United States District Court, D. South Dakota, Southern Division
LARSON MANUFACTURING COMPANY OF SOUTH DAKOTA, INC., and SUPERIOR HOMES, LLC, Plaintiffs,
WESTERN SHOW HOMES, INC., AMERICAN MODULAR HOUSING GROUP, LLC, AMERICAN MODULAR HOUSING GROUP, INC., and PAUL THOMAS, Defendants.
REQUEST FOR INTERNATIONAL JUDICIAL ASSISTANCE
Honorable Veronica L. Duffy, United States Magistrate Judge.
United States District Court for the District of South Dakota
presents its compliments to the appropriate judicial
authorities of Canada and the Province of Saskatchewan and
requests international judicial assistance to effect service
of process and obtain evidence to be used in a civil
proceeding before this Court in the above-captioned matter. A
trial on this matter is presently scheduled for Tuesday,
August 20, 2019, at 9:00 a.m. in Sioux Falls, South Dakota,
United States of America.
Court requests the assistance described herein as necessary
in the interests of justice. The appropriate judicial
authorities of Canada and the Province of Saskatchewan are
requested to effect service of process and compel the
appearance of Gregory Jahnke to appear for a
video-taped oral examination to be used as evidence at a
trial in this matter under the United States' Federal
Rules of Civil Procedure concerning dealings among Aspen
Village Properties, Ltd., Aspen Village Developments, Ltd.
("Aspen Village Developments"), Aspen Creek
Developments, Ltd., Superior Homes, L.L.C.
("Superior"), Larson Manufacturing of South Dakota,
Inc. ("Larson"), Western Showcase Homes, Inc.
("Western"), American Modular Housing Group, Inc.
("AMGH, Inc."), American Modular Housing Group,
L.L.C. ("AMGH, LLC"), and Paul Thomas relating to the Aspen
• Name of Witness/Person to Be Served: Gregoryjahnke
• Nationality of Witness/Person to Be Served: Canadian.
• Address of Witness/Person to Be Served: P.O. Box 537
Station Main, White City, Saskatchewan, Canada, S41 5B1 or
310 Emerald Park Rd., Emerald Park, Saskatchewan, Canada, S4L
• Description of Documents or Evidence to Be Produced:
Larson is a South Dakota corporation with its principal place
of business in Brookings, South Dakota. Plaintiff Superior
Homes, LLC is a South Dakota limited liability company, the
members of which are residents of South Dakota.
Superior's majority owner is Larson, but Superior
conducts its own business separate and apart from Larson,
with its own employees and accounts.
Western is a corporation formed under the laws of Nevada with
its principal place of business in Las Vegas, Nevada.
Defendant AMHG, LLC is a limited liability company formed
under the laws of Nevada. Defendant AMHG, Inc. is a
corporation formed under the laws of Saskatchewan, Canada,
with its principal place of business located in Las Vegas,
Nevada. Defendant Paul Thomas is a resident of Las Vegas,
Nevada, and is the sole owner of Western and both AMHG
Greg Jahnke and the Aspen Village Project
and Greg Jahnke, the president of Aspen Village Properties,
had a business relationship involving the Aspen Village
project in Emerald Park, Saskatchewan, Canada. Superior
manufactured modular homes for the Aspen Village project.
Aspen Village project was a significant project. It first
contemplated the development of numerous residential living
units, including high density multi-family, and single-family
residences. It also included the McKenzie Lane project, which
involved the construction of nineteen condominium units.
Finally, it included the Emerald Park project, which
consisted of Aspen Links Country Club, including the
associated golf course and clubhouse; Block XX and
twenty-four other separately parceled lots near the Aspen
Links Country Club ready for residential development; Blocks
W, WW, YY, and ZZ; and other real property suitable for
residential and/or commercial development.
the end of 2011, the defendants entered into an agreement
with Aspen Village that provided the defendants the
opportunity to acquire a 25% ownership interest in a new
entity (Aspen Village Developments, Ltd.). Also in 2011,
Western agreed to purchase two modular homes from Superior.
