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Guilderland Archives The Altamont Enterprise, September 17, 2009
Brandle Meadows sues contractor for $12 million
By Anne Hayden
GUILDERLAND Last month, Latham contractors Bette and Cring filed a lien against Brandle Meadows, Jeff Thomas’s senior housing complex, for non-payment of over $2 million.
This month, on Sept. 15, Brandle Meadows filed a lawsuit against Bette and Cring, for $2 million in damages and five times that amount in punitive damages.
The suit alleges that Bette and Cring is trying to extort fraudulent charges of approximately $1 million, and that the company filed a lien in an attempt to halt construction and sales of the units in the Brandle Meadows development. The 72-unit complex on Brandle Road, just outside the village line, is two-thirds finished.
The suit filed by Brandle Meadows also alleges that Bette and Cring used The Enterprise to present false information to suggest that the project is in financial distress, which Brandle Meadows believes constitutes defamation, said Richard Weisz, with Hodgson Russ, the attorney representing Brandle Meadows in the suit.
The Enterprise broke the story last week about the $2 million lien against Brandle Meadows based on court papers, with comments from both Thomas and Bette and Cring’s attorney.
The alleged defamation is considered, by the developer, to be malicious and willful, which is why Brandle Meadows is asking for the $10 million in punitive damages on top of the $2 million in regular damages, Weisz said.
Weisz told The Enterprise yesterday that Bette and Cring had been fired by Brandle Meadows in August. However, Joel Howard with Couch and White, Bette and Cring’s attorney, said last week that the company had stopped working in August because of the alleged non-payment.
Howard was out of the office this week and did not respond to e-mail. Peter Bette did not return calls yesterday, and Ed Lewi Associates, the public relations firm for Bette and Cring that provided a statement to The Enterprise last week, did not return calls yesterday.
Another lawyer for Thomas, Mark Couch with Couch Dale P.C., who said he handles construction litigation, called The Enterprise yesterday to complain about last week’s story. He mentioned the lawsuit, and asserted, “It appears Bette and Cring is trying to tell its subcontractors they don’t have money.”
Ed Lewi Associates’ statement last week said, “Bette and Cring has been forced to place a lien on the property to preserve its right as creditor and will pursue all legal means available to secure outstanding payments owed on the project.”
Brandle Meadows’ view
The developer was dismayed by the lien filed against him, Weisz said, because the contract between the two companies contained a clause that called for mediation for the resolution of disputes. According to Weisz, a date was to be set in late October for mediation.
“If there is a dispute under contract, it’s handled by mediation, but mediation doesn’t prevent a mechanic’s lien from being filed,” said Weisz. He said Brandle Meadows has demanded information and commencement of foreclosure on the lien. Some aspects of the lien will be handled by mediation, and some will be handled in the court, he explained, while the Sept. 15 suit against Bette and Cring, filed in Albany County Supreme Court, the last rung on the state’s three-tier system, will be handled entirely by the court.
According to Weisz, the basis for the lien, which was the claim that Brandle Meadows had not paid Bette and Cring over $2 million of an agreed upon $6,480,000, is false.
Brandle Meadows believes and alleges that the contract with Bette and Cring was a construction-management contract, not a fixed-price general management contract, said Weisz. The difference, he said, is that a construction-management contract does not allow for a fixed-price agreement the payment is based on the actual cost of the project.
“You could, depending on interpretation, say that Bette and Cring had a fixed fee, but they were paid for the cost of the project,” Weisz said.
The language on the contract reads, “Standard form of agreement between owner and construction manager, where the construction manager is also the constructor; and where the basis of payment is the cost of the work plus a fee and there is no guarantee of cost.”
“Obviously, there is an assertion that the contract wasn’t clear,” Weisz said.
In addition, Weisz described what he called “improper billing processes” on the part of Bette and Cring. Brandle Meadows repeatedly requested back-up information for the bills, and, Weisz said it recently obtained information that revealed bills were submitted to Brandle Meadows for work done for another developer.
“Construction disputes on billing are not unusual, and there is a process in place to deal with those disputes, but improper billing is a whole separate problem,” said Weisz, adding that a review of all billing from the project is still ongoing.
Through a statement submitted by Ed Lewi Associates, Bette and Cring indicated to The Enterprise last week that it had received no payment from Brandle Meadows since January; Joel Howard, the attorney representing Bette and Cring, confirmed the statement.
Weisz said he did not know why Bette and Cring would declare that they had not received payment since January, other than for the purpose of defaming Brandle Meadows by suggesting that the project was in financial trouble. Weisz said that the project was not in trouble, and that the claim was false.
According to Weisz, Bette and Cring has received close to $1.5 million since February, including a payment of nearly $900,000 on June 29.
On Sept. 10, The Enterprise ran the story on the lien filed against Brandle Meadows, which is included as an exhibit in the suit. (To see the full story, go to www.altamontenterprise.com, under archives for Guilderland, Sept. 10, 2009.) Weisz said Brandle Meadows is alleging that the purpose of the information provided by Bette and Cring’s attorney to the newspaper was to stop sales at the site.
“There are a lot of confused people out there right now,” he said. Howard said last week that it would be almost impossible for Brandle Meadows to sell units when there was a lien against them, because banks did not like to furnish mortgages in such circumstances.
Weisz said that information is not necessarily true. He said there are processes in place to procure mortgages when there are liens on the property.
“I hope that people will take a deep breath and realize that things are proceeding in a satisfactory manner at the property,” Weisz said.
The nine-building complex is two-thirds complete, but Weisz said the construction is ongoing. Some sub-contractors pulled out, which Weisz said he believes is a result of Bette and Cring’s influence. Other sub-contractors have stayed on, he said.
The score of units that have sold range in price from $201,500 to $304,500, according to Albany County records.
The Brandle Meadows project has been controversial. Thomas initially sought municipal water from the nearby village of Altamont, which was strapped for its own water; new wells have since gone online.
The couple who had owned the land where the village found water, Michael and Nancy Trumpler, filed papers in Albany County Supreme Court in 2005 to have a judge decide whether the village’s contract for the five-acre site was legal and binding. They sought no money from the village. The village filed counter claims for hundreds of thousands of dollars.
In June 2005, Thomas sued the Trumplers for $17 million over what he called “tortuous interference” with his plans to build a senior housing project. His lawyer said the suit was not over money; Thomas just wanted the Trumplers to drop their suit.
The Trumplers lawyer, Michael Englert said, at the time, that Thomas filed the lawsuit for “retaliation against to seek direction on the option agreement,” which he believed was invalid. The matter was never pursued in court.
The original contracting company hired for Brandle Meadows by Thomas in 2007, Rapp Construction Management, filed a lien against the developer in the amount of $91,459.26. The contract between Rapp Construction Management and Thomas was terminated in July of 2007.