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Project FAITH loses first round of court battle with King George

King George won the first round in court last week in its case against Project FAITH to get back a 5.53-acre parcel of land it gave to the non-profit residential development company in 2012 with conditions attached to construct and operate a facility referred to as a help center.
At a preliminary hearing on Dec. 18, the Circuit Court Judge, Hon. Joseph J. Ellis, denied Project FAITH’s Plea in Bar and Demurrer, both of which asked for dismissal of the county’s complaint.

BREACH OF CONTRACT
King George’s lawsuit, filed in October, charges breach of contract due to Project FAITH’s failure to meet its first major deadline under the contractual conditions in the two guiding legal documents, which was commencement of construction earlier this year, by Aug. 1.

The county’s complaint is asking the Circuit Court to either rescind the Deed of Gift and Performance Agreement, or to declare those documents null and void due to default. Either would result in the land going back to the county, effective July 30, 2012, in the first instance, or July 30, 2013, in the second.

PROJECT FAITH SOUGHT BOARD HEARING
At last week’s preliminary hearing, attorney Clark Leming, acting for Project FAITH, unsuccessfully argued that the county should have provided Project FAITH a requested hearing before the Board of Supervisors to contest the allegations contained in the Aug. 2 Notice of Default letter.

The court sided with attorney Edward “Sunny” Cameron’s argument that reiterated an Oct. 7 response letter from Eric Gregory to that request. Gregory’s letter on behalf of the county said the provision cited by Leming in the Deed of Gift for a hearing by the Board was not applicable.

Gregory is the county attorney being assisted by Cameron on the King George legal team.

Leming had also argued there were circumstances beyond Project FAITH’s control that it wanted to explain directly to the supervisors.

Leming also insisted that if the hearing had been granted, they might not have ended up in court, adding, “They wanted at least an opportunity to say what happened.”

While the judge disagreed with Leming’s contention that Supervisors were required to hold a hearing, he appeared to encourage that possibility going forward.

Near the end of last Wednesday’s hearing, Judge Ellis told the lawyers, “I think there’s a lot to be said about working it out before the board and not being in court.” Ellis added, “Either try to settle this matter, or else set a date for a hearing.”  

CURE PERIOD?
Leming also strenuously argued that the Notice of Default from the county should have stated that it was providing a 60-day ‘cure’ period, arguing the Performance Agreement grants that under paragraph IV- 4.

That section states, “County shall give notice of any default and shall allow Company sixty (60) days to cure any such default before any reversion under the Deed or this Agreement shall take effect.”

The county’s position is that no cure period was required. But Cameron said nonetheless it waited 60 days after its default notice to file its legal proceeding to get the land back. Cameron argued it wasn’t necessary to put it in the default notice, saying Project FAITH was aware that they were being provided a ‘cure’ period. Cameron said, “We’re not dealing with unsophisticated parties.”

He stated, “You can see from the correspondence after that, that Project FAITH clearly felt they had 60 days.” He added, “And the cure period ran with no cure.”

PROJECT FAITH ALLEGING COUNTY IS TO BLAME
With Project FAITH’s pleadings for dismissal of the case being denied by the court, both sides are expected to debate the developer’s contention that the county was to blame for its inability to commence construction.

Whether a cure period was required under the contractual agreements is a key element in Project FAITH’s current argument that the county is to blame for Project FAITH’s inability to get a permit to commence construction prior to the end of the 60 days following the Aug. 2 default notice.

Leming last week alleged that the county had dragged its heels to prevent Project FAITH from obtaining a building permit, or at least a site and foundation permit, to enable commencement of construction prior to the end of the 60-day period.

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