BANK OF WASHINGTON,
Plaintiff,
v.
LAND CLEARANCE FOR
REDEVELOPMENT AUTHORITY
OF THE CITY OF ST. LOUIS and
LCRA HOLDINGS CORPORATION
Defendants.

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No. 18AB-CC00150

FIRST AMENDED PETITION
COMES NOW Plaintiff Bank of Washington and states as follows:
The Parties
1.

Plaintiff Bank of Washington (the “Bank”) is a Missouri banking

corporation in good standing.
2.

Defendant Land Clearance for Redevelopment Authority of the City of St.

Louis (“LCRA”) is a public body organized and existing under the laws of the State of Missouri.
3.

Defendant LCRA Holdings Corporation (“LCRAH”) is a Missouri not-

for-profit organization in good standing.
Venue
4.

Venue is proper in this Court pursuant to RSMo §508.010.4 because the

tortious conduct hereinafter alleged caused the Bank to release certain deeds of trust and to
relinquish lien rights in other collateral for substantially less than it would have otherwise,
therefore, the Bank was first injured by the fraudulent and negligent misrepresentations at its
principal place of business in Washington, Missouri.

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IN THE CIRCUIT COURT OF FRANKLIN COUNTY
STATE OF MISSOURI

 5.

The Bank was and is a lender to NSR in connection with its

redevelopment of roughly 1,500 acres in north St. Louis known as the Northside Redevelopment
Area. The Bank’s involvement began early on as NSR began assembling the ground necessary
to support the revitalization of this long-neglected area of the City of St. Louis (the “City”).
NSR’s redevelopment efforts were interrupted by the collapse of the real estate market, and then
by lawsuits challenging NSR’s redevelopment rights and the constitutionality of land assemblage
tax credit legislation designed to foster large-scale redevelopment efforts such as NSR’s.
6.

Nonetheless, NSR was able to use its assemblage of land to attract the

relocation of the National Geospatial-Intelligence Agency (“NGA”) to its redevelopment area.
The relocation of the NGA facility promises a $1.7 billion investment in north St. Louis. It is a
redevelopment project that will keep 3,100 high-skilled, high-wage jobs in the City, and which
will create thousands of new construction jobs and generate extraordinary growth opportunities
for the surrounding area.
7.

In 2015, the Bank and NSR began negotiating a series of related

agreements with representatives of LCRA and LCRAH. The agreements contemplated NSR’s
transfer of its land within the NGA site (the “NSR NGA Property”) and NSR’s assignment of
valuable economic activity taxes to support the NGA facility. The agreements also contemplated
the Bank’s release of its liens on the NSR NGA Property and consent to NSR’s transfer of other
collateral. During those negotiations, LCRA and LCRAH represented that they spoke on behalf
of the City of St. Louis.1 Also as part of those agreements, the City Parties agreed, among other
things, that they would not declare a default under NSR’s redevelopment agreement so long as

1

The Bank may sometimes hereinafter refer to (i) the City and (ii) the parties who executed the series of related
agreements as the “City Parties.”

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Introduction and Summary of Claims

 specified terms.
8.

The Bank and NSR honored all of their promises. The City Parties not

only did not honor their promises, but they have made public statements suggesting that they
never had any intention of doing so. The Bank considers the City Parties’ conduct to be
consistent with other efforts that the City Parties have made to impede NSR’s redevelopment
progress.
9.

But for the representations and contractual promises made by LCRA and

LCRAH, the Bank would not have released its lien rights on the NSR NGA Property or
consented to the transfer of other collateral. Those rights were extremely valuable and were a
critical component of the Bank’s collateral package securing its support of the redevelopment of
north St. Louis.
Background
A.

NSR’s Effort To Redevelop North St. Louis

10.

Over the last sixty years, north St. Louis has suffered from debilitating

blight compounded by indifference from the development community. The City Board of
Aldermen’s attorneys recently described the predicament to the Missouri Supreme Court as
follows:
The abandonment of the City has been felt acutely on its
north side, and in particular in the redevelopment area at
issue in this suit. As far back as 1947, the City’s
Comprehensive Plan reclassified much of this area as
“obsolete or blighted.” As the trial court noted, this area
today “suffers from declining population, higher than
average crime rates, low owner occupancy of residential
premises, and a fairly high percentage of dilapidated
housing….” Today, approximately 44% of the
redevelopment area is vacant or contains vacant structures,
and much of its infrastructure (sewers, utilities and roads) is
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NSR met certain deadlines and that they would enter into a new redevelopment agreement on

 Substitute Brief of Appellants The City of St. Louis, etc., submitted by Carmody MacDonald, PC
in Smith v. City of St. Louis, 395 S.W.3d 20 (Mo. 2013)(“Aldermen’s Brief”) at p. 5.
11.

