Fair Oaks family sues two Dunmore brothers over development loans
Irwina and Harold Smith say they lent Roseville developers Jeremy and Sidney D. Dunmore $4.5 million after the brothers and their grandfather George, founder of Dunmore Homes, guaranteed the loans. Other family members also invested. The lawsuit contends that George Dunmore’s signature was forged and that family members were duped out of their money.
Two Fair Oaks investors and their children sued Roseville developers Jeremy and Sidney D. Dunmore on Monday, saying they were duped out of millions of dollars in part through forged documents.
The $9.5 million lawsuit by Harold J. Smith, 80, and his wife, Irwina Smith, 83, a retired substitute schoolteacher, represents the latest salvo against the Dunmore brothers, the third generation of a prominent area home-building family. The Smiths claim they lent millions to the Dunmores only after the developers’ grandfather George personally guaranteed they’d be repaid.
But the lawsuit contends George Dunmore’s signature was forged. The allegation mirrors charges made by the brothers’ grandmother, George’s widow Ruth Dunmore, in a series of lawsuits two years ago. At least some of those suits have been dropped.
The Smiths’ lawsuit, filed in Placer Superior Court, said the Dunmores accepted millions of dollars knowing that “Harold and Irwina Smith would not be getting their investments paid back.”
Reached by phone Monday, Jeremy Dunmore declined comment on the lawsuit. Asked if the Dunmore brothers’ three companies were still in business, he said, “For the record, we’re still in business.”
During the housing boom, the Smiths, who had previously earned millions of dollars on regional land investments, personally invested $4.5 million with the Dunmores for new development ventures in Sacramento, Yolo, Butte and Madera counties. The couple’s sons and a son-in-law invested $1.6 million more, according to the lawsuit. A family friend, the late George T. Peekema of Oregon, also invested $1.1 million. With interest, the suit seeks $9.5 million.
“I spent a year and a half trying to work it out,” Harold Smith said in an interview. “I decided I wasn’t getting anyplace.”
The Dunmore family’s legacy – built on the more than 22,000 homes constructed by Dunmore Homes of Granite Bay – has been stained by lawsuits and judgments. Dunmore Homes, founded by Jeremy and Sidney D. Dunmore’s grandfather and run by their father, went out of business in 2008 after the market collapsed.
The brothers had earlier formed their own development companies, separate from Dunmore Homes. Their companies, including Dunmore Communities, Dunmore Capital LLC and GSJ Co., ran into their own financial problems.
Among the brothers’ woes:
• In September, Dutch pension fund Stichting Pensioenfonds Zorg en Welzijn obtained a default judgment against the two after investing $15 million in Dunmore Capital. The pension fund, in a lawsuit filed in U.S. District Court in Delaware, said the brothers lied to the pension fund about their investing activities, which “provided enormous financial benefit to Sidney and Jeremy,” but not to the pension fund.
During an interview with The Bee in early 2008, when he and his brother were being inundated with lawsuits, Sidney Dunmore said the two men had secured a $100 million investment from a pension fund then known as PGGM. That fund has now become the Stichting fund. According to its lawsuit, it invested just under $15 million with the Dunmores.
• In December, Umpqua Bank and A. Teichert & Sons Inc. obtained a judgment totaling $2.8 million against the Dunmore brothers and their main company, GSJ Co. LLC, according to Sacramento Superior Court records.
The Smiths’ attorney, Paul Cass of Sacramento, said he was told Monday by a tenant that the Dunmores moved out of their rented Roseville offices “a couple of months ago.”
Sacramento attorney Gary Gorski, who previously represented the Dunmores, said Monday, “I’m not representing them right now, and I’m currently getting out of the cases I’m on the record on.”
The Smith lawsuit described scores of meetings between Harold Smith and Sidney D. Dunmore in 2007, 2008 and 2009 in which efforts to reclaim some of the millions invested with the brothers were repeatedly met with “stalling tactics.” In meetings described in the suit, Sidney D. Dunmore told Smith he would be paid, and that “he did not want a lawsuit and that he did not want the newspapers publishing a story or stories about Sidney Dunmore and his brother.”
In the lawsuit, the Smiths said they made most of the loans only because they were personally guaranteed by Sidney D. and Jeremy Dunmore and by their grandfather George, who was then alive. But they contend they discovered in the summer of 2008 that “many of those notes were forged with George P. Dunmore’s name on the notes.”
In three lawsuits filed in March 2008, George Dunmore’s widow, Ruth Dunmore, said her signature and her late husband’s signature were forged on documents co-signing loans for their grandsons. The lawsuits didn’t say who committed the alleged forgeries.
In two of the lawsuits, Ruth Dunmore accused the grandsons of badgering her into signing new loan guarantees after the earlier signatures were found to be forgeries. She said she was 84 at the time and was coping with her husband’s dementia. She said her grandsons conducted “an aggressive and unending campaign to … scare, pressure and manipulate” her.
At least two lawsuits, in Sacramento and San Francisco Superior Court, have been dropped. The status of the third lawsuit, in Placer County, could not be determined Monday.
