On July 8, 2025, the U.S. District Court for the Western District of Washington granted in part and denied in part motions to dismiss claims brought by AHP Capital Management LLC against Oak Harbor Capital LLC, Western Alliance Bank, and related defendants. While the court dismissed the bulk of AHP’s claims—including RICO, RESPA, fiduciary duty, negligence, and California statutory causes of action—it allowed unjust enrichment and declaratory relief claims against Western Alliance to proceed, leaving the door open for AHP to pursue recovery on narrower theories.
The litigation stems from a 2022 “Mortgage Loan Sale Agreement with Repurchase Obligation” between AHP and Cymbidium Restoration Trust. Under the agreement, hundreds of mortgage loans were conveyed to Cymbidium in connection with a $19.75 million loan to AHP. After AHP failed to repurchase the loans as contemplated, the parties amended the Sale Agreement to expand the pool of loans covered and extend servicing arrangements. AHP nevertheless alleged that the defendants who managed Cymbidium and its affiliates—the “Weinstein defendants”—abused powers of attorney, diverted loan proceeds, pledged loans as collateral for their own financing, and charged borrowers for non-existent insurance.
In their motions to dismiss, Western Alliance and the Weinstein defendants argued that AHP’s theories contradicted the plain terms of the Sale Agreement, which expressly authorized the transfer of the loans, and that its allegations of fraud lacked the particularity required under Rule 9(b). The court agreed, holding that because the contract contemplated the transfer of the mortgage loans, AHP could not plausibly allege they were “stolen.” On this basis, the court dismissed claims brought under RICO, California Penal Code § 496(a), and California Business & Professions Code § 17200, among others. The court also concluded that AHP failed to allege any fiduciary or negligence duty owed by Western Alliance or Land Home, and that its RESPA claims were defective because the statute requires fee-splitting, which AHP had not pleaded.
At the same time, the court found AHP’s unjust enrichment theory against Western Alliance viable, reasoning that the bank—though not a party to the Sale Agreement—could have benefited at AHP’s expense if it received mortgage loan proceeds or security interests under circumstances not justified by the contract. The court also declined to dismiss AHP’s request for declaratory relief, holding that a judicial declaration as to the parties’ rights in the disputed mortgage loans was not duplicative of other remedies. The decision permits AHP to replead the dismissed claims.
The case is AHP Capital Management LLC v. Oak Harbor Capital LLC, No. 2:25-cv-7 (W.D. Wash. July 8, 2025). AHP is represented by KMA Zuckert LLP and Katers & Granitz LLC. Oak Harbor is represented by Byrnes Keller Cromwell LLP. Western Alliance is represented by Ballard Spahr LLP. The opinion is available here.