NSR concluded that reversing the pervasive blight affecting north St.

Louis would require a project of extraordinary scale because piecemeal redevelopment efforts
had been ineffective.
12.

NSR developed a redevelopment strategy that sought to acquire property

within a 1,500 acre area of north St. Louis and combine it with the land already owned by the
City to create a project of scale. The partnership and support of the City was thus a critical
component from the outset – NSR was only willing to take the assemblage risk (and the Bank
was only willing to underwrite that risk) if the City would sell its scattered property to allow
NSR to assemble developable sites.
13.

In the early 2000s, NSR began assembling property and the Bank provided

financing for the assemblage.
14.

In 2008, NSR brought its redevelopment project to the City and began to

work with the City on the terms of a Redevelopment Agreement. By then, NSR had purchased
over 800 separate parcels (constituting almost 100 acres) in the proposed redevelopment area.
15.

In 2009, the City approved NSR’s redevelopment plan and, on December

14, 2009, the City and NSR entered into a redevelopment agreement (the “Original
Redevelopment Agreement”), which was subsequently amended and restated in 2014 (the “2014
Redevelopment Agreement”).
16.

The execution of the Original Redevelopment Agreement coincided with

the collapse of the local and national real estate market plunging the economy into a debilitating

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outdated, deteriorated and incapable of supporting the
needs of modern development.

 virtually every segment of the American economy.
17.

In 2009, local residents also filed a legal challenge to NSR’s

redevelopment rights that was not resolved until the Missouri Supreme Court ruled in NSR’s
favor in April 2013. Smith v. City of St. Louis, 395 S.W.3d 20 (Mo. 2013).
18.

In 2007, the Missouri legislature approved the Distressed Area Land

Assemblage Tax Credit Act, Sec. 99.1205 RSMo. (“DALATC”) designed to support the largescale assemblage of property impacted by urban decay, such as NSR’s redevelopment effort. In
2009, and again in 2011, citizens brought lawsuits challenging DALATC. Both of the lawsuits
were resolved in favor of NSR and DALATC. See Nelson v. Dept. of Econ. Devel., No. 1122CC0027 (St. Louis City Circuit Court); Manzara v. State, 343 S.W.3d 656 (Mo. 2011).
B.

NSR Delivers The NGA Facility To North St. Louis

19.

In late 2012, NSR began courting NGA to relocate its new western

headquarters facility to NSR’s redevelopment area. When NSR determined that NGA was
interested in relocating to north St. Louis, NSR involved the City in the NGA discussions,
primarily because it would be necessary to use the City’s power of eminent domain to acquire
the remaining properties within the proposed NGA site that NSR did not own.
20.

Ultimately, NGA selected north St. Louis for the relocation of its new

facility, at a 99 acre site at the northeast corner of the intersection of Jefferson and Cass
Avenues, within the NSR redevelopment area. NSR owned some 330 parcels (roughly 50 acres)
within the NGA site, making NSR the largest property owner within the NGA site.

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recession. The great recession impeded NSR’s redevelopment efforts just as it impacted

 The City Parties’ Fraud
1.

The Future Assurances Agreement
a.

21.

The negotiation of the Future Assurances Agreement

Instead of reacting to NSR’s delivery of NGA with support, the City

threatened to declare NSR in default under the 2014 Redevelopment Agreement, and used that
threat in an effort to (i) force a fire sale of NSR’s land within the proposed NGA site and (ii)
force NSR to hand over all of NSR’s interest in the Economic Activity Taxes which would be
generated by the NGA project (the “EATs”) – —a value well into eight figures—which
otherwise would have flowed into the TIF account available to reimburse NSR’s eligible
development costs.
22.

The Bank and NSR opposed those efforts to strip NSR of its

redevelopment rights, which prompted negotiations over a new set of documents governing
NSR’s redevelopment project and NSR and the Bank’s relationship with the City Parties.
23.

The Bank relinquished valuable lien rights in reliance upon the City

Parties’ fraudulent misrepresentations made in connection with the negotiation and execution of
the new agreements.
24.

