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Taylor v. Gorilla Capital, Inc.
United States District Court, D. Oregon
October 23, 2018
DAVID NORMAN TAYLOR, and DEBRA LEE TAYLOR; Plaintiffs,
GORILLA CAPITAL, INC., JOHN HELMICK, and CTC ESCROW Co. dba CASCADE ESCROW; Defendants.
OPINION AND ORDER
MICHAEL MCSHANE UNITED STATES DISTRICT JUDGE.
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. I previously granted Defendants'
motion to dismiss the fraud claim without prejudice.
Plaintiffs filed an amended complaint reasserting the same
four claims against Defendants Gorilla and Helmick.
Defendants only move to dismiss Plaintiffs' amended fraud
claim.Because the amended complaint fails to
allege sufficient facts to support a fraud claim, the motion
to dismiss is granted.
Taylors' son was involved in an auto finance business
with Jeremy Cruz. Am. Compl. ¶ 11; ECF No. 22. Cruz had,
at a point in the past, worked for Defendant Gorilla Capital
(“Gorilla”), a corporation that makes or invests
in mortgage loans. Am. Compl. ¶ 9. Gorilla Capital is
run by Defendant John Helmick (“Helmick”),
“a sophisticated lender, broker and real estate
‘flipper' who has run Gorilla since 1993.”
Am. Compl. ¶ 15. Helmick and Cruz are close friends. Am.
Compl. ¶ 9.
Sometime on or about May 27, 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. Cruz negotiated the
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 lent $35, 000 of the loan proceeds to
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 Escrow 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 day, Taylor called Cascade
Escrow and demanded that the loan be rescinded. Cascade
Escrow employees told Taylor that the loan already funded and
could not be rescinded.
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 based loan, relying only on the
value of the collateral and the right to foreclose, and not
on the borrowers [sic] ability to repay the loan.
Taylor never made a single payment to Helmick and never
ratified the loan after rescinding the loan. Taylor received
no benefit from the loan nor [sic] consideration for pledging
the Property as collateral for the loan.
Am. Compl. 3-6.
In addition to the allegations included above, the Taylors
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