City targeted in new lawsuit by demolition contractor
The company that tore down part of a downtown Washington apartment building following its collapse 18 months ago filed a new lawsuit against the city this week.
Allegheny Crane Rental Inc. claims in its lawsuit that local officials “knowingly engaged in a scheme to obtain services from (the equipment company) while never intending to pay any amount” for the work to tear down the three-story structure known as the Montgomery Building on North Main Street.
The lawsuit is similar to one the company filed in federal court in October. Last month, a judge dismissed that case at the request of the company’s attorneys.
The new lawsuit, which was filed Tuesday in the Washington County Court of Common Pleas, is the latest development in multi-faceted litigation and negotiations involving respective lawyers for the city, the contractor and Mark and Melissa Russo, the brother and sister who owned the building that partially collapsed July 12, 2017.
That wrangling already resulted in a payment from the Russos’ insurance carrier to the crane company. It also resulted in a company tied to the contractor buying the property – where a one-story storefront strewn with rubble now stands – from the Russos before it went up for tax sale because of unpaid real estate taxes.
“Because it’s litigation, it’s very difficult to say anything,” said Councilman Joe Manning, who oversees the city Accounts and Finances Department. “I would like to see it brought to a conclusion.”
Court papers say the crane company, which is based in Robinson Township, Allegheny County, quickly dispatched cranes and other equipment when city officials contacted it on the day of the collapse.
The company helped rescuers free Megan Angelone, a then-resident of the building who was trapped for more than nine hours, court papers say. It then spent several months removing remaining debris from the site.
On the day of the collapse, the city filed a petition for emergency demolition. As part of that proceeding, county President Judge Katherine B. Emery gave the city the authority to lien the property for expenses of the demolition.
In that case, the city filed a claim for more than $1.1 million against the Russos. Most of that amount was based on invoices Allegheny Crane had submitted to the city, but also included some legal costs and first responders’ overtime.
But as the company waited on its money, president Kyrk Pyros complained about the nonpayment during a city council meeting in November 2017, saying that his employees hadn’t been paid and threatening a lawsuit against the city.
“When Plaintiff confronted the city regarding its refusal to remit payment, the representatives of the city informed the plaintiff that the city never procured or had sufficient funds to pay for the plaintiff’s services,” the contractor’s attorneys wrote in the civil complaint.
The lawsuit contains counts of fraud, breach of contract, unjust enrichment and a violation of the state law governing public works contracts. The company seeks an “amount to be determined at trial,” plus interest.
Asked about the new case on Thursday, city solicitor Steve Toprani said the Russos eventually reached a deal in which the Russos’ insurer paid Allegheny Crane “more than $800,000,” though he didn’t have an exact figure.
Elizabeth Tarasi, who represented the Russos, was surprised at the new litigation between the city and its contractor.
“I thought it was all worked out,” she said.
Tarasi said insurance paid a “considerable amount” to the contractor and that Toprani’s estimate was “in the ballpark,” though she wouldn’t give a precise sum.
The Russos also made a deal with Pyros in a bid to resolve their legal issues.
In March, the Russos sold the Montgomery Building to Appalachian Basin Logistics LLC – which is owned by Pyros, the businessman who also owns the George Washington Hotel nearby – for a recorded price of $5,000.
But in September, the property went up for sheriff’s sale because of 2016 real estate taxes that were unpaid when it sold. A buyer wasn’t forthcoming.
Manning said officials are hoping to see a new owner take over the property and put a business at the site, which had a barbershop on the ground floor.
“When the collapse happened, it was occupied,” he said. “There was a business there.”