IN THE COURT OF COMMON PLEAS HAMILTON COUNTY, OHIO
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1 IN THE COURT OF COMMON PLEAS HAMILTON COUNTY, OHIO Village of Silverton, Ohio : CASE NO. an Ohio municipal corporation 6943 Montgomery Road : (Judge ) Silverton, Ohio : and : JRA MVG Silverton Land, LLC an Ohio limited liability company : 3825 Edwards Road, Suite 200 Cincinnati, Ohio : Plaintiffs, : vs. : COMPLAINT The Board of Education of the City : School District of the City of Cincinnati 2651 Burnet Avenue : Cincinnati, Ohio : Defendant. : STATEMENT OF FACTS 1. The Village of Silverton, Ohio ( Silverton ), formerly known as the City of Silverton, Ohio, is an Ohio municipal corporation. 2. JRA MVG Silverton Land, LLC is an Ohio limited liability company ( JRA/MVG ). 3. The Board of Education of the City School District of the City of Cincinnati, is an Ohio City School District operating the Cincinnati Public School System ( CPS ). 4. In 2008, Silverton adopted a comprehensive plan for the development of a City Central Office District in the area surrounding the land underlying the Silverton Paideia School
2 site ( Silverton Development Plan ). The Silverton Paideia School was located on land owned by CPS (Auditor s parcel numbers and ) (Silverton Paideia School Property ). 5. The Silverton Development Plan contemplated a land swap with CPS in which CPS would receive a substantial portion of Silverton s 12-acre Ficke Park property (Auditor s parcel number , , , , and ) on which CPS would build a new Silverton Paideia School in exchange for Silverton receiving the Silverton Paideia School property. (Auditor s parcel number and ) ( New City Property ). 6. In publishing its re-development plan, Silverton articulated its intent to negotiate a land swap with CPS specifically to promote mixed use commercial development of the former Silverton Paideia School Property by a third party commercial developer. 7. After extensive and lengthy negotiations between Silverton and CPS, the parties entered into a Real Estate Conveyance Agreement, the terms of which facilitated a land swap between Silverton and CPS allowing CPS to move its Silverton Paideia School to land within Silverton s Ficke Park Property upon which it could build a new Silverton Paideia School ( New School Property ). In exchange, Silverton would receive CPS s Silverton Paideia School Property ( New City Property ). The Real Estate Conveyance Agreement is attached hereto and identified as Silverton Exhibit A. 8. The Real Estate Conveyance Agreement contemplated that each of the parties would execute an appropriate deed to exchange the real estate in question with the deeds being held by the escrow agent until triggering events occurred. The first triggering event would allow CPS to acquire ownership of the New School Property and begin construction of their school 2
3 building. Once their new school building was completed and occupied, CPS would abandon its former school site and, after demolition removal, remediation and restoration of the property to developable land, the New City Property would be transferred to the Village of Silverton. The first part of this transaction occurred April 12, 2010 when a Limited Warranty Deed, a copy of which is attached hereto as Silverton Exhibit B, was recorded in the Official Records of Hamilton County, Ohio transferring ownership of the New School Property to CPS. Thereafter, CPS began construction of its new school on the land that Silverton separated from Ficke Park and conveyed to CPS. 9. During the academic year , CPS completed construction of the New Silverton Paideia School and the second stage of the transaction was initiated. 10. As outlined within Paragraph 7(k) of the Real Estate Conveyance Agreement within 120 days after the new school opening, CPS was obligated to demolish the old Silverton Paideia School located upon the New City Property. These obligations included an obligation to: (i) remediate, abate and remove from the New City Property any and all Hazardous Substances upon, about or beneath the New City Property, and to comply with all applicable Environmental Laws, for residential development purposes, (ii) demolish all buildings and impervious surfaces located upon the New City Property and remove all debris from the New City Property, (iii) mass grade and balance the New City Property without any material change to the topography thereof, (iv) grass seed the New City Property and install appropriate erosion controls, and (v) deliver sole possession of the New City Property to the City (collectively, the Site Work ). 3
