Parties in a civil trial between Railyard developer John Lichtenegger and his former business partner Steven Sandoval reached a settlement last Wednesday, Feb. 8.
The lawsuit, filed by Lichtenegger back in 2021 with legal counsel Matthew Dolan of Bloch & Chapleau, LLC, claimed that Lichtenegger’s former business partner Sandoval was negligent in his construction of the first homes on the Railyard property.
The case was set for a week-long trial last week beginning Feb. 6, but ended early once the parties reached a settlement.
The breach of contract lawsuit has a long history and dates back to 2020, when Sandoval and Lichtenegger began a working relationship, according to a complaint filed by Lichtenegger and his company, Affordable Mountain Homes (AMH).
Court documents say an operating agreement created then required Sandoval and his company BW-Ane, Inc. to build ten single-family homes in the Railyard development and receive compensation based on 10 percent of the actual cost of each home and garage for Lichtenegger.
The agreement also stated that Sandoval would receive one-third of all net profits on closing expenses and realtor fees on these properties, according to the complaint.
Court documents say Lichtenegger discovered gross negligence in Sandoval’s construction work that year, citing dangerous construction flaws like missing parts and building code violations. The plaintiffs estimated that remedying the construction defects cost them at least $80,000 as of the summer 2021 filing date and state that these violations “rendered the homes unsuitable for ordinary and reasonable purposes.”
The complaint further alleged that Sandoval and BW-Ane, Inc. did not pay subcontractors on the project and also inflated and fabricated expenses.
The lawsuit included nine claims for relief such as negligence, breach of contract and deceit based on fraud.
Defendant Sandoval and BW-Ane, Inc. with legal counsel Andrew Miller of Sweetbaum Miller PC filed an answer to the amended complaint in September 2021 and denied most of the allegations presented, claiming Lichtenegger and other plaintiffs breached the contract.
The countercomplaint alleges that Lichtenegger and AMH failed to perform their obligations in the operating agreement, specifically refusing to pay Sandoval’s company BW-Ane, Inc. in accordance with the contract.
The documents allege that Sandoval’s company performed around $180,000 in unpaid work and that he was wrongfully dismissed from the construction project and not allowed to complete it.
Sandoval and his company argued that Lichtenegger breached the contract as well as good faith and fair dealing agreement.
Lichtenegger could not be reached for comment before the Herald’s print deadline.
Dolan and Miller said they cannot discuss much about the settlement due to a confidentiality agreement.
The Herald submitted a records request for these documents, which are not public until signed by Judge Paul Dunkelman.
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