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Judge rules civil suit against developer Terry Diehl can proceed

Published May 17, 2017 12:43 pm

Courts • Defense asked that case be delayed as former UTA official fights federal charges.
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A judge on Tuesday refused to temporarily halt a civil lawsuit filed against indicted real estate developer Terry Diehl, saying assertions that the lawsuit has significant overlap with a pending federal criminal case had been overstated.

Diehl was sued in civil court in March 2015 by his former business partner Michael Bodell over the proceeds from the 2014 sale of land the pair jointly owned in Draper.

A federal grand jury also indicted the former Utah Transit Authority board member last month on 12 felony counts of lying and concealing assets in a 2012 bankruptcy case.

The allegations, Diehl's attorneys contend, are so closely related to the Draper transaction that the court should stop the civil proceedings until the criminal case is resolved.

"All of these claims derive from and are centered around the project processes from the Draper project," Diehl's attorney Jeff Bramble said in 3rd District Court arguments Tuesday.

But Judge Todd M. Shaughnessy disagreed and sided instead with Bodell's attorneys, arguing that the central issues of the cases differ significantly despite a similar nucleus of facts.

The indictment's focus is on whether Diehl lied about his assets, Bodell attorney James Magleby said, while the central issues of the civil case are about the details and execution of a business contract between the men. The allegations in the indictment also predate the Draper land sale by about two years and are related to financial transactions beyond Draper.

"I don't see that there's a huge amount of overlap," Shaughnessy said in a ruling from the bench. "Particularly given that they appear to concern different time periods and different transactions."

Shaughnessy then set a February 2018 date for a trial in the civil lawsuit.

Diehl and Bodell were partners in Vista Station Holdings, which held an interest in property in adjacent to a planned UTA FrontRunner station in Draper.

Bodell says in court papers that when the land was sold in 2014, $8.3 million that should have gone to Vista was redirected to Skyline Ventures, a company owned by Diehl's daughters, but that their father controlled.

Those events parallel, in part, the allegations in the federal indictment, which states that Diehl "managed and controlled the day-to-day business affairs" of Skyline Ventures, including moving funds in and out of its bank accounts — money federal prosecutors say Diehl should have disclosed in financial statements required by the bankruptcy court.

Federal prosecutors have twice served Bodell's attorneys with subpoenas seeking documents related to his business relationship with Diehl, along with information about lawsuits involving Diehl, Bodell and developers Jeff Vitek and Mark Robbins. The four had ties to UTA development projects in South Jordan and Draper, which have come under scrutiny.

In early April, federal prosecutors announced a criminal probe of the developments around UTA train stations that were the subject of two critical legislative audits, which raised questions about conflicts of interest and self-dealing.

Diehl was indicted the next day and is scheduled for an initial federal court appearance in June.


Twitter: @jenniferdobner






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