Lawsuit over Black Rock to conclude

COEUR d'ALENE — "Actions speak louder than words," Attorney Adam Springel of Las Vegas repeated several times Friday afternoon at the U.S. Courthouse in Coeur d'Alene.

After a two-week trial, final arguments were held Friday in the case of Cayne v. Washington Trust, a class-action lawsuit filed by members of the former luxury golf Club at Black Rock. There were approximately 300 members named in the lawsuit, represented in court by a select few.

Each member had paid up to $125,000 as a "membership deposit" when they purchased property surrounding the golf course, and the plaintiffs argued the deposits should have been refunded within 30 days after the club closed in 2010, as per a membership agreement they each signed.

Springel, lead attorney for the plaintiffs, said the former members were only asking for their money back — a total of nearly $27 million.

Washington Trust Bank obtained the property from the developer, Marshall Chesrown, in August 2010 after it fell into financial distress. The club closed Oct. 31 of that year.

"What this case is really about are the actions of the parties and not their words," Springel said. "The words have already been decided by the court that the defense wrote a 'deed in lieu' that protected them, but it does not protect them from their actions."

The bank took over the contract for the membership agreement, Springel said, but the "deed in lieu of foreclosure" stated the bank accepted no liability in the memberships. Black Rock was a limited liability company, but the LLC was not among the assets transferred in the "deed in lieu."

Springel went through a list of arguments the defense had made, and attempted to discredit each one.

Springel said the bank claimed the membership deposits were an investment. He countered that the properties themselves were an investment, but the memberships were not.

"They don't deserve a refund, because the bank could not predict a recession" was another statement on Springel's list. He said the recession was not the fault of the members and "greedy lenders" are who "really caused the recession" in the first place.

For the plaintiffs, what it really came down to was the jury instructions, which were read to the seven members of the jury by Judge Ronald E. Bush, and reiterated by Springel during his closing argument. Among many other instructions, the members were told to look at the circumstances surrounding the transfer of the membership agreement, whether the bank agreed to the terms of the membership agreement and to look at the bank's conduct, its words and actions.

Attorney Robert Dunn of Spokane, representing the defense, said the case is about accountability, and that the plaintiffs refused to accept accountability for their own actions. He referred to the plaintiffs as "rich, country club, golfer gamblers," who "obviously had lots of disposable income."

Dunn had motioned to the four plaintiffs in the courtroom during his arguments, claiming they flew in from Las Vegas on their private jet. Springel later reminded the jury 40 percent of the 300 former members are from Coeur d'Alene and surrounding area.

"These plaintiffs decided that they were going to file this lawsuit in order to recoup losses that they alone ... freely elected to gamble on real-estate here in North Idaho," Dunn said. "They did it just before the economic tsunami hit, and when it hit, they've been scrambling ever since to try and figure out who they can blame for the economic decisions they made just before it hit."

Dunn argued the plaintiffs failed to prove intent — whether the bank's conduct "manifests an intent to be bound by such duty or obligation." He said every witness that testified was asked whether that intent existed, and each testified there was no such intent.

He also argued the plaintiffs had a chance to mitigate their own damage by joining other Black Rock members who had since purchased the golf course, turning it into a member-owned club. Springel countered that they would have had to invest even more money to buy into the club with the others. Instead, he said, they are "still targeting Washington Trust."

After two weeks of testimony and evidence, the jury went into deliberation shortly after 5 p.m. Friday. The Press will report the outcome as the information becomes available.