Sherwood Ex-owners Win In Court

Judge Awards Pair $8.6 Million From Fairfax Savings For Fraud

May 12, 1991|By Kerry O'Rourke | Kerry O'Rourke,Staff writer

TOWSON — A Baltimore County jury awarded two former owners of Sherwood Squaremall in Westminster $8.6 million in damages Friday, saying a Baltimore bank had defrauded them.

After a 4 1/2-week trial, the jury found that Fairfax Savings Association defrauded Charles Ellerin of BocaRaton, Fla., and Louis Seidel of Baltimore, by inserting provisions into loan documents without the partners' knowledge.

An attorney for the bank said Fairfax will appeal the decision.

The case has been in court since 1985 and had been tried three times, said David Freishtat of Baltimore, attorney for Ellerin and Seidel.

Ellerin, 72, said, "I feel great to have the courts finally bring justice to this thing."

Seidel, 56, said, "It's been six long, tedious years of litigation. It's just been horrendous."

In 1982, the partners borrowed $5.7 million from Fairfax to buy Sherwood Squareand renovate it. They weren't successful with the project, and in 1985 filed for bankruptcy. After the partners had defaulted on loan payments, Fairfax attempted to foreclose on the mall.

For the next three years, the partners devised plans to pay off their debts, but none met with the bank's approval. In 1985, Fairfax sued Ellerin and Seidel for the amount of the loan, saying they had signed papers that held them responsible for the debt.

In 1986, the partners counter-sued, saying Fairfax and its lawyers inserted provisions in the loan documents without their knowledge that made them responsible for an additional $4.5 million, Freishtat said.

Ellerin and Seidel had agreed they would be responsible to complete the Sherwood Square project and for an additional $850,000, their lawyer said. The jury found thatthe partners were not aware of the additional provisions, Freishtat said.

The jury deliberated for about two days, a court official said. It awarded Ellerin, who owns a school supply business based in Columbia, Howard County, $1.35 million for emotional distress and $34,564 in other compensatory damages, Freishtat said.

The jury awardedSeidel, a contractor, and his wife, Gloria, each $625,000 for emotional distress, he said. Ellerin and the Seidels also were awarded $6 million in punitive damages. Ellerin said Friday the three have decided how to divide that sum, but he did not want to give the details.

The case first went to trial in 1987, and resulted in a verdict against Ellerin and Seidel, Freishtat said. The partners appealed, and the Court of Special Appeals, Maryland's second-highest court, ruled the trial judge had given the jury erroneous instructions, he said. Last year, the case went to trial again and resulted in a hung jury, he said.

Fairfax has owned Sherwood Square since 1989, when it boughtthe mall for $3 million at a foreclosure auction. The 50,000-square-foot mall has never been more than half full. Later this month, two brothers from Pikesville, Baltimore County, expect to sign a contract to buy the mall.

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