4 11. Ostensibly, to meet its contractual obligation to complete the site work on time, CPS advertised for bids and issued a Request for Proposal ( RFP ) to complete an environmental assessment of the New City Property, to abate any hazardous substances consistent with the environmental assessment, and to demolish the buildings and remove any debris. 12. After reviewing the contractor bids, CPS selected Sierra Environmental Group, Inc. for its environmental assessment, Total Environmental Services, LLC to remediate any hazardous substances from the site, and Wayne Contractors, Inc. to demolish all buildings and impervious surfaces located on the New City Property and remove all debris from the New City Property. Such Site Work was performed in and throughout calendar year The Site Work performed by Wayne was supervised by Turner Construction Company ( Turner ), CPS oversight general contractor. 14. After demolishing the Silverton Paideia School buildings pursuant to its contract with Wayne Contractors, Inc., CPS was to remove all debris from the New City Property. 15. In the spring of 2014, as Silverton inspected the New City Property prior to accepting title to the New City Property, the City complained about certain debris such as rebar and concrete left upon the site which was visible throughout the regraded site. Further, the City complained about various surface water runoff problems, and CPS commitment to the maintenance of the site until the New City Property would be transferred to Silverton. 16. In response to such complaints, on or about June 20, 2014, Robin Brandon, an employee of CPS, met on the site with Tom Carroll, then Village Manager for Silverton. 17. In addition to walking the site, on or about June 24, 2014, Robin Brandon and Tom Carroll discussed concerns that the demolition contractor, Wayne Contractors, Inc., may have failed to properly remove demolition debris in accordance with the demolition contract with CPS 4
5 since various surface debris was discovered on site. It was acknowledged that CPS contract with Wayne Contractors, Inc. specified that no debris was permitted to be buried on site. Robin Brandon assured Tom Carroll that CPS would hold Wayne Contractors, Inc. to that promise within the demolition contract including after the conveyance of the property to Silverton. These promises were restated in an on June 27, 2014 from Eric E. Landen, counsel for CPS, to Richard Tranter, counsel for Silverton. A copy of this exchange is attached hereto as Silverton Exhibit C. 18. Relying upon these assurances, the last step of the Real Estate Conveyance Agreement was completed February 9, 2015 when CPS transferred the New City Property to Silverton. A copy of that deed is attached hereto as Silverton Exhibit D. 19. After advertising for Requests For Qualifications and follow-up negotiations, Silverton entered into a Master Development Agreement with JRA/MVG on September 29, A copy of the text of the Master Development Agreement is attached hereto as Silverton Exhibit E. 20. The substance of the terms of the Master Development Agreement designated JRA/MVG as Preferred Developer for the New City Property acquired from CPS. JRA/MVG was to develop the site into a mixed use complex including residential, office and retail buildings. The JRA/MVG development will increase Silverton s tax base 15-18% on a mere 2% of the community s land area, making it the largest development in Silverton s history. 21. In July 2017, JRA/MVG entered upon the New City Property site to commence excavation for construction of one of its residential buildings. Despite promises by CPS within the Real Estate Conveyance Agreement to remediate the site for residential development purposes, 5
6 in excavating the building pad, JRA/MVG discovered that debris from the demolition of the Old Silverton School, including debris suspicious for asbestos, had been buried on site. 22. JRA/MVG stopped excavation and submitted a sample for an asbestos analysis. The sample was positive for asbestos. 23. JRA/MVG stopped excavation and notified CPS and Silverton of the discovery. JRA/MVG instructed its construction crew to leave the site as-is to allow time for CPS and Silverton to verify the nature and extent of the problem. 24. Silverton came to the site and documented the debris. Silverton made several efforts to encourage CPS to view the debris and the debris field but CPS refused to come. Instead, a representative of Wayne Contractors, Inc. on his own volition came to the job site. 25. When asked about the newly discovered debris, the representative of Wayne Contractors, Inc. acknowledged significant debris had been buried as instructed by CPS. Not only did the representative admit that CPS told him to bury the debris, he also told representatives of JRA/MVG where to look for additional debris. Debris was found where Wayne Contractors, Inc. said it would be found. 26. All the debris was buried well below the surface and additionally masked by a patina of grass. 27. Having heard nothing from CPS, and appreciating the magnitude of the debris field, JRA/MVG hired Green City Demolition and T.A. O Neal to excavate and remove the debris and work with TRC to develop and implement a site safety plan in accordance with local, state, and federal law regarding the handling and disposal of asbestos or other hazardous materials. 28. In excavating the debris, JRA/MVG found tile from Paideia School bathrooms, large concrete pylons, portions of foundation walls, rebar, pieces of gym floor and jump ropes. 6
