Baton Rouge developer J.T. “Tommy” Spinosa’s defenses and counterclaims in an Ohio lender’s foreclosure suit against his mixed-use Perkins Rowe project have been dismissed by a federal judge.
The decision by U.S. District Judge James J. Brady leaves Spinosa no defense against KeyBank National Association’s claims for more than $160 million that Spinosa and several of his firms allegedly owe on construction loans.
Spinosa personally guaranteed repayment, court records show.
Bank officials allege fraud was committed at Perkins Rowe. Spinosa denies that allegation.
Mark Beebe, Spinosa’s lead attorney in the civil suit, said in a written statement Friday that his client will continue the fight to retain his most ambitious development.
“Although KeyBank may seek a judgment to foreclose upon the property, there still remain other legal issues that need to be resolved before the property may be … sold,” Beebe said.
“While we strongly disagree with the conclusion of the district court, we must now await the opportunity to appeal to the United States Fifth Circuit to (ensure) that the proper result is reached,” Beebe wrote.
Beebe’s statement was released by public relations professional Jeff Wright, who frequently represents Spinosa.
Beebe did not specify the unresolved legal issues he mentioned in his statement, and Wright said the information could not be tracked before Monday.
Spinosa did not personally reply to telephone and email requests for comment.
He has argued in the KeyBank litigation that the lender cost him and his firms about $11 million by interfering in project decisions and delaying the sale of scores of condominiums.
Since KeyBank filed the foreclosure suit 23 months ago, the lender has changed its name to Key Corporate Bank.
“Key does not comment on the specifics of matters in litigation,” Laura J. Mimura, Key’s vice president for public relations, said in a written statement Friday.
“We believe that the court’s ruling granting our motion for contempt and sanctions was correct,” Mimura added.
The bank asked Brady to find Spinosa and his Perkins Rowe companies in contempt on May 9. The lender also asked the judge to dismiss the defendants’ defenses and counterclaims as the penalty for repeatedly refusing to surrender documents and other records in accordance with court rulings.
Brady and U.S. Magistrate Judge Stephen C. Riedlinger had ordered the release of those records on several occasions.
“If a party fails to obey a court order or provide (requested documents and other records), the court may sanction the party,” Brady said in his written ruling. “In such cases, the court … may even dismiss the sanctioned party’s claims or defenses.
“To do so, the court must find that (1) the penalized party’s violation was willful; and (2) a less drastic sanction would not be a sufficient deterrent,” the judge added.
Spinosa and his firms “willfully violated a court order, and the court is now convinced that (the) defendants, who have already been sanctioned four times for discovery abuses in this case alone, will not respond to a lighter sanction,” the judge wrote.
Brady said the fact that Spinosa and his firms “have refused to allow the documents to be produced only strengthens the argument for dismissal” of their defenses and counterclaims.
Perkins Rowe is located on more than 20 acres near the southeastern corner of Bluebonnet Boulevard and Perkins Road.
The development includes more than 60 shops and restaurants, 88 condominiums, 229 apartments, a movie complex, office space, two parks, a grocery store and a pharmacy.