On July 27, 2015 the City Parties delivered a draft term sheet to NSR and

the Bank setting forth terms acceptable for the purchase of NSR’s NGA property and for a
second amendment to the 2014 Redevelopment Agreement (the “Second Amended
Redevelopment Agreement”). The City Parties’ term sheet contemplated that NSR assign the
EATs and that the Bank release its liens on the NSR NGA Property.
25.

During the negotiations that followed, LCRA and LCRAH represented

that they had authority to negotiate on behalf of and bind all of the City Parties (i.e., the City,
LCRA and LCRAH, and related entities).
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C.

 The Bank reasonably relied upon these representations because, among

other things:

27.

(a)

LCRA and LCRAH affirmed that they represented all of the City
Parties and could and did speak on their behalf;

(b)

Ordinance 69977, adopted in 2015 by the Board of Aldermen of
the City, with respect to the NGA Site (and other property) found
the subject property blighted, adopted a redevelopment plan
proposed by LCRA for the subject property, and approved LCRA’s
acquisition of property within the NGA Site “through the exercise
of eminent domain or otherwise;”

(c)

In furtherance of Ordinance 69977, the City’s Board of Aldermen
subsequently adopted Resolution No. 112 and Resolution No.
142AA, specifically authorizing LCRA’s acquisition of certain
property within the NGA Site pursuant to eminent domain, both of
which Resolutions expressly recognize that “in order to meet the
National Geospatial-Intelligence Agency’s directive that property
be assembled and consolidated under common ownership as a
condition of its selection of a site for relocation [LCRA] has
undertaken the project of acquiring all land in the prospective
relocation site;”

(d)

On July 10, 2015, the City Board of Aldermen approved Ordinance
70074 authorizing the assembly of the NGA Site and the financing
required for the property acquisitions. Ordinance 70074
authorized actions by “the City, acting directly, through an
affiliated entity… or the LCRA….” and authorized the City and its
agents, “to take such further actions and execute such other
documents as may be necessary or desirable to carry out and
comply with the intent of this Ordinance;” and

(e)

The negotiated documents included express representations from
the LCRA and LCRAH regarding their authority to sign and
perform on behalf of the City Parties.

Following extensive negotiations, the parties entered into a series of inter-

dependent agreements on January 27, 2016, including:
(a)

A Term Sheet, executed by LCRA, LCRAH, LRA, the Planned
Industrial Expansion Authority of the City of St. Louis (“PIEA”),
the St. Louis Development Corporation (“SLDC”), NSR and the
Bank (a true and accurate copy thereof is attached hereto as
Exhibit 1);

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26.

 A Future Assurances Agreement, executed by NSR, the Bank,
LCRA and LCRAH (the “FAA”) (a true and accurate copy of the
FAA dated January 27, 2016, the Amendment to FAA dated
February 16, 2017 and the Second Amendment to FAA dated July
12, 2017 are attached hereto collectively as Exhibit 2);

(c)

A Purchase and Sale Agreement, executed by NSR, the Bank,
LCRA and LCRAH (the “PSA”) (a true and accurate copy thereof
is attached hereto as Exhibit 3);

(d)

An Escrow Agreement, executed by NSR, the Bank, LCRA,
LCRAH and U.S. Title Guaranty Company (the “Escrow
Agreement”) (a true and accurate copy thereof is attached hereto as
Exhibit 4);

(e)

A Second Amendment to Real Estate Acquisition Agreement,
executed by LCRA and NSR (a true and accurate copy thereof is
attached hereto as Exhibit 5);

(f)

A Second Amendment to Real Estate Acquisition Agreement,
executed by LRA and NSR (the “Second Amendment to Real
Estate Acquisition Agreement - LRA”) (a true and accurate copy
thereof is attached hereto as Exhibit 6); and

(g)

A First Amendment to Real Estate Acquisition Agreement,
executed by PIEA and NSR (the “First Amendment to Real Estate
Acquisition Agreement - PIEA”) (a true and accurate copy thereof
is attached hereto as Exhibit 7).

By letter dated January 25, 2016, Mayor Francis Slay acknowledged and

approved the substance of the final agreements, enclosing a copy of the Term Sheet as an exhibit
to his letter. A copy of the letter is attached as Exhibit 8.
29.

