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June 8th, 2011 NIGEL JAQUISS | News Stories
 

Survivor: Lake Oswego Island

Chris Dudley is in a fight over a $3.75 Million loan and control of one of Oregon’s most opulent homes.

news2_dudley_3731Dudley carries a torch - IMAGE: WW Photo Illustration
The friendship between two larger-than-life Lake Oswegans has turned into a bitter fight over property and money.

A lawsuit filed May 3 in Clackamas County Circuit Court pits Jerry Stubblefield, 70, a mountainous former University of Oregon discus thrower, against Chris Dudley, 46, the 6-foot-11 former Portland Trail Blazer, who in 2010 narrowly lost the governor’s race to Democrat John Kitzhaber.

In 2009, Stubblefield was in financial trouble. An inventor who founded and sold the Avia athletic-shoe company, Stubblefield couldn’t get out from under the loan on his Lake Oswego house. 

And not just any house. 

Stubblefield lives in a  9,000-square-foot Tudor mansion built in 1929 for textile magnate Carl Jantzen on a 4.5-acre island in Oswego Lake. Considered one of Oregon’s most exclusive homes, the estate is accessible by a private bridge and boasts a separate 3,000-square-foot guest house Stubblefield uses as a workshop.

In 2008, Stubblefield listed the estate for $19.5 million. Unable to sell it, he watched as his lender started to foreclose. 

Enter Dudley, who retired in 2003 after 16 seasons in the NBA.

In June 2009, Dudley bailed out Stubblefield with a $3.75 million loan, using the island as collateral. Stubblefield in turn allowed Dudley to use the estate for a $10,000-per-couple campaign fundraising event in August 2010.

When repayment time came four months later, the two ex-jocks disagreed on terms.

Court filings show that Stubblefield agreed to repay the loan, which included 7 percent interest, by December 2010. He also agreed to give Dudley 10 percent of the gross sales price of the property if it sold while the loan was outstanding—an agreement that could have yielded Dudley another $1 million to $1.5 million. 

But the property didn’t sell. And as the repayment deadline approached, Stubblefield’s lawsuit says, an unnamed investor agreed to refinance the loan so Stubblefield could pay off Dudley.

But the court file says Dudley wanted more than $3.75 million.

According to the file, Dudley claimed Stubblefield owed him a $1 million fee and some additional interest on top of the $3.75 million principal. Dudley filed a “notice of default” in March, began foreclosure proceedings against Stubblefield, and took the first step toward taking ownership of the island.

Stubblefield sued Dudley to block the former Blazer “from adding previously unasserted default charges [the $1 million] and retroactive ‘late’ interest to the amount of the loan,” according to the lawsuit.

The original loan agreement, which is included in the court file, doesn’t mention a $1 million late-payment fee. In his lawsuit, Stubblefield wants Dudley to drop his claim for the $1 million and compensate him for the lost refinancing opportunity.

“[Dudley]’s insistence on the $1 million ‘fee’ was an intentional interference with [Stubblefield]’s refinancing efforts,” the lawsuit says, “in an attempt to either (1) extort a greater payment than was due under the agreement, or (2) force [Stubblefield] in a position where financing was no longer available, and where [Dudley] could impose penalty interest, fees, and other late payment penalties, and then foreclose.”

Stubblefield’s attorney, Bill Elliott, declined comment. Dudley and his attorney, Tom Arenz, have not yet filed a response to the lawsuit.

“It’s a really unfortunate situation,” Dudley says. “I think the lawsuit is without merit, and the facts will bear that out.”  


FACT: According to Luxist.com, Stubblefield’s island has a helicopter pad, a lakeside pool, a formal English garden and a nearly one-mile walking path around the island.

 
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