Hat tip to MB for sending this along, from the pressdemocrat.com:
The pilot who earned international acclaim for safely landing a stricken airliner in the icy waters of the Hudson River in 2009 is suing officials at the former Sonoma National Bank and others for fraud related to a real estate deal that included a Jiffy Lube franchise.
Chesley Sullenberger and his wife, Lorraine, claim that bank officials and a real estate broker duped the Danville couple into purchasing the property in the city of Paradise in Butte County for an over-inflated price of $935,000 in 2002.
The couple is seeking to have the original loan nullified and to be reimbursed for what they contend have been overpayments.
But the lawsuit has the Hero on the Hudson fending off accusations that he is trying to use his celebrity status to recoup financial losses that otherwise might be attributed to the collapse of California’s real estate market.
“I think it’s unfortunate that he’s taking advantage of his notoriety to try and pursue a lawsuit, when the building was leased and they were enjoying the benefits of an income stream,” said Cherie Huillade, a senior vice president for Grubb & Ellis who brokered the real estate deal and is named as a defendant in the lawsuit.
Sullenberger declined to be interviewed, but a public relations representative for the pilot called assertions that he is trying to benefit from his celebrity “absurd.”
The suit alleges the couple learned the property may have been over-valued in July 2008 when the Jiffy Lube tenant moved out and the Sullenbergers attempted to lease or sell the building. They hired their own appraiser, who concluded the value of the property in 2002 was no more than $720,000.
The analysis blamed a “lack of fiduciary responsibility on the part of the other real estate professionals involved in the transaction” for inflating the value of the property.
The financing was through Sonoma National, which had a lending office in Roseville. The bank obtained an appraisal showing the property to be worth $920,000 — $10,000 below the final purchase price. The bank loaned the Sullenbergers $850,000 to complete the deal, according to the suit.
The Sullenbergers allege that Huillade and Sonoma National officials “conspired and agreed to implement a scheme to defraud and victimize” the couple by “significantly overinflating and misrepresenting the fair market value” of the property and increase commissions based upon those inflated property values and purchase prices.
The suit seeks general and punitive damages for, among other things, fraud, negligence and civil conspiracy. The suit names Sterling Savings Bank, which purchased Sonoma National in 2007 for $345 million in cash and stock. The bank is now known as Sonoma Bank. Sterling lost $855.5 million in 2009 as it continued to incur massive losses from its residential and commercial construction loans.
Huillade, however, said the original appraisal done on the Paradise property in 2002 accurately reflected market conditions at the time. She said the couple were not coerced into buying the property and that they had ample time to research the deal.
“That was Lorraine Sullenberger’s home town,” she said. “They knew the market better than most. They knew the viability of the economy.” Huillade said the couple only regretted the deal after the Jiffy Lube tenant moved out and the Sullenbergers lost their investment income.
“Many people bought properties that were worth two or three times what they are,” she said. “Anyone can go back and argue that they overpaid because it’s hindsight.”