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102410 osprey field file pic mg.jpg
The Missoula Osprey’s new stadium, as it looked from the air just before opening night in June 2004. Photo by MICHAEL GALLACHER/Missoulian

First Security Bank of Missoula is suing four prominent community members who backed loans to build the baseball stadium but have since declined to pay a total of $550,000, according to court documents.

“Each of the Defendants materially breached their respective promises to First Security Bank to answer for a share of the debt, default, or miscarriage of Play Ball Missoula on the loan from First Security Bank,” reads the lawsuit filed May 29 in Missoula County District Court.

Play Ball Missoula formed to raise money to build the ballpark, and the bank loaned the nonprofit money to do so, according to court documents filed by Glacier Bancorp, doing business as First Security Bank. The lawsuit notes 19 guarantors backed the deal, and when Play Ball defaulted, four of them claimed no obligation to pay.

Court documents allege Joe Easton, Robert Gillette, Keith Lokensgard and Bruce Micklus breached the “covenant of good faith and fair dealing” and damaged the bank. The lawsuit asks the court to order them to pay on guaranties plus attorney fees.

The filing requests Easton pay $150,000; Gillette pay $100,000; Lokensgard pay $50,000; and Micklus pay $250,000. Easton declined to comment in an email; Gillette did not return a voicemail for comment; Lokensgard could not be reached; and Micklus did not return a message left with an assistant.

Lawyer Richard Reep is representing the four guarantors and said Tuesday he must confirm he will continue to do so now that they’re in litigation. He anticipates settling that matter with his clients in the next few days.

“Once we’re prepared to respond to the complaint, I would be glad to share that with you. For now, I wouldn’t be able to have any comment,” Reep said.

He said defendants must respond to the complaint within 21 days after the date of service, but he didn’t believe all of them had been served with documents as of Tuesday.

***

Play Ball formed to raise funds to build the stadium and transfer it to the city of Missoula. The nonprofit raised some $6 million and opened Ogren Park at Allegiance Field in 2004, and earlier this year, the city took ownership of the ballpark, according to the Missoula Redevelopment Agency.

But the project dragged on and has been controversial.

Along the way, the city contributed land plus an estimated $4 million of urban renewal funds to the ballpark. Opponents of the deal have noted that money could have been used for things like sidewalks and affordable housing, but others point out that typically, baseball stadiums are built with public money instead of through private efforts.

For a variety of reasons, the stadium also cost more than expected, and at one point, Play Ball found itself drowning in $7.3 million of principal and accrued interest. A finance team worked out a complicated set of transactions to clear the debt, prevent foreclosure on the stadium, and transfer the ballpark free and clear to the city of Missoula as planned.

The deal involved payment on guaranties, and out of the 19 guarantors, 15 honored their commitments, paying an estimated $1.1 million to the bank.

The lawsuit quotes the bank documents signed by the four defendants who haven’t paid. It reads each “absolutely and unconditionally guarantees full and punctual payment and satisfaction of Guarantor’s Share of the indebtedness of borrower to lender.”

“Lender may hire or pay someone else to help enforce this Guaranty, and Guarantor shall pay the costs and expenses of such enforcement,” reads another portion of the lawsuit quoting bank documents.

It also notes Easton, once a director of Play Ball who “seconded and voted on motions,” has a family member who loaned Play Ball money, and the nonprofit paid back that money.

Court documents say Gillette lent Play Ball $110,000 in 2000, and then $100,000 the following year, and he demanded and received full repayment.

“Play Ball utilized a portion of the loan which Gillette partially guaranteed to pay Gillette in full for his personal loans,” the document states.

It notes that for four years, none of the defendants “contest(ed) the validity of the Guaranty” each signed.

***

According to an earlier interview with Play Ball Missoula’s Wes Spiker, though, the defendants argue they were misled when they signed First Security Bank documents.

The late First Security Bank senior vice president Hal Fraser, who died more than a year ago, was one of the biggest advocates of community projects such as the ballpark. Spiker earlier said the group of four claims Fraser told them the loan guaranties were only a formality and the bank would never call in the notes; thus, their refusal to pay.

Court documents, however, note defendants signed bank documents “in triplicate” and were “of sound mind and capable of contracting” when they did so. It also notes the businessmen received public recognition for securing the loan.

“By way of example only, and without limitation, (defendants are) listed by name on a large ‘Field of Donors’ plaque that is publicly displayed in Missoula’s Civic Stadium,” read court documents.

Reporter Keila Szpaller can be reached at @KeilaSzpaller, 523-5262, keila.szpaller@missoulian.com or on MissoulaRedTape.com.

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