City Seeks Judgment on Additional Damages in Chill-Can Case

YOUNGSTOWN, Ohio – The city is requesting that a Mahoning County Common Pleas Court issue sanctions and a judgment by default in its favor regarding the remaining damages it seeks from the developer of the stagnant Chill-Can project.

According to a motion filed April 17, the city says M.J. Joseph Development Corp. has repeatedly refused to comply with court orders compelling it to produce discovery information to city attorneys. 

The city is asking the court to order sanctions and judgment by default against M.J. Joseph of up to $733,480.80 in addition to attorney’s fees to be determined at a future hearing.

Motions filed in court Jan. 18 show that the city wants M.J. Joseph Development and a related company, Joseph Manufacturing Co. Inc. of Irvine, Calif., to produce documents identifying the whereabouts, condition or sale of certain assets and equipment that were used as collateral for a security agreement the parties signed in 2017.

The motions were prompted by a Business Journal story published in October that reported the developer’s parent company – Joseph Co. International – had sold its building in California for $5.4 million in August 2021, an attorney representing the city told The Business Journal earlier this year.

In its latest round of discovery requests, the city had asked for documentation regarding the sale of the building at the address.

Attorneys for M.J. Joseph objected to the request, noting it was “outside the scope of permissible discovery and not property directed to this party.” The response further stated that “JMC [Joseph Manufacturing Co.] was not the owner of the property identified in this request.”

According to the filing, the city noted that the company presented a list of equipment in 2016 that was worth “well in excess of $13 million.” However, M.J. Joseph had provided just one responsive document to the city’s request, a wire for $10,000 with the memo “lot of machinery and equipment.”

The security agreement provided guarantees for a $1.5 million development grant that the parties also signed that year. That agreement stipulated that the company would build a $20 million campus to produce self-chilling cans at a site on the East Side and create at least 235 jobs.

The project remains unfinished, and the company reports just one job has been created after nearly six years.

Judge Maureen Sweeney earlier ruled that M.J. Joseph must repay the city the $1.5 million for breach of contract. The city is seeking the additional damages related to expenses it incurred for the acquisition and demolition of houses and relocation of residents in the neighborhood along Lane Avenue.

In March, the court ordered that M.J. Joseph abide by the city’s request for additional information and respond within 10 days. The city filed a renewed request for sanctions April 7.

“At this point, the lawsuit has now been pending for almost two full years during which there has been nothing but a lengthy string of delays and unnecessary litigation costs related to trying to get plaintiffs to comply with their discovery obligations,” the motion said.

M.J. Joseph sued the city in May 2021, claiming it did not have the legal standing to collect monetary damages. The city filed a counterclaim in June of that year seeking return of the $1.5 million and the additional damages.

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