DeGraff seeking liquor license for new Aspen restaurant
The more than two dozen local businesses suing an Aspen restaurateur for nonpayment of debt will have their day in court, but it will take at least a year for the wheels of justice to turn for both sides.
Bill Kelly, the Denver-based attorney representing local restaurateur Scott DeGraff, said Friday that a trial date has been set for Aug. 22, 2011 in the lawsuits filed by Related WestPac — DeGraff’s former Snowmass Base Village landlord — and PCL Construction Services Inc. of Denver, the general contractor that renovated the spaces where two restaurants, Junk and Liquid Sky, were located.
As the owner and operator, DeGraff was evicted from the Base Village restaurants last fall after Related WestPac claimed he failed to pay $175,496 in back rent and most of a $2 million loan the development company granted him in November 2007. After Related WestPac sued, Pitkin County District Court Judge James Boyd placed the Snowmass properties in receivership.
In April, Boyd awarded a judgment against DeGraff and his company, Junk/LS LLC, for $703,433 in the lawsuit filed by PCL, which also is representing dozens of local subcontractors who say they haven’t been paid for the work done in Snowmass.
But the judgment was set aside because DeGraff was not properly served, Kelly said.
“He had not been properly served and couldn’t defend it,” Kelly said. “Now we get to defend ourselves.”
Last year, DeGraff said the work PCL had done wasn’t complete and the final payment was being withheld until the matter was resolved.
Chad Olivier, construction manager for PCL, said while the judgment has been deferred, Boyd’s ruling in his company’s favor is a good sign.
“When the judge made the ruling we considered it a victory,” he said. “We were hoping to get it resolved by now.”
As for the Related WestPac suit, Kelly said he’ll argue that the guarantee DeGraff entered into had been extinguished and the terms of the note were no longer valid.
“He provided certain amounts of funding under the terms and an account was established and it was drawn upon,” Kelly said.
He added that because Related WestPac failed to fully develop Base Village, it created a difficult climate to do business in and the company should be held partly responsible for Junk and Liquid Sky’s financial demise.
“I do believe [DeGraff] was a victim of a failed endeavor,” Kelly said, adding his client has successfully owned and operated restaurants and night clubs in Las Vegas, Chicago, Texas and other cities in the country for years.
DeGraff hasn’t realized that same success in Snowmass or Aspen. Last July, he was let out of the lease for the Red Onion, where he planned to open a second Junk location.
Liens and lawsuits have been filed against DeGraff on that property as well.
Bill Poss, owner of Poss and Associates, Architecture and Planning, filed a lawsuit in Pitkin County District Court last July, claiming that DeGraff’s companies, Fun Worldwide LLC and Junk/Red Onion LLC, owed him $117,135.79 for work done in the empty space on the Cooper Avenue Mall.
Poss’ Aspen-based attorney, Rhonda Bazil, said the lawsuit is pending and her client is still owed money.
The general contractor for the Red Onion renovation, Hansen Construction, filed a lien last June against Junk/Red Onion LLC for $293,620.
Both suits are part of the larger litigation against DeGraff that involves Related WestPac and PCL.
There are other liens filed against DeGraff, and his wife, Liza, for work done on their $8.4 million West End home.
Hac Inc. and Axelson Heironymous, the principal contractor for a newly built addition to the home on Hallam Street, filed a lien with the Pitkin County Clerk and Recorder last fall for $344,489.51.
Westminster-based Lafarge West Inc., still has a lien pending against the DeGraffs for $1,287 related to the Hallam Street addition. A couple of other liens filed by subcontractors for the residential job have been released.
Another lien, filed by Basalt-based electrician T&E Marshall Enterprises in April 2009, is still pending for work done nearly two years ago on DeGraff’s only operational restaurant, N9NE Steakhouse on the Hyman Avenue Mall. The lien has been reduced from $28,780 to $18,780.
Meanwhile, DeGraff has signed a new lease to take over the old D-19 space and Popcorn Wagon at the corner of Mill Street and the Hyman Avenue Mall. An escrow account has been established by the building’s owner, Mark Hunt, so that workers on that renovation are guaranteed payment at the time the work is completed.
DeGraff will have to go in front of the city’s liquor board, as early as July 6, to get approval for the transfer of a liquor license from D-19.
According to sources, several people, including those who are owed money by DeGraff, plan to attend the public meeting to speak against the liquor license transfer.
According to the city’s municipal liquor code, an applicant has to be in moral good standing. City attorneys are currently researching case law regarding that concept.
sack@aspendailynews.com