After the execution of the January 27, 2016 FAA, the City Parties asked

the Bank and NSR to amend it and agree to new terms to accommodate the City’s desire to
develop a multipurpose sports stadium on land located within NSR’s redevelopment area, which
resulted in the negotiation and execution of two amendments to the FAA, the last of which
occurred on July 12, 2017. See Exhibit 2.
b.
30.

The parties’ agreements under the FAA and PSA

NSR and the Bank agreed to the following:
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28.

(b)

 NSR agreed to assign the EATs to the City, an eight figure dollar
concession;

(b)

NSR agreed to “New Minimum Development Threshold
Requirements” for its redevelopment project, pursuant to which
NSR warranted that it would annually commence projects of
$5,000,000 or greater (subject to certain carryover credits from
prior years);

(c)

NSR agreed to sell NSR’s NGA Property to LCRAH; and

(d)

The Bank agreed to release its liens against the NSR NGA
Property.

The City Parties agreed to the following:
(a)

To “in good faith negotiate the terms of an amendment and
restatement of the [2014] Redevelopment Agreement” - a task
much simplified because the FAA sets forth in extensive detail (71/2 pages) the agreed material terms of the Second Amended
Redevelopment Agreement;

(b)

To “cooperate diligently and in good faith to pursue and obtain all
necessary aldermanic and other approvals required” for the Second
Amended Redevelopment Agreement;

(c)

So long as NSR complied with the New Minimum Development
Threshold Requirements and deadlines” under the FAA, the City
Parties agreed that they would not claim a default under the 2014
Redevelopment Agreement. This agreement was particularly
important to both the Bank and NSR because it meant that the City
Parties could not claim any default under any of the negotiated
documents so long as NSR met the new thresholds (although the
City Parties’ express promise has not stopped them from doing so);

(d)

To acquire certain property owned by the state highway
department (the “MHTC Excess Property”) and to offer the
property for sale or lease to NSR;

(e)

To cooperate with NSR toward the development of projects in the
vicinity of the NGA Site;

(f)

“If the NGA selects the NGA Site, [to] cause the timely
completion of improvements to Jefferson Ave. (from Highway 40
to Natural Bridge) and Cass Ave. (from Tucker Blvd. to Grand
Blvd.), substantially consistent with the May 2013 summaries
prepared by Cole;” and

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31.

(a)

 32.

“If the NGA Announcement selects the NGA Site, LCRA and the
Developer will work together to qualify Redevelopment Projects
(as defined in the [2014] Redevelopment Agreement) as Offsite
NGA Project Costs (as defined in the Financing Agreement
(including any amendments and supplements thereto) entered into
by and among the State of Missouri, the City and the LCRA (the
“NGA Financing Agreement”).”

In the FAA, the LCRA and LCRAH represented and warranted: “The

City Related Parties have full power to enter into and perform their respective obligations under
this Agreement” and that the FAA was “enforceable in accordance with its terms.” In the PSA,
the LCRA and LCRAH represented and warranted that they each had “been fully authorized by
all requisite actions” and both had “full power to enter into and perform this Agreement in
accordance with its terms.”
2.
33.

The Bank and NSR’s Performance
Under the New Agreements

The Bank and NSR fully performed all of their obligations under the FAA

and PSA and the Bank has complied with all conditions precedent to the filing of this lawsuit.
34.

35.

In particular, but not by way of limitation:
(a)

NSR conveyed its NGA property and the Bank released its “liens,
claims and encumbrances against the [NSR] NGA Property”;

(b)

In December 2017, NSR commenced construction of the Greenleaf
Market project, having project costs in excess of $20 million
(satisfying the New Minimum Development Threshold
Requirements with respect to 2018, 2019 and 2020);

(c)

NSR has now closed on the sale of the first five of 100 residential
lots under contract to a residential homebuilder; and

(d)

NSR provided the City Parties with a draft Second Amended
Redevelopment Agreement, consistent with the terms specified
under the FAA.

3.

