HUNTINGTON - A Huntington doctor is charging fraud against the partners with whom he helped to create Regency Park Assisted Living Facility.
Bobby Miller, M.D., filed a lawsuit July 10 in Cabell Circuit Court against Jon Grant, James Jeffery, John DeLeonibus, Regency Park at Huntington and Huntington Facility.
He claims the defendants conspired to take investments from him and that he has lost more than $200,000 as a result. He also says he's potentially on the hook for $3.2 million as a result of a Guaranty Agreement that he signed in order to obtain a construction loan from BB&T banks.
"The defendants… fraudulently misrepresented to Plaintiff that the defendants had sufficient financing in place to acquire and renovate the subject property," the complaint says. "Plaintiff eventually discovered that Defendants did not have financing in place to acquire and renovate the property as was represented to him when he initially invested in the project."
Miller says he was approached in 1998 by Grant, Jeffery and DeLeonibus with a proposal offering 10 percent interest in the facility. He says they claimed they needed a West Virginia resident as their partner and offered to make him the medical director for a dementia program he could develop. Miller is a forensic psychiatrist.
He says they also claimed they would register the Regency Park building as a historic landmark, which meant Miller would receive state tax credits of approximately $400,000.
Also, he says they told him they had a contractor and financing in place to complete the project.
Miller says he agreed and gave the defendants a check for $63,750.
The group, known then as Huntington Facility, took out a loan from BB&T in the amount of $3.2 million to purchase and renovate the former Foster Memorial property on April 9, 1999, the lawsuit says.
It adds that Miller executed a Guaranty Agreement with the bank, personally guaranteeing repayment of the loan.
Two years later, he signed another agreement on a $150,000 loan, he says.
At the request of his partners, Miller says he took out additional loans totaling $116, 750 over the course of seven years.
He says Huntington Facility is now in default on the loans and has entered into a Forbearance Agreement with BB&T to give it a chance to sell the real estate.
Miller adds that he invested $39,738 in a similar project in Clarksburg, known as Clarksburg facility, and has received no information on it.
"Although Plaintiff has received no accountings, reports or information on the operation of the said Clarksburg Facility LLC, upon information and belief, Plaintiff believes that said facility has been sold without Plaintiff's knowledge or consent, and that his investment of $39,738 is now worthless," the complaint says.
The Regency Park facility was closed on April 21 and has lost its license.
"By refusing to provide Plaintiff with even rudimentary financial information concerning his investment, Defendants likewise breached the contract with Plaintiff," the complaint says.
Miller adds that he never received the state tax credits promised him.
"Plaintiff relied upon each of the fraudulent representations of Defendants, and, based upon those representations, invested in the assisted living facility at Huntington and Clarksburg and entered into the contract discussed above, and personally guaranteed the loans set forth above," the complaint says. "But for these misrepresentations, Plaintiff would not have become involved with Defendants and invested money with them."
He charges the defendants with breach of contract, fraud and civil conspiracy. He also makes a claim for punitive damages in addition to seeking a refund of $220,238. He also demands to not be held responsible for the $3.2 million loan he personally guaranteed with BB&T.
Regency Park landed in hot water with Attorney General Darrel McGraw's office in 2004. McGraw filed a lawsuit in Cabell Circuit Court demanding the facility pay refunds it had previously promised.
Regency Park was not paying refunds on a month's fee after a resident died during the month. Eleven families were awarded refunds that totaled $16,317.35
Leon Oxley of Huntington law firm Frazier and Oxley is representing Miller.
Judge John Cummings has been assigned the case.
Cabell Circuit Court case number 06-C-497