Global News has obtained copies of court documents that show mayoral candidate Bill Smith was sued for more than $2.2 million by a Calgary company that hired him to represent them as lenders in a real estate project in the city’s Eagle Ridge neighbourhood.
The lawsuit was filed in Alberta Court of Queens Bench in November 2010 by Sterling Bridge Mortgage Company. The company’s website describes it as “a provider of project financing solutions for residential and commercial real estate developers and builders.”
However, Smith says the lawsuit was settled without going to court.
The statement of claim says Sterling agreed to provide Tom and Kelly Shumlich with a loan of $2.3 million for the redevelopment of their residential property at 190 Eagle Ridge Drive S.W. and hired Smith as legal representation.
Sterling alledges Smith failed to project the company’s interesst by neglecting to obtain a guarantee on the money loaned to the Shumichs and when Sterling repeatedly asked if there was a guarantee in place, Smith didn’t respond.
The court documents say because Sterling was unaware there was no guarantee in place, it continued to provide funding to the Shumlichs for the development.
Taken together, Sterling alledges these actions amount to a failure of Smith’s fiduciary responsibility and a “failure to exercise the care and skill to be a reasonably competent solicitor.”
With no guarantee in place, the Shumlichs refused to pay back the money they borrowed.
The case ended up in court with Sterling suing the Shumlichs to try to recover the money it lost on the unsecured mortgage.
Sterling lost the lawsuit, including the money it had loaned the Shumlichs and was ordered to pay their legal costs.
In an attempt to recover the money, Sterling sued Smith and his law firm.
Smith says a confidentiality agreement prevents him from discussing the terms of the settlement which he says was settled out of court less than four months after the statement of claim was filed .