The City Parties’ Breach of the New Agreements

The City Parties failed to honor their promises made during the

negotiation and execution of the FAA and PSA in at least the following respects:
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(g)

 The City Parties have publicly taken the position that the City is
not bound by its agreements under the FAA, despite the City
Parties’ representations to the contrary during and since the FAA
negotiations, the explicit obligations undertaken by the City under
the FAA, and the City’s acceptance of benefits under the FAA. In
fact, in their “default letters” under the PIEA and LRA acquisition
agreements, the City Parties act as if they never executed the new
agreements, referring only to earlier provisions superseded by the
January 2016 amendments;

(b)

The City Parties attempted to re-negotiate material terms of the
Second Amended Redevelopment Agreement previously agreed to
and mandated by the FAA;

(c)

The City Parties have therefore and thereby prevented the
submission of the Second Amended Redevelopment Agreement to
the Board of Aldermen for approval;

(d)

Contrary to the City Parties’ representations that they intended to
and did bind the City, the City has declared NSR to be in default
under the 2014 Redevelopment Agreement despite NSR’s
satisfaction of the New Minimum Development Threshold
Requirements imposed on and assumed by NSR under the FAA;

(e)

The City Parties have failed to undertake good faith efforts to lease
or acquire the MHTC Excess Property, and to offer the same for
lease or purchase to NSR;

(f)

The City Parties have failed to cooperate—and, in fact, have
actively worked to undermine—NSR’s development of projects in
the vicinity of the NGA Site;

(g)

LCRA has stated that it will not construct improvements to
Jefferson Ave. (from Highway 40 to Natural Bridge) and Cass
Ave. (from Tucker Blvd. to Grand Blvd.) in a manner consistent
with the requirements of the FAA; and

(h)

LCRA has not cooperated with NSR to qualify Redevelopment
Projects (as defined in the 2014 Redevelopment Agreement) as
Offsite NGA Project Costs (as defined in the NGA Financing
Agreement);

(i)

LRA has declared NSR to be in default under the Real Estate
Acquisition Agreement – LRA, because, among other reasons,
NSR has failed to meet development deadlines inconsistent with
the new minimum thresholds established under the FAA. That
declaration was made in bad faith. LRA does not mention its
execution of the Second Amendment to Real Estate Acquisition
Agreement – LRA, LRA’s express agreement to the new
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(a)

 (j)

36.

PIEA has declared NSR to be in default under the Real Estate
Acquisition Agreement – PIEA, because, among other reasons,
NSR has failed to meet development deadlines inconsistent with
the new minimum thresholds established under the FAA . That
declaration was made in bad faith. PIEA does not mention its
execution of the First Amendment to Real Estate Acquisition
Agreement - PIEA, PIEA’s express agreement to the new
development thresholds or NSR’s satisfaction of the new
development thresholds.

Upon information and belief, the City Parties have disavowed their

promises because they intended, and intend, to transfer NSR’s redevelopment rights to
developers with “favored” status at the City: “It is time to allow other developers a fair chance
to improve our neighborhoods….” 6/12/18 Letter from City Counselor Julian Bush. The Bank
does not consider it “fair” to allow other developers to capitalize on NSR and the Bank’s long
term investment, particularly when these other developers have ignored north St. Louis until the
NGA selection.
37.

The City Parties’ rejection of the FAA, the First Amendment to Real

Estate Acquisition Agreement – PIEA and the Second Amendment to Real Estate Acquisition
Agreement – LRA constitutes a complete failure of consideration under those agreements.
4.
38.

The City Parties’ Efforts to Undermine
NSR’s Redevelopment of north St. Louis

The City Parties’ current position is consistent with their recent efforts to

undermine NSR’s ability to successfully pursue redevelopment projects in north St. Louis.
39.

For example, the head of the City’s development agency recently

suggested that the City Parties were stringing the Bank and NSR along until the City Parties got
NSR’s property it needed for NGA: “Williams said the city did not act against McKee sooner
for various reasons, including because it needed 330 of his parcels within the site that will house

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development thresholds or NSR’s satisfaction of the new
development thresholds; and

 was competing against a site in St. Clair County, Illinois.” 6/12/18 St. Louis Business Journal.
40.

