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Breidenthal: one suit down, another starts

Former Jackson County Commissioner Doug Breidenthal settled one lawsuit against his marijuana business partners this week only to get hit with a new suit Friday alleging he hasn't made loan payments on his house since Feb. 1, 2015.

The Feb. 23 lawsuit over Breidenthal's business, American Cannabis Co., was settled by a confidential agreement, and all claims have been dismissed, according to an Aug. 17 email to the Mail Tribune from John Howry, Breidenthal's Medford attorney.

Howry didn't provide any details of the settlement. The suit alleged Breidenthal misappropriated funds to start the business, located at 2131 W. Main St.

Meanwhile, E-Trade Bank filed a $563,216.84 suit Friday in Jackson County Circuit Court against Breidenthal and his wife, Melanie, alleging they failed to make payments on their house on Pinnacle Drive in east Medford. The amount asked for by the bank includes interest and attorney fees.

The suit stems from a $500,000 adjustable-rate loan the Breidenthals took out Jan. 27, 2005, from Quicken Loans Inc.

Neither Breidenthal nor his attorney could be reached for comment Friday. 

A frequent critic of marijuana activities as a county commissioner, Breidenthal, who was a commissioner until the end of last year and earned $100,318 annually, tried to open American Cannabis in February when foreclosure proceedings had already started on his house.

But Greg Allen and two other elderly investors in the store filed a lawsuit in Jackson County Circuit Court against Breidenthal claiming at least $529,000 in damages.

Breidenthal eventually opened the cannabis store in March, operating under the corporate name Marigold Enterprises LLC.

Allen and his attorney, Chris Hearn of Ashland, said they could not comment because of strict confidentiality requirements in the settlement agreement.

Lawrence and Mary Nelson of Arizona alleged Breidenthal misappropriated $150,000 that they invested in the marijuana business. The money was received through another Breidenthal business called Capital Pacific Advisors.

According to the Thursday email from Howry, who is with Frohnmayer, Deatherage, Jamieson, Moore, Armosino & McGovern P.C., Breidenthal is the sole member and owner of Marigold Enterprises and Capital Pacific Advisors.

When Breidenthal's legal dispute with Allen and the Nelsons erupted in February, his house was scheduled to be auctioned June 8, according to ListSource.com, which compiles foreclosure notices. At the time, the Breidenthals were in default on their payments by $84,534.09.

According to the new suit, Citibank Federal Savings Bank also has a lien on the Breidenthal property from a separate $151,000 loan issued Sept. 7, 2008. E-Trade claims it has first right to any proceeds from Breidenthal before Citibank.

The unpaid balance on the original $500,000 loan is $499,873.43, according to the E-Trade suit, filed by the Portland firm of Aldridge Pite LLP. The E-Trade lawsuit provided a letter to the court from Bayview Loan Services dated May 18, 2015, claiming the Breidenthals were in default at the time by $5,216.13.

E-Trade wants the court to grant it permission to sell the Pinnacle house to collect the original balance plus interest and attorney fees.

Zillow, a popular real estate website, estimates the current value of the two-story house, built in 2003, at $477,184.

The settlement and the new lawsuit are part of a series of legal problems that have confronted Breidenthal over the past two years.

The Oregon Government Ethics Commission is still investigating a special campaign account Breidenthal set up through the Association of Oregon Counties. The Oregon Department of Justice conducted a yearlong investigation into the campaign account but determined there was no criminal wrongdoing.

The Ethics Commission is also investigating videos that showed Breidenthal allegedly taking cash payments for marijuana consulting while still a county commissioner.

Ethics Commission investigator Michael Thornicroft said he uncovered “substantial objective evidence” that Breidenthal may have violated ethics laws between August and December 2016. During that period Breidenthal allegedly received $45,000 in cash payments from Greg Allen for marijuana consulting and to help open a marijuana business in Medford. At the time, Breidenthal was still a commissioner. The cash transactions were videotaped.

In a statement Breidenthal gave to the Ethics Commission, he said he had contacted the Ethics Commission to avoid any possibility of a conflict of interest in his marijuana business. 

“A check of Commission records did not reveal any written advice was given to Mr. Breidenthal,” the Ethics Commission review stated.

— Reach reporter Damian Mann at 541-776-4476 or dmann@mailtribune.com. Follow him on www.twitter.com/reporterdm.