7 The volume of debris was significant. Consistent with Wayne Contractor, Inc. s confession, the debris was buried intentionally and then covered up to avoid detection. 29. Silverton verified the nature and extent of the debris and then attempted to engage CPS in funding for the remediation effort. CPS initially claimed it was not their debris. It must have been pre-existing debris or debris from neighboring properties. 30. The old Silverton Paideia School was built on a former apple orchard. The debris included bathroom tiles, jump ropes and gym floor directly traceable to the Paideia School Building. The debris belonged to CPS. 31. Unable to get answers from CPS, Silverton submitted a public records request to CPS. CPS has yet to comply with all records requests. CPS claims that the contract file for Wayne Contractors and the daily log sheets for Turner Construction cannot be found. 32. In the meantime, JRA/MVG has submitted a demand for repayment of its cleanup costs, delay damages, lost profits, unnecessary overhead and site management in the amount of $1,476, all of which was caused by CPS breach of the Real Estate Conveyance Agreement and fraud in covering up the breach. FIRST CAUSE OF ACTION (Breach of Express Written Agreement) 33. Silverton incorporates Paragraphs 1 through 32 above, as if fully restated herein. 34. Under the specific terms of the Real Estate Conveyance Agreement, CPS was required to demolish all buildings and to remove all debris from the New City Property. 35. CPS has not removed the debris from the New City Property as promised, which is a breach of the Real Estate Conveyance Agreement. The remaining debris includes asbestos containing materials. 7
8 36. Under Paragraph 7(k) of the Real Estate Conveyance Agreement, CPS agreed to be liable to Silverton for any and all costs incurred by Silverton in connection with completing the obligations of CPS identified as the Site Work in Paragraph 8 above. 37. Under the terms and conditions of Paragraph 7(k) of the Real Estate Conveyance Agreement, CPS did grant to Silverton all remedies at law or in equity upon CPS failure to comply with its Site Work obligations outlined within Section 7 of the Real Estate Conveyance Agreement. Further, CPS agreed to be liable to Silverton for any and all claims, actions, expenses, including attorney s fees incurred as a result of either the failure to properly remediate the site or to demolish and remove debris from the site consistent with Paragraph 7 of the Real Estate Conveyance Agreement. 38. JRA/MVG was an intended third party beneficiary to the Real Estate Conveyance Agreement and has made a demand upon Silverton and CPS as a result of CPS breach of Paragraph 7 of the Real Estate Conveyance Agreement for the costs incurred to properly remediate the site in the total amount of Three Hundred Forty Three Thousand Nine Hundred Sixty Eight Dollars ($343,968.00). 39. JRA/MVG has made a demand upon Silverton and CPS for the costs incurred for consequential damages for the failure to properly remediate the site and the delays in development of the site in the additional amount of One Million One Hundred Thirty Two Thousand One Hundred Eighty Three Dollars ($1,132,183.00). 40. As a result of CPS breach of the Real Estate Conveyance Agreement, CPS is liable to Silverton and JRA/MVG, the intended third party beneficiary of the Agreement, in the amount of this combined demand totaling One Million Four Hundred Seventy Six Thousand One Hundred Fifty One Dollars ($1,476,151.00). 8
9 SECOND CAUSE OF ACTION (Breach of Oral Agreement) 41. Silverton incorporates Paragraphs 1 through 40 above, as if fully restated herein. 42. In addition to the express terms of the written Real Estate Conveyance Agreement, which CPS has breached, CPS, through its representatives, made a secondary promise documented in Silverton Exhibit C, assuring Silverton that if CPS contractors, Wayne Contractors, Inc., failed to remove demolition debris in accordance with the CPS contract, CPS would hold Wayne Contractors, Inc. to the specific terms of the demolition contract, including after the conveyance of the property to Silverton. This oral promise was made on or about June 24, 2014 and documented June 27, 2014 by and through legal counsel for CPS. 43. In the documented exchange from June 2014, CPS representatives also assured Silverton that no debris was permitted to be buried onsite. 44. As noted in Paragraphs 15 through 30 above, substantial demolition debris was discovered to be buried on the site and CPS has not taken steps as promised to hold Wayne Contractors, Inc. to the specific terms of the demolition contract, which is a breach of the oral agreement. 45. As an intended third party beneficiary and Silverton s Preferred Developer, JRA/MVG has incurred Three Hundred Forty Three Thousand Nine Hundred Sixty Eight Dollars ($343,968.00) to properly remediate the site as a result of this breach by CPS and JRA/MVG has lost an additional One Million One Hundred Thirty Two Thousand One Hundred Eighty Three Dollars ($1,132,183.00) as consequential damages. 46. JRA/MVG has made a demand for such damages as against Silverton and CPS. 47. CPS is liable to Silverton for the breach of its oral promises and the claims asserted against Silverton and CPS by JRA/MVG. 9