Despite their promises to cooperate with NSR toward the development of

projects in the vicinity of the NGA Site, the City Parties have actively interfered with NSR’s
efforts to revitalize north St. Louis, including:
(a)

LCRA and/or the City appears to have intervened to influence the
State’s consideration of NSR’s request for tax credits under the
Brownfield Remediation Program, administered by the Missouri
Department of Economic Development (“DED”), needed by NSR
to remediate the Pruitt Igoe site, which has interfered with NSR’s
ability to develop a hospital on the site. The abandoned nearly 34
acre Pruitt Igoe site sits just south of the NGA site. When NSR’s
affiliate applied for tax credits, DED demanded that NSR agree
that LCRA could purchase Pruitt Igoe for one dollar if NSR
missed certain development deadlines. This forfeiture provision is,
to the Bank’s best knowledge, unprecedented. First, assuming that
the condition was meant to remedy NSR’s failure to implement the
remediation, the issuing entity, the State, would not receive any
benefit from the transfer of Pruitt Igoe—the benefit would flow
instead to a third party, LCRA. Second, Pruitt Igoe is worth many
multiples of the Brownfield credits sought. Thus, the forfeiture
would be an enormous windfall, even assuming the State would
somehow benefit from it. Upon information and belief, DED was
aware of the City’s 2016 agreements and promises, was aware of
the Bank’s mortgage on the Pruitt Igoe site and knew or should
have known that its actions threatened to impair the Bank’s
collateral;

(b)

On January 5, 2018, Alderman Brandon Bosley introduced Board
Bill 219, drafted by the City’s Planning and Urban Design Agency,
which provided for creation of “The NGA Protection and
Enhancement Zone Special Use District”, a new zoning district
covering over 800 acres around the NGA Western Headquarters
site, including Pruitt Igoe, the balance of NSR’s redevelopment
area and a wide area of north St. Louis. No one contacted NSR or
the Bank before introducing the bill, even though it would impact
the entirety of NSR’s development area. The City has taken the
position that NGA requested all of the conditions, but NGA has
denied doing so; and

(c)

One of NSR’s long-standing development objectives has been the
construction of a 15,000 square foot, 3 bed hospital on the
southwest corner of the abandoned Pruitt-Igoe site, which will
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the National Geospatial-Intelligence Agency's new $945 million western headquarters. The city

 41.

The City Parties’ actions have been undertaken with malice and with a

conscious disregard for the known rights of the Bank such that the Bank is entitled to an award
of punitive damages.
Count I
Fraud
42.

The Bank re-alleges the allegations of paragraphs 1-41.

43.

During the negotiations associated with the FAA and related agreements,

and in the agreements themselves, LCRA and LCRAH represented (i) that they were authorized
to negotiate and agree to the promises and conditions contained in the agreements on behalf of
all themselves and the City , (ii) that all the City Parties intended to and would abide by the
promises and conditions, including the promise that LCRA and LCRAH could and did bind the
City, (iii) that the City, LCRA and LCRAH would not declare a default under their respective
agreements so long as NSR met the New Minimum Development Threshold Requirements,
(iv) that all the City Parties would support NSR’s redevelopment of north St. Louis, including
but not limited to, in the ways promised in the City Parties’ agreements, and (v) that the City
would agree to a draft of a Second Amended Redevelopment Agreement consistent with the
FAA and would present that agreement to the City’s Board of Aldermen.
44.

LCRA and LCRAH representations were false, false when made and

known to be false when made.
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provide around the clock emergency room and medical services
sorely needed by residents of north St. Louis. By March 2018,
after numerous public hearings, NSR had satisfied all conditions to
begin work on the hospital except for a building permit, typically a
formality. At the final hearing for the building permit, the City
sent an SLDC employee to object to the requested permit based on
“lack of community input,” the “suddenness” of the permit request
and the lack of authority of elected Alderpersons to appropriately
represent the views of their community.

 LCRA and LCRAH (for themselves and on behalf of the City Parties)

made the representations without the present intention to perform them.
46.

The Bank reasonably relied on LCRA and LCRAH’s representations.

47.

LCRA and LCRAH’ representations were material to the Bank and the

Bank would not have entered into the FAA and related agreements absent LCRA and LCRAH’s
representations and would not have released its liens on the NSR NGA Property or agreed to
NSR’s transfer of the EATs, but for the LCRA and LCRAH’s representations.
48.

LCRA and LCRAH knew that the Bank would rely upon their fraudulent

representations and intended that the Bank do so.
49.

As a result of the Bank’s reliance upon LCRA and LCRAH’s

misrepresentations, the Bank was damaged in that the Bank released its liens on the NSR NGA
Property and agreed to NSR’s transfer of the EATs, which removed the EATs from the Bank’s
collateral package.
WHEREFORE, the Bank asks the Court to enter Judgment in its favor and against
LCRA and LCRAH for its actual damages in excess of $25,000, plus punitive damages, costs
and interest and such other relief as the Court deems proper.
Count II
Negligent Misrepresentation
50.

