The collapse of the region’s real estate bubble has put Bend’s Crown Villa RV Resort in the center of a multiyear legal tussle between several real estate developers and U.S. Bank over a failed effort to develop the property.

The attorney for the resort’s owner said the resort isn’t in danger of closing.

In November, U.S. Bank filed suit in Deschutes County Circuit Court saying the resort’s owner, Lava Ridge LLC, owed the bank more than $7.6 million after defaulting on a line of credit that was due in April 2009.

But last month, Lava Ridge filed a complaint in a separate suit against Lake Oswego homebuilder Don Morissette and two companies he controls, Don Morissette Homes Inc. and Venture Properties Inc., in essence saying it’s their fault Lava Ridge is in default and asking for $12 million in damages.

The complaint, also filed in Deschutes County Circuit Court, says Lava Ridge purchased the roughly 20-acre resort — at 60801 Brosterhous Road in southeast Bend — for $8.5 million in April 2006 on behalf of Morissette, who had agreed to purchase the project from Lava Ridge once it had received city approval to build 99 homes on the property.

The development was approved by the city in May 2007 on condition that sewer improvements be made to the area.

According to the complaint, Morissette backed out of the deal, saying the sewer improvement voided the agreement with Lava Ridge.

“Our position is that Don Morissette and his companies backed out of this deal not because of the sewer improvement but because the real estate market had crashed, and they were no longer going to be able to profit from the development, which leaves my client holding the bag,” said Michael Seidl, the Portland-based attorney for Lava Ridge.

Lava Ridge’s members are Bend developer Larry Kine, contractor Claude Rickman and Shevlin Heights Management LLC, which is controlled by its sole member, David Swisher, a mortgage lender.

“We would not have bought this property except for Don Morissette’s written agreement to buy it from Lava Ridge as soon as city approval was made,” Seidl said.

Messages left for Peter Hicks, Morissette’s Bend-based attorney in the case, were not returned. Messages left at Don Morissette Homes Inc. and with Kelly Ritz, the president of Venture Properties Inc., also were not returned.

In the years leading up to the housing bubble burst, many large lots in Bend, including mobile home parks, were targeted by developers for construction of new homes and other commercial projects.

The complaint filed in December by Lava Ridge against Morissette is an amended complaint to a lawsuit Lava Ridge first filed in Deschutes County Circuit Court in September 2007. The case was dismissed in December 2008 pending approval of a settlement.

However, Seidl said U.S. Bank would not agree to extend the term of Lava Ridge’s line of credit, so a settlement was never reached. The case was reinstated in August, Seidl said.

Messages left for C. Marie Eckert, a Bend attorney representing U.S. Bank, were not returned.

Seidl said that despite the legal wrangling, the resort will stay open. He said Lava Ridge has written assurances from U.S. Bank that it will not interfere with the resort’s operation while Lava Ridge’s suit against Morissette remains unresolved.

Kine could not be reached for comment but told The Bulletin in a July 20, 2007, article that he was happy running the resort in lieu of development, though the property’s costs and debt service ate up most of the resort’s revenues.