Appeal filed in developer’s lawsuit

A jury awarded hundreds of thousands of dollars to a local developer and his former employee as part of an ongoing civil lawsuit, but an appeal has been filed.

The lawsuit filed by developer Greg Allen against his former employee, Jeff West, went to trial last year. A jury awarded Allen $824,000 and West $459,135, according to court records.

Now, West and his attorneys have filed an appeal of the jury’s decision, saying the amount West was required to pay — $220,000 — was off the mark.

The lawsuit filed by Allen claims that West and another former employee, Kim Hutchinson, made unauthorized payments to themselves from Allen’s development companies and then concealed the thefts. Hutchinson was charged with wire fraud in U.S. District Court, pleaded guilty and was sentenced to 18 months in federal prison and ordered to pay $446,000 in restitution. West was never arrested or charged.

In his lawsuit, Allen claimed that West, who was president of two of Allen’s companies — J. Greg Allen Builder Inc. and Princeton Homes — told Hutchinson, who worked as controller and assistant treasurer, to reflect the improper payments to himself and others as payments to a vendor in the companies’ financial statements. Allegations made in a civil lawsuit are the opinion of the person filing them and can be refuted at trial.

Both companies ceased operations in 2011, laying off employees.

After the trial last year, the jury awarded Allen $600,000, to be paid by Hutchinson, and another $224,000 to be paid by West, according to court records.

The amount West was ordered to pay was based on a claim of breach of fiduciary duty, which he is appealing, said Tom Vander Luitgaren, West’s attorney.

They don’t believe Allen and his attorneys proved that West violated his fiduciary duties, especially since West didn’t financially benefit from Allen’s companies losing money, Luitgaren said. The companies were losing money for years, which was due to the economy, not West, he said.

“The company just went bust because they didn’t have any more houses to build,” Luitgaren said.

The jury also awarded West more than $459,000 to be paid by Allen and his companies on a claim of defamation of character, according to court records. The amount awarded was reduced by the court, based on state law, to $300,000, Luitgaren said.

They argued that Allen was being vindictive in telling people that West had stolen from him, when the evidence clearly showed Hutchinson had stolen the money, Luitgaren said.

Allen was surprised by the defamation award, which he said stemmed from a letter he sent to suppliers and subcontractors about the thefts and the final impact to the companies.

“I can’t understand how they would come down with that with how they ruled on these other things,” Allen said.

Allen said he was disappointed by the appeal because he had hoped to move on from the lawsuit.

Author photo
Annie Goeller is managing editor of the Daily Journal. She can be reached at agoeller@dailyjournal.net or 317-736-2718.