Cease And Desist Letters - Rocky Mountain Construction Lending reply

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June 5, 2001
Jeffrey W. Ludwig
9826 South Bucknell Way
Highlands Ranch, CO 80449
Re: Rocky Mountain Construction Lending file no 137-2 ( 6 pages)
Dear Mr. Ludwig,
We are in receipt of your letter dated May 31,2001, in which you demand that Rocky Mountain be removed from our web site, www.NorthStar-Sucks.com. For us to "cease making any false and defamatory statements regarding Rocky Mountain" is very easy to do because we have not made any. Every statement we have made is true. It is unfortunate, as in this case, that sometimes the truth is defamatory. Taken in context with the information provided on the entire web site, we have made what we feel are reasonable conclusions based upon the information provided to us by Monica Wasden, Kevin Marks, Barbara Robbins, and a slew of individuals who feel they were cheated and lied to by these three.
We've been told that lawyers hate surprises, especially when the surprise is a result of their client either withholding information or not being honest with the lawyer. You could check with the lawyer that represents NorthStar, M. James Zendejas. He was recently very surprised, while in the judges' chambers to learn that NorthStar Design & Construction is not an L.L.C. as represented. He had to call his client to confirm. Don't you just hate when that happens? Your client, Monica Wasden, is putting you into a similar situation. Fortunately, we can provide you with the information she neglected to include.
It is apparent that you are operating under a major misunderstanding of the relationship between your client, NorthStar Construction, and Grand West Financial. In Teller County, for a period covering the last two years, these three companies have been closely involved with each other concerning the sale of home and land, construction loans, and permanent mortgage financing. In almost every case in which we have been able to contact the buyer, there emerges a pattern of lies, cheating, intimidation, and fraud. The majority of the complaints concern NorthStar, and a proportionately lower number of complaints include Grand West with Rocky Mountain at the lower end of the scale. This lower end doesn't lessen the involvement or diminish the responsibility of Rocky Mountain in any manner. The interviews we've had with victims of the Terrible Trio indicate a pattern of criminal activity that simply cannot be accidental. These three are involved in a noticeable pattern of lies, deceit, intimidation, and fraudulent payments.
You are correct In your statement that "Ordinarily, the relationship between a lender and it's borrower is a creditor-debtor relationship." What you omit is the fact that when a creditor assumes a fiduciary responsibility, as did Rocky Mountain, then the creditor must perform that fiduciary responsibility to it's fullest. Ask your client for a copy of the constriction Loan Agreement. We claim that she is in violation of:
Article One - The Contractor Agrees: Paragraph 2 and Paragraph 9
Article Three - All Parties Agree: Paragraph 1
Specifics: under Article One ~ The contractor Agrees: Rocky Mountain paid invoices that were not included in the original schedule. Rocky Mountain also paid for changes that were not authorized. While Paragraph One states the contractor is to "make no changes in said plans or specifications:, etc, "without the written approval of lender", the fact that Monica Wasden paid invoices that were changed, and paid invoices that incorporated changes, all without written approval of her, the lender, she assisted the contractor in violation this paragraph and violated it herself, willingly and knowingly. She does not have the right to alter the terms of this contract and give the contractor a verbal approval.
Under Paragraph 9, the contractor is strictly limited to a 5% overrun "unless the Lender has provided the Contractor with its prior written consent of such change order." The key here is the wording "prior written consent." NorthStar routinely makes modifications to construction agreements, stating that they have the authorization to do so based upon the wording that says Cost Overruns may occur for "changes made to meet code requirements." NorthStar, like Grand West and Rocky Mountain, pointedly ignores making any reference to other contracts or other clauses that contradict or limit this ability. NorthStar's Construction Agreement with us does not supercede, replace, or void any parts of the Construction Loan Agreement signed with Rocky Mountain. Yet, Monica Wasden regularly paid for overages exceeding 5% and not one provided "prior written consent" for these overages. In doing so, she again assisted the contractor in violating this paragraph and again, violated it herself, willingly and knowingly. Again, oral permission is not allowable under the terms of this agreement.
