Agents’ relationships in spotlight in trial involving failed condo project

Would they have signed a sales contract and put down nonrefundable deposits of $160,000 to $300,000 if they knew there was no financing for the $800 million project?

These are some of the questions Prudential Americana real estate agents Dave Berg and Jeannine Cutter were asked Tuesday in the second week of a Clark County District Court trial in which 22 plaintiffs seek the return of $3.5 million in deposits.

Spanish View Towers broke ground in April 2005 and stopped construction in 2006, the first of many Las Vegas high-rise projects that failed to deliver as promised. Developer Tower Homes and its principal, Rod Yanke, filed for bankruptcy in 2007.

Terry Coffing, lead attorney for the plaintiffs, brought Cutter to tears several times while questioning her about her romantic relationship with Yanke — a line of inquiry unusual in a lawsuit over real estate.

But the personal relationships are a key part of the case. Berg and Cutter served as "dual agents" at Spanish View, representing both the seller and the buyer, which crosses into a gray area of what they should disclose to their clients and what they were bound by contract to keep in confidentiality.

And there were other entanglements.

Cutter — Yanke’s sixth wife — said she divorced the developer after a few months of marriage in 2002 because he "did not behave as a husband." She said she told him to stay away from her, that she didn’t want to talk to him, yet she admitted they talked occasionally by telephone.

Over lunch, Yanke told her about his plans to develop three 18-story towers with 405 luxury condo units at the Las Vegas Beltway and Buffalo Drive, and in May 2004, Cutter and Berg signed a listing agreement to market and sell units at Spanish View Towers.

In addition to business ties, Cutter said, the "passion" remained and she came to her ex-husband’s aid following an automobile accident that left him incapacitated in late 2004.

"So between February 2003 (when the divorce was final) and the accident in November 2004, you didn’t have a romantic relationship with Mr. Yanke?" Coffing asked.

"No, I did not," Cutter said.

But when Yanke was injured, his first call was to Cutter, she said.

"But you told him to stay away," Coffing said.

"Romantically, yes, but not personally," Cutter responded. "We were not foes or enemies. We never had been. He knows if he would reach out to me, I would help. That’s how I am. I would even help you, Mr. Coffing."

Cutter said she had to be with Yanke nearly 24 hours a day as he was incapable of getting out of bed or going to the bathroom by himself. There was no romance, she said.

"After the accident, it was difficult. He had headaches, so when we went to bed, we went to sleep. I did not want to expose the loss of his manhood," she said.

Coffing showed the jury an e-mail from a source who believed there was "something more" to their relationship.

"Something more? It was an old shoe in the closet. I don’t know what more is," Cutter said.

What about the $750,000 check from Yanke made out to Cutter’s Orion Star trust in February 2006, which was voided? Cutter had loaned Yanke $214,000 and she herself purchased several units at Spanish View Towers through Orion Star.

Coffing asked if Cutter had ever before loaned money to the developer, or if she disclosed to buyers that she or her trust had loaned money to Tower Homes?

"I’ve always loaned money to Rod since I’ve known him,” she said. "Rod always needed money since 2002. I felt like an ATM machine. That’s one of the reasons he didn’t behave as a husband."

Berg testified that he and Cutter stood to split about $8 million in commissions on Spanish View sales. It was a "chance of a lifetime," he said.

Normally, those commissions are paid after the close of escrow. However, Berg said he was putting in a lot of hours and running up personal expenses, so he asked Yanke for an advance. He started receiving money in March 2005 through a "handshake" deal that allowed Berg to avoid paying a 10 percent cut to his broker, Mark Stark, owner of Prudential Americana.

Berg was paid $4,000 a month over at least five months, with the payments called consulting fees.

When asked how much he knew about the financing for Spanish View Towers, Berg said he never discussed it with Yanke, even though he also spent days and nights at Yanke’s home taking care of him.

"Did you think it’s important for my clients (the buyers) to know about financing?" Coffing asked.

"They never asked," Berg responded.

The trial continues through Friday in Department 11 with Judge Elizabeth Gonzalez presiding.

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.