Key hearing in Burton-Katzman lawsuit this week

“This development stinks.”
— anonymous West Village resident

By J. PATRICK PEPPER
Times-Herald Newspapers

 

DEARBORN — A Wayne County judge is scheduled to issue an opinion tomorrow on whether several aspects of a city lawsuit against Burton-Katzman Development Co. and several related parties will remain as part of the suit.

 

The suit, filed in January, alleges that Burton-Katzman, several employees and related limited liability companies breached a developer’s agreement with the city by failing to construct certain aspects of West Village Commons.

 

The project, on Michigan Avenue between Tenny and Howard, was supposed to include 48 condominium units, two 37,500-square-foot mixed-use buildings, and two midrise condo towers. To date, only 36 condos and the mixed-use buildings have been built.

 

Also in the complaint, city attorneys allege that several Burton-Katzman executives committed silent fraud by failing to make the city aware of a 2008 corporate dissolution filed by the company. The allegation stems from a disclosure clause in the developer’s agreement that provides, in part, that any change in the status of either party as they are represented in the agreement necessitates disclosure.
But Burton-Katzman attorneys are seeking that all but the complaint against West Village LLC, an entity created expressly for the project, be dismissed.

 

The argument is that even though several company officials signed the developer’s agreement as representatives of Burton-Katzman Development Co., the language in the contract lists West Village Commons LLC as the developer, thus placing all liabilities on the LLC.

 

The silent fraud count should be thrown out for several reasons, B-K attorneys contend, but chiefly because individuals are not subject to tort claims for actions conducted as part of an LLC.
In another development surrounding the case, the West Village condo association is considering joining the city’s suit as co-plaintiffs.

 

According to a man who owns one of the condos, many fellow owners are upset with high association fees that they blame on the 12 unbuilt units.

 

“The fees are way higher than they quoted me when I bought this place, because they quoted it from a model of 48 condos, not 36,” said the man, who did not want to be identified for fear of retribution.

 

“Between the blank (condo) foundations, the towers they haven’t built and all the empty storefronts, this development stinks,” he added.

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