Lawsuit filed against Aspen restaurateur
July 24, 2009
ASPEN – Another lawsuit has been filed against embattled restaurateur Scott DeGraff, who recently was let out of his lease at Aspen’s historic Red Onion.
Bill Poss, owner of Poss and Associates, Architecture and Planning, filed a lawsuit in Pitkin County District Court Thursday, claiming DeGraff’s companies, Fun Worldwide LLC and Junk/Red Onion LLC, owe him $117,135.79 for work done in the empty Red Onion space on the Cooper Avenue Mall.
Poss filed a mechanics lien against the companies earlier this week, and the general contractor, Hansen Construction, filed a lien in June against Junk/Red Onion LLC for $293,620. Both Poss and Hansen did most of the millions of dollars in renovation for the building’s landlords, local attorneys Ron Garfield and Andy Hecht. But some work was done specifically as tenant improvements.
DeGraff refrained from commenting on the lawsuit because he hasn’t seen it, but he did say Poss has been paid.
“I feel very comfortable that I do not owe him any money,” DeGraff said, adding any work performed was for the benefit of the landlords and a future tenant. “I’m not the beneficiary of this work.”
Poss’ lawsuit claims that despite demand for payment, DeGraff’s companies have refused to pay the balance due.
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Garfield and Hecht terminated the lease with DeGraff last week.
DeGraff said it was an amicable split.
“We decided for the benefit of all that I’d be moving on,” he said. “I did what the landlord and I wanted … we tried, all of us, to make it work … I wish we could have made it work.”
The latest lawsuit brings DeGraff’s alleged debt to local companies to more than $1 million.
Colorado First Construction Co. and PCL Construction Services Inc. of Denver filed a lawsuit in June in Pitkin County District Court. The suit claims that DeGraff owes $663,732.41 for work done at his Snowmass’ businesses, Liquid Sky and Junk in Base Village, which opened in December and are now closed until next ski season.
The lawsuit claims DeGraff agreed to pay the construction group $1.89 million to perform “interior and exterior finish construction work.” The total was later upped to $2.11 million because of additional work.
As an inducement to commence work on the project, DeGraff “guaranteed payment” Nov. 3 to the construction group for the work, the lawsuit says.
The construction firms, which also have filed a mechanics lien on the property, claim they are entitled to foreclose and sell the property that houses Junk and Liquid Sky.
Chad Olivier, construction manager for PCL, said at the time that the lien filed by his company was a formality.
But when reached via e-mail earlier this month, Olivier’s position had changed.
“We have been more than patient under the circumstances, and are hopeful for a breakthrough soon so the contract can be closed peacefully,” he said. “The foreclosure action was the next necessary step to secure our interest in getting ourselves and the subcontractors involved paid what is currently due and owing on the project … The project was substantially complete on Dec. 23, 2008, and open for business, and we have overdue amounts in excess of four months now.”
DeGraff said it’s being sorted out privately, and he hopes to make an announcement on a resolution soon.
DeGraff said he never intended for his other restaurants in Snowmass Junk and Liquid Sky to be open in the summer because Base Village isn’t complete.
DeGraff’s only eating and drinking establishment that’s open is N9NE Steakhouse, operating in the former location of the Cooking School of Aspen on the Hyman Avenue mall. Currently it’s open Wednesday through Saturday.