A Victoria County company has filed suit against four corporations, alleging it was cheated out of almost $75,000.
Service Supply of Victoria claims it provided plumbing, air conditioning and electrical supplies for defendant Lankford Mechanical.
However, Landmark did not pay for the materials, according to the complaint filed May 20 in Jefferson County District Court.
"As of the date of the filing of this lawsuit, Defendants owes (sic) Plaintiff the principal balance of $73,590.68," the suit states. "As a direct result of Plaintiff providing goods and services, a benefit was conferred on Defendants, in that Defendants obtained Plaintiff's goods and services without paying for them."
After Service Supply did not get paid for its work, it sent a notice on Dec. 15 to defendants Lankford, Port Arthur Interest Development and DHN Construction. The notice informed the defending companies of their obligation to hold construction funds in trust so that Service Supply could eventually be paid, the complaint filed May 20 in Jefferson County District Court states.
However, construction funds continued to be paid to the general contractor, DHN, which was a violation of the trust fund obligations, the complaint says. In addition, DHN used the funds to their own benefit and did not hold them in trust, according to court records.
Southwestern Bank, another defendant, was notified of what was occurring, but failed to work out a joint check agreement or payout agreement, the suit states.
By Dec. 15, Service Supply still had not been paid, so it filed a perfected mechanics and materialmens lien affidavit in Jefferson County District Court.
"This petition is intended to foreclose on that perfected lien affidavit and to sell the property in question at public sale," the suit states.
On Jan. 27, the bank's attorney, Tri Nguyen, contacted Service Supply's attorney, Christopehr L. Janak of The Janak Law Firm in Victoria, and informed him Service Supply would have to complete an agreement regarding outstanding balance in order to be paid, Service Supply states.
Later, however, Service Supply learned the bank would not complete the application because of problems with DHN, the complaint says.
"During this time period the suppliers have gone unpaid," the suit states. "In addition, construction proceeds have been paid in violation of the trust bund restrictions and an argument is now being made that certain contractors have been paid a greater percentage of the contract value than they are entitled."
DHM and Port Arthur Interest contend they are unable to pay their bills, according to court records.
But Service Supply argues DHM and Port Arthur Interest are in the process of transferring assets into the possession of insiders and family members.
"Plaintiff would show that certain assets of Defendants were disposed of to the advantage of, or for the benefit of insiders (discovery will identify the existence or extent of benefit conferred on other Defendants), and as a result, the corporation was rendered incapable of paying its debts," the suit states. "Defendants' retention of these assets and property is the result of the fraud perpetrated on Plaintiff by these Defendants."
Service Supply says the transfer of the defending companies' property was done so Service Supply would be prevented from obtaining money it says it is due.
Part of the basis for Service Supply's allegation is that the transfer was concealed and Port Arthur Interest will become insolvent shortly after the transfer is made, according to the complaint.
In addition to the money it says it is owed, Service Supply is requesting the court rule that DHM"s and Port Arthur Interest's assets be held in trust for Service Supply's benefit.
It is also seeking interest on the account of $7,987.45, plus pre- and post judgment interest at the highest legal rate, attorney's fees of at least $25,000, costs and other relief to which it may be entitled.
The case has been assigned to Judge Gary Sanderson, 60th District Court.
Jefferson County District Court case number: B184-122.