Debt not city’s, Fort Smith says

Ball-field ruling appeal OK’d

FORT SMITH — Insisting that River Valley Sports Complex partners were responsible for failing to pay four contractors more than $200,000 for work on the failed ball-field project, city directors voted Tuesday night to appeal a jury verdict that ruled the city was liable for the debt.

Directors passed a resolution to give notice of appeal to the Arkansas Court of Appeals of a Sebastian County Circuit Court jury verdict last month that Fort Smith had breached contracts with the contractors. Fort Smith claimed the sports complex’s partners, former state Sen. Jake Files and Lee Webb, hired the contractors on their own and that the contractors should seek payment from Files and Webb.

The vote on the resolution was 6-0 with Director Keith Lau abstaining, saying he had a conflict of interest because he has pressed criminal charges against Files over another matter.

Director Andre Good said he believed the city should appeal the verdict because directors owed it to Fort Smith residents to protect the city’s money. He also questioned why financial information that directors received from city staff Tuesday had not been presented to jurors during the trial.

City Administrator Carl Geffken said the city’s trial strategy was not to attack the contractors who had done work but to go after Files and Webb for failure to forgive their obligation to pay the contractors.

Director Mike Lorenz said the city should appeal so as not to set a precedent. The city cannot be held responsible for conflicts between contractors and subcontractors, he said. Otherwise, the city faced the danger of subcontractors suing the city when contractors fail to pay them for their work.

Director Kevin Settle said he believed the city should consider pursuing criminal charges against Files and Webb for the damage they did to the city by failing to pay the contractors and leaving the city to pay the debt.

The four plaintiffs in the lawsuit — B&A Electric Inc., Megehee Fencing Contracting LLC, Grimes Dozer Service Inc. and James Griffith — charged that the River Valley Sports Complex was acting as an agent of the city and, as such, the city was responsible for the sports complex’s debt after the city terminated its contract with the partners in February 2017.

The jury also ruled against Fort Smith in its third-party complaint that the River Valley Sports Complex breached its contract with the city in failing to complete the proposed tournament-quality ball field complex as set out in the agreement.

The verdict also meant the city would not recoup the $25,945.91 in state General Improvement Fund grant money that Files pleaded guilty in U.S. District Court to falsely taking.

Files had persuaded city officials to apply for the grant money, over which he had control, and use it to pay for infrastructure work on the sports complex, which by December 2016 was unfinished and far behind schedule.

But Files submitted falsified bids for the job so that an employee of his was awarded the project. After the employee received the money, Files instructed her to turn it over to him, which he used to pay his construction company employees and to deposit into a bank account in his name.