DALLAS, Oct. 18, 2024 - A Dallas County jury found that Stallion Funding, LLC fraudulently lured Reese Marketos client Colin Dooley and his real estate development firm, Dooley Developments USA LLC, into loan-to-own terms that resulted in foreclosure on a lucrative townhome development in Old East Dallas. The scheme wrongfully deprived Mr. Dooley, an Australian expat, all of the equity value of the property.
In an Oct. 10 verdict, the jury found Stallion Funding and several related entities liable for fraud, breach of contract, usury, wrongful foreclosure and promissory estoppel. The jury determined the defendants acted with malice and also rejected the defendants' $16-million counterclaims against Dooley in their entirety, instead awarding Dooley more than $6 million in damages.
The Skyline Terraces project in East Dallas is comprised of 25 condominium units that were originally appraised at $13.55 million. But instead of Dooley Developments profiting from its work on the project, evidence at trial showed that the defendants engaged in a scheme to capture the equity value of the project for themselves.
During a weeklong trial, jurors were presented evidence that Stallion Funding didn't honor an underlying settlement agreement with Dooley Developments when it failed to fund draw requests only weeks after the settlement was entered and failed to cooperate with Dooley in the closings of sales of the units in Skyline Terraces - the very issues the original lawsuit brought by Mr. Dooley sought to resolve. The jury also heard evidence that the defendants made a $5-million profit on the real estate project through a wrongful foreclosure, which contradicted defendants' claims that they lost money on the project. Jurors also reviewed internal communications by the defendants that showed the amount of money Stallion Funding committed under the loans was never available.
"I am proud of our client Colin Dooley," said partner Brett Rosenthal, Mr. Dooley's co-lead counsel at trial. "He put nine years of hard work into this project. The defendants thought they could take advantage of him and get away with it, but that's not how it works in Texas. After years of hard-fought litigation, Colin has been vindicated and justice has finally been done."
Mr. Dooley is currently the chief executive officer of Swiss Avenue Funding, a Dallas-based loan originations company he founded in 2020 with the mission of bringing fairness and integrity back to the private real estate lending industry.
"I am relieved that justice has finally been served and I look forward to getting back to work on Swiss," Mr. Dooley said after the verdict.
The Reese Marketos trial team was co-led by partner Brad Gordon.
The case is DC-20-06471 in Dallas County's 193rd Civil District Court. Visiting Judge Charles Stokes presided over the trial.
Founded in 2011, Reese Marketos is a Dallas-based trial boutique that specializes in high-stakes commercial litigation ranging from tens-of-millions of dollars to bet-the-company cases. For more information, visit rm-firm.com.
SOURCE Reese Marketos LLP
