YOUNGSTOWN — After attorneys for M.J. Joseph Development Corp., the owner of the Chill-Can site, failed to submit a timely response in a breach-of-contract lawsuit filed by MS Consultants Inc., the architectural firm asked a judge to award it the $322,908 in unpaid bills by default.

Justin Markota and Brian Kopp, M.J. Joseph attorneys, asked Feb. 13 for an extension to file a response to the lawsuit. Magistrate Dennis J. Sarisky of Mahoning County Common Pleas Court gave them until March 13 to “answer, move or otherwise plead to” the complaint.

A response hasn’t been filed, but Markota filed a motion Friday asking for a second extension, this time for seven days.

Luther L. Liggett Jr., attorney for MS Consultants, filed a motion Wednesday for default judgment with Judge Maureen Sweeney because of M.J. Joseph’s “failure to plead.” He requested the judge award MS Consultants the $322,908 the firm contends is owed by M.J. Joseph and interest of 18 percent or at the statutory rate under state law.

The money has been owed since Oct. 5, 2018, according to the lawsuit.

“As the exact amount and date due appear in the complaint, rather than a general (allegation), defendant has admitted the amount of damages and prejudgment interest by failing to plead,” Liggett wrote.

MS filed the lawsuit Jan. 17. Markota and Kopp responded Feb. 13 that they would represent M.J. Joseph and asked for 30 days to answer.

By failing to respond, Liggett wrote that “no evidentiary hearing is required. The trial court has discretion to decide whether to hold a hearing regarding damages.” He added that when the complaint and motion for default judgment are clear on the financial damages, the court can award that amount.

Two days after Liggett’s request, Markota requested the seven-day extension stating that he was busy handling another case in Mahoning County Common Pleas Court that concluded Wednesday.

“As grounds, the court may grant additional leave to move or plead for good cause shown,” Markota wrote.

Markota told The Vindicator about the default judgment filing: “It’s a little premature in a case like this. Mahoning County local court rules say we get extra time. It’s a common practice to do this. We need a couple of extra days. We have an intend to defend it. The request doesn’t have merit. It doesn’t make much sense to file it as it’s not going to be granted. Default judgment is for those who ignore the system, not for those who participate in it.”

In the Jan. 17 lawsuit, MS listed five claims against M.J. Joseph, including two counts of breach of contract for paying $291,921 on a $614,829 bill.

M.J. Joseph was to make its final payment to MS on Oct. 5, 2018, and failed to do so, according to the lawsuit.

The 18 percent annual interest adds up to more than $200,000.

MS also has filed a lien affidavit on the Chill-Can property on the city’s East Side.

M.J. Joseph signed a contract with MS on Dec. 21, 2016, for design services for its proposed Chill-Can plant, according to the lawsuit.

CITY LITIGATON

The project remains undeveloped and the subject of litigation between the city and M.J. Joseph and Joseph Manufacturing Co. Inc., a sister company.

Mitchell Joseph, who owns the companies and was raised in Youngstown, had said the project, which broke ground in November 2016, would cost about $18.8 million and be in full operation by 2018 to produce the world’s only self-chilling beverage can.

M.J. Joseph failed to construct four finished buildings at the location and create 237 jobs by Aug. 31, 2021, Sweeney wrote in a Nov. 21 judgment entry in which she decided the company “breached the agreements” it had with the city to receive $1.5 million in water and wastewater grants for the project and “the city is entitled to damages” in that amount.

To date, there is one employee and three unfinished buildings at the 21-acre Chill-Can location.

Sweeney plans to hold a hearing on further potential damages to the city.

M.J. Joseph hasn’t repaid the $1.5 million to the city and plans to appeal the decision.

City Law Director Jeff Limbian has said he had “little expectation” the company would make good on what it owes Youngstown and the city “will have to continue to fight hard to reacquire city assets.”

Court documents in that case state the city entered into a development agreement with M.J. Joseph on Oct. 20, 2016, in which the company agreed to “construct and operate bottling and warehouse facilities and employ local residents. In turn, the city would issue payment of certain grant funds, transfer title to certain parcels of land and provide tax incentives to” Joseph. That specifically included the $1.5 million grant.

On July 27, 2017, there was an “amended and restated development agreement” that requires M.J. Joseph to construct four buildings and employ 237 workers by Aug. 31, 2021.

Before entering the agreement, “the city law department made clear” to Mitchell Joseph, who heads the company, by letter dated March 28, 2017, to his attorney that if the Chill-Can owners”failed to fulfill their obligations, the city would seek or could seek a number of specific remedies in addition to monetary damages. Plaintiffs chose to enter” into the agreement, according to Sweeney’s decision.

The city lawsuit seeks other money: $414,948.09 it spent on acquiring 15 properties it bought for the project, which also include relocation expenses. It also lists $318,532.71 in demolition and abatement costs and as of June 2021, at least a $575,000 loss in income tax revenue from the project’s failure. That lawsuit said the “full amount of lost income tax revenue will be proven at trial,” but the city stated it was losing about $18,333 a month. At that rate, the city would have lost almost $400,000 in additional income tax revenue.

The city filed a $2.8 million breach-of-contract lawsuit June 17, 2021, contending the company failed to live up to its promises to develop the business.

Knowing the city’s lawsuit was coming, M.J. Joseph and Joseph Manufacturing Co. Inc. filed a May 24, 2021, lawsuit against the city to stop it from reclaiming the $1.5 million in grants. That suit also contends the city doesn’t have any legal rights to money, property and buildings.

In a March 29, 2021, certified letter, the city informed Joseph he had 60 days to construct a number of buildings and hire about 150 workers or it would file a lawsuit. The city followed through June 17, 2021, with the lawsuit that was postponed because of the Joseph legal action.

M.J. Joseph attorneys have said the city’s lawsuit has caused the project to come to a complete standstill while acknowledging construction delays.