David Ovard and Daniel Troiano Secure $9.46 Million Arbitration Award

Collin County trial attorneys David Ovard and Daniel Troiano obtained an arbitration award of $9.46 million following an arbitration final hearing in Dallas.

Ovard and Troiano represented a real estate development firm specializing in developing amenity-rich RV Parks throughout Texas. In conjunction with a development on Lake Livingston, the firm’s client sought construction financing. The client contracted with a lender group that promised to provide $10 million in financing on terms that were “too good to be true.”

In conjunction with funding that loan, the lenders required the client to deposit $500,000 in pre-paid interest that was to be credited against accrued interest after the loan was funded. Despite making the required $500,000 deposit, the lender group failed to fund the loan. Over the course of the parties’ dealings, the lender made frequent representations and promises about the status of funding and promised on several occasions that funding of the loan was imminent. After receiving excuse after excuse, the client located Ovard, who had previous experience successfully suing the same lender group for similar issues.

The firm’s client was the latest in a group of developers defrauded by the lender group. As had become clear from multiple prior lawsuits in Dallas and Collin County, the purported lenders have operated a long-running and widespread scheme. The lender induces prospective borrowers, seeking construction financing, to deposit funds as prepaid interest, prior to the time the loan is to be funded. The lenders never fund the loan and use the initial deposit as an interest-free loan for months or years before being forced to return the deposit when sued by the borrowers. Upon being sued by Clark Hill again, the lender group promptly refunded the $500,000 deposit to the clients. However, the clients had taken many steps and invested significant sums into the development of the project based on the representations of the lender group. The firm’s client sued for breach of contract, fraud, and conspiracy, and sought a broad range of actual, special, and consequential damages.

At arbitration, Ovard and Troiano successfully argued that the loan documents’ prohibition against special or consequential damages was void due to fraud. The arbitrator ultimately awarded more than $800,000 in actual damages, all of Clark Hill’s attorneys’ fees, and more than $8 million in special and consequential damages including delay costs, lost revenues, and to compensate for increases in construction costs, materials, and labor.

“Because of our success in this case and other results obtained against this fraudulent lender group, similarly defrauded parties are reaching out to us for assistance in enforcing their legal rights and obtaining justice, and we are always willing to help our clients achieve just results,” Ovard said.