By: Lacie Pierson, Staff Writer | Posted: April 10, 2018 | Source: WV Gazette-Mail
Nine months after the bridge into Elkview’s Crossings Mall was re-opened, four lawsuits for and against the owners of the shopping plaza have been directed to federal bankruptcy court.
As of this month, lawsuits involving the liability of Crossings Mall owners, their shareholders and their insurance company have been referred to U.S. Bankruptcy Court for the Northern District of West Virginia, according to court records.
A fifth and separate lawsuit, which the owners, Tara Retail Group, filed in August against the West Virginia Department of Transportation, was voluntarily dismissed without prejudice in March at the request of attorneys for both sides, according to court records in Kanawha County Circuit Court.
Steven Thomas, of Kay Casto & Chaney in Charleston, represents Tara Retail Group, which filed for Chapter 11 bankruptcy in January 2017.
Tara Retail sued the DOT in August, claiming that the state was responsible for rebuilding the bridge to the shopping center that was washed away during the June 2016 flood.
Attorneys for the DOT argued that it was Tara Retail’s obligation to rebuild the bridge.
The bridge to Crossings Mall was reconstructed during spring and fall 2017 after its contractor, David Alvarez, of Applied Construction Solutions, agreed to pay for its construction up front, in exchange for being a priority creditor in the bankruptcy case.
The bridge re-opened in July 2017.
Thomas said Tara Retail’s claims against the DOT were denied twice in circuit court, meaning a trial would be the only way for the company to assert its claim that the state was responsible for the cost of rebuilding the bridge.
“That means we would have to prevail in our case against the state, and then take that judgment to the [West Virginia Legislative Claims Commission],” Thomas said.
The process altogether could take years, Thomas said, and would be a distraction from Tara Retail’s bankruptcy proceedings.
To that end, attorneys for both sides filed a stipulation of dismissal on March 26 in Kanawha Circuit Court.
With attorneys’ full attention to bankruptcy proceedings, the remaining lawsuits related to the flooding at Crossings Mall were referred from the U.S. District Court for Southern West Virginia to the bankruptcy court in the Northern District of West Virginia, where Tara Retail’s bankruptcy case is proceeding.
The cases were referred to bankruptcy court after attorneys agreed that all of the cases have in common a significant amount of evidence and financial records that are at-issue in Tara Retail’s bankruptcy case before U.S. Bankruptcy Judge Patrick M. Flatley.
During a hearing on April 5, Christopher Schueller, of Buchanan Ingersoll and Rooney of Pittsburgh, said the cases were being referred to bankruptcy court to allow Flatley to make findings of fact and conclusions of law, meaning he will make rulings on certain evidence in the case before it goes to trial.
Once the pretrial issues are resolved, the intent would be to send the cases back to the Southern District court, where they would progress to trial.
Three of the cases will stay in bankruptcy court and progress as Schueller described. Flatley said during the hearings that the cases hadn’t been transferred to his court, as of April 5.
Those three cases include claims against the mortgage trust for Crossings Mall, collectively represented by U.S. Bank National Association. Wells Fargo Commercial Mortgage Servicing and Gold Coast Partners LLC, landlord and manager or the plaza, also are named as defendants.
One of the cases is a class-action lawsuit that involves people who suffered property damage at Crossings Mall or downstream from the failed culvert bridge and people who were stranded at the plaza after the flood.
A second lawsuit was filed by The Elswick Co. LLC, the holding company for Anytime Fitness at the plaza. In the lawsuit, the company seeks damages for loss of income and opportunity to continue operations, as well as expenses incurred while the business was closed because the bridge was out.
The third case was brought by an Elkview woman who claimed property damage from the failed culvert.
A fourth case was filed in U.S. District Court for Southern West Virginia by U.S. Bank National Association against Tara Retail.
The association claims William A. Abruzzino and Rebecca A. Abruzzino, owners of Tara Retail, defaulted on their $13.65 million loan after the flood. The association sought $13.4 million, plus interest and legal fees, from Tara Retail.
Tara Retail filed a counterclaim saying the association denied them $24,000, in January 2016, to replace the bridge, and that lack of support to replace the structure contributed to the damage caused by the flood.
Tara Retail also said it was up to date on loan payments before the June 2016 flood and the loss of the bridge led to Crossings Mall tenants not being able to make lease payments, which subsequently led to Tara Retail not being able to make loan payments.
During the April 5 hearing, Flatley gave attorneys a 21-day window to either withdraw a motion to refer the fourth case to bankruptcy court or to file a motion to have the case dismissed from bankruptcy court because the circumstances of that case weren’t similar enough to the other cases for it to be grouped with them.