A Houston man claims he lost out on nearly $1 million when the company that he loaned money to defaulted on a loan.
James E. Alm filed a lawsuit June 23 in Jefferson County District Court against Richard Melamed.
In his complaint, Alm alleges he made a secured loan to Mutual Hospitality Group in late 2011. Melamed, who had represented Alm in multiple secured lending transactions, approached Alm about making the loan and assured him it would be secured by a lien against a 4.361-acre tract of land in Beaumont, according to the complaint.
After being assured that he would have the first lien on the Beaumont property and that the property was legally “clean,” Alm agreed to lend the $500,000 to Mutual Hospitality Group, the suit states.
It was only after Alm lent the money to Mutual Hospitality Group that he learned of a pending tax lien against the property. Still, Alm believed he held the first lien on the property and paid property taxes of about $400,000 in an effort to protect his first lien position, the complaint says.
After paying the property taxes, Alm discovered that there was a judgment lien of $700,000 against the Beaumont property. Therefore, he did not hold the first lien on the property as he had believed.
Meanwhile, Mutual Hospitality Group had not made any payments toward its $500,000 loan. Concerned about his position, Alm approached his lawyer, Melamed.
Melamed advised Alm that he could eliminate the judgment lien on the property by foreclosing on his own lien. Following Melamed’s advice, Alm claims he elected to post the property for a non-judicial sale in October 2012.
Rover Dynasty purchased the property, but later filed for bankruptcy. Because of the sale to Rover, Alm was prohibited from making a claim against the mortgage title insurance policy, according to the complaint. Thereafter, the Beaumont property was sold at a constable’s sale to satisfy the $700,000 payment, the suit states.
In addition to losing the property, Alm lost out on the $400,000 in taxes he paid and the $500,000 he lent to Mutual Hospitality Group, the complaint says.
He alleges negligence against Melamed.
In his complaint, Alm seeks actual and exemplary damages, plus costs, necessary disbursements, pre- and post-judgment interest at the highest rate allowed by law and other relief the court deems just.
Christopher M. Portner of Beaumont, and Houston attorneys Mark E. Dykes and John W. Havins will be representing him.
Judge Donald Floyd, 172nd District Court, has been assigned to the case.
Case No. E194-483