 at ¶ 51.² David Guilot was Vice President of Sales of EVMC. T&N SUF, DE 344-2 at ¶ 28.

Eagle was a property developer domiciled in the state of Florida. Eagle SUF, DE 343-1 at ¶ 2. Pine Creek Ranch, LLC and University 1248, LLC (hereinafter, with Eagle, "Eagle Plaintiffs" or "Plaintiffs") were limited liability companies organized under the laws of the state of Florida, with their principal places of business in Florida. Id. Eagle was the sole member of University 1248, LLC and a member of Pine Creek Ranch, LLC. Id. Eagle established these entities to facilitate the purchase of two undeveloped plots of land in Charlotte County, Florida in an attempt to capitalize on growth anticipated from the nearby opening of a satellite campus of Florida Gulf Coast University. USI Def. Rule 56.1 Statement of Undisputed Fact ("USI SUF"), DE 345-1 at ¶¶ 11-13, 25. The first property Eagle sought to purchase was the University 1248 property or R&D Cattle property. USI SUF, DE 345-1 at ¶¶ 11-12. The second property Eagle sought to purchase was the Pine Creek Ranch property or 5200 Ranch property. Id. OJ Buigas was the owner of the 5200 Ranch property. Id. From April 2005 to July 2006, Eagle tried unsuccessfully to obtain financing to purchase the properties. Id. at ¶ 28. As a result of his inability to obtain financing, Eagle forfeited almost nineteen million dollars in non-refundable deposits that he had paid on the 5200 Ranch property. Id. at ¶¶ 21, 36-37. Eagle was ultimately unable to close a deal with Florida Gulf Coast University and forfeited an additional five million dollars in non-refundable contract deposits on the R&D Cattle property. Id. at ¶¶ 40, 46.

Having exhausted traditional funding avenues, Eagle sought alternative financing

586 F.Supp.3d 168

to revive the project. Id. at ¶¶ 24, 25, 29, 30, 33, 34, 35, 47, 48. This search led Eagle to Jay Jones and Frank Zarrelli, whom Eagle retained as consultants to assist him in obtaining financing. Id. at ¶ 42. Zarrelli then introduced Eagle to David Guilot, a loan financing broker, whom Eagle also retained. Id. at ¶ 43. It was Jones who ultimately introduced Eagle to Stephen Alexander. Id. at ¶ 45. Alexander managed a company, Grove Tactical Training and Survival Center, LLC, that was attempting to develop a plot of land in Florida into an antiterrorism training facility. Id. Guilot, Jones, and Zarrelli also introduced Eagle to EVMC. Id. at ¶ 50. About this time, Guilot was hired by EVMC—and thus acted as Eagle's broker and an employee of EVMC. Id. at ¶ 50.

EVMC and Eagle, as managing member of 1248 University, LLC, entered into a consulting agreement on August 24, 2006. Id. at ¶ 55. Pursuant to that agreement, Eagle agreed to pay EVMC $1.5 million in exchange for assistance in obtaining $150 million in financing for land development projects in Florida. Eagle SUF, DE 343-1 at ¶ 6. Although not formally hired as a Vice President by USI until September 1, 2006, Reis and EVMC had a prior relationship. Id. at ¶¶ 8-9. In June of 2006, Reis and EVMC had signed an independent consulting agreement entitling Reis to commissions on referrals that he made to EVMC. USI SUF, DE 345-1 at ¶ 95. Reis never disclosed this relationship with EVMC to USI despite completing employment forms calling for such information. Id. On October 1, 2006, USI and EVMC entered into a Client Services Agreement ("CSA") pursuant to which USI would help EVMC obtain Residual Value Insurance ("RVI") for real estate financing projects in exchange for fees totaling $250,000 a year. Eagle SUF, DE 343-1 at ¶ 12. To that end, Reis communicated with insurance intermediaries in London, including David Arbuary and Kim Bolton, to set up an insurance facility that could provide RVI for projects that EVMC sought to fund. USI SUF, DE 345-1 at ¶¶ 97-100.

Eagle was initially told that EVMC would be the lender, using funds on deposit with UBS to fund the loan, but EVMC then provided documents purported to be from Deutsche Bank. Id. at ¶¶ 78-79. Though Eagle was assured that a loan would close shortly after he wired the $1.5 million to EVMC, EVMC's title agent only provided a letter stating it had documentation confirming that EVMC had the funds, and draft loan commitment documents did not materialize for several months. Id. at ¶¶ 79, 86-88. Eagle was then informed that Credit Suisse would, in fact, be funding the loan. Id. at ¶ 90. Though without a loan commitment, Eagle paid an additional $3 million to reinstate his right to purchase the R&D Cattle property. Id. at ¶ 91. Eagle ultimately failed to obtain a contract with Florida Gulf Coast University, so he formed a joint venture with Stephen Alexander to develop a tactical training center on the R&D Cattle property. Id. at ¶¶ 106-107.

After repeatedly changing the funding source and loan closing date, EVMC advised Eagle that the loan would now close on December 15, 2006. Id. at ¶ 115. No loan closed on that date. Id. at ¶ 116. It was then determined that the loan amount would need to be increased to $200 million to cover the costs of the project. Id. at ¶ 118. Due to this increase, EVMC demanded that Eagle pay an additional $500,000 as another non-refundable advance fee, which he did. Id. at ¶¶ 118-23. After sending the additional advance payment, the closing date for the loan was to be January 31, 2007, but that date, like so many others, came and went without a loan being closed. Id. at ¶¶ 124, 141, 144.

586 F.Supp.3d 169

Other participants grew suspicious. Id. at ¶ 134. On January 2, 2007, Eagle's land use planner, Greg Stuart, sent Eagle and his team a memorandum detailing exactly why Stuart believed that EVMC was defrauding Eagle. Id. at ¶¶ 129-31. Eagle's attorney, Gregg Truxton, Eagle's brother, Tim Eagle, and Stephen Alexander all expressed similar concerns. Id. ¶¶ 133-34. In February of 2007, the Eagle team sent Zarrelli to visit Guilot in Pittsburgh to investigate whether EVMC was a legitimate operation. Id. at ¶ 149. To that same end, in April of 2007 Truxton contacted an attorney involved in prior litigation against EVMC to compare experiences. Id. at ¶ 162. In May of 2007, Eagle was told that the loan was close to being funded, only for EVMC to again scuttle the deal on the eve of closing. Id. at ¶¶ 163-70. As purchase expirations grew near, Eagle, Truxton, Eagle's brother...