Baseball's Dykstra sues JPMorgan for $100 million

* Dykstra allegedly allowed to borrow too much

* Former star's assets being liquidated in bankruptcy

* JPMorgan declines to comment

By Jonathan Stempel

NEW YORK, March 17 (Reuters) - Lenny Dykstra filed a $100 million lawsuit against JPMorgan Chase & Co (JPM.N) alleging he was fraudulently induced into borrowing more money than he could afford, leading to the former star baseball center fielder's bankruptcy.

Dykstra contended that Washington Mutual Inc, now owned by JPMorgan, let him borrow $20.5 million even though it knew the sum was "well beyond" his means. He said the thrift them reneged on an assurance it would let him refinance a mortgage used to buy a mansion from hockey legend Wayne Gretzky.

"Defendant issued a loan designed to fail," Dykstra said in a complaint filed on Wednesday in Manhattan federal court. "The end result was that plaintiff incurred losses of approximately $100 million." Dykstra seeks triple and punitive damages.

JPMorgan spokesman Tom Kelly declined to comment. Arturo Cisneros, a court-appointed trustee liquidating Dykstra's assets through a Chapter 7 bankruptcy proceeding in California, was not immediately available for comment.

The case arose out of Dykstra's roughly $17.4 million purchase in 2007 of Gretzky's six-bedroom, eight-bath mansion on 6.7 acres in Thousand Oaks, California.

Dykstra, 47, alleged Washington Mutual agreed to lend him $12 million. He said a loan officer then steered him to a different lender for an $8.5 million "piggyback" loan, payable in full in one year, to cover the rest of the mortgage and to pay off loans at a property in Simi Valley, California.

But Dykstra alleged this arrangement left him responsible for $135,000 in monthly loan and property tax payments, which was more than then the $125,000 in monthly income he then had.

Dykstra said he was eventually forced to enter a series of transactions to pay off the $8.5 million loan, causing him to take on more debt and sell assets.

Last July, Dykstra filed for bankruptcy in the wake of more than 20 lawsuits over his entrepreneurial activities.

Earlier this month, Dykstra asked a California judge to dismiss that case, saying he would do a better job satisfying creditor claims than the trustee, whom he said is "only interested in dumping assets as quickly as possible."

By ending the bankruptcy proceedings, Dykstra said he could "once again claim his role as a productive member of society."

A hearing in that case is set for April 6. The Thousand Oaks mansion is being listed by Ewing & Associates Sotheby's, with a $14.9 million asking price.

Dykstra retired from baseball in 1996 after 12 years with the New York Mets and Philadelphia Phillies. He helped the Mets win a World Series crown and the Phillies a pennant.

The case is Dykstra v. JPMorgan Chase & Co, U.S. District Court, Southern District of New York, No. 10-02413. The bankruptcy case is: In re Lenny Kyle Dykstra, U.S. Bankruptcy Court, Central District of California, No. 09-18409. (Reporting by Jonathan Stempel; editing by Andre Grenon)