S&L; Files Suit, Says Loan Was ‘Mismanaged’
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North America Savings & Loan Assn. of Huntington Beach has filed suit for $5.7 million in damages from a Seattle S&L; for an alleged breach of contract that led to the shutdown of a Southland housing development.
According to the suit, filed Monday in Orange County Superior Court, North America held a 13.6% ownership interest in a $14.7-million construction loan that Westside Savings & Loan Assn. of Seattle had agreed to make available to two partners who were building a residential subdivision called Bear Valley Homes near Victorville.
But North American discovered last June that the partners, Frank Woolsey and Charles Humansen, did not have enough funds to complete the development and were unable to borrow more from Westside, the lawsuit said.
North American alleged that Westside “mismanaged the development and the loan proceeds” in part by failing to properly disburse the money and by failing to properly supervise the builders’ progress.
The civil complaint, accusing Westside Federal of “breach of fiduciary duty and contract, negligence, fraud and negligent representation,” claims Westside mismanaged the loan funds for its “own personal gain” but does not explain how.
Attorneys for Westside and North America declined comment Tuesday, as did a top Westside executive.
North American is seeking $738,638 in compensatory damages and $5 million in punitive damages.
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