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Orange County Digest

South Laguna : Developer Files Suit to Block Foreclosure

November 14, 1986|John Spano

Developer and national Democratic Party fund-raiser David F. Stein went to court Thursday to fight foreclosure on his $1.4-million oceanfront home in South Laguna.

Stein, who earlier this year was struggling to keep his $1-billion Monarch Beach resort development in the south county, claimed in a lawsuit filed Thursday that trustees threatened to publish notice today of their intention to sell the home at 11 Lagunita.

The 4,500-square-foot home is on a bluff overlooking the Pacific Ocean.

The threatened foreclosure involves disputes over loans to repair damage to the property after 1983 storms, as well as a disagreement over $12,459 in attorneys fees, according to the suit filed in Superior Court.

On Nov. 7, Stein offered First American Title Insurance Co. a check for $86,000 to cover back payments due on a mortgage, which totaled $1.2 million when it was taken out three years ago, the lawsuit said.

But First American Title, acting as representative for the Gregory Marshall Smith Trust, which sold Stein the home in 1983, refused to accept the check.

America Title asked that Stein pay the attorneys' fees in addition to back payments covering principal, interest and late charges.

Stein's lawsuit characterized the claim for attorneys fees as an "illegal and unreasonable demand."

According to the suit, the dispute dates back to last February, when trust representatives refused to subordinate their interest in a $250,000 loan to pay for permanent repairs for damage to the property by the heavy storms of 1983.

The suit indicated that California Coastal Commission approval of the needed repair work was dependent upon getting agreement on the repairs from representatives of the trust.

Stein said in his suit that he stopped making payments last April, after the trustees refused to agree.

That refusal "prevents Stein from doing the work of improvement necessary to preserve the property from storm and wave action, and the failure and refusal of the sellers to provide such (agreement) is causing great damage to Stein and may result in the total destruction of the property," the suit said.

Neither Stein nor representatives of the Smith Trust could be reached Thursday for comment.

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