YOUNGSTOWN — Attorneys for the owner of the stalled Chill-Can plant object to Youngstown’s motion to be awarded by default $733,480.80 the city is seeking.

Chill-Can lawyers also object to requiring additional documentation for the ongoing lawsuit.

During a Wednesday hearing in front of Magistrate Dennis J. Sarisky of Mahoning County Common Pleas Court, Thomas F. Hull II, an attorney for the city, said lawyers for the Chill-Can owner have been “slow rolling or not producing discovery,” and “these discovery problems have plagued this lawsuit from the start.”

Discovery is the process in court cases in which parties exchange information about the case.

Hull said he’s had to file eight discovery motions, and Sarisky has twice ordered Chill-Can attorneys to provide information.

Because of that failure, Hull said, “Sanctions are appropriate, particularly in the amount of the default judgment.”

A court order “won’t do it. They just have no intention of satisfying their obligations,” he added.

The sanctioned amount of $733,480.80 by the city comprises $414,948.09 it spent on acquiring 15 properties bought for the project, which also included relocation expenses, and $318,532.71 in demolition and abatement costs.

Judge Maureen Sweeney on Nov. 21 agreed with a Sept. 28 ruling from Sarisky that M.J. Joseph Development Corp., which owns the Chill-Can location, breached a $1.5 million agreement with the city to receive water and wastewater grants for the project and the city was entitled to get the money returned.

Mitchell Joseph, who was raised in Youngstown and is the principal of M.J. Joseph and its sister companies, 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 and create 237 jobs by Aug. 31, 2021, as per its agreement with the city for $1.5 million in grants. To date, one employee and three unfinished buildings are at the 21-acre site.

SOUNDED BOTHERED

Sarisky sounded bothered Wednesday by Brian Kopp and Justin Markota, the Chill-Can lawyers, not following his orders.

“I don’t understand why we have to have six motions or requests for discovery, motions to compel,” he said. “Here we are, in this point in time, where we’re still not in compliance with discovery.”

Sarisky later said the city is “entitled to discover what they’ve requested.”

Kopp said that “blanket requests of everything is not reasonable.”

Markota added: “We complied the best we can.”

Kopp and Markota in a Feb. 6 court filing wrote that Sweeney’s decision on the $1.5 million “is not a final judgment or final appealable order” so it “does not permit the discovery of facts concerning a party’s financial status or ability to satisfy a judgment since such matters are not relevant and cannot lead to the discovery of admissible evidence.”

Hull said the Chill-Can lawyers have failed to produce required documents, which is “a great example of the lack of appreciation of this court that he’s relitigating what he’s already lost on multiple times.”

Kopp said: “We have repeatedly tried to resolve this matter in mediation,” and “it’s always met with paper, paper, paper.”

The two sides had one mediation session in August that failed to settle the case.

LAND AND MONEY

The city is looking to regain control of the Chill-Can property on the East Side as well as recoup its money. Chill-Can wants to retain the property and not repay the money.

Sarisky gave both sides seven days to respond to arguments raised at Wednesday’s hearing. He plans to rule on the sanctions after those are filed.

After the hearing, Kopp said, “Ultimately, we believe that this matter will go to trial sometime in the fall on some or some very limited issues, and there are appellate rights on both sides, a bunch of other things.”

If the two sides “don’t take control of this case” it “is going to linger for a decade,” Kopp said.

Kopp also said about Sarisky’s seven-day deadline, which the magistrate ordered and then immediately left the courtroom, that he and Markota are “going to take a look at the original motions based on the dialogue with the court today and we’ll form a response if necessary.”

Asked about the “if necessary” part, Kopp said, “Sometimes the briefs cover all of the questions that are here. It’s obviously now a pretty focused issue as to whether or not discovery needs to go forward.”

Kopp said: “The court is looking at certain aspects the city is looking for which we believe is just unnecessary litigation as opposed to getting to the point where we get to the trial and then see if discovery is necessary.”

NO REPAYMENT

M.J. Joseph hasn’t repaid the $1.5 million to the city.

In addition to the $1.5 million and the $733,480.80 for property acquisition and demolition is a city claim that as of June 2021, it lost at least $575,000 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 was losing about $18,333 per month. At that rate, the city would have lost more than $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 site.

Knowing the city’s lawsuit was coming, M.J. Joseph and Joseph Manufacturing Co. Inc., a sister company, 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 with the lawsuit that was postponed because of the Joseph legal action.

At an Aug. 4, 2022, hearing, Kopp said M.J. Joseph Development Corp. incurred about $2.9 million in labor and materials “and opportunity costs in not taking this project elsewhere, including buying equipment, that is sitting idle because we cannot come to a resolution.”

Kopp said Wednesday: “Mitchell Joseph made a significant personal contribution — when I say personal I mean his own company. There is no commercial lender. There is no bank. No one wants to put that kind of investment into a property and walk away from it.”

Kopp said, “If we can get this lawsuit out of the way, then everyone is going to continue to maintain a positive mentality about moving this project forward.”

City officials repeatedly have said they don’t believe Joseph will advance this project under any circumstances.

Hull raised concerns Wednesday about Joseph Co. International, also owned by Joseph, selling its building in Irvine, Calif., shortly after the lawsuits were filed. Equipment that was supposed to be used as collateral for the $1.5 million grant was stored there.

Only one document has been provided that shows a $10,000 piece of equipment was sold to a Joseph sister company, Hull said.

dskolnick@vindy.com