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Article published Jan 18, 2008 Misdeeds alleged Local developers suing GreenBank/American Fidelity
By Rick Laney of The Daily Times Staff
A local construction company filed suit in Blount County Chancery Court Wednesday against American Fidelity Bank and its parent company, GreenBank, for alleged violation of the Tennessee Consumer Protection Act, negligent misrepresentation, intentional misrepresentation and breach of contract.
The lawsuit stems from loans made by American Fidelity to Potter & Sunderland General Contractors Inc., a Louisville-based construction company that developed the Ashwood Park Villas near the intersection of William Blount Drive and Dotson Memorial Road.
The complaint is based on what the developers say were misleading terms and conditions of their loans with American Fidelity and GreenBank and an attempt by American Fidelity to keep the developers from obtaining construction loans from Citizens Bank of Blount County (CBBC).
In the 25-page complaint, attorneys for Potter & Sunderland charge that Jerry Simmerly, then vice president of GreenBank, and Mike Stuart, an agent of the bank, misled Potter & Sunderland regarding the terms of their loans and tried to keep them from transferring their business to CBBC.
According to the documents filed with chancery court, Potter & Sunderland purchased 22 acres of land on William Blount Drive in 2005 for $770,000 from Jim Lord. Potter & Sunderland originally planned to build a retirement community with an assisted-care facility and a medical office, but later decided to build a condominium complex called Ashwood Park Villas at Fairview. The Ashwood Park Villas had an estimated appraised value of about $4 million, and Simmerly, according to the complaint, agreed to loan the developers money based on a percentage of the appraised value.
Before construction started on the project, the complaint states that CBBC approached Potter & Sunderland and expressed an interest in lending money for the project. The documents claim CBBC continued to pursue business with Potter & Sunderland on the project.
Simmerly left American Fidelity Bank in 2007 and, later, was named president and chief operating officer of American Patriot Bank. According to the documents, Stuart then became Potter & Sunderland’s primary contact at GreenBank.
The complaint states, “Mr. Stuart encouraged Potter & Sunderland to keep the loan at GreenBank, stating that Citizens may have lower interest rates and possibly lower closing costs but had hidden fees that would offset the savings.”
Later in the complaint, Potter & Sunderland allege that CBBC did not have hidden loan fees and that GreenBank had disparaged CBBC with false or misleading representations of fact.
Potter & Sunderland was founded as a residential building company in the early 1990s by Ronnie Potter and H.L. Sunderland. In 1999, the business incorporated and expanded into commercial projects.
The complaint, filed on behalf off Potter & Sunderland by Katherine Hamilton of the Knoxville-based law firm Young, Williams, Kirk & Stone, does not seek a specified amount of money, but does seek incidental and consequential losses, including special damages incurred to date and to be incurred.
Hamilton told The Daily Times she did not wish to comment on the complaint. When contacted Thursday afternoon, American Fidelity Bank also declined comment.
Brenda Flowers, Blount County clerk and master, said that unless other motions are filed in the case, a trial date will be set in five or six months.