More defendants added in Burton-Katzman suit

Times-Herald Newspapers

DEARBORN — A Wayne County Circuit Court ruling last month gives the city several more options to extract damages in its ongoing lawsuit against Burton-Katzman Development Co.

Judge Michael Sapala on Dec. 15 granted the city’s motion to include in its complaint the individual trusts of several company executives as well as other Burton-Katzman-related entities. New to the suit are Burton-Katzman Manager LLC; Burton Share Management Co., B/K/G Investors, LLC; Chief Financial Officer Steven Bentley and Vice President Lawrence Goss.

The original defendants are Burton-Katzman Development Co., West Village Commons LLC; Abbey Homes LLC; company principals Peter Burton and Robert Katzman, Vice President Charles DiMaggio and attorney Daniel Share.

City attorneys have been seeking the personal assets of Burton and Katzman from the outset of the lawsuit, filed in January 2009, since discovering that B-K Development Co. was dissolved almost a year earlier in March 2008.

The lawsuit concerns the West Village Commons development on Michigan Avenue in the west downtown district. In 2003, the city chose the development company to redevelop the city-owned, former Jacobson’s department store into a mixed-use project with retail, office, and residential components. But construction has been at a standstill for nearly two years, with many portions not even started.

Already in a previous ruling, Sapala ordered the company to begin construction on the rest of the development: two midrise buildings and 12 condominiums. He cited a “specific performance” clause from the original development agreement as reasoning and said B-K Development must begin construction in April and finish within 15 months of groundbreaking.

But it was uncertain what would compel the company to comply with the order, which was directed only at the defendants who were listed on the initial complaint, which comprise a collection of shell corporations with no assets. Sapala’s latest ruling shifts accountability to the men behind the company as well as capitalized B-K entities.

“We know it gives us at least one very collectible entity,” City Attorney Debra Walling said.

The city on Friday filed a motion for summary judgment on more than $20 million in damage claims in the case. Walling said a hearing on the matter has been scheduled for Jan. 29.

Also at the Dec. 15 ruling, Sapala denied the city’s motion to add a count of fraud in the inducement. Walling said she wanted to add the count because information has surfaced through the course of proceedings that indicate that B-K Development never had any intention of finishing the project when it first entered into an agreement with the city. The motion was rejected because the statute of limitations for the claim has expired.

“I tried to argue that we didn’t even know about any of this until after the fact, but he didn’t agree,” Walling said.