Mark Hunt, others seek dismissal of restaurant row couple’s suit | AspenTimes.com

Mark Hunt, others seek dismissal of restaurant row couple’s suit

The owners of a two-floor penthouse on 308 E. Hopkins Ave. are litigating in federal court to stop a bank from foreclosing on the rest of the building. Last week the defendants filed motions to dismiss the case on the grounds that it belongs in state district court.

Defendants in a restaurant row couple's federal lawsuit to thwart a building-foreclosure sale have joined forces to dismiss the case.

Attorneys for one of the building's owners, Alpine Bank, and developer Mark Hunt filed separate motions last week to throw out the lawsuit, which was filed by New Yorkers Michael Sedoy and Natalia Shvachko, who own a two-floor penthouse at 308 E. Hopkins Ave.

The couple are trying to stop a foreclosure on the building because its owners owe them a $1.28 million court judgment. The foreclosure action includes two commercial and three affordable-housing units in the 308 E. Hopkins Ave. building, where the couple's two-level penthouse also is located. The penthouse is not subject to the foreclosure sale, which Pitkin County has set for Nov. 18.

The couple argue that selling the building for a cut-rate price at foreclosure jeopardizes Sedoy and Shvachko's chances of being made whole on the judgment, their suit says.

"Should the foreclosure sale proceed as now scheduled, the amount obtained at such sale would not be enough to satisfy the Sedoys' lien," the couple's suit says.

The defendants' motions argue the case does not belong in federal court and also rehashes arguments that were heard at trial in October 2014 in Pitkin County District Court.

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A ruling in the trial didn't come until May, when Judge Gail Nichols, who has since retired, ordered building owner JW Ventures to pay $1.28 million to Sedoy and Shvachko.

Nichols also determined JW Ventures — which is controlled by John Provine, James Farmer and Charles Cunniffe — wrongly assured the couple when they bought their units that they would have exclusive rights to the building's front entrance, east stairway and main elevator. Additionally, the judge ruled the couple violated a city of Aspen ordinance by barring renters of affordable-housing units in the building from using the access.

In September, Nichols heard the couple's contempt-of-court complaint that alleged the Bootsy Bellows nightclub, located in the building's basement, violated the judge's order because it doesn't operate as a restaurant. They also accused the building's homeowners' association and JW Ventures of violating the judge's order by allowing Bootsy Bellows to be open as a nightclub (the owner of Bootsy Bellows has maintained the business is both a bar and restaurant) and allowing loud noise to come from it.

But they withdrew the motion, and two days later on Sept. 30, the couple sued a collection of defendants in the U.S. District Court of Denver.

The couple have a $1.28 million lien on the units owned by JW Ventures, and they have argued their lien deserves priority over the $500,000 loan that Hunt provided to JW Ventures in June 2014. Hunt also has had the building under contract to buy for $6 million since February 2014. But the pending sale has been frustrated by subsequent litigation and foreclosure action, prompted by Alpine Bank, which is owed $4.88 million on an original principal of $5.3 million, according to county records.

The couple also have accused Hunt of aiming to buy the building at lower than the $6 million agreement at a foreclosure sale.

In their motions to dismiss the federal case, the defendants argue Sedoy and Shvachko are "shopping" for a legal venue that fits their agenda.

"Some federal lawsuits should be filed in state court instead of federal court," wrote Denver attorney Philip W. Bledsoe in a motion to dismiss the case against Pelham Holding Corp., which is a holding company controlled by Farmer of JW Ventures. "This lawsuit not only belongs in state court — it was actually filed and litigated to judgment in state court."

rcarroll@aspentimes.com