May 30, 2014 in Idaho, Region
Ownership of items taken from luxury lake home contested
Two high-rollers who have fought over a sprawling lakefront property in North Idaho are back in court, trying to determine who can keep hundreds of fixtures, appliances and other items removed from that home just before a foreclosure sale last month.
The latest contention erupted shortly after the 11,000-square-foot home on Mica Bay changed hands during a foreclosure proceeding on April 14-15.
Dana Martin, owner of a Los Angeles-based car dealership, is now the owner of the home and two adjacent lots on the west shore of Lake Coeur d’Alene.
Losing the home through foreclosure was Arizona developer Denny Ryerson, a 69-year-old Gonzaga University regent who had built the house as his and his wife’s dream retirement home.
But Ryerson defaulted on his bank loans when the recession decimated his business.
Last month the only foreclosure offer for the home came from Martin, who had acquired the bank note on the property from Idaho Independent Bank in 2013.
Martin offered roughly $7 million, using a “credit bid” that lets him apply the amount of money he was owed by Ryerson on the defaulted bank loans.
But within days of the foreclosure sale, Martin discovered the missing items, which had been removed earlier by crews working for Ryerson.
Gone were a French-made gas cooking range valued at $45,000, a 20-foot-long iron chandelier that graced the home’s spiral staircase worth about $40,000 – even the house’s three-slip boat dock, estimated to cost $60,000.
Ryerson’s property includes a nearby caretaker house and a guest house above a garage. As a result the home had three interior propane generators, all of which were removed by workers before April 15.
Martin’s attorney, Bruce Anderson, wrote in one court document: “The premises could only be described as ‘stripped.’ ”
It continued, “All windows were covered with sheets or other coverings to keep observers from seeing what happened to the interior of the home.”
The fixtures and many items are considered “appurtenances” and belong in the home because they were used as collateral when Ryerson applied for secondary bank loans, Anderson said in the court document.
Ryerson tried to sell the home himself in recent years but didn’t find the right offer. In 2012 it was listed for $10.5 million – or $12.5 million including all its furnishings and art. The listing made it onto the Wall Street Journal’s website as the house of the day.
In the past two years Ryerson twice refused offers made by Martin, saying they were too low.
Jerry Flowers, who was hired by Martin to survey what was gone, said, “I saw a few other homes stripped like this, but only in $150,000 homes in subdivisions. I’ve never seen it happen in the high-end lake properties.” Flowers’ Rathdrum company often works at North Idaho’s higher-priced lake homes.
Flowers’ list of missing items includes 42 wall sconce lights, 192 recessed can lights, assorted kitchen and laundry room appliances and several outdoor post and column lights. One of the items taken was a “powder room pedestal sink” valued at $8,000.
He estimated that the cost of items removed ranges from $550,000 to $700,000.
An Idaho federal bankruptcy judge has said he’ll hold a hearing in August to resolve the dispute between Martin and Ryerson.
John Munding, a Spokane attorney representing Ryerson, said the value of the items cataloged by Flowers hasn’t been independently assessed. He also said Ryerson removed those items “because he felt they were his personal property.”
Munding said Ryerson clearly is allowed to remove custom furniture and the extensive art collection that were inside his home.
Ryerson has stored those items in a number of North Idaho locations until the legal wrangling concludes.
He’s taken the art pieces to Cisco’s Gallery, hoping to sell them on consignment.
Among the items that were removed and under dispute are two large, bronze sculptures that were outside the home. Those pieces were created by noted American sculptor Lincoln Fox. Flowers’ survey said those two pieces, which depict Native American figures and were created specifically for Ryerson’s lake home, could not be valued due to their uniqueness.
Munding said Ryerson’s goal is to sell the items to help pay off the remaining debts Ryerson has amassed. Ryerson has estimated the value of items he wants to sell exceeds $400,000.
“Denny is a very caring guy who is very seriously working on getting this taken care of properly,” Munding said.
Sam Kennedy, owner of Cisco’s Gallery, in Coeur d’Alene, said the legal dispute will have to be resolved before he can start selling the art pieces. Kennedy said he has a national clientele who would likely be interested in many of the items.
Among the items he’s storing are the Lincoln Fox pieces and the three generators. Some items, including some wall sconces and drapes, have already been sent back to the home, Kennedy said. “I’ve talked with Mr. Ryerson and he’s already said he was wrong, that some of those items should be returned,” Kennedy said.
While the court sorts that battle out, Munding said it’s possible Ryerson will also challenge the validity of the credit bid process and the foreclosure sale.
Among the issues is the possible lack of adequate advance notice before the sale, Munding said.