Specifics: under Article Three ~ All Parties Agree: Paragraph One states that "lender may disburse the net proceeds of the loan, only in proportion of it's inspector's report of progress,…" This is basically stating that all work will be confirmed before any payment is made to the contractor. This was not done. We seriously doubt that her "inspector", and the "inspector's reports" will withstand any reasonable scrutiny, if, in fact there really is an inspector. She did not identify her inspector. When we questioned items concerning her "inspector", she because vague and evasive. Answers to specific questions became very general. Like the "inspector" used by her partner, Grand West Financial, the "inspector" seems to exist more in the contract than in reality. If there were in fact any "inspector's reports" to confirm her monitoring go the construction, why didn't she refer to them and answer with specifics? Why didn't she product just one to prove her point? Could it be that these reports don't really exist and that she is relying on verbal confirmation from NorthStar instead of following the contract? Here she repeatedly violates her fiduciary responsibility to the debtor because she pays for work not done.
Generally: These three paragraphs strongly imply that at all times Rocky Mountain will act in the best interests of the creditor. This contract can reasonably be interpreted to state the relationship between a lender and it's borrower is more than a simply creditor-debtor relationship; the lender has assumed a fiduciary responsibility, in writing.
What Monica Wasden, a.k.a. Rocky Mountain, also failed to tell you is that we also signed an agreement with Grand West Financial which specifically states that in the payment process all the debtor is expected to do is sign the draw statement because all information within that statement will subsequently be verified before payment. There is nothing in the contract, or the contract signed with Rocky Mountain that says the draw sheet, regardless of the wording, supercedes, replaces, or voids, any of the verification process or the need for an inspector. That draw sheet is on Grand West stationery. Additionally, read the clause in the Draw Request that you quote: Certification: The undersigned certifies and warrants that, (1)all of the labor and material identified above has been furnished to and incorporated into the construction of improvements at the above named property address; (2) prior to this time, the undersigned has not been paid or reimbursed for such labor and materials. Take a real close look at Sentence 2. The statement obviously refers to the contractor as there is no intention of anyone paying or reimbursing the debtor for any amounts listed in the draw. Additionally, if you look at the column titled "Payable to:", you will see the name NorthStar Construction, and only NorthStar Construction. There is no reasonable way that this can be interpreted to mean us. Taken with the clause in the contract signed with Grand West Financial, there is no legal way that this can be interpreted to mean us. All we did, and your client is well aware of this, was to sign the draw as instructed, with the reasonable expectation that the amounts and work shown would be verified before payment, which, if you look closely, is also stated on the Draw Request form. Did you actually look at a signed Draw Request or are you again relying on information furnished by your client:
Let us also take into consideration geography. We signed the contracts while we were in Virginia, some 1600 miles away. Rocky Mountain, Grand West Financial, and NorthStar were all well aware of this fact. Based upon the wording of the contracts, and my wife's experience in the construction industry with construction loans, we expected Grand West Financial and Rocky Mountain to perform their fiduciary responsibilities as defined in the contracts. We signed the first two draws while still in Virginia. Were we expected to fly to Colorado and take the time to inspect the work done? Where is that stated in either contract? When was it verbally stated to either one of us that we were expected to fly to Colorado and personally supervise the construction? Is that a reasonable expectation considering the wording of both contracts? The contracts specifically state that Rocky Mountain and Grand West will confirm all work before monies are paid out.
We've noticed that a typical tactic of the Terrible Trio is to shift the blame in an effort to confuse the issues. They use the same verbiage, the same approach, and are mutually supportive. They all shout, "Read the contract" and point in different directions. Generally the confusion is successful and the victim gets lost in the maze of contradictions. We're not lost and we're not confused. As far as we're concerned, the references to our signatures on the draws is a smokescreen. This is clearly an attempt by your client to avoid taking the responsibility for making unauthorized payments of our funds. Our Funds. This was a loan in our name, being disbursed for work being done for us. This was no longer her money. She is accountable to us, we are not accountable to her. She accepted that responsibility and that duty when she tendered the contract for our signatures.
