The Republic says that T.D. Service, the company conducting an auction for the bankrupt, half-finished project at Loop 101 and the Santan Freeway held two trustee sales for Elevation Chandler on June 15, 2009 because of confusion over the auction's location. The first trustee sale failed to attract any bidders, meaning mortgage holder Point Center Financial's $1 million stood.

The Republic says the second auction came about when local real estate buyer Tom Peltier showed up some hours later, claiming he had been notified of an incorrect time for the auction. T.D. Service agreed to host a second auction that same day, during which Peltier bid $1,000,001 for the project. He was told he won the asset.

The next day, according to the Republic, Peltier was told he couldn't have the property because T.D. Service had erred and the sale was invalid. The article reports Peltier then filed suit against T.D. Service, claiming breach of contract, negligence and other charges. Read more about the situation here.

T.D. Service attorney Roger Cohen tells GlobeSt.com that Superior Court Judge Bethany Hicks heard arguments on cross-motions for summary judgment early last week. "The next thing that will happen is she'll issue a ruling, which could be to deny any of the trustees ownership, or to grant one or the other," he adds. Cohen comments that Hicks is "reasonably prompt" with her rulings, though this case is particularly complex, so he was unable to pinpoint an actual date. A phone call to Peltier's attorney William Doyle seeking comment was not returned.

Michael Smalley, a partner with Rose Law Group PC in Scottsdale, AZ says this particular case is unusual because the rules of trustee sales are pretty clear cut: follow the procedures and do everything by the book, and things will go fine.

"Generally speaking, there are probably hundreds of trustee sales happening at a given time, and you get only a few of these nightmare cases that arise," says Smalley, who is uninvolved with the case, but is familiar with it. "This is an outlier; a cautionary tale, more than anything else."

He tells GlobeSt.com courts in these types of cases will look at a few things. First, the adequacy of consideration and second, whether there was some sort of irregularity in the sale proceedings to cause the inadequate price. The price paid by Peltier might be considered inadequate because the site has been appraised at approximately $36 million and Point Service Financial was willing to accept a bid as high as $25 million for the project.

"The more inadequate the price is the more the threshold of irregularity goes down," Smalley remarks. "The court will probably look for a reason to overturn the trustee sale. Whether they find it or not will be another story."

The court case caps Elevation Chandler's rather bizarre history. Construction was launched on the luxury condo development, which was also to have had a 243-room Renaissance ClubSport Marriott, in 2005. Landmark Realty Capital LLC stepped in with a $24 million bridge loan a year later when developer Jeff Cline ran out of money and the project stalled.

However, the economy and other issues conspired against Cline, who filed Chapter 11 in spring 2007. In 2008, the project was brought to market, but there were no takers. In late 2008 the "condotel," once valued at $250 million, was destined for the auction block.