Three years later, CLE sold the property for $1.548 million. But with default interest and costs, the lender said the borrowers still owed close to $2.5 million. CLE sued again in 2021, seeking to recover the remaining amount—minus the value of the property at the time they took it back, not when they sold it.
That valuation turned out to be the heart of the legal battle.
At trial, CLE brought in appraiser Robert Vodinelic, who estimated the 2018 value at $1.31 million. He used the sales comparison approach, noting the building’s condition and a HUD restriction that capped potential rental income. The borrower’s expert, Donald Durrah, estimated the value at $2.03 million. But Durrah didn’t factor in the HUD restriction—he didn’t even know it existed.
The trial court sided with CLE, calling Durrah’s approach speculative. The court also cited Ohio Supreme Court precedent that requires HUD restrictions to be included when valuing property. Though the trial court originally misstated the property value as $1.03 million, it later corrected the figure to $1.31 million and entered a final judgment of $1,735,579.45 against the borrowers, plus interest.
On appeal, the borrowers tried to discredit CLE’s appraiser, arguing he hadn’t written the report himself or visited the property. But the appeals court found those issues weren’t properly raised at trial—and weren’t enough to reverse the outcome anyway.