For the week of June 18 - 24, 2003

Clash over Warm Springs contract heats up

Two new lawsuits could determine future of property

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By GREGORY FOLEY
Express Staff Writer

Two development groups vying for uncontested ownership of the Warm Springs Ranch property in Ketchum filed two new lawsuits against each other last week, each citing that the other violated the terms of a still-pending contract to buy the site for $12 million.

Express photos by Willy Cook
Groups of diners took advantage of a warm evening on Monday to dine on the outside deck of the Warm Springs Ranch Restaurant. Although the ownership of the Warm Springs Ranch property is being contested in court, Bob Dunn, owner of the business, said the facility remains open for dining, golf and various events. "We’re open. Come on in," he said.

The two lawsuits—which come after each of the parties filed separate suits against each other earlier this year—could decide the future ownership of the approximately 76-acre golf course and restaurant property.

Sun Valley Ventures, a limited liability company that in March acquired title to Warm Springs Ranch, on Wednesday, June 11, filed a civil complaint against George W. Tischer and his company, Warm Springs Ranch and Restaurant. The suit alleges that Tischer committed "fraud" and "materially breached" elements of a July 2002 contract to purchase the property from the rightful owners, in effect voiding any claim by Tischer to have a right to purchase the property.

The Sun Valley Ventures suit demands a declaration that that the contract issued to Tischer in July 2002 be declared "void," and seeks unspecified monetary damages.

One day later, on Thursday, June 12, attorneys for Warm Springs Ranch and Restaurant, on behalf of Tischer and his partner Steve Roth, filed a civil complaint against Sun Valley Ventures alleging that the company and its principal, Erwin D. Mieger, "breached their obligation" to the same contract. The Tischer group’s suit also demands an injunction to prevent any changes being made to the property, as well as a jury trial to resolve certain elements of the controversy.

Both lawsuits were filed in Idaho’s 5th District Court in Hailey.

Representatives of both groups this week said the lawsuits against them are unfounded.

"Their suit is totally frivolous and without merit," Tischer said Tuesday. "It’s just another nail in their coffin and a further desperate attempt to muddy the waters."

Henry Dean, local representative for Sun Valley Ventures, said Tuesday that Sun Valley Ventures would continue to move forward with its plans to retain ownership of and eventually develop the property. Of the suit filed by Warm Springs Ranch and Restaurant, Dean said: "As far as we’re concerned it has no merit, and we’re going to continue with the development of the property."

The two suits complicate an already complicated situation surrounding the disputed ownership of Warm Springs Ranch.

Central to the issue is a July 2002 contract between Tischer and the Simpson Family Limited Partnership, the former owners of the property.

The July 2002 agreement to purchase the property for $12 million required Tischer to issue a down-payment of $250,000 and agree to eventually put forth $2 million in cash and a promissory note for an additional $10 million to be paid over five years. The contract allowed Tischer until July 1, 2003, to close the deal.

However, Mieger and Sun Valley Ventures earlier this year negotiated to purchase the property—with any binding obligations to the July 2002 contract—for $12 million from the Simpson family. Sun Valley Ventures accepted title to the property on March 18.

Sun Valley Ventures then filed suit against Tischer and his company on April 11 in U.S. District Court in Boise, alleging that Tischer "committed fraud" and violated terms of a preexisting agreement with Mieger.

Then, Tischer’s company on April 15 filed a suit in California Superior Court alleging that Mieger and Sun Valley Ventures illegally interfered with the contract he had established with the Simpsons.

According to documents, Warm Springs Ranch and Restaurant, through its attorney Steve Hardesty, notified Sun Valley Ventures that on June 10 its principals wanted to close on Tischer’s long-standing contract to buy the property.

Hardesty on Thursday said he and other Warm Springs Ranch and Restaurant representatives on June 10 attended a meeting at Blaine County Title Co., fully prepared to issue $2 million in cash and a promissory note for $10 million to Sun Valley Ventures. "They did not show up … It was their failure to show up that led to (our) lawsuit," Hardesty said.

Dean on Tuesday said Sun Valley Ventures representatives did not show up because the terms of the contract have repeatedly been violated. "That contract has expired by it’s own terms," he said. "We told them ahead of time there would be no closing."

Hardesty said that Warm Springs Ranch and Restaurant—whose primary partners are Tischer and Roth—asked for injunctive relief in its June 12 suit to "keep the status quo" at the property until the ownership dispute is resolved.

A temporary restraining order has been granted in their favor, he noted.

He said his clients have not violated the disputed contract and "want to compel" Sun Valley Ventures to honor it.

Roth noted that he and Tischer have forged a partnership with Bob Dunn, the longtime manager of Warm Springs Ranch Restaurant and Golf Course and an owner of those businesses since 2000.

In a meeting Thursday with Hardesty and Roth, Dunn confirmed he has aligned himself with Tischer and Roth. "My employees and I look forward to working with Steve Roth to improve and make Warm Springs Restaurant and Golf Course better than ever," he said.

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