10 THIRD CAUSE OF ACTION (Promissory Estoppel) 48. Silverton incorporates Paragraphs 1 through 47 above, as if fully restated herein. 49. CPS promised Silverton, both in accordance with Paragraph 7(k) of the Real Estate Conveyance Agreement and through its agents in an exchange of June 2014, that it would remove all debris from the site, remediate the site, and assure Silverton that its agents would follow through with the contractual promises to complete such demolition and site clearing. 50. Acknowledging that Silverton anticipated residential development on the site, CPS knew that Silverton and ultimately its Preferred Developer would rely on the promises to present a site free of any debris which would not be an obstacle to development and construction. 51. Silverton and JRA/MVG relied upon these promises, which reliance was reasonable and foreseeable when CPS acknowledged the need to prepare the site for residential development purposes. 52. Silverton and JRA/MVG completed their transaction under a Master Development Agreement relying upon these expressed promises to now find that CPS has breached its promises, the consequences of which have cost JRA/MVG Three Hundred Forty Three Thousand Nine Hundred Sixty Eight Dollars ($343,968.00) to properly remediate the site and to remove debris from the site, and another One Million One Hundred Thirty Two Thousand One Hundred Eighty Three Dollars ($1,132,183.00) in added costs associated with the delays in development. 53. A demand has been made upon Silverton and CPS for these damages. FOURTH CAUSE OF ACTION (Fraudulent Misrepresentations) 54. Silverton incorporates Paragraphs 1 through 53 above, as if fully restated herein. 55. On or about June 24, 2014, as restated in an exchange June 27, 2014 outlined in Silverton Exhibit C attached, CPS representatives falsely represented to Silverton that the property had been appropriately cleared by its contractor and nothing had been buried onsite, knowing that there was a contractual duty to complete the remediation and demolition of the site. 56. The misrepresentation from the representatives of CPS were material to the Real Estate Conveyance Agreement and the anticipated residential development of the site. 10
11 57. The representation was made with the intent of misleading Silverton and JRA/MVG and to rely upon it, particularly when there were assurances that even post-closing they would hold their contractor to the responsibility to have properly cleared the site. 58. Silverton justifiably relied upon the misrepresentation in acquiring the site consistent with the terms of the Real Estate Conveyance Agreement and later entering into a Master Development Agreement which JRA/MVG for development of the site. 59. This misrepresentation was material to the transaction between Silverton and CPS, and knowing that the promises had been made by CPS, both in written contract and orally, Silverton relied on such misrepresentation to complete its transaction with JRA/MVG. 60. As a result of such material misrepresentation, JRA/MVG has incurred Three Hundred Forty Three Thousand Nine Hundred Sixty Eight Dollars ($343,968.00) to remediate the site and to remove debris from the site, and has lost an additional One Million One Hundred Thirty Two Thousand One Hundred Eighty Three Dollars ($1,132,183.00) as a result of the delays in developing the site caused by the need to remediate and remove debris onsite. 61. JRA/MVG has made a demand upon Silverton and CPS to be compensated for these losses. FIFTH CAUSE OF ACTION (Attorney Fees by Contract) 62. Silverton incorporates Paragraphs 1 through 61 above, as if fully restated herein. 63. Paragraph 7(k) of the Real Estate Conveyance Agreement states that CPS shall be liable to Silverton for the failure to comply with its obligations under Section 7 of the Real Estate Conveyance Agreement, including expenses and attorney s fees incurred by Silverton. 64. Silverton is incurring expenses through Special Counsel investigating and litigating this claim, all of which they are entitled to recover under Paragraph 7(k). 65. Attorney s fees are expected to be in excess of Twenty Five Thousand Dollars ($25,000.00). WHEREFORE, the Plaintiffs, Village of Silverton, Ohio and MVG JRA Silverton Land, LLC, hereby demand judgment against The Board of Education of the City School District of the City of Cincinnati as follows: 11
12 I. Upon the First Cause of Action in the amount of One Million Four Hundred Seventy Six Thousand One Hundred Fifty One Dollars ($1,476,151.00); II. Upon the Second Cause of Action in the amount of One Million Four Hundred Seventy Six Thousand One Hundred Fifty One Dollars ($1,476,151.00); III. Upon the Third Cause of Action in the amount of One Million Four Hundred Seventy Six Thousand One Hundred Fifty One Dollars ($1,476,151.00); IV. Upon the Fourth Cause of Action in the amount of One Million Four Hundred Seventy Six Thousand One Hundred Fifty One Dollars ($1,476,151.00); V. Upon the Fifth Cause of Action for attorney s fees incurred by Silverton in an amount in excess of Twenty Five Thousand Dollars ($25,000.00); and VI. Such other relief as may be just and appropriate, including the costs incurred herein and interest as allowable by law. Respectfully submitted, /s/ Terrence M. Donnellon Terrence M. Donnellon ( ) Trial Attorney for Plaintiff Village of Silverton, Ohio DONNELLON, DONNELLON & MILLER A Legal Professional Association 9079 Montgomery Road Cincinnati, Ohio (513) Telephone (513) Facsimile tmd@donnellonlaw.com 12 /s/ David P. Kamp David P. Kamp ( ) Sarah E. Abbott ( ) Trial Attorneys for Plaintiff JRA MVG Silverton Land, LLC WHITE, GETGEY & MEYER CO., L.P.A Fourth & Vine Tower One West Fourth Street Cincinnati, Ohio (513) dkamp@wgmlpa.com sabbott@wgmlpa.com
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