City weighs contractors case appeal

FORT SMITH — The attorney who represented the city’s losing effort in a breachof-contract trial last month involving the River Valley Sports Complex told city directors Tuesday that getting a reversal on appeal would be difficult.

City directors agreed during a study session Tuesday to vote next Tuesday on whether to appeal the Sept. 11 Sebastian County Circuit Court jury’s verdict that the city breached contracts with four contractors and that River Valley Sports Complex Inc. developers did not break an agreement with the city.

If they decide to appeal, attorney Michael Jones of Mountainburg, who represented the city in the case, said the city directors might expect a ruling by next summer. The deadline for filing a notice of appeal is Oct. 27, Jones said.

The verdicts mean that the city must pay more than $200,000 owed to the contractors that the sports complex developers, former state Sen. Jake Files and partner Lee Webb, hired to do work on the complex before the city terminated its agreement with Files and Webb for failure to meet deadlines to finish the project.

City directors seemed inclined Tuesday to want to appeal the verdicts. They said they thought the city was wronged by Files and Webb, who didn’t pay their contractors and left the city to pay the debt.

City directors said they paid Files and Webb $1.08 million so Files and Webb could pay the contractors, and they want to know where that money went.

The contractors in the sports complex project were taken advantage of, as was Fort Smith, Jones said.

In 2014, Files and Webb approached the city seeking to build a tournament-quality complex of eight ball fields, plus amenities, to draw in teams from around the region as an economic boost to the area.

The Fort Chaffee Redevelopment Authority donated 63 acres to the city for the project, and the city agreed to give Files and Webb up to $1.6 million. The developers were to finish the project — estimated to cost as much as $5.5 million — with donations of work, material and labor.

But Files and Webb consistently missed deadlines, which city directors continued to extend until the end of 2016, when the developers said they wanted to withdraw from the project.

In February 2017, city directors voted to terminate the agreement and demanded that Files and Webb return the $26,945.91 in state General Improvement Fund grant money they received from the city for infrastructure work at the sports complex.

Files had suggested that city officials apply for the grant money, which he authorized to be released to the Western Arkansas Planning and Development District for distribution to the city for the sports complex project.

But Files falsified bids for the project so one of his employees would win the bid. He had the employee forward the money to him, which he used to pay employees of his construction company and deposited a cashier’s check into his bank account.

Files pleaded guilty in U.S. District Court to charges of wire fraud and money laundering in connection with taking the grant money, and began serving an 18-month federal prison sentence Aug. 2. The four contractors — B&A Electric Inc., Megehee Fence Contracting LLC., Grimes Dozer Service Inc., and James Griffith — sued Fort Smith for the more than $200,000 that the sports complex owed them for work they did at the complex. City officials responded that the contractors’ agreements were with Files and Webb and not the city, and that the contractors should seek payment from the developers.

The city then sued the sports complex for the return of the General Improvement Fund money and any other expenses the city had incurred as result of the project.

Jones told city directors Tuesday that an appeal would go before the Arkansas Court of Appeals, and that appeals courts typically don’t like to overturn judges or jury verdicts.