We also have paperwork from Monica that contradicts good business practice. Bear in mind, these are her documents. This is just to give you an idea of the difficulties facing you should you want to pursue this mater. This is gong to be confusing but here it is.
Invoice #327, dated October 24, 2000, which has entries for Draw #1 ($69,980.69) and Draw #2 ($4,720.92). The spreadsheet that accompanied the invoice has Draw #1 and Draw #2 combined into Draw #1 for a total of $74,701.61. Why? Was space an issue? Couldn't have been since she had listed three separate columns for interest. Why contradict her own paperwork?
Then we received Invoice #327, dated November 28, 2000, in which she has entries for Draw #3 for #13,048.86. The spreadsheet that accompanied the invoice has Draw #3 listed as Draw #2 for $13,048.86. We have a number of problems with her invoice dated November 28, which is based upon the Draw Request dated November 22, 2000.
First, the well was billed at $2,500.00 and she shows the amount paid to be $6,050.00
Second, the septic was billed at $10,240.00 and she shows the amount paid to be $6,040.00
Third, foundation was billed at $100.00 and she shows the amount paid to be $100.00 but under the category of drywall & trim work.
Fourth, she shows the amount of $10.86 applied to perimeter wall while the Draw Request has no such amount.
Fifth, the carpeting was billed at $755.00 and she shows the amount paid to be $488.00
Sixth the Draw Request shows $275.87 for skirting, which is totally omitted from her invoice
Seventh, the Draw Request shows $550.00 for setup, which is totally omitted from her invoice
Eighth, the Draw Request shows $100.00 for interior, which is totally omitted from her invoice
Ninth, the Draw Request shows $35.00 for other, which is totally omitted from her invoice
Tenth, she shows the total paid for the Draw request at $13,048.86 while the actual draw request totaled $14,915.87.
Now, let's go over each of these items. Bear in mind, Monica stated to us that she had been told by NorthStar that she had received the final draw on this project.
First and Second: the well and septic. We questioned Monica about these. Her reply was that since one came in under and one came in over, she applied to underage to the overage, "it was a wash". What happened to priority written consent?
Third: foundation. Obvious. The amount was put with drywall & trim work because foundation was already at 100%.
Fourth: where the hell did that come from? No answer from anyone.
Fifth: carpeting. How do you run 65% over on carpeting for a modular home? She didn't pay it, or so she said. NorthStar says she paid it. Then Monica found where she had paid it. She told us she paid the overage because it was on the Last Draw and there was money left over. Hello? Again, what happened to prior written consent?
Sixth through Ninth: who knows? Since we have not received any documentation from NorthStar, Grand West or Rocky Mountains, we have no idea what happened to these numbers.
Tenth: total. The difference is $1,867.01. No explanation given by her for the discrepancy. This becomes important because on January 23, 2001, we received from Monica another spreadsheet showing the amounts for Invoice #327, dated November 28,2000. But, the total paid now shows to be $14,915.87! What happened? There was an added $450.00 for propane; excavation was increased from the original $360.00 to $970.00; $750.00 was added for culvert; $7.01 was added to delivery (???); drywall and trim work was increased to $150.00 (from the original $100.00) Surprise! An adjustment of $1,867.01, the exact amount missing.
But, where did these numbers come from? Again, on the Draw Request that we signed, dated November 22nd, there was no $750.00 for culvert, there was not the additional $610.00 for excavation, there certainly wasn't any $7.01 amount, and the propane wasn't in yet so there wasn't any charge for that! Hello? This second sheet has adjustment to reflect the missing amount but not the actual amounts presented to us. Why were these changes made? And based upon what documentation? Why weren't we kept appraised of what was happening? Who authorized her to place numbers anywhere she wanted? What was her purpose? It looks like she didn't' want any one particular category to go over so she moved the numbers around to use up any available balance in underused categories. The spreadsheet Received January 23, 2001 doesn't show a single category going over original estimate while the draws from NorthStar show several going over, way over. Is she doctoring the books?
