Prominent tech investor Gideon Marks has accused Randy Lamb, the developer of a luxury housing project in Los Gatos, known as 405 Alberto Way, of defrauding him of nearly $800,000.
Marks—a mentor at business incubators such as Google for Startups and Plug and Play, who recently helped his kids found a pet care app called DogLog—says Lamb owes him $200,000 for a Mountain View project, $250,000 for a Palo Alto project and $250,000 for the Los Gatos project.
“As a direct and proximate result of Lamb’s fraudulent misrepresentations, Marks has been damaged in the amount of $798,000,” Marks said through his lawyers Grellas Shah LLP in a filing in San Mateo County Superior Court, adding there are other agreements they’d struck on top of these which remain unfulfilled. “Lamb acted for the purpose of causing Marks to suffer financial loss and is guilty of malice, oppression or fraud, justifying an award of exemplary and punitive damages.”
When reached for comment on Monday, Lamb declined to respond to questions directly.
In their official rebuttal in court, Lamb’s lawyers said Marks hasn’t been harmed, and, even if he has, it’s his own fault because he didn’t take actions to protect himself.
“If Plaintiff suffered any damage, which (Lamb) denies, Plaintiff is not entitled to recover the amount of damages alleged or any damages because of Plaintiff’s failure to act reasonably to mitigate the damages,” reads an Aug. 2 filing by Jennifer J. Hagan, of Menlo Law Group. “Defendant asserts and contends that the Plaintiff has engaged in conduct and activities that constitute an express and/or implied waiver of his respective right(s) to recover on his Complaint as against the answering Defendant.”
It’s not the first time this piece of Los Gatos real estate has landed Lamb in court.
Santa Clara County Case
On Nov. 19, 2020, Lamb was sued—alongside Lamb Partners, LLC and 405 Alberto Way, LLC—by Robert D. Hall (trustee of The Robert D. Hall and Patricia A. Hall Revocable Declaration Trust) for breach of contract, in Santa Clara County Superior Court.
According to that Complaint, the Hall Trust, Dan Hall and Tom Sosine were each owed $1,331,857.70, with Jon Gunderson owed $1,179,778.88—plus $25,000 for attorneys’ fees.
Before it was a high-end housing build, 405 Alberto Way was to become an office complex.
A brochure described the benefits of locating such a development in Los Gatos.
“Unlike many of the suburban communities in the Bay Area, Los Gatos has its own identity,” reads the digital pamphlet. “Los Gatos prides itself on being a ‘self-contained community’ even though it borders a major metropolitan area. It is a close-knit and friendly community.”
On March 16, 2023, Judge Frederick S. Chung found for the plaintiff, on stipulation of the parties, awarding $6,841,550 in damages.
Meanwhile, the bottom had fallen out of the commercial real estate market during the pandemic, and Los Gatos was dragging its feet on approving the housing plan that the State of California ordered the town to complete.
405 Alberto Way made headlines as the first in a litany of projects to emerge in town that rely on new state laws meant to encourage more homebuilding by allowing developers to avoid planning hurdles. The new configuration was for a four-story mixed-use offering with 52-units of residential, including 8 affordable (so, 15% of the homes).
Los Gatos went ahead and rezoned the land under its newly created Housing Element Overlay Zone.
Lamb let his “SB 330” development rights expire and, earlier this year, he told the Los Gatan he was planning on reviving it as a taller concept with more units.
On May 28, 405 Alberto Way was added to the crexi.com real estate listing website.
The page, which on Monday noted it’s now been on the market for 160 days, says “the Project is being re-designed as two 6-story buildings totaling 78 units with an on-grade podium (65 market rate and 13 affordable at 120% AMI at 30 du/ac with a 20% affordable housing concept)…The expectation is it will take one neighborhood meeting in the Fall, and likely a Planning Commission and Town Council meeting to approve the project in late 2024…the goal is to be ‘in the ground’ by late spring of 2025.”
Tech Investor Files Suit
Marks sued Lamb on June 17. The lawsuit laid out the following timeline:
“In early 2015, Marks was introduced to Lamb, the co-founder and Managing Director of Lamb Partners, Inc.,” the Complaint reads. “Lamb Partners was seeking investors for various new real estate development projects. In that context, Lamb represented to Marks that Lamb Partners could offer a safe, secured investment to Marks in the form of a note for a Lamb Partners project in Mountain View.”
This was secured by 6.67% of Lamb Partners’ 20% membership interest in National Avenue Partners, and was due Oct. 9, 2018.
Marks decided to invest $200,000 (via a promissory note) in that development, on Oct. 25, 2015; a few months later, on Oct. 9, 2015, he invested another $250,000 for a project in Los Gatos (with this promissory note due Oct. 9, 2018).
This was secured by 9.43% of Lamb Partners’ 20% interest in LP Acquisitions, LLC; on Oct. 25, 2015, its due date was extended by six-months, and Lamb Partners agreed to pay a “bonus” interest payment upon repayment of the principal amount that worked out to 20% a year (up from 8%). The bonus was even backdated, the Complaint added.
Then, he invested another $250,000—again via a promissory note—for a project in Palo Alto, with this debt due July 11, 2019.
This became secured by 9.43% of the company’s 20% interest in LP Churchill Avenue, LLC, the lawsuit’s narrative continued.
The Palo Alto deal’s due date was extended by six months, it reads, with Lamb Partners agreeing to pay a bonus interest payment that—like with the Los Gatos pot-sweetener—would hike the interest to 20% per year via a “bonus,” upon repayment of the principal.
Marks says he helped Lamb Partners get a $400,000 loan from Offir Gutelzon, the former Getty Images vice president who led a protest last year when Elon Musk met with Israeli Prime Minister Benjamin Netanyahu (claiming unsatisfactory antisemitic hate speech moderation on Twitter).
“On February 16, 2021, Marks issued Lamb Partners an invoice for $83,000 for the Consulting Payment, as that amount became calculable,” Marks’ lawyers said. “The Consulting Payment remains unpaid.”
While Lamb has been fulfilling interest obligations, he hasn’t paid back any of the principal, the Complaint states.
Just weeks after Los Gatos rezoned the land at 405 Alberto Way, Lamb Partners committed to a payment plan, Marks’ lawyers said in the lawsuit, through a “Modification” agreement, with the outstanding debt due by May 15, 2024.
“By signing the Modification on February 2, 2024, Lamb represented that Lamb Partners intended to make the payments under Section 4 on those dates…Lamb Partners has failed to make any payment under the Modification, resulting in a default,” the lawsuit reads. “Lamb’s representation was false when he made it. Lamb and Lamb Partners never had any intention of making any of the payments due under the Modification.”
Rebuke from the Bench
The parties were supposed to meet tomorrow for a case management conference.
However, while there is a Case Management Statement from Marks’ attorneys in the court files, Lamb didn’t submit the proper paperwork leading up to this.
“Although it appears from a review of the docket of this action that the case is ‘at issue’, some or all of the parties failed to timely file a Case Management Statement (emphasis in original). This is a violation of Rule 3.725 of the California Rules of Court,” reads a minute order of the Oct. 23 hearing presided over by San Mateo County Superior Court Civil Commissioner Timothy E. Elliott. “Due to the failure of some or all of the parties to timely file a Case Management Statement, the initial Case Management Conference is CONTINUED to 4/3/2025 at 9:00 AM in the Department of the Civil Commissioner, located at Courtroom H, 800 North Humboldt Street, San Mateo.”
