PEABODY — The city has filed a lawsuit in Essex Superior Court against Middleton appraiser Greg Story seeking damages in connection with an appraisal he conducted in an eminent domain seizure of the historic O’Shea Mansion in 2016.
The complaint, filed July 30, alleges that Story was negligent and breached the terms of a contract he entered into with the city to conduct the appraisal.
The city is seeking damages in the amount of $7,587 for services paid by the city to Story and an additional $725,000 in damages, according to a civil action lawsuit filed by City Solicitor Donald L. Conn.
The property was owned by Empire Design and Development, LLC, which purchased the property from the city in 2015 for $350,000. Empire owner Michael Corsetti of Gloucester planned to demolish the then-123-year-old landmark and replace it with apartments and shops.
According to the complaint, the city took the land by eminent domain in 2016 to prevent its demolition, paying Empire $425,000 in compensation for the seizure. The city and Story entered into a contract in 2016 in which Story agreed to appraise the property and testify as an expert witness on behalf of the city in the event litigation ensued, the filing said.
Empire sued the city in Superior Court, claiming the compensation was too low as the appraised value of the property was closer to $1 million. The lawsuit sought $1.8 million in damages.
The complaint states that on July 31, 2018, Story was deposed in the lawsuit. The deposition revealed that Story had been placed on probation for a six-month period by the Board of Registration of Real Estate Appraisers and was fined $2,000. That was the first time the city says it learned Story had entered into a consent agreement, dated April 10, 2018, with the board and that he had been placed on probation and fined.
“At no time prior to his deposition had the defendant disclosed the existence of the consent agreement to the plaintiff (the city),” the complaint said.
Following Story’s deposition, the appraiser’s attorney informed the city that he would not give expert testimony in the Superior Court case filed by Empire, according to the complaint. The filing continues that “after the defendant’s refusal to testify, and without an expert witness after the deadline for expert disclosure, the plaintiff settled the litigation.”
That settlement, along with a settlement in a U.S. District Court case filed against the city by Empire alleging violation of civil rights, resulting in the city having to pay a total of $825,000 in November 2018.
The complaint claims that Story’s “failure to disclose that he had been placed on probation and his failure to testify constituted a breach of contract, and that as a direct and proximate result of of the defendant’s (Story’s) breach of contract, the plaintiff paid to sett(le) the litigation and paid the defendant for services that had no value and has otherwise been injured or damaged.”
The city is also seeking treble damages, costs and attorneys’ fees under state law, claiming that Story’s actions constituted unfair and deceptive acts and practices that are prohibited by the commonwealth.
The city also alleges that Story’s actions and omissions constitute a breach of implied covenant of good faith, and that his actions were negligent as he “failed to provide the plaintiff with an appraisal, which could be used in litigation.”
The city has demanded a jury trial. Story is required to file an answer to the complaint no later than Nov. 29. The deadline for a final pre-trial conference and/or setting a trial date is Nov. 22, 2022, with the case to be resolved no later than July 31, 2023.
Conn did not respond to a request for comment.
