2/7/14 First Merit withdrawals foreclosure lien after LifeCare Hospice, Bogner Construction look to settle claims out of court

  • By Nick Sabo
  • February 7, 2014
  • 394
                        
SUMMARY: First Merit will continue to finance construction of LifeCare's new inpatient facility A bank foreclosure lien has been dropped as an ongoing legal dispute between Bogner Construction Management Co (BCMC). and LifeCare Hospice goes into arbitration. First Merit Bank, which provided financing for LifeCare’s new inpatient facility, has dismissed a primary lien for $3,022,135.38 against the property, located at 1900 Akron Road, Wooster, First Merit legal representative Robert Preston said Friday Feb. 7. Preston spoke following a hearing in Wayne County Common Pleas Court in which Judge Corey Spitler ordered legal foreclosure proceedings between LifeCare and BCMC stayed while the case moves into arbitration with the American Arbitration Association. The arbitration will seek to settle a claim out of court for money owed brought against LifeCare by BCMC. The primary lien would have allowed First Merit to collect first if BCMC’s case was successful and the new inpatient facility was to go into foreclosure. Preston said First Merit’s intentions was only to protect its stake in the building. First Merit will continue to finance construction of the facility. “First Merit will continue to finance the project,” Preston said. “It was never (First Merit’s) intention to foreclose...the lien was about preserving their interests.” LifeCare Hospice took out a five year construction loan with First Merit Dec. 10, 2012 to fund construction of the hospice inpatient facility. According to court records, the initial amount of the loan was for $5 million, with an $800,000 line of credit. The loan was amended to $7 million and a $405,000 line of credit May 30, 2013. The loan carried the provision that the care facility be kept free of any mechanic liens, such as that brought by BCMC. LifeCare attorney Joseph Isabella said the inpatient facility is “eight to 10 weeks” worth of work away from completion. In the foreclosure action, BCMC is seeking $2.7 million in damages. BCMC started construction of the facility, but stopped after LifeCare switched architects. BCMC has alleged that new architect, Eberhard Architects, LLC, mishandled the project and withheld payment for completed work. Isabella said he expects the arbitration to last at least four months. Other liens filed against LifeCare by subcontractors totaling $1.6 million have been paid by LifeCare. The arbitration will center around the lien filed by BCMC and claims by Duer Construction.


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