Judge rules in case of foreclosed Lake CdA mansion

An Arizona developer who lost his Lake Coeur d’Alene luxury home to foreclosure this spring doesn’t have to return most of the items he took from the property before the new owner moved in, a bankruptcy judge said.

Denny Ryerson, 69 and a Gonzaga University regent, lost his 11,000-square-foot lakeside mansion on Mica Bay after defaulting on bank loans.

The buyer of the home and nearby property is former Spokane resident Dana Martin, who owns a large auto dealership in Southern California.

Martin paid $7.1 million for it in a foreclosure sale. Ryerson had tried to sell the property for about $10 million but found no bidders.

Martin moved into the home in June but discovered hundreds of items he considered fixtures – including wall and ceiling sconces, home furnishings, a security system, kitchen appliances and other items – were gone.

Crews hired by Ryerson removed those items, including three power generators, an expensive French-made kitchen range and a dock.

Martin’s attorney, Bruce Anderson, asked Idaho Bankruptcy Judge Terry Myers to force Ryerson to give back most of the items, claiming they were to be included in the sale. His first estimate of their replacement value was more than $550,000.

The property Martin moved into was “stripped,” Anderson wrote in a court filing.

After a two-day hearing, Myers ruled that most of the large items – except for the range – were not home fixtures and Ryerson didn’t have to return them to Martin. By that point all the wall sconces and window coverings had been returned by Ryerson.

Ryerson’s Spokane attorney John Munding has said Ryerson plans to sell the items to reduce remaining debts. Ryerson has estimated the value of items he wants to sell exceeds $400,000, according to court documents.

Myers ruled that some items taken were fixtures – built to remain with the building and property. In addition to the French stove, the fixtures included recessed can lighting; installed in-cabinet lighting; wall sconces; installed indirect lighting; carriage lights; in-wall speakers; and garage gate remotes.

The judge denied Martin’s argument that work crews caused significant damage to the property in removing items and that Ryerson should cover the cost of repairs.

Martin’s attorney declined to comment on the ruling. He also wouldn’t comment on a related court battle in which Martin argues Ryerson still owes him more than $2 million – the difference between the bank debt and what was paid for the property.

Munding, Ryerson’s attorney, said he hopes Ryerson and Martin can settle that dispute.

“We’ve been trying to settle this numerous times,” Munding said. “It’s a waste of resources to keep fighting.”

Ryerson bought the property and built the home and an adjoining caretaker’s house in the mid-2000s. He described it as his and his wife’s dream retirement home. His business, developing residential properties in the Southwest, took a significant loss in the Great Recession.