As Juban Crossing prepares to open more stores and restaurants this fall, developer Creekstone Companies has been drawn back into court over a financial dispute with a contractor who holds a mortgage on the commercial heart of the 471-acre development.
The dispute involves a $6.9 million promissory note for site work Associated Concrete Contractors of Texas performed when the development broke ground in 2011.
Creekstone principal Stephen Keller signed the note in 2013 as part of a settlement agreement to remove a lien the concrete company had filed against the property over unpaid invoices.
The note is secured by a second mortgage on the first and second phases of Juban Crossing, giving Associated Concrete an interest in the property second only to the bank that is financing the project.
The first two phases are where the existing and announced stores and restaurants are located.
Court records show Creekstone paid $1.5 million on the promissory note in November 2013, a month ahead of schedule, but missed a second payment due in December 2014.
Associated Renters of Texas, the company that now holds the note, sued Creekstone in the 21st Judicial District Court in Livingston, seeking the rest of the principal plus 18 percent interest — a total of more than $8.5 million to date. Creekstone removed the case to federal court in Baton Rouge, where the two companies are fighting over which court should hear the case.
Denham Springs attorney Shelby Easterly, who represents Associated Renters, could not be reached for comment this week. Creekstone’s attorney, Scott Frazier, said he had no comment beyond what is in the court record.
In answering the lawsuit, Frazier acknowledged that Creekstone signed the note and mortgage but alleged that Associated Concrete’s invoices were “improper and/or otherwise excessive and grossly misrepresented the quantity of work performed.”
Easterly, in response, said the promissory note and mortgage settled the companies’ dispute over the value of the work and, therefore, speak for themselves as to what the concrete company is owed.
Easterly also argues in a motion for summary judgment that a letter addendum to the 2013 settlement agreement specifically states that Creekstone and its partners “relinquish any standing or right to dispute the validity of the lien.”
Creekstone’s reasons for missing the December 2014 payment, and the reasons for the failure of the settlement agreement, aren’t entirely clear. But court records indicate the two sides were back at odds within months of inking the deal.
In addition to the promissory note and mortgage, Creekstone and its general contractor, Block Construction, had agreed to give Associated Concrete more work on the Juban Crossing development, according to a pair of settlement documents signed in May 2013.
The two sides now disagree on the terms and conditions of that promise.
Associated Concrete said in various court filings that the deal was for a guaranteed $23.8 million worth of work on the first two phases, plus some third-phase work with a guaranteed profit margin of at least 15 percent.
But Creekstone said the future-work agreement was contingent on Associated Concrete’s proposal falling within the project budget, which was subject to amendment and in fact was later reduced.
Associated Concrete contends that revision was the result of Creekstone securing a lower bid from a competing contractor in October 2013 so the developer could squeeze Associated Concrete for a lower proposal price or force it into a consulting position instead.
The concrete company also claims Creekstone demanded that its payments to Associated Concrete for any future work be credited against the promissory note, which represented work already completed.
In May 2014, Associated Concrete sought to have the federal court reopen the lien case and enforce the settlement agreement, arguing that Creekstone’s stance represented “a near complete obliteration of the obligations contained in the agreement.”
But Chief Judge Brian A. Jackson, of the U.S. District Court in Baton Rouge, ruled in November that the dispute would require a new lawsuit. The disagreement over the settlement, which had not been made part of a court order, was essentially a contract dispute, legally distinct from the underlying lawsuit over the lien, Jackson said.
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