Baton Rouge developer J.T. “Tommy” Spinosa decided Tuesday to fight an Ohio lender rather than settle a $170 million dispute over the bank’s efforts to sell his mixed-use Perkins Rowe development at foreclosure.
Spinosa told U.S. District Judge James J. Brady last week that he and KeyBank National Association, of Cleveland, were negotiating a possible settlement of their three-year-old courtroom war over Perkins Rowe. The developer was granted a one-week extension of his Aug. 31 deadline for responding to KeyBank’s request for a final judgment that would enable the lender to sell the development.
In his response Tuesday, Spinosa argued the judge improperly ignored a precedent case decided 22 years ago by the U.S. Supreme Court. The developer, through attorney Mark R. Beebe, argued that Brady should have dismissed KeyBank’s suit from federal court because of that precedent.
In late 2009, Spinosa argued that KeyBank should have filed its complaint in state District Court in Baton Rouge rather than federal court.
Civil suits in federal court usually involve either issues of federal law or disputes between parties in two or more states.
But Spinosa noted early in his dispute with KeyBank that the lender also was representing eight other lenders who had purchased minority interests in the $170 million Perkins Rowe loan. One of those lenders is Bank of New Orleans, which holds a $1 million interest in the project.
Because Bank of New Orleans is chartered in Louisiana, Spinosa said, KeyBank should have filed its suit in state court.
Brady overruled Spinosa on that point in 2009, however, and denied the developer permission to immediately ask the 5th U.S. Circuit Court of Appeals to reverse his ruling.
Spinosa said in his latest court filing that he has learned a ninth bank purchased a minority interest in the $170 million loan. He said that lender, MidSouth Bank, of Lafayette, bought $6 million of the construction loan. The developer argued the participation by MidSouth Bank bolsters his position that KeyBank’s suit does not belong in federal court.
“KeyBank’s motion (for sale of Perkins Rowe) should be denied, and this case should be immediately dismissed,” Spinosa’s attorney wrote the judge.
KeyBank officials did not respond to a request for comment Tuesday.
But Janine Cone Metcalf, an Atlanta attorney for KeyBank, argued in November 2009 that all of the minority lenders had signed a document in which they agreed to let KeyBank represent all of them in the foreclosure suit against Spinosa and his Perkins Rowe companies.
“We are the master of the litigation,” Metcalf said at that 2009 hearing. “Whatever we do here is binding upon the Bank of New Orleans. … There is no reason to have nine banks all trying to foreclose. Everybody signed the same piece of paper.”
Beebe, Spinosa’s attorney, argued Tuesday that the 22-year-old Supreme Court decision shows Brady “does not have the authority to enter a final judgment … and should dismiss KeyBank’s claims.”
Perkins Rowe is on 23 acres near the intersection of Perkins Road and Bluebonnet Boulevard. It includes 229 apartments and buildings that house more than 60 shops and restaurants, as well as other businesses and offices.
The development also has 88 condominiums, a movie complex, pharmacy and grocery store.