Two companies, indiviudals sue Grand Central Building for fraud

By Kyla Asbury | Feb 1, 2010

MORGANTOWN -- Shenandoah Ridge, Walnut Woods and two individuals are suing Grand Central Building Limited Liability Company of Morgantown and its four owners after they claim they committed fraud and misrepresentation.

MORGANTOWN -- Shenandoah Ridge, Walnut Woods and two individuals are suing Grand Central Building Limited Liability Company of Morgantown and its four owners after they claim they committed fraud and misrepresentation.

David L. Leonard Jr. and Patricia M. Sanderson are members of Shenandoah Ridge.

In November 2005, Grand Central owned a parcel of real estate in the Union District of Monongalia County that was 9.31 acres, according to a complaint filed Jan. 4 in Monongalia Circuit Court.

Leonard and Sanderson negotiated a business relationship with Kristian E. Warner, Monroe P. Warner, Benjamin F. Warner and Andrew M. Warner to form a limited liability company for the purpose of purchasing the property and creating a residential subdivision with 170 lots, according to the suit.

On Sept. 20, 2005, Leonard, Sanderson and the Warners formed Walnut Woods with Warner Ridge and Shenandoah Ridge as its members.

Walnut Woods agreed to purchase the property from Grand Center for $1,700,000, according to the suit.

The plaintiffs claim Grand Central represented that the property had public water and sewer available.

According to the suit, on Jan. 12, 2006, the dead from Grand Central to Walnut Woods described the property as "two separate parcels containing 9.15 acres and .16 acres."

The plaintiffs claim the defendants knew or should have known they did not own the .16 acre parcel when it conveyed this to Walnut Woods. They claim they relied upon representations of Grand Central and the Warners concerning ownership of the .16 acre land.

Fifth Third Bank filed a civil action against Sanderson and Leonard, demanding to recover monies due and owing on the loan in the amount of $2,542,840.47.

Leonard and Sanderson claim the defendants committed comingled funds and other assets; diverted Grand Central's funds or assets to non-business uses and the personal uses of its members; failed to maintain the limited liability company formalities; failed to maintain limited liability company records; and/or disregarded legal formalities.

The plaintiffs are seeking compensatory damages in an amount in excess of $2,500,000 and punitive damages for breach of purchase agreement, contractual guaranty indemnity demand, negligent misrepresentation, intentional misrepresentation/fraud, breach of general warranty and improper distribution. Michael J. Novotny is representing them.

Monongalia Circuit Court case number: 10-C-4

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