Free Motion for Summary Judgment - District Court of Arizona - Arizona

Case 2:O4—cv—OO384-ROS D0c:ument413e35 FiIed 12/ 18/2006 Page10f 2

, »NAv·¤.cAMT ~ L A .
( c 0 N s u L T x N cs _ _ _ _ _ _

V. Lost Opportunity Damages (Westwind, Riatta West and Kings Ranch)
One specific action related to a land acquisition by Greg Hancock directly contributed to an
additional darnage to Meritagel Sometime in the summer of 2001, Greg Hancock failed to
bring an opportunity to Meritage related to the purchase of land on property known as
Westwind. Westwind is an 807 acre property about three-quarters of a mile south of
Interstate 10 on the west side of Palo Verde Road. Instead, on or around july, 2001, this I
property was purchased by Olympic Properties, LLC ("Olympic") for $11,896 per acre.
Olympic was formed in February, 2001 by Greg Hancock and David Cornwall, its two .
y members. _ ‘
Shortly after Olympic purchased the Westwind property, it appears Greg Hancock was
advised that his interest in Olympic was not a passive investment. As a result, he
( relinquished interest in Olympic, including an option to increase his ownership to 60% for _
I ` $3,500, in exchange for an amount that was approximately equal to his initial investment
After Greg sold his interest in Olympic, Olympic was dissolved and a new entity, Cavalier
Properties, LLC, was formed to hold the Westwind property.
” It is my understanding that sometime in 2004, Meritage secured approximately 300 acres of
, the Westwind property through land options at a cost of $32,500 per acre. Meritage claims y
that Greg Hancock, as its President of the Hancock Communities business within Meritage,
should have acted in the company’ s best interest in bringing this land acquisition to it,
instead of acting on his own behalf. Assuming l\/Ieritage could have acquired the same ‘
number of Westwind acres as it now has secured for the same price Greg Hancock received
asppart of Olympic of $11,896 per acre, it would have saved over $6.2 million in land °
acquisition costs. (See Exhibit 4) Thus, the loss to Meritage related to this specific conduct
of Greg Hancom is $6.2 million. _ .
_ Meritage claims that Greg Hancock engaged in similar activities with regard to Riatta West ·
l and Kings Ranch land acquisitions. However, as of the date of this report, I have not ,
· received sufficient inforrnation related to these activities to quantify the financial impact to
.Ma¥ltag€. If I receive additional informationqrelated to these projecm, I may modify or ·
I i supplement my findings and opinion in this report, as I deem necessary. A
( - ` _ _ . c
_ c · · _, ,, ,¤‘ .EXH#£
s . . ' WN SS Q c
· · ragaage 2:O4—cv—OO384#ROS o¤_¤€se‘tit¤n‘s¤ss Filed 1 .· · ur ¤ .

Case 2:04-cv-00384-ROS

Document 413-35

Filed 12/18/2006

Page 1 of 2

Case 2:04-cv-00384-ROS

Document 413-35

Filed 12/18/2006

Page 2 of 2