Now let's address the issue of the statement by Monica that she had been told by NorthStar that she had received the final draw. In fact, she state to us that she had expected us in the house much sooner based upon what she had been told by NorthStar. So, what did she tell her "inspector"? First, it was Thanksgiving Weekend. Barbara dated the draw November 22 (we show signing it on the 21st). Barbara Robbins sends the Draw Request to Grand West. After all, it is on stationery with the logo of Grand West in the corner, and Grand West has an inspection obligation as well. Let's say she faxed it to him the afternoon of the 21st, Tuesday. Kevin Marks may have faxed this to Monica on Wednesday, at the earliest. Best guess would be late morning, early afternoon. Did Monica get the fax Wednesday? Even if she did, how did Monica get her "inspector" to the site for an inspection on Thanksgiving Weekend? Or the Monday following? Our house is in the middle of Park County, 75 miles from Colorado Springs. Her invoiced is dated the Tuesday following. We'll tell you how - no inspector and no inspection.
But, just for giggles, let's say the "inspector" did manage, on short notice on a major holiday weekend, to get to the site for an "inspection", What did she tell her "inspector"? This was the final draw. Wouldn't the "inspector" need to make an interior inspection of the house? Does the inspector have a key or did the "inspector" have to coordinate with NorthStar to make sure someone would be available to open the house? Shouldn't she instruction her "inspector" to make sure of certain basic needs for a new home like water, power, gas connection to make sure there's heat? None of which existed that weekend! A simple twist of the water faucet would have told the "inspector" that. What about the piles of trash inside the house? We have pictures of that (taken December 18). And county inspections? The inspection packet was outside and available for anyone who stopped to look. How could the house be ready for a final? The propane tank wasn't delivered under November 30th. Surely the "inspector" would have noticed there was no propane tank sitting in the yard? A week after the propane tank was delivered the power hookup was completed. Running water wasn't available until January. The gas connection didn't pass state inspection until February. So just what was the purpose of the "inspector" is not to provide an inspector's report of progress Is Monica lying or is her "inspector" inept, or perhaps, non-existent? Or, perhaps, neither of them really cared if the house was ready for a final? And, the General Contractor's Fee is a line item on the original cost list. Barbara Robbins did not included that on her "Final Draw". Monica didn't notice this?
What we also find interesting is Monica's practice of sending the owner an invoice that plainly states that no payment is due. Later, if it suits her, she claims the owner (debtor) is delinquent and therefore the loan is in default. Very convenient. She creates a situation that she can later exploit at her convenience.
You also reference the fact that so far as you can determine "from the correspondence" that you have reviewed, that we have not disputed that the work referenced in the draw requests was actually performed. What have you been reading? Documents supplied by Monica? She's withholding information again. First, we did not arrive in Colorado until Monday, November 20, 2000. Second, NorthStar refused to allow us access to the interior of the property, citing those phony insurance regulations that companies drag out whenever it suits them. It was December 8th or so when we finally got into the house. Third, when we signed the draw on November 21, we had no idea what had been done. We couldn't have known. Nor were we required by contract to know since both Grand West and Rocky Mountain had contractual obligations to confirm all work done before making any payments to NorthStar. We did begin to question the amounts on the draws, beginning with that draw. The more we questioned, the more evasive the answers became. Fourth, when it became obvious to us that NorthStar was lying and delaying, we contacted Monica. We were living in a motel room, all of our papers in boxes in storage. Thru telephone conversations, faces, and letters, we have been disputing the amounts, once we became aware the amounts were inconsistent and fraudulent. Our written correspondence with Monica began January 5, 2001. I've enclosed copies of our correspondence with Monica for your reading pleasures. There's four of them. Every one of them addresses our concerns about the amounts being billed and being paid. Seems she just forwarded them to NorthStar so they could be ignored by more than one party.