The Bank re-alleges the allegations of paragraphs 1-49.

51.

LCRA and LCRAH made the representations set forth in paragraph 44 in

the course of their business.
52.

Because of LCRA and LCRAH’s failure to exercise reasonable care, the

representations were false.

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45.

 LCRA and LCRAH made the false representations for the guidance of the

Bank and NSR during the negotiations of the FAA and related agreements.
54.

The Bank justifiably relied on the false representations as aforesaid.

55.

As a result of the Bank’s reliance, the Bank was damaged.

WHEREFORE, the Bank asks the Court to enter Judgment in its favor and against
LCRA and LCRAH for its actual damages in excess of $25,000, plus punitive damages, costs
and interest and such other relief as the Court deems proper.
Count III
Unjust Enrichment
56.

The Bank re-alleges the allegations of paragraphs 1-55.

57.

By its release of its lien rights against the NSR NGA Property and its

consent to NSR’s transfer of the EATs at the request and insistence of LCRA and LCRAH, the
Bank conferred a benefit upon LCRA and LCRAH. Under these circumstances, LCRA and
LCRAH’s retention of the benefit would be unjust.
WHEREFORE, the Bank asks the Court to enter Judgment in its favor and against
LCRA and LCRAH for its actual damages in excess of $25,000, plus costs and interest and such
other relief as the Court deems proper.
Count IV (Alternative)
Equitable Claim for Rescission—Fraud,
Negligent Misrepresentation, Failure of Consideration
58.

The Bank re-alleges the allegations of paragraphs 1-57.

59.

The Bank hereby offers to tender the return of all consideration received

by the Bank at the closing held pursuant to the Escrow Agreement in the event that the Court
orders the rescission of the FAA and PSA as requested.
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53.

 By reason of LCRA and LCRAH’s fraud and negligent misrepresentation,

and because of a failure of consideration under the FAA, the Bank is entitled to rescission of the
conditions, promises and provisions between the Bank and LCRA and LCRAH, including the
reinstatement of the Bank’s liens.
WHEREFORE, the Bank requests that the Court enter Judgment severing and
rescinding the provisions of the FAA and PSA applicable to the Bank, restoring the Bank’s lien
rights on the NSR NGA Property, restoring the Bank’s security interest in the EATs transferred
by NSR, awarding the Bank its fees, costs and such other relief as the Court deems proper.
Count V (Alternative)
Equitable Claim for Rescission—Mutual Mistake
61.

The Bank re-alleges the allegations of paragraphs 1-60.

62.

The parties were operating under a mutual mistake of fact in connection

with the negotiation and execution of the FAA and related agreements—namely, LCRA and
LCRAH mistakenly represented that they intended to, could and did bind the City to the
promises under the FAA and NSR, and the Bank mistakenly believed and relied upon the fact
that LCRA and LCRAH intended to, could and did bind the City to the promises under the FAA.
63.

In the event that the Court determines that LCRA and LCRAH could not

act for and bind the City to the promises under the FAA, which the Bank denies, then the parties
were operating under a mutual mistake of a material fact when they negotiated and executed the
FAA and related documents.
64.

By reason of the parties’ mutual mistake of fact, the Bank is entitled to

rescission of the conditions, promises and provisions between the Bank and LCRA and LCRAH,
including the reinstatement of the Bank’s liens.

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60.

 rescinding the provisions of the FAA and PSA applicable to the Bank, restoring the Bank’s lien
rights on the NSR NGA Property transferred by NSR, restoring the Bank’s security interest in
the EATs transferred by NSR, awarding the Bank its fees, costs and such other relief as the Court
deems proper.

STONE, LEYTON & GERSHMAN,
A PROFESSIONAL CORPORATION

By

/s/Paul J. Puricelli
Paul J. Puricelli
#32801
7733 Forsyth Boulevard, Suite 500
St. Louis, Missouri 63105
(314) 721-7011 (telephone)
(314) 721-8660 (telecopy)
pjp@stoneleyton.com

ECKELKAMP KUENZEL, LLP

By:

/s/Steven P. Kuenzel
Steven P. Kuenzel
#25658
P.O.Box 228
200 West Main Street
Washington, MO 63090
Telephone 636/239-7861
steve@eckelkampkuenzel.com

Attorneys for Plaintiff

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WHEREFORE, the Bank requests that the Court enter Judgment severing and