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Press Room
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Three Wise Women
Paradise family wins lawsuit against Fort Worth bank
By UMUT NEWBURY
Wise County Messenger
Fraud, conspiracy, deceptive and misleading acts, knowingly engaging in conduct that produces damages. Those were the exact words and phrases a 271st judicial district court jury used last week to define the acts of a bank, a banker and a contractor while dealing with the loan account of three Wise County women, Ruth Ann and Erika Taylor and Ruth Narramore.
A six-woman and six-man jury found that Citizens National Bank of Fort Worth, one of its former vice presidents, Don Lawson and Bed & Bath Inn of Dallas committed fraud against Narramore and the Taylors and awarded them $1.4 million in damages. The three women, all of Paradise, were partners in Allen Rae Investments, Inc., a company they formed in 1997 with an initial investment of $200,000 to start a motel business in Decatur. The thought of starting a business with her mother and grandmother, Erika Taylor said, "was exciting.""We wanted to be the three wise women," she said.
For Ruth Ann Taylor, this was going to be "a family owned business that we could leave to the children and grandchildren." "We looked around to see what Decatur could support and decided a motel would be the best," she said.They chose to go with Motel 6, Ruth Ann Taylor said, "because of the name recognition."
The three women started taking classes in Fort Worth on how to start a small business.
"The local banks in Wise County told us they couldn't handle a small business loan that large," Ruth Ann Taylor said. "We saw the brochures on Citizens National Bank at those classes and thought we could go to them for a loan."
In December 1997, Ruth Ann Taylor approached Citizens National Bank about a Motel 6 loan and spoke with Lawson. "Initially, we trusted them," she said. "They were very nice."
Yet Citizens National Bank never approved a loan for Motel 6. Instead, Lawson met with Taylor to recommend another company, Bed & Bath Inn of Dallas. He told her, "if you go with bed and bath we'll give you a loan." "I felt disappointed about the switch, because I felt we had enough money to go with Motel 6," Taylor said, "but how can you argue with a person who says we'll give you the loan if you do this?"
The Taylors and Narramore paid the franchise fee to Bed & Bath Inn and 10 days later Citizens National Bank approved their loan for the motel project in Decatur. The bank proceeded to advance Bed & Bath the majority of the loan up front with no work and no material furnished on the project.
"For nine months they worked off and on," Taylor said. "They walked off the construction site several times."
Being members of a small community, she said everybody knew they were in charge of the project, including the subcontractors. "The subcontractors were not getting paid," Narramore said. "They kept coming to my door and asking to be paid." At one point the project site, located on U.S. 81/287 in Decatur, was vandalized."I called the police about the vandalism," Narramore said. "Even they acted like 'this wouldn't happen if you paid your bills.'"
For several months, Taylor said, they tried to keep the project going and told workers that they were supposed to be paid by Bed & Bath Inn, who took the advance from the bank. They hired Fort Worth lawyers to keep the project moving, but when those attempts failed, the lawyers from Fort Worth suggested "we get local lawyers." Then the construction came to halt. "We realized they (the bank) just wanted us to go away," Narramore said. "We told them we'd go away if they reimbursed us."
The three women approached Decatur attorney Carol Ann Carson in 1999 and asked for help.
"We felt that we were being cheated," Taylor said.
In July 2000, Citizens National Bank foreclosed on 300 shares of Allen Rae Investments stock and then foreclosed on the real estate pledged as collateral. "We tried to get another loan to stop the foreclosure, but our credit was ruined," she said. Taylor said when they first formed Allen Rae Investments, she, her mother and daughter joined several local civic groups to be active in the community as businesswomen.
"After this whole thing happened, we got embarrassed to go out to chamber of commerce meetings," she said. "Everybody thought we were deadbeats. They didn't know it was the bank and the contractors that didn't come through on the project."
During that time, Taylor said, even her husband Larry, who was not a part of the company with the women, started seeking treatment for stress-related illnesses.
"This whole thing stressed him out severely," she said. "They kept telling him that he needed to give a deposition for the foreclosure."
Larry Taylor died from a heart attack at age 53. "We held together as a family and kept trying to get this brought to light," Taylor said. Carson and her partner at the time, Kevin Clark, joined with attorneys Michael Simpson and Derrick Boyd and started researching the case for Allen Rae Investments. What they found, Narramore said, "proved we weren't crazy."
The attorneys, through several subpoenas to the bank and Lawson, found evidence which showed suspicious activity between Citizens National Bank and Bed & Bath Inn. Boyd said the representatives of Bed & Bath made a formal presentation to various individuals at Citizens National Bank shortly before the Paradise women applied for a loan with them in 1997.
A later memo from Lawson to Bed & Bath Inn said, "We could be on the verge of losing a deal we switched from Motel 6 to you because of the delay. ""Once we saw the documents we knew we had a good case," Simpson said. "Most jurors don't get to see internal documents like these." "The bank had a consultant who said 'don't do it (this project with Bed & Bath),'" Boyd said. "They kept this from our clients and went ahead with the project." The consultant was FAS Construction Management, based in San Antonio, which sent the bank an initial project review and wrote, "this is a bad deal and that payment terms should be modified before closing." Citizens National Bank, however, told the Taylors and Narramore "there is nothing to worry about. This is a good deal." "This was the performance bond sent to the bank about the contractor. It would have protected the ladies," Boyd said. The bank, Clark said, "put its interest in front of the borrowers."
Jacqueline Ann Baird, one of the 12 jurors, said it was a "really cut and dried case with the evidence."
"If you paid attention to all the evidence, you knew it was obvious who was at fault," Baird said. "Everybody on the jury paid good attention." Citizens National Bank had countersued Narramore and Taylors for deficiency on their loan, but the jury excused the women and awarded them a total of $1.4 million in damages. One third of the that award will go to pay the four attorneys' fees. The $1.4 million award is "very nice," Ruth Ann Taylor said, but is not the most important aspect of this lawsuit.
"For me, money is money, but your name lasts a long time," she said. "50 years after your death people say things like 'Do you remember the women who had that motel thing ...' I wanted to clear my name."
The loss from the project falling through, Taylor said, can never be made up. "This was their retirement plan, essentially an accumulation of their life savings," Boyd said. "This was a family dream. They were onto a good idea and they got derailed."Bruce McGee, Lawson's attorney, says there are parts of the jury's decision he does not agree with. "I don't like to second-guess jury decisions, but I think Bed & Bath carried the majority of the responsibility in this case," he said.
McGee said the entire chain of events "is unfortunate." "Everybody involved in this made mistakes and has responsibility, but the party that caused the most damage is the Bed & Bath people," he said.
The bank's attorneys could not be reached for comment.Narramore and the Taylors say they feel grateful to their attorneys and to the jury. "I'm glad it is over, it's been a long time," Narramore said. "It's good to have things come to light." Taylor said she wished they could have used a local bank for their project.
"The moral of this story is: be careful who you trust with your money and your reputation," she said.
Still, the oldest partner in the group, Narramore, keeps her optimism. "Whatever happens, don't give up your dreams whether you are a farmer or a small businessman," she said. "America is the land of opportunity."
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