Legal disputes about Hayden subdivisions to move forward
The Steamboat Pilot & Today, March 22, 2009
Legal rumblings are echoing throughout the Hidden Springs Ranch, Villages at Hayden and Mount Harris at Grassy Creek projects.
One set of mechanic's liens might go before a judge soon. Property owners are joining to get legal representation. Trials involving discovery started in Denver last week.
Still, no resolution is in sight.
The three projects in or around Hayden thumped to a halt when Oregon-based Robinson Construction filed liens in August 2007 alleging that it hadn't been paid. The company said developers owed it for work worth $721,000 at Hidden Springs, $1.4 million for the first part of the Villages at Hayden and $3 million for Mount Harris.
A conference to set a trial-setting conference is scheduled for Wednesday for the Mount Harris liens. Some of those property owners have hired the firm of Sharp, Steinke, Sherman and Engle, of Steamboat Springs, to represent them against Robinson.
Robinson representatives have said they want to be paid by the people who ordered the work and isn't interested in foreclosing on lots.
"Our intent is not to harm the homeowners," Robinson Construction Project Executive Kirk Moisan said. "Our intent is to protect our rights against an unfortunate situation."
Rodney McGowen lives in one of the two houses in Hidden Springs. The subdivision is in Routt County, west of Hayden Valley Elementary School on Breeze Basin Boulevard. Mount Harris is off Routt County Road 27, Twentymile Road. The Villages at Hayden is off Routt County Road 53 in southern Hayden.
The liens have prevented McGowen from refinancing his home, for example, and have kept vacant all but one other lot in the neighborhood.
He's asking other lot owners whether they want to fight the filings. McGowen said the liens weren't valid because the homeowners never contracted with Robinson.
"We are trying to get together to get a lawsuit against Robinson for fraudulent liens," McGowen said.
Oregon-based Robinson Construction has standing to file the liens, Moisan said. The company is willing to work with homeowners, he added. But when it files liens, it must file them against the property owners. Michael Glade, the company's attorney, backed that up.
"All the individual lot owners would be responsible for paying their portion of how much their lot was improved by the work we performed," Glade said.
The problems stem from partnership and payment disputes. The subdivisions were under the control of Mountain Adventure Property Investments and its local managers.
Robinson and Sons, based in Oregon and affiliated with Robinson Construction, was one of four partners in Mountain Adventure Property Investments. Neither is affiliated with RN Robinson & Son of Hayden.
MAPI's local partners were 4-S Development, controlled by Ron Sills, and Grassy Creek Holding Company, controlled by Roger Johnson. Oasis Development, listed in legal filings as an Oklahoma company, also was a partner. MAPI began operations in July 2006.
Mountain Adventure and Grassy Creek are in Chapter 7 bankruptcy. 4-S is in Chapter 11 bankruptcy.
Johnson does not differentiate between the two Oregon Robinson companies. He also doesn't differentiate between Oasis and FSB Bancorp, though Moisan is adamant the two are not affiliated.
FSB Bancorp was issued a cease-and-desist order in February from the Board of Governors of the Federal Reserve System. Altus Venture is named as a subsidiary in that federal document. FSB Bancorp also is listed as a defendant in a complaint Mountain Adventure filed a year ago as part of its bankruptcy suit.
"In the Spring of 2006, 4S and Grassy Creek were approached by individuals from Oklahoma acting on behalf of venture Capital funds. … These individuals held themselves out as representatives of an affiliate of FSB Bancorp, Altus Venture," the complaint states. It goes on to say that Altus Venture brought in Robinson Construction.
The complaint then states that when Mountain Adventure was formed, "another affiliate of FSB Bancorp was made a member of MAPI in lieu of Altus Venture. This affiliate was Oasis."
Moisan offered a different account of the partnership.
He said Oasis and FSB Bancorp shared employees but were not affiliated. Bob Keys' company, RK Enterprises, and Global Industrial Management made up Oasis Development, Moisan said. He said RK Enterprises was an Oregon company, though Mountain Adventure Property Investments' complaint lists it as an Oklahoma company.
FSB Bancorp President Larry McLaughlin did not return two phone calls seeking to clear up the confusion last week.
Johnson said the Oklahoma partners brought in Robinson Construction intending to have that group do the construction.
"We had never worked with them before, but it was represented that the bank had — FSB Bancorp had — and they're a large company, they're reputable," Johnson said. "They made all the representations that (Robinson) would be capable of doing the three projects we had under development all at the same time, and that was appealing to us."
Moisan said Robinson Construction had worked with Keys but never with FSB Bancorp. He said the company was brought in only to help bid the three projects.
"We assisted with bidding the project originally, and there were not enough contractors available to do the work, so then we provided them a quote for Robinson Construction to perform the work," Moisan said.
Johnson said 4-S and Grassy Creek contributed land worth about $20 million to Mountain Adventure. Oasis Development was supposed to contribute financing, accounting and tax reporting, he said. In 2007, an outside person suggested that the company watch its books, Johnson said.
"We passed a resolution to have an outside audit done, and within a week or two of that resolution, we started having notes called, liens filed, all kinds of stuff happen," he said. Johnson said the accountants involved never provided the requested financial reports.
The liens were unrelated to any accounting dispute, Moisan said. He also said that Johnson's claim about not having access to financial information was false.
Down the road
All the parties contacted said they wanted the property owners to come out OK.
"I'm going to do everything in my power to protect the homeowners," Sills said.
All also acknowledged that the lot owners are stuck, however. A trustee is in charge of Mountain Adventure Property Investments because of the Chapter 7 bankruptcy. Because liens are filed at all three subdivisions, owners can't do anything without court permission.
Glade's team has gotten a stay on the Mount Harris property from the bankruptcy court, which allows it to move forward with the lien lawsuit. He's hoping for stays on the other two properties.
Robinson Construction still says they just want to get paid for work. The company hopes to get that money when the unsold property is released from bankruptcy and sold.
"As long as the property and developments are held up in the bankruptcy court, there's nothing anybody can do but sit around and throw mud at each other," Moisan said.
Sills and Johnson said they expected a final hearing on evidence in late April. Sills said he expected 4-S Development to file suits against Robinson Construction and the Oklahoma companies.
His and Johnson's companies flat lost the property they contributed to Mountain Adventure Property Investments, he said. But he was optimistic that a resolution would come for others.
"I think in the end, the homeowners will be fine, the lot owners will be fine," Sills said. "I think in the end ,they will not be penalized besides the time cost."