July 24, 2001
City, Yardmaster head back to court
By Erik Burriss
Staff Writer
Call it the "The Lawsuit That Ate Tiffin" or "The Tort That Wouldn't Die."
The city's ongoing legal issues from the construction of storm sewers on the south side of town are headed for a federal appeals court.
City Council authorized the payment of almost $110,000 to a Michigan bank to clear the way for the filing of an appeal with the U.S. Sixth Circuit Court of Appeals at a special meeting Monday night.
"This is a continuation of the Yardmasters/Citizen's Bank case," Law Director Brent Howard said.
The city is appealing the decision by a federal district court that Tiffin owes Citizen's Bank of Jackson, Mich., $109,564.92 as of July, 11, with $29.53 in interest accumulating per day.
The initial suit in the matter was filed in December 1998 when Yardmasters, Inc. &emdash; the Lansing, Mich. contractor hired to build sewers out SR 100 and SR 231 &emdash; sued Tiffin in Seneca County Common Pleas Court, alleging the city misrepresented or failed to disclose conditions that led to increased costs. The suit was settled in October 1999 when the city agreed to increase the payment for the contract.
Yardmasters declared bankruptcy after receiving the city's $325,000 payment and the company's primary creditor, Citizen's Bank of Jackson, Mich., sued the city in May 2000 in the U.S. District Court in Toledo, arguing that the bank, not the company, should have received the payment.
On April 18, Judge David Katz ruled that the city owed the bank $131,382.90. The city agreed to pay the bank $53,773.29 on May 12 after filing a motion asking that the judgement be amended to $43,612 &emdash; the initial figure the bank said it was owed. Katz denied the motion July 10.
"I wish we had a count of the number of how many times we've had to deal with this," Mayor Bernie Hohman said.
The city had the option of buying a bond for the amount of judgment or paying it in full before proceeding with the appeal, Howard said.
The Cleveland firm Squires, Sanders and Dempsey is representing the city.
Monday night the council also:
* Approved a resolution authorizing the city administrator to apply for a $14,518 grant from the Ohio attorney general to fund the DARE program.
* Authorized the purchase of a $110,000 ambulance, $40,000-worth of other emergency equipment, a $65,000 bucket truck for Public Works, $195,000 of sewer cleaning equipment and $29,000 new roof for part of the Park and Recreation building.