YOUNGSTOWN — The attorney for developer Dominic Marchionda and two of his companies told a judge that Youngstown filed its lawsuit seeking $834,608 against his clients past the statute of limitations — despite the city’s contention it didn’t — and the case should be dismissed.

Attorney Gregg Rossi, who represents Marchionda and the companies, wrote that the city’s opposition to his clients’ request for summary judgment isn’t valid and the case should be dismissed because Youngstown’s lawsuit was filed past the six-year statute of limitations.

The city filed the lawsuit Nov. 21 against Marchionda, U.S. Campus Suites and Erie Terminal Place LLC, as well as ex-city Finance Director David Bozanich in Mahoning County Common Pleas Court for their involvement in a public corruption case.

Marchionda, Bozanich and U.S. Campus Suites LLC all pleaded guilty to felonies after taking deals on Aug. 7, 2020.

The statute of limitations argument was raised in Rossi’s first filing — a Jan. 2 answer and counterclaim. He also raised it in a Feb. 11 motion for summary judgment.

Rossi wrote the issues raised in the city’s lawsuit were included in annual state audit reports in 2012, 2013 and 2014.

In an April 28 response to the summary judgment request, Hilary DeSaussure of the Akron law firm of Brennan, Manna & Diamond LLC, which is representing the city, wrote the six-year statute of limitations for the city’s claims did not begin until the state auditor filed a 2021 report containing findings for recovery, which included findings of illegal expenditure and misappropriation.

In his May 22 filing, Rossi wrote that state law doesn’t specify whether questions about the legality of spending public money are identified in a regular or a special state audit.

“The city’s interpretation would, in essence, provide them an unlimited statute of limitations,” Rossi wrote. “In essence, if the court accepted the city’s position, the auditor could file a ‘special report’ whenever it chose and then the appropriate municipality could claim that the six-year statute of limitations runs from that date. Such a position should be rejected as antithetical to the purpose of statutes of limitations.”

Pointing to the 2012, 2013 and 2014 state audits, Rossi wrote: “The city hides behind the argument that this information could not have been obtained at the times of these reports. It certainly would have been if they did not sit on their hands. Furthermore that information contained in the ‘special report’ of 2021 was certainly obtained by investigation by the auditor in 2015 and 2016, which resulted in the indictments in 2017 and of which the city was clearly aware of.”

Rossi added: “The city of Youngstown cannot be rewarded or saved by doing nothing between 2015 and 2021 as it related to this matter and then claim a new six-year statute from the date of the special report.”

DeSaussure wrote April 28: “It is well settled that the statute of limitations to assert a claim under (state law) is six years from the date of the state auditor filing its findings of recovery. This six-year limitation period begins to accrue at the time a report is filed that contains specific findings of recovery or illegal expenditure, not at the time the violations or illegal expenditures occurred.”

Visiting Judge W. Wyatt McKay, who is hearing the case after all Mahoning County Common Pleas Court judges recused themselves, hadn’t ruled on the summary judgment or the counterclaim from Marchionda and the two companies as of Tuesday.

The city’s lawsuit accuses Bozanich, Marchionda and the companies of defrauding Youngstown out of $834,608.

Marchionda, Bozanich and U.S. Campus Suites LLC all pleaded guilty to felonies after taking plea deals on Aug. 7, 2020.

Bozanich pleaded guilty to one count each of bribery and tampering with records, both felonies, and two misdemeanor counts of unlawful compensation of a public official. Bozanich spent nearly a year in a state prison for his crimes.

Marchionda pleaded guilty to four felony counts of tampering with records, all occurring on Oct. 6, 2011, admitting he used false invoices to get money from the city for his Erie Terminal Place downtown-housing project to pay bills he owed for the Flats at Wick.

U.S. Campus Suites LLC pleaded guilty to a felony count of receiving stolen property for illegally obtaining money from the city.

Charges against Erie Terminal Place LLC were dropped as part of the deal.

The city received $100,000 from Hartford Fire Insurance Co., Bozanich’s bonding company, when he was finance director, as partial payment of the $614,608 it is seeking specifically related to funding given at Bozanich’s behest to Marchionda to develop the Flats at Wick.

The $100,000 from Hartford would be deducted from the amount the city is seeking, though the company filed a motion to intervene in this case on Jan. 17, seeking to get that money from Bozanich. McKay hadn’t ruled on that motion as of Tuesday.

Bozanich’s conviction for tampering with records stemmed from him giving $1.2 million from the city’s water and wastewater funds, divided evenly, to Marchionda if he gave $1 million of it to the city’s general fund in December 2009 to buy the property for a Madison Avenue fire station, which was subsequently closed. That transaction allowed Bozanich to balance the city’s general fund that year.

The state auditor began its investigation into the transaction after The Vindicator reported on it.

The lawsuit states the fire station purchase “was a calculated scheme, facilitated by U.S. Campus Suites and orchestrated by Dominic Marchionda and David Bozanich to illegally transfer money from the city’s water fund and wastewater fund to the city’s general fund in violation of” state law.

Marchionda, who wasn’t convicted of any crime related to the fire station transaction, got to keep the extra $200,000 from the city grant.

The city also paid $3,220 in closing costs.

The appraised value of the fire station at the time was $411,388, according to the lawsuit.

As for the $200,000 from the original $1.2 million grant, Rossi wrote in his Jan. 2 filing that more than that amount was used for water and wastewater work related to the student-housing project.

The fire station, Rossi wrote in a Jan. 2 answer and counterclaim, was deemed as surplus property by the city “with no value and no use” so the monetary recovery claim “is unfounded.”

If U.S. Campus Suites LLC is liable for the value of the fire station, Rossi wrote the fair market value is zero with the county auditor valuing it at $46,000 for property tax purposes.

If it’s determined that the lawsuit is not barred by the statute of limitations, Rossi wrote U.S. Campus Suites LLC seeks the $1 million “in grant money improperly received by the city of Youngstown as a result of the transaction.”

The lawsuit seeks a total of $614,608 from the two men and two companies: $411,388 for the fire station purchase, $3,220 for the closing costs, $100,000 from the wastewater grant and $100,000 from the water grant.

The city is seeking $220,000 from Marchionda and Erie Terminal Place LLC — $110,000 each for water and wastewater grants given to that project which Marchionda pleaded guilty to creating false invoices.

In addition to the $834,608, the city is seeking costs and interest on the money, and for Bozanich to “forfeit and disgorge any and all compensation he received from the city during the relevant time period pursuant to the faithless servant doctrine in an amount to be determined at trial.”

Bozanich was city finance director from Nov. 15, 1993, to Dec. 31, 2017.