WASHINGTON COUNTY — A developer who claimed a bank’s poor business practices led to the foreclosure against the Grand Valley Ridge subdivision must refile that claim in Washington County Circuit Court before the state Supreme Court will rehear the case, the high court ruled Thursday.
Developer Tom Terminella of Fayetteville must refile part of his Washington County lawsuit againstMetropolitan National Bank, which foreclosed on Terminella’s failed multimilliondollar housing subdivision in Springdale, before the state court will hear his arguments, spokesman Stephanie Harris said.
The ruling means Terminella can either refile issues left unresolved during the bench (nonjury) trial or wait until time runs out to refile in Washington County, thereby resolving that case, and appeal once again to theSupreme Court, Harris said. Terminella has not yet decided whether to re-file but is likely to pursue the case, said his attorney, James Penick.
Penick said the fact that the Supreme Court considered the case shows arguments against the bank have merit.
“I would consider [this] a win because they could have dismissed the whole deal,” Penick said.
Terminella, a developer and real estate agent in Benton and Washington counties for at least 20 years, wanted the Supreme Court to reverse several Washington County Circuit Court decisions that favored the Metropolitan, including a finding that the bank had the right to demand full payment without the $9.6 million loan being in default. Terminella also asked the Supreme Court to reverse the ruling that he did not have grounds for a jury trial.
The Supreme Courtplanned to hear arguments for the case Thursday morning, but those were canceled Wednesday afternoon, and the court issued a ruling.
The ruling by Justice Elana Cunningham Wills said the lower court did not address Terminella’s claim that the bank was negligent and refused to pay for work on infrastructure for the development before the note went into default in 2007. The ruling said Terminella left “a dangling issue that has yet to be decided,” by the lower court because he did not renew a countersuit on that claim, according to the ruling Thursday.
Terminella claimed the bank failed to pay for expenses related to pipe needed for Grand Valley, misled him about available funding and failed to apply a $500,000 certificate of deposit as promised. Terminella said in court documents the bank changed the rules.
“MNB backpedaled, repudiated and squeezed Terminella into an untenable situation, to either agree to ‘the terms’ dictated by a bank that had mislead him, or else,” according to court documents submitted to the Supreme Court.
Terminella attorney Robert Ginnaven said in an email on Oct. 18 that Terminella “naively trusted MNB.” Ginnaven and Terminella did not return phone messages left Thursday.
Metropolitan has continually denied Terminella’s claims in news releases.
The trial court agreed with the bank in February 2009, and Washington County Circuit Judge Kim Smith ruled Terminella owed the bank $7.61 million.
“It has been a very litigious case, but we have seen success in the legal system,” said Susie Smith, bank senior executive vice president.
Smith is not related to Kim Smith.
The Grand Valley property was auctioned on the courthouse steps for about $2.2 million in August 2009, but Terminella still owes Metropolitan millions on the loan, on top of mounting attorney fees, court records show.
While Penick saw the state court’s ruling as a nod in Terminella’s favor, bank attorney Philip Kaplan said the Supreme Court ruling is a blow to Terminella’s case because the court declined to hear his appeal. The latest case is just another ruling against a developer who has filed suits against the bank and individual bank employees in three counties - Benton, Washington and Pulaski - and failed to win, he said.
“Terminella hasn’t wonany case he’s ever had. Terminella didn’t win anything [Thursday],” Kaplan said.
Northwest Arkansas, Pages 9 on 10/29/2010