Aborted $8M sale of Cherry Hills home leads to deposit dispute

In March, as the local developer Patrick Fleming neared the close of a lucrative business deal, he began looking for a larger house — one that wouldn’t require new construction.

“We found very, very little,” he said last week, “as we wanted a contemporary home.”

There was only one he liked. What Fleming calls the Blue Glass House is an 8,300-square-foot abode in Cherry Hills Village. The six-bedroom, five-bath home contains $1 million in floor-to-ceiling Belgian glass and a wooded 2.4-acre lot for privacy.

“The owner was not getting any offers or even any viewings from other prospective clients,” Fleming recalls.

That owner was David Johnson, who co-founded Etkin Johnson Real Estate in 1989, sold it in 2021, and was looking to downsize. He paid $3.6 million for the house in 2003 and listed it in November 2023 for $8.5 million.

In June, the two real estate men agreed on a price: $8 million. Whether their agreement required $200,000 in earnest money deposits depends on who you ask.

But as the closing date neared, Fleming’s business deal — which he referred to as a “buy-out from an investment group in the U.K.” — still had not been finalized, so he wasn’t able to buy the house. Fleming claims he advised Johnson to cancel their contract and sell to someone else. Instead, Johnson suggested Fleming sign a promissory note for the earnest money amount, $200,000, and still buy the house. The note was signed in July.

Fleming’s purchase of Blue Glass House again fell through in August and the house was sold to someone else in October for $6.2 million. Fleming said that he emailed Johnson then to say he “was sorry for the situation and felt horrible.” Johnson reportedly told him it was OK, he understood.

Then, a few weeks later, a lawyer for Johnson demanded $82,183 from Fleming, noting he hadn’t been making monthly payments on the $200,000 note. Fleming, who said he signed the note paperwork quickly at the advice of his realtor, was surprised by the demand.

“I responded that I thought it was a bridge (loan) and would go away, given the contract fell through,” Fleming recalls of his conversation with the lawyer. “He pointed out in a firm but kind manner, saying, ‘No, you should read the note.’ After reading it more closely and not in haste, I see I am responsible. So, I responded that I would have to pay when I closed.”

Fleming, who co-owns Verde Global Partners, a developer of environmentally friendly modular housing, expects to pay Johnson after his business deal finally closes in 2025. But he may first need to pay a lawyer. On Dec. 3, Johnson sued him for breach of contract and theft of the $200,000 in earnest money. Through his attorney, Johnson declined to comment.

Johnson’s lawsuit accuses Fleming of misrepresenting that he “was about to receive $37.17 million from the closing of a stock sale that was imminent.” As a result, the house was off the market “during the peak Denver sales season” and sold for less during an off season.

Fleming said that Johnson and his wife “could not have been more kind and cooperative” throughout the aborted sales process. He maintains that he simply misunderstood the promissory note, “never acted in any malicious manner or with ill intent,” and will pay.

“This is not a crime,” the businessman told BusinessDen. “It is stupidity on my part.”

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