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Judge rules Chill-Can owner defaulted on $322K payment

YOUNGSTOWN — A judge approved a default motion by MS Consultants Inc. that the owner of the Chill-Can site on the city’s East Side failed to submit a timely response in a breach-of-contract lawsuit and ordered that $322,908 in unpaid bills plus interest be paid.

Less than three hours after the decision by Judge Maureen Sweeney of Mahoning County Common Pleas Court was filed, attorneys for M.J. Joseph Development Corp., the stalled Chill-Can business owner, submitted a motion to vacate the default judgment.

Luther L. Liggett Jr., attorney for MS Consultants, filed a motion March 15 for default judgment because of M.J. Joseph’s “failure to plead” by the March 13 deadline in response to the lawsuit.

M.J. Joseph attorneys had asked Feb. 13 for a one-month extension to file their response, which the court granted.

Justin Markota, an M.J. Joseph attorney, asked March 16 — the day after Liggett’s default judgment request — for a second extension, this time for seven days.

Sweeney instead on Monday granted MS’s motion for default judgment for the unpaid design fees owed by M.J. Joseph since Oct. 5, 2018, and 18 percent annual interest, which adds up to more than $200,000.

In her decision, Sweeney wrote that the defendant was served Jan. 17 by certified mail and “is in default for failing to file an answer or other pleading” by March 13.

The court docket shows a civil summons was successfully served Jan. 17 and another one to a different address was unsuccessful.

“This is a final appealable order; there is no just reason for delay,” Sweeney wrote in her decision.

The judge’s decision was filed at 9:20 a.m. Monday. Markota’s motion to vacate default judgment was filed at 11:56 a.m. the same day.

Markota wrote that the default judgment doesn’t comply with a court rule.

“By entering an appearance, defendant was entitled to notice and a hearing prior to this court’s entry of default,” he wrote.

Markota wrote that “without the requisite notice and hearing” the “default judgment is voidable.” He also requested a hearing “to allow the presentation of evidence upon this motion.”

Markota wrote that a court rule “requires that a party be given written notice of default seven days prior to a hearing to consider the application,” and Sweeney “improperly granted default judgment on (Monday) without following the procedural guidelines.”

Regarding the civil summons issue, Markota wrote that MS attempted service to an Irvine, Calif., address and M.J. Joseph was notified Jan. 18 and Feb. 27 that certified mail to the company’s statutory agent in Sunbury, Ohio, was unsuccessful and no further attempts were made to serve.

“The hearing requirement” in the court rule “is precisely why defendant must be permitted to present evidence to rebut any presumption of service,” Markota wrote. “Default judgment must be vacated to allow defendant to rebut plaintiff’s attempt at service.”

Liggett filed on Tuesday a certificate of judgment that also seeks court costs for MS with the “total accrued to be determined by the clerk” of courts.

In the Jan. 6 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.

MS has also filed a lien affidavit on the Chill-Can property.

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.

The project remains undeveloped and the subject of litigation between the city of Youngstown 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.

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