Cleveland-based KeyBank has scored a significant win in its battle to gain access to Perkins Rowe developer Tommy Spinosa’s financial records, and says it is moving forward with foreclosure of the mixed-use development over a $170 million loan on which it claims Spinosa defaulted. U.S. District Judge James J. Brady found Spinosa in contempt and levied sanctions against him in a ruling Tuesday, including dismissal of his defenses and counterclaims in the matter. “Throughout this case, defendants have disobeyed court orders, filed frivolous motions and impeded plaintiff’s attempts to obtain third-party discovery,” says Brady’s ruling. “For their efforts, defendants have already been sanctioned four times for discovery abuses. Clearly, the previous sanctions have not had the necessary deterrent effect, and thus more drastic measures are now required.”
Mark Beebe, Spinosa’s attorney, says he “strongly disagrees” with the ruling, adding, “We must now await the opportunity to appeal to the United States Fifth Circuit to insure that proper result is reached.”
KeyBank initiated foreclosure proceedings nearly two years ago; in September it began subpoenaing records for Spinosa’s accounts with BancorpSouth, Hancock Bank and Capital One Bank, as well as records from his construction company, Echelon Construction. All of Spinosa’s subsequent attempts to quash the subpoenas have been denied. “We believe that the court’s ruling granting our motion for contempt and for sanctions was correct, and we plan to move forward with the foreclosure proceeding,” says KeyBank spokeswoman Laura Mimura. For a recent Business Report cover story about Spinosa, click here—Steve Sanoski