FYI ~ we researched the files in Teller County for information concerning residents who had used NorthStar. The information provided referenced only those who had financed their homes. We came up with some 19 names over a two-year period. Of these 19, 16 of them also did business with Rocky Mountain Construction Lending. It doesn't take much guessing to figure that they also had their loans brokered thru Grand West Financial. These three are the three mention on the web site. They are the Terrible Trio. NorthStar signs the victim to a construction contract. This loan is brokered thru Grand West. The construction loan goes out to Rocky Mountain. As long as the victim remains quiet and doesn't recognize what's happening everything is fine. If the victim realizes that the delays, the overruns, the additions are costing more money then expected, Grand West steps in to assure them that isn't the case. If that doesn't work, Grand West begins to make threats. If that doesn't work, Rocky Mountain steps to the plate and begins to threaten foreclosure because of delays and overruns (not the fault of the victim) and because the victim is delinquent on the building loan (not the fault of the victim). Rocky Mountain is too well entrenched with Grand West and NorthStar to claim any sort of innocence. While in the county records, we also noticed a fair number of other construction projects owned by NorthStar and financed thru Rocky Mountain. We did not find a single instance of a construction load in Teller County or Park County where Rocky Mountain's name did not come up combined with NorthStar Construction. Not one. It appears that anyone could argue that Rocky Mountain has an unprofessional relationship with NorthStar and a vested interest in supporting and protecting NorthStar's activities.
There is a Japanese saying that says something like: the first time something happens, it's just an occurrence; the second time, it's an accident; the third time, it's intentional. We have included on our site stories from a number of persons who have also fallen into the clutches of the Terrible Trio. The scenario related above has happened too many times to be an accident.
Your mention our item concerning Greg Abbot. As Greg Abbott advises, we have reported facts, facts, and nothing but facts. And the facts aren't pretty. The facts indicate that there is a criminal conspiracy between NorthStar, Grand West, and Rocky Mountain. The pending four-party lawsuit will establish that. Our suit is in the filing stages as well. Others will be coming. As we said in the beginning of the letter, your client hasn't told you the entire story. Take a real close look at the stories on the web site. All these people are lying? We think not. We're reporting facts and then drawing logical conclusions from them.
Also, we do not need to prove that we are telling the truth. You and your client must prove that we are lying. And you can't do that because we are not. And, for us to prevail, we do not have to show that specifics are true, only that the gist of what we say is true. Counselor, you have an impossible mission. Should you decide not to accept it, that would be a wise move. A frivolous lawsuit would leave you libel for damages as well as your client. Our web site plainly states our opinions as well as the stories of persons who feel they were cheated by NorthStar Construction, Grand West Financial, and Rocky Mountain Construction Lending. We do not have to fabricate stories, the people have related them willingly. Your client doesn't like what we've posted but your client did the dirty deeds attributed to her.
In this letter, we've posted a number of questions. These questions all relate to your client's failure to perform her fiduciary responsibility. Your threat to file "an action" against us doesn't scare us. We can't wait to get your clients "inspector" on the witness stand. We also claim there is a conspiracy. Karen is an accountant with a construction background. She would love the opportunity to go over Monica's books. Your client doesn't want to open all of her books and answer the questions we've posed. Your client doesn't want to face the people who will call her a liar and a cheat. Your client doesn't want to attempt to explain the paperwork mess we described to you. She will lose, and lose badly. And so will you. To pursue civil action when the evidence clearly indicates the guilt of your client s to leave yourself vulnerable.
One final note: the site counter. The site counter you describe is an animated gif or moving picture. It is a joke. The counter is moving at an impossible speed. No server could handle that many hits. If the site were getting that many hits, the Terrible Trio would be out of business. Did you really look at the web site before writing the letter? Take another look. A real long look.
Feel free to contact us at any time should you require further information or documentation that we might possess concerning the activities of your client and her accomplices.
Very truly yours.