Friday, December 24, 2010

Former mayor sues land speculator

Young alleges breach of contract by Triumph Mineral Co.

Express Staff Writer

Disbursement of proceeds from the sale of this East Fork-area property in 2008 to Denovo Independence LLC is the subject of a lawsuit in Blaine County 5th District Court that pits former Ketchum Mayor Larry Young against Triumph Mineral Co. Photo by Mountain Express

A jury trial is scheduled to start early next year in a lawsuit that pits former Ketchum Mayor Larry Young against Triumph Mineral Co. in a business deal that apparently went sour.

In his suit against Triumph, owned by land speculator Carl Massaro, Young alleges that he was short-changed in receiving his share of the proceeds in the sale two yeas ago of land and mineral rights in the East Fork Area to Denovo Independence LLC.

Young alleges in a civil complaint filed in January in Blaine County 5th District Court that Massaro agreed that in lieu of payment for legal services he would reimburse Young 20 percent of the proceeds from the sale, which brought more than $6 million, but paid him only $270,000.

Massaro claims in court documents that there was never a firm agreement between Triumph and Young and that Young failed in his responsibilities as an attorney to fully represent Triumph in the sale of assets to Denovo.

The property in question was an ill-fated land-and-mineral-rights acquisition made by Denovo in 2008 of the Triumph Mine area and the ridge between East Fork and Elkhorn. Denovo intended to develop an upscale subdivision in the largely uninhabited area, but the plan was shot down by the city of Sun Valley, which declined to annex the land into the city.

Without annexation, the property was subject to Blaine County's Mountain Overlay District ordinance, which greatly restricts residential development in rural mountainous areas.

The trial is scheduled to last four days, starting on Feb. 8.

Young, an attorney who served as Ketchum's mayor from 1988-1992, won a partial victory earlier this month when Judge Robert J. Elgee dismissed a counterclaim filed against him by Triumph. Massaro alleged in the counterclaim that Young was already paid more than his services were worth.

Legal dispute

Young alleges in his complaint that he was retained by Massaro in 2006. He acknowledges that his agreement with Massaro was a "verbal contract" but states that the agreement to pay him 20 percent of the sale cost is documented in Massaro's correspondence with other investors and that he was "unjustly deprived of the benefits and amounts owed him."

Massaro alleges in his answer to Young's claim that Young dropped out of the deal midway through the process of selling the property.

Massaro claims that in the spring of 2008, Young "informed Massaro that he would no longer be a part of the TMC [Triumph Mineral Co.] sale transaction and would withdraw his legal services unless Massaro took his advice and sold TMC assets for half the amount that Massaro wanted."

The Massaro claim states that Massaro declined to sell the assets when advised by Young and that from that point on, Young did not provide legal assistance and that Massaro had to hire new legal counsel.

The Massaro claim states that in addition to the $270,000 paid to Young from the disbursement of proceeds from the Denovo sale, Young was paid $9,000 in retainer.

"Young received a greater benefit from the sale of TMC's assets than what TMC received in exchange for Young's legal services," Massaro claims.

Neither Young nor Massaro could be reached for comment by press deadline Thursday.

Terry Smith:

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