Appeals court rules against Mike Ross in civil case
The 6th Circuit U.S. Court of Appeals has rejected Maryville developer Mike Ross' bid for a new trial in connection with a lawsuit filed by a former business partner.
In an opinion last week, the court said it appeared that Ross and other defendants "forced the district court's hand" when it came to ordering a default judgment in the 2009 suit filed by Robert Stooksbury.
The court cited claims by Ross and other defendants that their attorneys were to blame for a failure to comply with discovery requests, and that they were unaware of the plaintiff's renewed motion for a default judgment.
The court said those claims were "belied by the record", that the case showed a "clear record of delay" for nearly one-and-a-half years, and that the default judgment was warranted.
Stooksbury had sued Ross and several other defendants in connection with Rarity Pointe, a waterfront golf community in Loudon County.
Among other things, that suit alleged that the defendants diverted large portions of the capital from Rarity Pointe and other projects for their personal use and that Ross and other principals repeatedly made false statements about the defendants' intentions to spend money on amenities at various Rarity developments.
Ross and other defendants denied the allegations, but in 2012 a default judgment was entered in the case after they failed to adequately respond to discovery requests.
A jury subsequently awarded Stooksbury compensatory damages of more than $3.5 million on RICO violations and $11.3 million for state-law claims, plus an additional $15 million in punitive damages.
The district court later trebled the compensatory RICO damages, increasing that portion of the award to $10.64 million and bringing the total damages to more than $36 million.
The opinion is a setback for Ross, who recently had gotten some positive news on the legal front.
A federal judge last month dismissed a criminal case against the developer, who in November had been indicted on charges of mail fraud, wire fraud and money laundering.
The appeals court also affirmed a district court injunction that enjoined an entity called Athena of SC, LLC, from foreclosing on its security interest in some of the Ross defendants' property.
The court said evidence in the case raised a strong inference that Athena and another entity collaborated with Ross and other defendant entities to transfer assets to the owner of Athena.