Failed midvalley development plans spark legal battle
The Aspen Times
Aspen, CO Colorado
ASPEN ” A well-known Aspen land-use planning consultant and a high-profile development firm are fighting a legal battle connected to two midvalley projects that crumbled in the economic meltdown.
Planner Stan Clauson filed a lawsuit earlier this year against Coleman Brothers Construction LLC for allegedly not paying his firm nearly $33,000 for work on the projects in Emma and El Jebel.
The Coleman Brothers responded last week with a counterclaim that alleges the work by Clauson’s firm was “juvenile,” sloppy and too late to capitalize on “a year long window of opportunity” before rules got tougher in Eagle County.
The lawsuit is a sign of the times for the development industry in the Roaring Fork Valley. Projects throughout the valley stalled last year when financing dried up.
The Colemans are probably best known as the builders of a 13,544-square-foot house along the slopes of Buttermilk ski area. The highly-visible house next to the mountain’s superpipe was seized by Alpine Bank in February when the Colemans couldn’t pay a loan. The house was sold for $12 million; it was listed for $26 million.
For Dan and Lee Coleman, partners in a construction and development company that bears their name, trouble also struck twice in the midvalley before construction got under way. They hired Clauson’s firm, Stan Clauson Associates Inc., to guide two applications through the Eagle County review process. On one project, they wanted to build a mix of residences and commercial space at the old Fitzsimmons Amoco station in El Jebel. On the other, they planned high-end residential development at a ranch in Emma.
Clauson’s lawsuit claimed the Colemans couldn’t pay him in November before hearings were completed on the El Jebel project, known as Crown Mountain Plaza. The brothers signed a promissory note pledging payment of $32,834.15, plus interest, in return for additional representation. The lawsuit claimed they defaulted on the note in February and “have failed to even respond.”
But in their counterclaim, the Colemans claimed they were forced to sign the promissory note under conditions they deemed “economic distress.”
“Plaintiff threatened defendants that he would not appear at a scheduled hearing before the Eagle County Board of County Commissioners unless the unconscionable promissory note was executed,” the Colemans’ counterclaim said. “Defendants had ‘no choice’ but to execute the note in an effort to mitigate damages as the hearing was the ‘last chance’ opportunity to get approvals on the Crown Mountain Plaza project so that it could be sold and some value realized in the midst of the global economic meltdown occurring at that time.”
The promissory note should be voided since it was induced by a “improper threat,” the lawsuit claimed.
The Colemans also contend that Clauson’s firm didn’t properly assess the development potential of the Emma ranch for them. Their attorney, Michele Nelson Bass, said the Colemans had two weeks to decide whether to buy the ranch at an auction in 2007. Clauson was hired to assess the zoning and development potential. Based on his information that the 24-acre ranch could be subdivided into roughly 12 lots, they bought the property for $3.65 million.
“It was basically pie-in-the-sky advice,” Bass said.
She acknowledged that development is speculative and there were no guarantees that Eagle County would approve 24 units. However, that didn’t dismiss Clauson from the responsibility to give competent advice, she said.
The Colemans lost their Crown Mountain Plaza site in El Jebel through a foreclosure by Alpine Bank, Bass said. The brothers retained the ranch in Emma, but Bass said that property is worth substantially less than what they paid, based on Clauson’s assessment of the development potential.
The Colemans are seeking an unspecified amount of damages from Clauson for the work his firm performed on the two projects.
“Defendants were damaged as a result of Stan Clauson Associates Inc.’s failure to get a single approval issued for either the Coleman Ranch or the Crown Mountain Plaza projects despite being entirely responsible for the planning process on these projects for over two years and being paid approximately $75,000 in fees,” their lawsuit said.
Bass said the counterclaim is essentially a professional negligence case. She intends to convince a jury that Clauson’s firm gave her clients poor advice and service.
Clauson’s law firm, Brandt Feigenbaum P.C., declined comment.