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Taylor v. Gorilla Capital, Inc.

United States District Court, D. Oregon

June 28, 2018

DAVID NORMAN TAYLOR, and DEBRA LEE TAYLOR; Plaintiffs,
v.
GORILLA CAPITAL, INC., JOHN HELMICK, and CASCADE TITLE, CO.; Defendants.

          OPINION AND ORDER

          Michael McShane United States District Judge

         Plaintiffs David and Debra Taylor received a loan backed by a deed of trust on their home. They bring this action against the alleged broker, lender and escrow agent involved in the making of the loan. Defendants each move to dismiss.

         BACKGROUND[1]

         The Taylors' son was involved in an auto finance business with an individual identified in the complaint as Jeremy Cruz. Compl. ¶ 11. Cruz had, at a point in the past, worked for defendant Gorilla Capital, a corporation that makes or invests in mortgage loans. Compl. ¶ 31. Gorilla Capital is run by Defendant John Helmick, who is described in the complaint as “a sophisticated lender, broker and real estate ‘flipper' who has run Gorilla Capital since 1993.” Compl. ¶ 16. Helmick and Cruz are close friends. Compl. ¶ 9.

8.
Sometime prior to July 6, 2015, a Jeremy Cruz contacted Gorilla Capital and Helmick about a loan related to his business, Eugene Auto Finance. He proposed that Defendants give Plaintiffs a loan secured by a third lien on their principal residence but with the proceeds being used for purposes as directed by Cruz and Helmick.
10.
On or about July 6, 2015, a loan was closed in escrow at Cascade Title for $90, 000 with Helmick as the lender. The proceeds went partly to certain creditors of Eugene Auto Finance, and $39, 800.35 was distributed to Cruz personally. Within days, Cruz lend [sic] $35, 000 of the loan proceeds to Gorilla Capital.
11
Immediately after closing, Taylor was contacted by their son, a business partner with Cruz. He advised them that the payments to Eugene Auto Finance creditors were not as he agreed with Cruz, and that the distribution to Cruz should have been capital for Eugene Auto Finance. Taylor immediately went back to Cascade Title to rescind the loan. The closing occurred around 5 pm PST and Taylor found the doors locked. A Cascade employee came out to talk to Taylor and advised them to call the next day. The next Taylor [sic] called Cascade Title and demanded that the loan be rescinded. Cascade title employees told Taylor that the loan already funded and could not be rescinded.
12.
Within three days after closing, Taylor sent a written rescission notice to Helmick and Gorilla Capital via email, as this was the ordinary course of communications.
13.
Cascade Title employees, prior to closing, confirmed that funding would not occur until three (3) days after closing.
15.
Taylor never provided a loan application, made any financial disclosures nor provided evidence of an ability to repay the loan. The loan is an asset loan, relying only on the value of the collateral as a basis to foreclose.
16
Helmick is a sophisticated lender, broker and real estate ‘flipper' who has run Gorilla Capital since 1993. Helmick as [sic] created multiple securitized real estate investment trusts, a form of a regulated security. On information and belief, Defendants have a long history of working in concert in lending, as well as buying and selling real estate. Thus, any statute of limitation applicable to this action should be tolled in equity.
17.
All communications with Helmick, before and after closing, were by email and used Helmick's Gorilla Capital email. All emails from Helmick were signed by Helmick as CEO of Gorilla Capital.
18.
Taylor never made a single payment to Helmick and never ratified the loan after rescinding the loan. Taylor's [sic] received no benefit from the loan nor consideration for ...

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