ELKO — At a time when Nevada is leading the nation in foreclosures for three years running, Signature Developers just avoided adding another piece of property to the list.
In a major victory for the developers of the Riverside Condominiums, an Elko District Court jury found Wednesday that Wells Fargo Bank committed fraud, negligent misrepresentation, breach of written contract and breach of good faith and fair dealing when trying to foreclose on the property.
The civil jury awarded a total of $9.5 million in damages to Signature Developers LLC of Linden, Utah. The jury will reconvene on May 26 to decide on punitive damages.
Signature Developers spearheaded the Riverside Condominiums project on 12th Street. Two 12-unit buildings were completed in late 2008 and offered to buyers at prices of $169,900 to $174,900. The plan called for a total of 21 buildings.
Wells Fargo sued Signature Developers in May of 2010 to foreclose on the property. Signature filed a counter-claim alleging breach of contract, fraud and negligent misrepresentation.
According to Abe Bates, lead attorney for Signature Developers, Wells Fargo wanted to foreclose on the property in order to convert the condominiums into lease-based apartments.
“In its relationship with Signature, Wells Fargo became not only a lender but also a co-developer and or project manager and referenced that a special agreement exists between Signature and Wells Fargo because in the course of the parties dealings, Signature reasonably imparted special confidence in Wells Fargo and Wells Fargo was aware of that confidence,” Bates wrote in a letter to the court.
The jury awarded $5.5 million for fraud, $2.5 million for negligent misrepresentation and $1.5 million for breach of the duty of good faith and fair dealing.
Wells Fargo regional spokeswoman Angie Kaipust said the bank disputes the jury’s findings, however, she could not provide details on the company’s plans moving forward.
“We are extremely disappointed with the jury’s decision,” Kaipust said. “Right now, we are reviewing our options. We will continue to vigorously defend ourselves going forward.”