Following up on our earlier report: The three lawyers arguing for key interests in the legal fight over lien priorities in West Seattle’s stalled Fauntleroy Place project, aka “The Hole,” have just wrapped up their closing statements before King County Superior Court Judge Susan Craighead. She then said she will deliver her findings in the case at 9 am Monday, November 15th; rather than just sending out paperwork, she will read them aloud, in order to answer any questions. We’ll add toplines here from the closing statements – during which, at one point, the judge observed to a lawyer that it seemed much of the project and its financing had been “a charade” (she also acknowledged, when setting the date for announcing her decision, that she knows this is “important to the community” as well as to the individual parties involved). ADDED 11 PM: Click ahead for toplines from the closing arguments:
Needless to say, this is a complicated case. And it was consolidated from at least two lawsuits, according to the court dockets we’ve been following online for more than a year. Primarily at issue here: Who has a valid lien against the property, and who’s entitled to get paid first – to settle any such lien(s).
As such, much of the closing presentation dwelled on what had, or had not, been done to the site before a certain date in summer 2008, and who even had a deal to work on the site before the alleged work was done. Much terminology was argued as well – agreements and letters cited as proof that no “work” had been done – online search results cited as potential definitions for the types of letters and agreements cited.
“Whether they thought they were doing ‘work,'” said one lawyer, “a whole bunch of people were there doing LABOR.”
One key date cited by those arguing that work had occurred before that pivotal summer day was April 30th. Heavy equipment and fencing had appeared on the site (as we covered here that day). Another round of similar activity was noted a month later, and then, the June 12th ceremonial groundbreaking, which we covered here, was pointed out. One lawyer said, “They had a groundbreaking, which is a ritual to tell the world that construction has begun.” He had photos on easels showing some of the scenes he described – “first delivery of materials, first performance of labor.”
Various multimillion-dollar figures were thrown around – the lawyer for Ledcor saying, “These numbers help us remember, my client is a general contractor with an army of subcontractors that have not been paid.” He refuted the “no signs of construction activity” – the argument used to claim that the construction companies had no right to liens on the property – by noting photos have even shown an official from then-developer BlueStar “standing next to the holes” (made by the work that was being done on the site in April and May. He also said then-financier Seattle Capital’s John Huddleston “knew we did the work … (BlueStar’s) Easton Craft testified that Huddleston met with him on the site and discussed the dewatering system.” He also brought up the offices that Ledcor had set up across the street: “Ledcor didn’t move into the site for a picnic, they moved in to work.” Back to more numbers, he contended, “(Seattle Capital was) over their heads, the economy (was) on the decline … but they were already overextended in spring of 2008, so they had to make some adjustments, and the terms of the (potential buyer) UDR deal didn’t necessarily conform to reality, so they loaded all conceivable costs into (the) construction loan. … The amount of work done after everybody knew they were out of moey … is substantial … there was still hope in their minds there might still be another potential bailout out there. They had to keep Whole Foods as a prospective tenant, because if they didn’t, you’re left with a parking lot, in this case, a hole in the ground.” He claimed Seattle Capital “never intended to see this project through to completion” and “never intended to be the insured (company) on the title insurance, that was supposed to be (a buyer).” This lawyer also dismissed the 3922 SW Alaska LLC attempt to buy the project, saying they are trying to pay “$2 million for a property that sits with more than $15 million in work and entitlements attached to it.”
That firm’s lawyer went last, saying, “The only winner in this debacle so far has been BlueStar, which has collected $2 million in fees” and displayed big boards with timelines underscoring their contention, “Ledcor performed no lienable work on the property before June 25, 2008.” His contention was that Aero worked before then under the direction of BlueStar, not Ledcor, and therefore was not a subcontractor. As he went on to outline that contention, that’s when Judge Craighead interrupted to say it seemed clear to her that there were many lies, “a great deal of this project and the financing was a charade.” The 3922 SW Alaska lawyer contended “the financing wasn’t a charade, your honor … Seattle Capital disbursed real money to (various entities),” but he also noted that Huddleston’s deposition testimony about whether he recalled a conversation with a BlueStar executive conflicted with other testimony in which he seemed to have specific memories of what was and wasn’t said in that conversation.
“The truth has never mattered to these guys, it’s always been ‘call it something it’s not’,” the attorney summed up.
Setting the schedule to present her findings orally on Monday, November 15th, at 9 am, Judge Craighead noted she had found the trial “interesting,” as had her staff.
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