Costly IRA lesson: ‘Experienced real estate investor’ loses twice in lawsuit against bank

A North Carolina Court of Appeals judge ruled against a Weaverville man claiming TruPoint Bank defrauded him when he tried to get money to purchase property in Washington, D.C.

The appeal ruling was 69-year-old David Russell Roberson’s second loss in a case the real estate professional has been fighting since 2019. It stems from his attempt in May of that year to get a a home equity line of credit, or HELOC from Virginia-headquartered TruPoint.

Roberson’s initial complaint was filed late March 2020 and claimed he had a verbal understanding with TruPoint leadership that he could get a $750,000 HELOC.

According to court documents, Roberson was self-employed in real estate management and had two rental homes in North Carolina, a commercial property in Alabama and $930,000 in liquid assets.

The real properties he owned were valued at $2,675,000.

At the center of the matter is Roberson’s decision to pull $670,000 from his individual retirement account to fund the D.C. property purchase. He did this knowing that, if he didn’t put the money back into the IRA within 60 days, it would be taxed.

According to the complaint, Roberson wanted the $750,000 “to give him an option for replacing the IRA withdrawal within the applicable grace period.” Roberson allegedly talked about this with TruPoint loan officer David Brown and “bank president” Bob Tuck, conversations that would become the case’s linchpin.

Tuck is currently listed on TruPoint’s website as one of its executive vice presidents and chief lending officers.

Roberson signed a rate lock-in and received HELOC disclosure documents, according to the complaint. The TruPoint loan was set to close on June 14, 2019. Simultaneously, the clock was ticking on Roberson’s 60-day, early July 2019 deadline to put the money back into the IRA before it was taxed.

In June, the complaint describes how things fell apart for Roberson.

According to the complaint, on June 8, 2019, “Trupoint and David Brown informed Roberson that he had applied for a residential loan on his primary residence, and not technically a HELOC, even though Roberson had made it clear to Brown and Trupoint that he wanted a HELOC.”

Days later, the bank said this “confusion” had been cleared up, according to the complaint.

But in a whiplash turn on June 13, a day before it was due, TruPoint canceled the loan closing.

A representative from the bank on June 17 allegedly offered Roberson a different $670,000 loan, the details of which were “onerous” to him.

He declined it, but the 60-day clock was still ticking.

Early July, the bank told Roberson the HELOC he’d initially applied for was not only incomplete, it was impossible because the bank didn’t offer HELOCs for more than $250,000.

Roberson wanted a loan three times that amount, and the complaint alleges he was led to believe he could get it.

Claiming the bank caused him to miss his deadline to put money back into his IRA and that he’d “incurred unnecessary income tax liability,” according to the complaint, Roberson sued.

The exact amount he was taxed for the withdrawn IRA funds wasn’t listed in court documents, but they did state it was more than $25,000.

Roberson filed his initial complaint on March, 26, 2020, in Buncombe County Superior Court.

TruPoint filed a counterclaim in June, asking for the case to be dismissed.

Roberson countered that with his own request for dismissal of TruPoint’s counterclaim.

But in November 2020, Buncombe Superior Court Judge Marvin P. Pope ruled Roberson “failed to plead facts sufficient to support any of his claims,” and dismissed his accusations against TruPoint, which included fraud, deceptive practices and negligent misrepresentation.

Much the same happened on Dec. 21 when N.C. Court of Appeals Judge John Tyson ruled in TruPoint’s favor as well.

Focusing on Roberson’s allegations that TruPoint representatives told him the HELOC he wanted was feasible, Tyson’s decision emphasized the importance of doing research before making financial decisions.

“The loan process was a professional business negotiation in which Defendant had no obligation to look out for Plaintiff’s interests, especially given that Plaintiff was an experienced real estate investor,” the Dec. 21 appeal ruling stated. “Plaintiff incorrectly presumes Defendant incurred a legal duty to ensure he understood the loan application that he signed.”

After rejecting Roberson’s allegations that TruPoint negligently misrepresented the situation, Tyson’s ruling pointed out Roberson was offered a way out of the situation in the form of the $670,000 loan offer, which he declined.

Additionally, since the loan was never closed, there wasn’t a “binding obligation” on which a complaint could be built, the ruling stated.

In asserting there wasn’t fraud in the case, the ruling gave special emphasis to Roberson’s knowledge of the real estate industry and the fact that he built his complaint around personal assurances.

“Plaintiff is an experienced real estate professional, who has bought, sold, owned, and financed several properties,” the ruling stated. “Plaintiff owned assets worth several millions of dollars. Plaintiff allegedly relied upon conversations with a lender, with whom he had no previous relationship to make a significant financial decision, before applying for a loan. Plaintiff could not conceivably place reasonable reliance upon a loan officer’s forecasts that his ‘loan would go through’ or that it would close by a certain date.”

Reached by phone Dec. 30, Roberson told the Citizen Times he did not want to comment on the case.