Anderson attorney: foreclosure plaintiff broke lending laws

An attorney for former Middle East hostage and one-time Ohio Senate candidate Terry Anderson in a property foreclosure action has countersued the developer plaintiff in the case, alleging that he broke state laws governing money lending and loan collection.

An attorney for former Middle East hostage and one-time Ohio Senate candidate Terry Anderson in a property foreclosure action has countersued the developer plaintiff in the case, alleging that he broke state laws governing money lending and loan collection.

In June, Athens developer James "Brent" Hayes filed a legal action against Anderson in Athens County Common Pleas Court, seeking to foreclose on a 230-acre horse ranch Anderson owns in Rome Township.

Hayes claimed that in May 2007 he loaned Anderson $150,000, which he allegedly failed to repay, and for which he had pledged the property as collateral. Hayes has demanded around $286,000 in damages.

A local bank later joined the action, seeking to attach some Athens businesses in which Anderson is a partner.

Anderson is represented by attorney Susan Gwinn, who has also had political dealings with him in her role as the chair of the Athens County Democratic Party. He ran in 2004 for the Ohio Senate seat held by Republican Joy Padgett, but lost.

More recently, Anderson supported Gwinn in her failed (and controversial) bid to unseat incumbent Democrat county Prosecutor C. David Warren in the last primary election, which she undertook while still retaining her seat as party chair.

In a counterclaim filed in the foreclosure case last week, Gwinn alleged that Hayes broke state law when he "engaged in the business of lending or collecting his own money," because he failed to register with the state as a lender.

The pertinent law, cited in the counterclaim, states that no person, on his own behalf, shall "engage in the business of lending or collecting the person's own or another person's money, credit or choses in actions for such loans."

("Choses in actions" is a legal term for rights to receive or recover a debt, or money, or damages for a breach of contract.)

The counter-claim also alleged that Hayes at one point began charging a 15 percent interest rate on Anderson's promissory note, and a $500 per day non-payment penalty.

Gwinn maintained that Ohio law mandates that non-payment penalties cannot exceed 5 percent of the loan amount, whereas the level Hayes charged, she claimed, "exceeds 100 percent."

The legally defined penalty for breaking this law, Gwinn wrote, "is that the lender can receive no interest or charges on that loan."

She went on to allege that Hayes has been offered money to pay off the loan, but has refused to accept it without the "additional charges that are not permitted under Ohio law."

According to the counterclaim, Anderson had a buyer in line to purchase part of the ranch property, for an amount that would have covered most of the loan amount with interest, and that Anderson stood ready to cover any shortfall. Because Hayes rejected this plan, the counterclaim alleged, the sale fell through.

Contacted Sunday, Hayes said he had not seen the counterclaim, and did not wish to comment without consulting his attorney.

"I really don't know anything about it," he said. "This is the first time I've heard about it."

As part of Hayes' foreclosure case, the Common Pleas Court has issued an order barring Anderson from harvesting trees on his property while the case is pending, to avoid reducing its value.

Because of this order, the counterclaim stated, Anderson has missed out on more than $50,000 in timber sales that he could have used to pay off his debt to Hayes.

Gwinn has asked Judge Michael Ward to permit Anderson to pay off the original loan amount minus penalties, release the first mortgage on the ranch, and award Anderson at least $25,000 in damages.

Anderson, a former U.S. Marine and journalist, was kidnapped in 1985 by the Hezbollah Shiite Muslim organization in Beirut, and spent a record six years and nine months in captivity.

After his release in December 1991, he sued in a U.S. court over his abduction, and according to published reports, collected about $26 million in damages from frozen bank assets of the Iranian government, which allegedly was supporting the Hezbollah.