Bank Seeks $211,000 Plus Damages : Christian Farmers Market Faces Fraud Suit
Dana Niguel Bank has sued Christian Farmers Market for more than $211,000 plus punitive damages, alleging that the upscale grocery chain has defrauded the institution and defaulted on a loan.
The lawsuit gives further indication of financial problems for Christian Farmers Market. Over the weekend of May 27, the chain abruptly closed the doors of its open-air grocery and food court at MainPlace/Santa Ana mall.
Christian Farmers Markets still operates two stores, in Laguna Hills and San Juan Capistrano. The chain earlier had two other stores, in Diamond Bar and Fullerton, according to the lawsuit.
The owners and founders of the Orange County grocery chain, Michael and Susan Christian, could not be reached for comment. Their attorney also could not be reached.
According to the lawsuit filed April 25 in Superior Court in Santa Ana, the Christians borrowed $290,000 from Dana Niguel Bank in May, 1987. The loan “was to repurchase all of the business assets” of the Christian Farmers Market in Diamond Bar, which had been sold the year before, according to the lawsuit.
To secure the loan, the Christians gave the bank a security interest in the accounts, fixtures, furniture and inventory of the Diamond Bar store.
Within 15 months, by August, 1988, the Christians--without asking the bank’s consent--had transferred their collateral in the Diamond Bar store to their landlord in exchange for ending their 15-year lease, the lawsuit states.
The bank agreed to substitute the collateral at the Diamond Bar store for the collateral at the Christian Farmers Market in Fullerton.
The Christians later “abandoned the Fullerton store and turned over the key to the store to the landlord,” the lawsuit states.
The Christians have not made payments on the bank’s loan since Feb. 1, the action contends. The bank wants to immediately collect more than $211,415 plus interest and punitive damages.
In addition to seeking repayment of the loan, the bank has sued the couple for fraud. The bank contends that the couple “had no intention of repaying the loan” or giving Dana Niguel Bank a security interest in the collateral of the Diamond Bar store.
Bank officers declined comment on the suit. The bank’s lawyers could not be reached for comment.
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