Larson's Loans to the Aspen Entities
Western, and the Aspen Entities negotiated a series of
agreements to formalize their commercial relationship. In
2011, Larson entered into a loan agreement with Aspen Village
Properties, Ltd. (hereinafter "Aspen") through
which Larson loaned Aspen 2.3 million (Canadian) dollars. The
loan agreement included a series of documents (a promissory
note, a collateral mortgage, and an assignment of leases and
rents) to secure Aspen's debt to Larson. At that time,
Greg Jahnke, the president of Aspen, also signed a personal
guarantee for the loan. Although the original mortgage
agreement encumbered many of the lands to be developed for
the Aspen Village project, it did not encumber the parcels on
which the McKenzie Lane project condominium units were to be
The Credit Agreement and Amendments to the Credit
on April 24, 2012, Western and Larson entered into a credit
agreement through which Western assumed Aspen's
obligations under the loan agreement, the principal balance
of which was $2, 247, 191.30 (US dollars) at the time, plus
accrued interest of $71, 060.50 (US dollars). The term note
related to Aspen's debt on the Aspen Village project
lands. These funds were also used to settle external bills
and liens against the Aspen Village project properties and to
pay for the two homes that Superior had manufactured in 2011.
and Larson agreed to form a revolving credit facility
("revolving note") in the amount of $2.7 million to
fund further progress on the Aspen Village project. The
credit agreement, and particularly the revolving loan, was
intended to finance the residential development of the Aspen
Village project. A portion of the money advanced by Larson to
Western under the amended credit agreement was used to
purchase modular housing units from Superior.
to the credit agreement, Western executed a term note in the
amount of $2, 247, 191.30 (US dollars) and a revolving note
in the amount of $2.7 million (US dollars). Interest accrued
on the amounts loaned pursuant to the notes and credit
agreement at the rate of 9.95% per annum.
exchange for Western's assumption of its debt, Aspen
agreed that its prior collateral mortgage and assignment of
leases and rents would continue to secure the amounts and
obligations Western assumed or owed Larson under the credit
these transactions, therefore, Western was indebted to Larson
for $5 million, with $2.3 million related to the term note
for debt related to the Aspen Village project lands and $2.7
million related to the revolving note to fund further
progress on the Aspen Village project.
credit agreement expressly states:
Section 4.2 Payment of Revolving
Note: The revolving note shall be due and
payable as follows: (i) the minimum required revolving note
payment shall be due and payable immediately upon the sale of
any residential unit, and (ii) the remaining principal
balance of the revolving note and all accrued but unpaid
interest on the revolving note shall be due and payable on
the revolving credit expiration date. Without limiting the
generality of the foregoing, no interest on any note shall be
payable until the sale of a residential unit, provided
that all accrued and unpaid interest on the notes shall
be due and payable in full on the term note maturity date or
the revolving credit expiration date, as applicable, whether
or not any residential units have been sold.
credit agreement does not specify that Western was to repay
its obligation with the exact funds paid by purchasers; it
only provides that a minimum payment must be made on the
revolving note when a sale of a modular home unit to an end
customer occurs. The parties disagree about whether Larson
was required to obtain a South Dakota lending license to
lawfully enter into the credit agreement(s).
early as July, 2012, the maximum amount of the initial
revolving note was reached. Larson and Western subsequently
amended the credit agreement three times, though Western
disputes the validity of the third amendment. The first
amendment was made on August 9, 2012, and temporarily
increased the revolving note to $4.7 million (US dollars).
The second amendment to the credit agreement was made on
December 10, 2012, and increased the amount of the note to $7
million (US dollars). The second amendment set a date of June
30, 2012, for payment of the $7 million, which represented
the total amount of both the term and revolving notes. As
consideration for the increase in the limit for the note to
$7 million, Western was required to pay Larson an additional
with the first and second amendments to the credit
agreements, other documents were signed to secure the debt.
These documents were signed by Greg Jahnke -the president of
Aspen Village - who still retained an ownership in the Aspen
Village land. Specifically, in August, 2012, Aspen amended
the collateral mortgage and assignment of leases and rents to
substitute new collateral land for a parcel that had been
previously sold, and to revise the amount of Western's
debt that was collateralized by Aspen's property to $7
when the time came to sign the third amendment to the credit
agreement, seeking to again increase the amount of
Larson's loan to the defendants, Aspen/Greg Jahnke
withdrew cooperation and refused to sign the third amended
credit agreement or the counterpart documents which ...